The former fact forces us to list first among issues, the post-election expectations of our people that the PNP administration combat joblessness, contain growing national debt while negotiating a more manageable set of arrangements with the International Monetary Fund.
Our list may go on to include providing more and cheaper access to health care while enabling more youth to benefit both from what the education system currently has on offer and needed improvements. These are but a few of the matters of concern.
Perceptions
Two perceptions hamper us though, in any attempt to understand the backdrop against which we must address these problems. They have to do with how our financial system should, and actually functions, and the true nature of government debt.
Audley Shaw, in a piece titled 'The other side of the truth', published in the Jamaica Observer, December 28, seems to maintain an erroneous view of the financial crisis and meltdown of Jamaica's indigenous financial-services sector in mid-1996.
Shaw maintains that both former "prime minister (P.J. Patterson) and the former minister of finance blatantly ignore the underlying issues that led to the collapse of the financial sector and its catastrophic effects on both the economy and the psyche of our people."
He goes on to add: "More than 10 years on, Dr Davies stubbornly refuses to acknowledge what we all recognise: that it was his own ruinous polices which were the root cause of a systemic meltdown of the financial sector."
This view of the crisis persists even though its logic is plainly, transparently and fundamentally flawed. It flies in the face of two questions: why only local banks and financial institutions failed, and why former Bank of Jamaica Governor Jacques Buissierres could speak, without contradiction, of local financial sector CEOs and operatives confusing clients' money with their own?
Why did Century National Bank issue certificates of participation in commercial paper (risky venture) when innocent, unknowing, unsuspecting and hardworking Jamaican migrants to the United Kingdom were convinced they deposited their hard-earned and saved sterling into fixed deposits bearing no risk.
The truth is, this idea of government policy 'causing' a financial crisis should have found the scrapheap in the 1990s.
This subject need not be shrouded in myth, emotion, superstition, and in our perhaps unique case, prejudice of politically partisan 'dieheartedness'!
If two species of fish swim in the same pond, eat the same food, experience the same temperature and its changes, when one goes belly-up leaving the other perfectly healthy, it can neither be the feedstock nor environment of the pond that is to blame. This is what one does when one attributes this failure to government policy.
Scotiabank, CIBC, Citibank and credit unions, operated in Jamaica. They did very well in that same period.
Much as one might prefer to think Mr Shaw's analysis is merely politics, it is worrisome that perhaps this view of causation genuinely persists and is actually believed to be true.
No one blames US government policy, except in a very specific way, for the Wall Street meltdown of September 2008. All credible analysts, including Alan Greenspan, agree it was repeal of Glass-Steagal and other deregulatory arrangements that allowed the casino-like process to emerge, flourish for a time and finally attain meltdown status.
No one but rabid ultra-rightist and Tea Party fringe elements blame government policy for failure of Lehman Brothers. They were over-exposed, too highly leveraged and basically gambling with other people's money.
Government did not force the Eagle Group to invest in Jamaica's most "prestigious address" at what became the pink elephant morphed into Crowne Plaza then US Embassy residences.
How many of us remember the huge billboard on the still open land across from Devon House proclaiming: "Future Home of Century National Bank"? What of the Mutual Life second tower? Island Life's J$1.4-billion blue elephant?
No government forced these companies to hold more than half their investable funds over which they should have jealously maintained fiduciary responsibility, in the form of real estate whose value kept increasing on their books.
I vividly recall one of the Matalon entrepreneurial family wittily referring to our indigenous financial sector as exhibiting an 'edifice complex'! That was not the behaviour of an entrepreneurial class, but one of speculators with other people's money.
This failure of our financial system derived from an erroneous view of how an economic system generates enhanced productivity and wealth. Some call it euphoria amidst greed. An entrepreneurial financial system funds innovation — of all kinds.
It is not the resources a country possesses, but rather how those resources are used that makes the difference between poverty and prosperity.
The real issue
As to our national debt, the analogy of a household managing its income and that of a government works well for explanatory purposes. It fails, however, if taken literally, and too far.
Yes, a household must balance its budget eventually, preferably quickly. A government however, issues debt which, in part, the private system of capital accumulation requires to be incurred.
The real issue is how government uses that debt through the management of legitimate and properly assessed expenditures. Entrepreneurs seeking capital accumulation do not as a first priority build roads, fund university education and research, underwrite the police force and nurses.
Government must ensure proceeds of debt incurred add to productive capacity of the private entrepreneur who, for his or her part, must ensure their ventures are innovative and productivity enhancing.
That's how an economy grows, how standards of living may improve. In our system, government policy may then tweak the outcome, with judiciously conceived taxation, expenditure and other arrangements.
Wilberne Persaud is author of 'Jamaica Meltdown: Indigenous Financial Sector Crash 1996'. Email wilbe65@yahoo.com.