Christopher Lowe
I was quite surprised to see such incomplete and misleading statements issuing forth from a former Finance Minister of the Bahamas (Tribune Business November 17 2009).
It leads to three initial questions, being:
- Who is he pandering to?
- Why would he omit half the picture? and…
- Does he have any clue what it takes to survive the Bahamas in Business?
His main, if overly simplified synopsis, is that businesses are compensating for a drop in revenue or sales by increasing prices, and for the ignoble purpose of keeping profits high.
The worst travesty is that he omits the other action that businesses can take if revenue falls. Things like layoffs, shift rotations, and closure.
Also, in tying profit motive into overcoming revenue decreases, he is being entirely disingenuous.
While profit does indeed come from the prices charged for goods and services, profit also covers repairs and renewals, and inward business re-investment.
It is not an entirety to be shoveled off the top of the books by ownership after running costs have been met.
This may be the practice of government ministers and lackeys, where it is gotten away with but, as a former Finance minister, he surely knows this?
When revenue streams decrease, but fixed costs do not, one of three things can result:
Lower costs,
Increase margins,
Go out of business.
Also, with reduced cash flow, reduced purchasing power is already working against the businesses solvency, forcing a business to rely on previously banked profits to survive.
If they exist.
He goes on to place great import on our tie in to the U.S. economy, playing ignorant of the fact that, while predominantly supplied by that country, and faced with their market conditions, we also have a few demons of our own:
Increased shipping costs,
Increased utility costs,
Increased government interference and restriction of trade
Lower productivity,
Lower education level of new hires,
Increased theft, both internal and external, day and night,
Increased staff benefit costs, I.E. medical insurance and cost of living raises and general salary increases, and the list goes on.
Perhaps when all U.S. citizens receive their national health insurance coverage, there will be no effect on the Bahamas?
Bollocks!
It will be passed directly onto the consumer, both domestic and foreign.
Every small business will have added to their costs of doing business medical insurance cover for their employees.
What of our own governments increase in N.I.B. contributions and wage ceiling?
Is it all a bad dream?
I would have expected more from a man supposedly versed in the economic world, but, perhaps it is par for the course in a country beset with no vision, leadership, or prospects.
And, profit is the last reality for most, even well run, Bahamian companies these days,
We are all preoccupied with survival.
As the Government ministers and their minions should realize as they cast about for a convenient demon,
They better hope we survive, despite their best efforts to thwart the same.
Chris, could not agree with you more. Perhaps we need to put him back in office, because we hardly heard from him when he was in Cabinet. Now, he seems to have the right answers for everything. You should send this one off to the paper.
Right on Chris.The gouging that’s being done, is being done by the government & only the government. They are gouging businesses big time.Some people go to jail for doing what they are doing. How long can we go on with all of the government “rip offs” ?
Right on Chris
Just proves the old saying “Where you stand depends on where you sit.”
I long for the old days when a letter would be written to a Government Minister and the reply would finish with “Your obedient servant.”
I agree with Jerome re sending this to the Press
For sure there are some entities that are managing to profit for their shareholders, specifically those publicly held, cable Bahamas, banks, etc.
But isn’t this why the public invests in them?
Or is this to be considered charity?
Goodwill?
The extent to which they will demonize is only exceeded by their desperation to remain relevant.
There are more disgruntled former civil servants running around now han ever before,
but, perhaps they are regretting their former oportunities lost? After the barn has burnt down, they wish to save it?
Chris you’ve hit the proverbial nail…
In this current economic climate, competition [both local and foreign]for what little business there is – is Fierce! In my industry we would be out of business if we tried “gouging”. …and to answer your initial question 3… NO!
“One of the penalties for refusing to participate in
politics is that you end up being governed by your inferiors.”
Plato.
Ain’t that the truth!!
Plato understood the shortcomings of democracy..
There’s a big difference between freedom and democracy as most of us know.
Sent to Madam Editor, Tribune, and also commented upon by the Business ed. in todays Trib, along with comments by Raymond Winder on the same article.
So few stand up to the lunacy……….
is it any wonder it is whole heartedly accepted?
Good stuff Chris.
So few stand up because they do not see he tyranny of more and more government.
I think it’s because we wish to abandon our personal responsibility. Let someone else take care of it…