The recently concluded G20 Summit was attacked by loconomists calling it an international conspiracy in the highest order. Attacks pictured the leaders of the world that met in Washington, D.C. as opportunists continuously conspiring to rob the American people blind!    

     By the way, in case anyone wonders, a loconomist that attacks the G20 Summit could be a carpenter, a plumber, a doctor, an Obamanomist or anyone at all other than a schooled economist, a stage streaker who likes to hug the limelight – television and video interviews, etc. – a voice that has never been heard before that sounds so different and therefore seduces the curiosity of the gullible.  

       In short, loconomists speak for Americans’ outrage about what’s going on around them that they hardly understand.

      This bugging anomaly that diverts national focus from finding a real solution to the financial crisis is not hard to explain. The nation is hurting economically.  Any suggested solution no matter how weird or “loco” [crazy], attracts an audience.

        A loconomist even receives big donations. Some donors like to hear a loconomist speaks out their anger. But nothing of what the loconomist says in rage is economics … only a truckload of emotion otherwise known as loconomics or literally, “loco” or crazy economics!

       This new breed of critics invokes the right to speak out their mind under the First Amendment. We have to respect their right. It means that everyone has the right to ventilate that gnawing anger because of what’s happening in Wall Street and to the floundering world economy – which of course includes the ventilation of one’s embarrassing ignorance of the wherewithal of international economics, as well as macro and micro economics often discussed but hardly understood … highly technical social sciences that are rarely learned from the university of hard knocks.

      This is not to say though that to know economics one has to go to U.K.’s London School of Economics.  But if you want to talk of what you know about economics, you must put some sense to it.

      For example, to declare in public that the G20 Summit is an international economic conspiracy is nonsense, a baloney! To say that the Federal Reserve that regulates our fiscal and monetary system otherwise inflation results in a massive loss of jobs and threatens a recession is a central bank run by “thieves”, has no economic sense at all. An indictment of the IRS that our income tax system robs the people of their income and therefore should be abolished … why, what are we talking about …isn’t that Mafianomics, a branch of loconomics?

      Oblivious to public ridicule, most probably a loconomist has a thick skin.  But that could be more apparent than real.

      For, in the first place, loconomists think that nothing is wrong of what comes out of their mouth since they believed that what they are saying is true although it is not, and secondly, they have an audience of equally ignorant hand clappers that made them think they had become an overnight “experts” of what they are babbling in public! It explains why they are so indifferent to public scorn and mockery.

      Thus a plumber or a podiatrist who speaks about the imagined causes of the recent financial meltdown direct from the ghetto probably has more listening audience than Alan Greenspan talking about the problems of the Keynesian economics that could have caused the financial market to spin out of control. Greenspan’s life which is nothing but a lifespan of dedication to the science of financial and monetary economics would not make any difference at all!                                   

       Listening to a loconomist’s litany of abuses against the Federal Reserve as the nation’s central bank ran by “thieves” will have more angry audience in standing ovation with catcalls of approval than Ben Bernanke or U.S. Secretary of the Treasure Henry M. Paulson, Jr. will have while explaining to the public the need for a financial bailout so that millions of Wall Street and Main Street abusers of credit could be saved from their own greed and financial foolhardiness.

   The bottom line is that these annoying attacks diverted attention from what was happening in the G20 Summit. Leaders of 18 countries and the EU [European Union] gathered in Washington to discuss the threat of a worldwide recession due to the current financial crisis. But that happens to be too much for the understanding of street economists.

        As a global response to this international problem, it was agreed that the global financial system must undergo certain urgent changes. Those changes must occur in the Financial Markets and the World Economy.

        The two-day Summit agreed on the following four principles of action: [1] “[A] coordinated and concerted stimulus through the use of budgetary measures to support demand; [2] the increase of financial assistance to emerging and developing countries and a new regulation for financial markets to prevent a similar crisis from happening again; [3] a global economic governance more open to emerging and developing countries for more justice and efficiency; [4] rejection of protectionism, and more openness towards exchanges.

      Our major interest in the two-day Summit was to involve China and Saudi Arabia as “stakeholders” in the international monetary system. The Saudis are the sole Persian Gulf oil producers with enormous oil revenue to invest worldwide, and China has close to a $2 trillion foreign exchange reserves, a giant economy that is still growing.

       “China is one of the few participants with the financial wherewithal to come to the aid of countries in distress, either directly or by swelling the coffers of the International Monetary Fund, so that it can make more emergency loans.”  [Nov. 13, 2008, The New York Times]

        This is probably what loconomists should know why G20 Summit was important to us: China has a vast foreign exchange reserve as a result of its trade surplus with the United States.

       The Chinese cleverly use this surplus to intervene in the markets to keep their currency “artificially low”.  This increased their exports, eventually “… contributing to the loss of U.S. manufacturing jobs.”

      The tightening of credits for international finance spells trouble. It could lead to a severe global recession. Contraction of world trade is a disaster that has to be avoided.  It is a result of a dysfunctional international liquidity or the drying up of reserve currencies in the wake of this worldwide financial meltdown.

      This critical problem is not something that loconomists should take as an opportunity to indulge in loconomics when America is hurting.

      It is not even funny!

© Copyright Edwin A. Sumcad. Freedomsphoenix.com access November 19, 2008.

The writer is an award-winning journalist. Know more about the author by reading his published editorials and feature articles or you may e-mail your comment at ed.superx722@yahoo.com.sg