‘You didn’t build that’

All those who followed the 2012 US Presidential election are aware of the infamously misquoted (or rather taken completely out of context): 'You didn't build that' Obama phrase.

The Republican Party, feeling no shame that their hands-off approach to a free market had led to a recession not seen in decades, insists that the State should not have a role in the running of the economy. Wall Street and some businessmen love this hands-off style of government, clearly because in such a scenario they are allowed to trade unregulated.

After all, what have they got to lose? CEOs become millionaires when things are going well, and get millions as severance packages when things go wrong. When President Obama uttered the now infamous 'you didn't build that', he was making the point that it is the government which educates future employees, it is the government who builds bridges and highways that businesses use and it is the government that invests in the infrastructure that is so important for business to thrive. Take Silicon Valley and all the dot coms who have made their home there - none of it would have been possible had it not been for the US army who built the internet.

It was clearly very dishonest of the Romney campaign to edit Obama's speech, making it sound like he was telling entrepreneurs that the government had built their businesses.

When following the US elections, most Europeans would be justified to feel bewildered to listen to discussion and arguments about subjects that don't have any place in our political arena. Discussing guns, the death penalty or universal coverage of healthcare seems out of place in the 21st century in a western democratic country. However, it is sometimes encouraging to see how it is possible for US politicians to reach decisions that echo European values, albeit for totally different reasons. A good example is the case of California's referendum to abolish the death penalty - something that was being promoted because executions cost more than life imprisonment.

Every decision taken by government has an economic impact on every citizen, even if one thinks he is immune. Unfortunately, most people in Malta (and probably Europe) have not realised this. When people heard in the news that government employees had a raise in their salaries, did anyone complain that this would lead to inflation? Or make Malta less competitive? Would people in Malta vote for lower taxes or cheaper utility bills if the economic impact were taken into consideration?

The people of Greece, and many other southern European countries, have repeatedly voted themselves into economic suicide. Political parties have time and again promised people short term myopic ideas without warning them that they will pay a very heavy price later on. Union-friendly left wing parties and populist right wing parties pushed Europe into a spiral of debt.

It would be easy to blame opportunistic politicians - however in reality this is a chicken and egg situation. Is it the politicians who are at fault or is it the electorate? Would any Greek politician who threatened to break up archaic monopolies, sack superfluous public workers and abolish ridiculous early retirement ever have had a hope of getting elected? Would a Maltese politician who stuck a 'Pjaciri Le' ('No Favours') sign on his district office ever get elected?

I don't want to be over-critical of Maltese governments as since Independence, Malta has seen the development of a manufacturing base and a tourist destination in the 70s and 80s, and a financial and IT sector in the last 20 years. Both parties have contributed positively to the economy, but both parties have held back out of fear of losing elections.

I was recently invited on Xarabank to discuss Lawrence Gonzi and Joseph Muscat's debate. It is clear to me that both in the case of the original leaders' debate and the ensuing post-mortem debate with Mario de Marco and Manuel Mallia, the politicians followed their party's scripted arguments. Basically, there is no economic debate at all.

Both parties want to improve the economy, create jobs, decrease the tax burden and decrease prices of consumer products. That is all well and good but ultimately everything has a price and at some point the bill must be paid. Why is everybody scared of shoving this bitter pill down our throat?

Are politician really to blame for Europe's economic woes? Or are we ultimately the ones to blame for voting for dreams?