Professor Clive Thomas (Global crisis - Guyana and the wider world)

In this week’s column I shall conclude the discussion on Stanford Financial Group started last week. Following that, over the next few weeks I shall undertake a review of the CL Financial Group, Trinidad and Tobago. As we shall see, like in the case of Stanford Financial Group, there are many important lessons to be learnt from the Guyana standpoint in that firm’s financial meltdown. 
Lessons to be learnt
From last week’s discussion of the Stanford Finan...

Recap 
In last Sunday Stabroek  I had started a discussion on what I described as the “crisis of credibility” facing actions by the government and its functionaries on economic matters. This credibility gap runs throughout the entire gamut of economic matters, from review and analysis of the current situation and recent trends to the setting of targets, framing of policy proposals/programmes/projects, and the efficient execution of these.
I have so ...

Moral hazard
When a sectoral regulatory authority, in this instance for the insurance sector, takes the position that regulatory intervention as prescribed by law would be prejudicial to a party that is involved in regulatory evasion and abuse, because such intervention “would have precipitated the demise of the company to the immediate detriment of policy holders,” it means one of two ghastly things, both of which reveal a deeply flawed legal-regulatory-institution...

‘Voodoo economics’
Economics is essentially a discipline based on commonsensical principles and ideas. These are then expressed precisely, with logic and theoretical rigour. And, more often than not, they are supported with the use of mathematical techniques, and statistical analysis and inference. It is for this reason I believe that when government and its functionaries make economic pronouncements which violate common sense, ordinary Guyanese dismiss these as ‘vo...