I find myself compelled to use words no longer in use to
explain what I have in mind, so bear with me. The word you see in the title
comes from the name Lyndon LaRouche, an actual person who wanted to be
president of the United
States of America . As far as I can remember,
he ran for the position of commander-in-chief at least half a dozen times and
lost. He ran mostly as an independent but also as candidate for a third party
that bore his name; even ran under the banner of the Labor Party of America.
Despite being accused of antisemitic tendencies, a charge he
denied – claiming instead he was anti-Zionist not antisemitic – LaRouche
attracted a number of Jews to his cause, one of them being David P. Goldman.
When LaRouche went nowhere with his quest to win the White House, Goldman did
what you would expect someone like him to do; he turned coat. From living the
life of an atheist, he rediscovered religion and switched to a Republican
philosophy of economics from the LaRouchian philosophy that some people called
idionomics. As to whether or not Goldman has the brains to understand anything
Republican is open to question.
Now you can see that the philosophy of idionomics is at the
roots of the article this man has written under the title: “The Economic
Blunders Behind the Arab Revolutions.” It is an article that also came under
the subtitle: “In Egypt and Syria ,
misguided food and water policies set the stage for revolt and civil war,” and
was published in the Wall Street Journal on July 13, 2013. As suggested in the
subtitle, the author discusses the Egyptian and the Syrian economies. To avoid
doing what he does which would be for me to discuss a subject I do not know
well, I shall refrain from discussing the Syrian economy, and concentrate on
the Egyptian which I know.
The thing that idionomists do frequently is invent anything
on the spot to make a point at the start of their presentation they hope will
sound so smart, it will impress the audience. And that's what David Goldman
does in the first paragraph of his article. Here is what tells you the man is
an idiot: “Half a century of socialist mismanagement has left [Egypt ] unable
to meet the basic needs of its people.” The fact is that right after the 1973
crossing of the Suez Canal, then President Sadat of Egypt started to liberalize the
economy, a move called “infitah” in Arabic which means “opening.” By 1978, the
policy was well entrenched and getting stronger. In time, the point was reached
when people started to worry not about “statism,” like says Goldman, but worry
about savage capitalism creeping into Egypt .
Beyond the author's first paragraph, he makes assertions and
he quotes numbers that are so screwed up, they do not deserve mention. Thus,
the best way to refute them is to refute the entire article by describing the
situation as it stands now; so here we go. There are 90 million Egyptians in
the world. Only 80 million of them live in Egypt ;
the rest having immigrated to other countries permanently, or working abroad
with the intent to return to Egypt
after a period of time. About 40 millions of these people live in urban areas
and 40 millions in rural areas. The one thing that must be mentioned here is
that because the population of the country lives along the one thousand
kilometer stretch of the Nile from the Sudanese border to the Mediterranean
Sea, no one in Egypt
except for a handful of migrants lives further than fifty kilometers away from
an urban center.
Since ancient times, an acre of Egyptian soil that was
irrigated with Nile waters fed one or two
people depending on the weather and other factors. Three or four million acres
were available for toil in antiquity, and this made it possible to feed
anywhere between three and eight million people. This is how Egypt became the bread basket of the ancient
world, including the Roman Empire . Thanks to
the Aswan dam (built in the 1960s) Egypt today has eight million acres
for toil – not once a year but twice, and in some cases even three times. In
addition, the yield per acre has gone up as much as five times since antiquity.
This is why the country can now feed 80 million people adequately, even after
devoting a great deal of acreage to plant cotton for local industries and for
export, plant flowers mostly for export, and plant herbs for local consumption
and for export.
Because agriculture was liberalized long ago, the farmers
make the decision as to what they will plant each season. And that decision
depends on what they believe the price of each commodity will be in the future.
Because wheat and sugar are subsidized by the big economies of Europe and North
America, the Egyptian farmers do not have an incentive to plant these
commodities unless they are “bribed” by their own government which happens to
run a version of the program known in America as Food Stamp.
The government has mills that turn wheat into flour, and has
under contract a number of bakeries producing subsidized bread in the poorer
regions of the country. It buys the wheat from local farmers, or imports it
depending on several factors such as price and availability. The most that the
government spends in a given year to run the bread subsidies program is a
billion dollars in local or in foreign currencies depending on the
circumstances. And this is a very small amount of money.
As to the international trade in agriculture and in
processed foods, Egypt
imports two or three billion dollars worth of raw foods from abroad. On the
other hand, it exports four or five billion dollars worth of agricultural products
and processed foods. Thus, Egypt
has a surplus in this sector of the economy, and the fact remains that the
problem the Egyptians are said to have is that they eat too much. This is shown
by the fact that once again when the world obesity chart came out this year, it
showed the Egyptians near the top of the list of big eaters alongside the
Americans, Mexicans, Germans and a number of other Arab countries. Yes, there
are places where people are not nourished as well as they should be but this is
a problem that exists everywhere in the world. And yes, Egypt has its
share of diabetics due to obesity which is also a worldwide problem. Nobody is
perfect.
As to the rest of the economy, it has shown itself to be
more robust than anyone could have imagined. In nearly two and a half years
during which time it was beat up by one thing after the other, the Egyptian
economy not only remained standing; it registered a positive growth – though a
modest one – quarter after quarter at a time when its trade partners were
registering negative growths. This happened to Egypt because it has a diversified
economy that grew organically in response to local needs, not artificially in
response to outside needs. What this has given Egypt
is a flexibility that the nations of Asia and South
America did not have when they experienced similar circumstances
and required massive infusions of bailout money to save them.
So now the big question is this: why is it that week after
week, for something like 130 weeks now, you saw these so-called economic
experts come out of hiding and predict that “the end is near, the end is near”
for the Egyptian economy only to see the thing continue to sail like a majestic
ship, braving the turbulent waters where many other ships have sunk before?
The answer is that these people are paid to do what they do. Because
measures have been taken everywhere in the world to make it near to impossible
for cheaters to make money by cheating openly the way they used to do,
mouthpieces are now hired to go out and express opinions that aim at convincing
other people to make the wrong kind of investment decisions. And in the
zero-sum game of finance, what the other people lose is what the cheaters gain.
And this, my dear friend, is the same old game of getting wealthy at the
expense of others; a game that is now sugar-coated with a different flavor and
a different food coloring substance.
The way that the game applies to the Egyptian situation at this time is
to tell unworldly investors to forget about all those indicators pointing to a
rapid rebound in the Egyptian economy. To explain why, they say that Egypt is a
basket case that will never recover. Thus, they hope to scare the others enough
to keep them from buying into the Egyptian economy while they scoop every
instrument and every derivative they can get their hands on at a relatively
cheap price. But when they have had their fill, expect to see them advise the
others to start buying at a high price what they will be selling to them. See
how it works?
One more point. The rating agencies which are supposed to give honest
opinions, have now joined the sorority of mouthpieces that go out and
deliberately give bad advice. They do this so that the cheaters who sustain
them, get rich at the expense of the people who produce the real wealth in
every economy.
They too should be labeled LaRouchian, and put out of business for the
sake of the world economy.