Kibaki is NOT A BRILLIANT ECONOMIST

By Mwarang'ethe

Recently, Chris wrote this. “One of the few things that Kenyans already knew about Mwai Kibaki early on and had known for decades was the fact that he was a brilliant scholar. Of that there is no doubt. ...” See his piece here. Chris is in good company in perpetuation of this myth. Read any mainstream media and you will find the same stuff. In view of this, we think that, time has come to demonstrate with irrefutable with facts that, the idea that, Kibaki is a “brilliant economics scholar” amounts to nothing but, feeding an ignorant nation with cow dung mixed with saccharin. We shall use Kibaki’s government (which includes Raila, Kalonzo, Uhuru etc) statistics to demolish this trash once and for all.

Let us first note this. In 1991, a committee from the American Economic Association noted that universities have been producing “WELL EDUCATED IDIOT ECONOMISTS.” It added that graduate programmes in economics may be turning out a generation of too many IDIOTS SERVANTS, skilled in technique but innocent in REAL ECONOMIC ISSUES. According to the report, one unnamed “leading” university graduate students could not figure out why barbers’ wages have risen over time, but, they could easily solve a two sector general equilibrium model with disembodied technical progress in one sector. Source: Report on the Commission on Graduate Education in Economics in Journal of Economic Literature, September 1991, page 1044-5.

Economic development (wealth creation) is about aligning the public interests of a nation with the private interests of the capitalists. However, the failure of standard economics since 1945 which men like Kibaki are schooled in, has led to a catastrophic failure in understanding the essence of colonialism. The essence of colonialism was and is to prevent colonies from developing manufacturing industries which are subject to INCREASING RETURNS. Having prevented development of industrial sector which are the source of HIGHER WAGES, and sources of high growth potential, they then, fasten on us the Malthusian activities which are subject to DIMINISHING RETURNS.

To fasten this yoke of slavery on us, they use “brilliant” economists like Kibaki. Let us now factor statistics from Kenya Monthly Economic Review, February 2010 issued by another “brilliant” economist calling himself Governor of the Central Bank of Kenya. The report is found here.

Inflation Statistics

Let us bear in mind this. Inflation is LOSS OF PURCHASING POWER. Bearing this in mind, let us now turn to page 7 -8 of this report (we were unable to lift the graphs). On these pages, we have statistics on loss of purchasing power for the previous 12 month for each of the three income groups in Nairobi. We expect the same trend all over the nation. As we go forward, let us bear in mind that, these inflation figures are a falsification of Kibaki/Raila government and the real inflation figures are over 20%. We demonstrated this in the article: EPZs and Modern Slavery: Who Shall Tell Wanjiku the Ugly Truth?.

Now, according to this report, for the previous 12 months, the lower income group (hoi polloi in Korogocho and Kibera) lost their purchasing power by 6.2%, for the middle income, by 3% and the upper income group, by 5.6%. Mark you, the low income group is on fixed incomes. Thus, under Kibaki and Raila’s government, the POOREST and the most vulnerable Kenyans lost more purchasing power than the middle class and the super rich. If you turn to page 9 of this report, you will see that, food prices were second to Tusker and Sportman in price increment. Ironically and tragically, it was the food’s component in the inflation “basket” that, this government has reduced so as to calculate inflation in accordance with “international standards” as if people of Kibera eat as per international standards, whatever that means. Is this how a “brilliant” economist runs a nation? How can a man who runs a government that subjugates the poorest due to its monetary and energy policies be termed as a brilliant scholar? We ask scholar of what?

Leaving all the bull shit in this report, let us now jump to page 12. Therein, we find what the gods of money under the leadership of our “brilliant scholar” does with our money. The first thing to note is that, trade (read imports) was given Ksh 28 billion so as to import used women under wears. The second highest recipient of our credit is private households to buy imported mobile phones, TVs and beds with Ksh 28 billion. The third beneficiary of our credit is consumer durables which received Ksh 18 billion. We need to note that, these debts on households are a direct result of low wages which force Kenyans to become serfs of the banks. Thereafter, we find land speculators were given Ksh 15 billion. Jumping all the other lucky sectors of our wonderful economy under a “brilliant scholar,” we manage to locate what should have been at the top, i.e. manufacturing and agriculture. We are told every independence day that, agriculture is the main stare of our economy at 23.4% of our GDP. However, we see that, this crucial sector received only Ksh 3.3. Billion. When you add the miserable Ksh 4.8 billion the manufacturing sector received, we see that, the two MOST critical sectors of our economy received only Ksh 8 billion. Brilliant!

On page 16, we find something about major crops such as horticulture, coffee, sugarcane and milk. We may note that, apart from sugar and milk (if not spoilt) which we consume locally, our tea, coffee, flowers, fruits and vegetables are in most cases meant for export so as to raise dollars for our debts which we are taking to build toilets. From these facts, we can see that, under Mr Kibaki, we dedicate much of our credit to consumption of imported stuff for consumption as well. And, even when we give some credit to our most vital industry, i.e. agriculture, we dedicate that credit to export stuff like flowers. Genius!

In very simple words, under the guidance of our “brilliant scholar,” who has been with us since 1963, Kenya is now locked into comparative advantage in economic activities subject to DIMINISHING RETURNS given that, land supply is fixed. A combination of population growth due to improved hygiene, vaccines etc, and diminishing return activities means that, our efforts are yielding less and less as our specialisation deepens. As we sink deeper into poverty thereof, many Kenyans, just to survive must go back to the nature to eke a living. In this we see the real cause of the ongoing destruction of our fragile environment, such as Mau forest is not greed, but, survival. Although destruction of our environment is in search of individual survival, it eventually becomes a collective destruction. From this standpoint, we hope the stupidity of Mau and other forests reclamation becomes obvious without a change of our economic structure.

Apart from the diminishing returns curse, we are also faced with PERFECT COMPETITION situation for all 3rd world governments sell same stuff. Under perfect competition conditions, there is no profit, i.e. the economic surplus necessary for future investments. This also translates to LOW WAGES and low taxes for the government. We dealt with this matter in the article: Even Dead Fish Goes with the Flow

Another tragedy we face is PRICE VOLATILITY of our products. By relying on flower, tea, coffee exports, it means that, our national wage levels and the level of economic activities tends to fluctuate with the world market of these exports. This means that, our wages are always reversible with very serious consequences.

Thus, under Kibaki’s watch, we are now locked into a double trap of resource curse. Even if we improve our tapping of the natural resources, it only leads to more disaster. As an example, improved fishing methods in Lake Victoria only leads to faster depletion of the fish stocks. Even if we introduce technical innovations like tea harvesting machines that Atwoli hates so much, the increasing returns part comes embedded in the machines we import and not as a result of knowledge created locally. As a result, there are few spills over effects to the rest of the economy from knowledge created in a resources based economy. Such an economy can only bring about zero sum game society of static rent seekers, i.e. land grabbers and stealing of aids. Such a nation is on the way to failure because such habits bring about feudal patterns of political and socio – economical behaviour as we see today in Kenya.

If we are not dealing with these Malthisian activities, we are busy building “special” EPZs, i.e. more slavery wage system as we documented in EPZs and Modern Slavery cited above. In these EPZs, we specialise in manufacturing low end activities which the developed nations outsource when they become subject to PERFECT COMPETITION. As a result, we specialise in areas subject to negative returns and have little scope of learning. We ask again, how does a man who has contributed so much to locking a defeated and vanquished nation to such a weird economic system, be called brilliant?

Instead of trapping Kenyans this way, if Kibaki was really brilliant as we are told, he could have come up with enlightened policies to move the nation to what Michael Porter calls created comparative advantage in activities not subject to diminishing returns, i.e. manufacturing activities. With industrial development, we would be able to develop our agricultural sector because, without a fully functioning industrial system, agricultural developments are impossible. More so, for those who tell us that, we can specialise in the in the services sector, we ask, services to serve who? Specialised services can only exist to serve high tech manufacturing and agricultural sectors of an economy.

By moving the nation towards manufacturing, he would have moved our economy to the economic activities subject to: (a) increasing returns, (b) imperfect competition, i.e. innovation rents, (c) large scale for learning and (d) technical changer. It is precisely these activities; colonialism was and is established to derail. To achieve these satanic aims, they use “brilliant economists” like Kibaki and the control of the “independent” central bank. It is precisely for these reasons; we have said so many times on this blog that, the so called “independence” of the central bank in our “new constitution” is the most dangerous clause and is treason.

However, since Kenyans rely on their “brilliant” economists like Kibaki, they ask, why are you talking about money all the time? We do so, because, money is the blood of the economy and if you take over the heart, i.e. the central bank, you will control the “blood flow” for personal as opposed to public interest. By controlling our “blood flow,” you can kill us any time you want by refusing to “pump enough blood” unless you are paid a tribute just when we are “running Boston Marathon and precisely when we need a lot of oxygen and maximum concentration to win” or you might just create unnecessary poverty to humiliate us by “releasing blood” when you want and reducing it whenever you fancy just to satisfy your satanic instincts of power and domination of other men, a characteristic of vipers and thieves.

In other words, to those who think we can reform our nation without reforming the monetary system, we say like Jesus, may the Lord forgive thee, for you do not know what you are talking about. A sound monetary system provides a basis for the people, NOT our private bankers and NOT our government, to control the very value of the money in our monetary system. This is why sound money is of such utter importance. Sound money means money will not be created as debt as it is today. We must say ENOUGH of this slavery.

As a matter of urgency, Kenyan needs well thought laws (not this draft constitution please) and policies to redirect our credit from imports and useless consumption to MANUFACTURING and AGRICULTURE so as to create the needed synergy for wealth creation. Instead of Kenyans doing this, they come up with weird ideas of CDF with borrowed money while accepting colonial welfare in the name of Millennium Development Goals (MDGs). What developments are mad men like Sachs talking about when we are directing all our credit to imports, i.e. creation of jobs and wealth to foreigners? In simple words, the vicious circle of NO PURCHASING POWER and NO PRODUCTIVE POWER must be broken. Not by CDF, MDG’s, or “Vision” 2030 which has only managed to increase policemen, i.e. brutality as we hear here, or the so called socio – economic human rights, but a complete restructuring of our economy. Anything else is word play, disguise, deception, deliberate use of nonsense and absurdity to distract the masses.

To break this vicious circle, we need leaders (Jeremiah 5: 1) who can see Kenyan as an entrepreneur organisation. In other words, leaders keenly aware of the need to restructure the country as a collection of resources which includes capital/money, people and productive assets and more so, able to regularly identify new and additional combinations of these resources based on a network of relations, information with the objective of sharing economic growth at all levels. This must be so because; there is a relation between economic structure and the political stability and peace or instability and armed strife.

That’s why we find in the Bible these words. “And the land was not able to bear/support them that they may dwell together.” Genesis 13:6. If they had machines in those days, the land would have been sufficient for their families. Thus, in the Bible, we read about one of the most important economic laws, i.e. DIMINISHING RETURNS and its corrosive effect on human relations. The only way of ensuring that, this law does not destroy a nation is to industrialise because this creates higher dynamic rents for future investments in research and knowledge acquisition for the capitalists, higher wages for labour and higher taxes for the government. And more so, industrialisation increases the carrying capacity of a nation as we see in Holland etc.

However, our “brilliant economists” in the 21st Century cannot understand what was known during the Renaissance Era. Now, if this is the case, would one dispute if we said Kibaki is not a brilliant economist as we have been told, but, he is just another “WELL EDUCATED IDIOT ECONOMIST,” or just another IDIOT SAVANT, skilled in technique but innocent in REAL ECONOMIC ISSUES?