Wednesday, April 25, 2012

A Cabinet of Deception

It is especially ironic when the government that is expected to guard and protect the interest of the public becomes the most important player in perpetuating deception and false calculus. These last events in Lebanon beg the question: If the government is not to be trusted then why have it?

Think, if you will, of a major corporation that sells rice in 1000 gram containers for 4000LL each. The marketing department of this corporation decides to maintain the size of the container and its 4000LL but instead puts only 900 grams of rice in each box. If the boxes are marked properly then this action will not be illegal although the consumer protection agencies would wage a campaign against the corporation accusing it of the intention to deceive the public by camouflaging the price increase of 10% that the said corporation has stealthily imposed on the unsuspecting public. One can even imagine calls to boycott such products for the lack of transparency.

Imagine the disappointment when those that are promulgating such practices are the governmental agencies whose only purpose is to protect the consumer instead of exploiting her. What makes things even worse is the unbelievable attempt at using wrong calculus in order to rationalize such action. Can they be that dumb? Apparently the current Lebanese ministers can be dumber than dumb and that is a tragedy of unbelievable proportions.

Let us go through a hypothetical example that illustrates the naiveté of this cabinet officials. Let us assume that the Lebanese populace consumes every day I million 1000 gram packages of bread. If each of these packages sells for 1500 LL then the cost for the one million KG of bread would amount to LL 1.5 billion. The government has decided; in its infinite wisdom; nay its obtuse thinking, that it would not allow the bakers to increase their price by 10% or the equivalent of LL150 per 1000 gram package but instead it forced the bakers to reduce the contents per package to 900 grams and maintain the price at LL 1500. The “genius” behind this voodoo calculus should be fired on the spot. Note that the 1 million kg that are to be consumed daily cost under the old system LL 1.5 billion. When the 900 grams per package is adopted then the 1 million kg would sell at LL1.66 billion i.e. an increase of LL160 million. Had the government allowed an increase in the traditional package of 1000 grams to be sold at LL1650 then the total expenditures for the 1 million kg of bread consumed each day would have been LL1.65 billion. So what did the government accomplish by creating this false crisis and then pretending that they have acted in the interest of the consumer when in fact they have attempted to deceive the citizen into thinking that the government was acting in favour of the common good. The government has simply increased the uncertainty and the level of anxiety simply to wind up in doing nothing.

 Shame on each and every member of the cabinet for having agreed to play this game of pure deception; shame on all the MPs who have failed to raise any objection to the above but most of all shame on a so called free press whose only role is to act on behalf of the weak, the voiceless and the exploited but obviously has failed miserably in living up to expectations. This is the perfect example of what is meant by the adage that one should be careful not to appoint the fox to guard the hen house. Unfortunately for Lebanon we did just that.               


Mustapha said...

When someone brought this up, the government's spokesperson attributed this to the government wanting to avoid using L.L 150 because of its 'impracticality' , but still your logic stands because the 900gs could have been changed to correspond to the increase demanded.

ghassan karam said...

The total subsidy amounts to LL 70 per KG and so both the government and the consumer would have been better served had we allowed the bakeries to lift their prices by 100-150 Lebanese Liras.
You know as well that the issue of 'impracticality" is a side issue. Since when has the cabinet worried about whether the measures it takes are practical? A tax /subsidy ought to be fair and let the producers and consumers worry about how to handle it.

danny said...

The befuddlement is that Lebanese; including media and so called politicians and economists have not criticized and made it a symptom of what ails Lebanese residents!
Sometimes I wonder whether all our worries are for naught. Sorry for the analogy but Lebanese remind me of two examples:
1. Little babies who like to stay in their soiled diapers rather than changed...

2. Pigs who roll in mud and refuse in July and be happy!

Good stuff as usual Gus

ghassan karam said...

Your analogy is spot on. We complain and complain but when it matters we are the biggest supporters of a broken down system. Go figure.

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