Author: Nassau Institute

Government Intervention in The Bahamas and Unintended Consequences (Part 1)

Speech to The Rotary Club of East Nassau by Rick Lowe, Vice President and Treasurer of The Nassau Institute on Friday, May 8, 2009. This presentation will cover two topics, Economic Diversification otherwise known as Government Planning, and the Governments intention to implement unemployment insurance. Before I get into the Economic Diversification discussion I must come clean. First: Part one of this presentation, or most of it, was for the National Economic Summit hosted by Mr. Lynden Nairn a few weeks back, and Second: I am not an economist, however, economics is a subject I have come to love. That said, let’s dive in. I’m told there was an old joke going around the British Parliament in the 1930’s that had it that if you asked five economists for their opinions, you would get six replies – two of them from Keynes. I should point out that The Nassau Institute was founded in 1995 and is an independent, non-political, non-profit institute. It believes economic freedom and choice in the marketplace, and a society that embraces the rule of law and private property rights are requirements for economic growth and reduction of poverty. Part one – Economic Diversification and Government Planning  At the risk of wasting your precious time, I would like to take a minute or so to conduct a thought experiment, with apologies to Dr. Charles Murray, the...

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Is Government in The Bahamas the problem?

When you’re walking around the office today ask your colleagues if they think government should do more or less for us as a people. I know, it’s a pretty broad question, but give it a try. I’ve tried this thought experiment hundreds of times, and more often than not, people say that government should do more. When they’re asked where government gets the resources to “help” Bahamians, few make the connection that government cannot give anything without taking it from us first. Fewer still will donate out of their pocket to help the drug addict on the corner, but think the government should take care of them. So there are many double standards when it comes to giving our own money and what we expect government to do with “other peoples money”. And of course politicians are all too willing to make us believe they can fix all our problems, but along the way, seem to make the problems worse. Now I don’t think for a second that politicians intentionally set out to make things worse, but I submit that the facts speak for themselves. And now as the government faces a deficit out of control and debt levels beyond anything imaginable, the country sits on the precipice of a free fall where public finances are concerned. It begs the question, how long will it take for the political...

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An Answer to Dr. Ken about Laissez Faire Capitalism

Dr. Ken is my friend and neighbour.  He is generous to a fault in sharing his medical knowledge and years of accumulated wisdom as a physician. Now retired, he shares his ideas on the Bahamian economy in the “Letters” column of the Tribune. Dr. Ken, known for his brevity and one-liners wrote: “The Nassau Institute reportedly stated,  ‘In simple terms we should turn to more laissez-faire capitalism rather than more government planning’.  Really?  Turn toward laissez-faire capitalism?  Isn’t much of the world suffering economically right now largely as a result of laissez-faire capitalism?” Laissez-fair is an economic doctrine and an ideal.  It has never existed. Therefore the cause of current economic malaise is not laissez-faire capitalism. The Bahamas was closest to the ideal of economic freedom (laissez-faire) before Independence; a period of phenomenal economic growth. After 1972 the Currency Board was replaced by a Central Bank enabling annual deficits, government expansion and related interventionism. “Interventionism” is not an economic system, that is, it is not a method which enables people to achieve their aims. It is merely a system of procedures which disturb and eventually destroy the market economy. It hampers production and impairs satisfaction of needs. It does not make people richer; it makes people poorer”. (L.V.Mises) Dr. Ken and the Nassau Institute have the same goals but differ on the means for achieving them.  He wants more...

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Letter to the Editor: The Famous Nassau Straw Market Shocker & The Forgotten Man

A report in the Tribune Business on the Straw market as described by a professional working on the plans – is a shocker.     The projected cost of the straw market rose from eighteen million to somewhere between 29 and 36 million. Taking the mid point projection of 33 million, the per capita cost for 300,000 Bahamians is about $110.00.  Considering the portion of the population that are not earning any income (children and retired) the amount is higher for income earners.    Clearly the PLP government “lost their heads”.   In September 2007 The Nassau Institute researched operations of the Straw Market. Some of the findings were: Licensed vendors pay an annual rent of $100.00 per year with no requirement to sell Bahamian made products or straw goods. Over 50% sell no straw and/or Bahamian –made products.   Six hundred and five stalls were licensed, but information as to whether the rents were current – was not known or not available. Subletting is illegal, however those operating the stalls were mostly Haitian and Jamaican  Over 50% of the stalls sell knock-offs of name brands in violation of copy-write laws.    It is time to ask whether a straw market on Bay Street is an asset or an unaffordable liability.   Rental income is negligible relative to the investment.  The result is a government subsidy for a few individual lessees.    There...

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