Why curtail corruption??

[mondongo]

Hipo does not control oil prices, and that's the number one reason for inflation right now, not the borrowing. The borrowing for govt projects by they way, is a form of foreign investment. He is doing the right thing, borrowing to build. Fernandez did the same thing.

Jimbo, you are really not with the program. Strictly speaking, oil price increases do not cause inflation. Oil prices are very volatile. Inflation is caused by systemic increases in prices. Inflation is definitely caused by accelerating spending beyond the revenue stream and increasing the money supply over and above that needed to sustain GDP growth. Borrowing that does not get invested begets more and larger borrowing.

Just because you see some pot holes being patched up does not imply that Mejia is doing a good job. You give me DR$200Billion and I will patch up a few roads. You are falling for the same hand-out mentality that the poor Dominicans fall for. Just beacuse he fixes a couple of things that matter to you, you think that he is fine.

Are you on the take with the Hippo?

 

[Jim Hinsch]

You're wrong again Mondongo. Wrong on all accounts.

<b>Rising oil prices cause inflation.</b> Almost immediately. Better go back to ECO 101.

<b> Hipolioto is planning growth through foreign investment</b>, and all things required to bring that about.

What kind of school did you go to, a "pretend" school? Everybody knows these things, even a 1st year student.

There are 2 main causes of inflation, increase in the cost of production (COST PUSH INFLATION) and increase in demand (DEMAND PULL INFLATION).

Or do a search on the internet using "Causes of Inflation". I'm not going to teach you economic theory.

See http://www.bized.ac.uk/virtual/dc/copper/theory/th17.htm.

One site sums it up pretty well (http://www.iea.org/new/releases/2000/oilprice.htm):

"Developing countries may also be disadvantaged by deterioration in their terms of trade. Higher oil prices directly increase the foreign exchange cost of imported oil. The domestic price of oil products also rises, which increases the production costs for all industries. These price increases can be, and often are, magnified by adverse currency adjustments, which lead to a drop in international competitiveness and so in exports.

Current oil prices have raised import bills in all oil-importing countries. The rise in oil prices will add US$6 billion to the oil import bill of India in 2000. Table 1 summarises the estimated additional bill for five selected countries, with oil import dependencies ranging from some 20 per cent to almost 100 per cent. In Brazil, the estimated oil import bill is nearly 150 per cent higher in 2000 than in 1999. In China, the increase is more than 250 per cent.

Did you even go to school? If you did, you didn't listen.

Hipolito's key plan is to invest in infrastructure. Infrastructure is the single most important factor leading to foreign investment, which brings MONEY. Money Money Money. Some people just don't get it. The world revolves around MONEY.

Fixing pot holes? You must be smoking some good stuff. Is this <b>like your "first hand account" of the airline crash deaths</b>, and how what is used on the job in <b>engineering is mostly what is learned in school vs. on the job </b> learned skills? Best not to speak unless you know what you are speaking.

 

[Drake]

Corruption

When will North Americans realize that the DR is part of Latin America and is made up of and constructed on Spanish traditions and culture. The historical Spanish system is based on the Patronage system were the subjects are oblidged to pay their masters. This goes back to feudal traditions. My point is that corruption is engrained in the system and will never be erradicated. One has to learn to play the system even though I do condone it. You can't change culture and are better off adapting to how things are done if you want to prosper in the DR.

Boca Chica is really part of Santo Domingo so it is not fair to compare it to Samana. It is like comparing apples with pears.

I believe the biggest threat to the DR economy is the massive governmental payload that is paid monthly. The PRD being a large popularist party has many members, so when Hippo got in power he had many favors to settle. Resulting in a massive payrole. I recently visited the Secretario de Turismo and it was full 300+ people apparently doing nothing. The govt is full of botellas (bottles as they are known here) that perform no productive role in this country and are an incredible strain on the economy.

 

[Robert]

Hippo's intentions might be good, and I genuinely think his heart is in the right place some of the time. Unfortunately, underneath him is often a completely different story.

As a President, it's all well and good talking up the increase in infrastructure, we are going to do this etc etc. But when the people underneath are not capable of implementing and have no experience of managing these projects, then it just doesn't happen.

This government has departments full of botellas, the payroll has exploded in the last 2 years and this has done zero to increase the governments productivity. It's been a step backwards from the PLD days.

I think one of the biggest tests is going to be the Panam Games, it's just 9 months away and it looks as if many of the projects are way behind schedule. I'm sure it's going to be a case of the last few months, let's slap it all together, one giant band-aid.
The only people that are going to gain out of the Panam games are the contractors, especially the ones with governmental and family ties.

If the government can manage to pull the games off, then maybe I might start singing a different tune.

I'm as pro DR as anyone, it's how I make my living. But, when you talk to people, the general consensus is the same, things are going backwards...

 

[Jim Hinsch]

hinges are <b>going backwards. That's why it's called a downturn. </b> Same in the USA. Same in Europe.

The general consensus is a good measure of how things are but not in where things are headed. The <b>general populace doesn't know where they are headed</b>. That's where the lack of marketing the vision comes into play.

It was <b>I who pointed out the DR needs a good iron rule</b>. A tight grip to squeeze the lemon seeds out and start making lemonade. The people are indeed children and they need to be led in a tight formation. Candalier?

That's why <b>short term, all those added taxes might be a good </b>thing. It puts someone else in charge of spending the money besides the children. So now papi can't buy that new cell phone, but they are going to have a new highway for the corporations to transport and distribute their goods.

That's why the tax-up-front on revenue instead of profits. They know that if the govt. doesn't' get their cut up front, they might not get it at all.

I remember when <b>they complained "Fernandez is building roads ... and bridges and modern infrastructure, tunnels and water pipelines while the people are hungry and suffering". </b> Hipolito even fueled that mentality as part of his campaign. Remember he said something about filling in the tunnel and distributing platanos? That was just to get elected.

I'll be the first to point out that the vision lacks practical implementation and administration.

Didn't I read that Hipolito, after the party handed out all those govt. jobs, actually did a big cut back, froze pay levels, cut certain pay levels, and raised the pay levels when they were absurdly low? Change the time zone. No, don't. Enforce traffic laws. No, don't, at least not so harshly. Pay a ton of taxes. OK, pay a bunch of taxes. OK, pay your taxes. That's his style. Two steps forward, one step back.

When the media reported that way too much was being spent on government jobs, he cut back. Salaries too high, lower them. People collecting twice. Not under my watch. He probably told himself, "they are right, I'm embarrased, and will make it better."

While I think the games will put the country on the world map, my "personal" instinct is that it was huge mistake. I too am of the opinion that the leadership lacks administrative skills, and that the games are going to do something awful to the country. Embarrass it. And do Dominicans hate embarrassment? Like no other.

All those people sitting around doing nothing? Who is to blame? The manager! That situation is not sustainable. It least they will eventually get to "looking" busy.

The military was even put to use as a general labor pool at the govt's disposal. The media protested that too, when actually it was a good move.

The people say things are going backwards? What do they know. Do the roads just appear out of nowhere? The people are generally idiots. That's why they need to be not just led, but ruled.

Prices go up because world fuel prices went up. Hipolito gets the blame. People are ignorant.

Clean up the streets of Boca Chica! The cops damn near killed the tourism there in the process. They let up. Two steps forward, one step back.

Hipolito is doing the right thing but the people under him are doing it wrong. In my book (firguratively), that's still miles ahead of doing the wrong thing right.

You nailed it. The administration sucks. But the vision is even more important. Which is better, an administration that is very efficient at administrating the wrong plan, or a crummy administration that can't administrate, administering a good plan.

Maybe I shouldn't blame Hipolito for micro-managing. He can't trust his people to do it.

I think Hipolito is learning a lot with his international travels and he'll bring all the concepts he gets exposed to right back home.

The USA government can't solve the nation's woes in two years, why should DR be expected to have fixed everything so quickly.

Hipolito is only now starting to team up with people who are experts in their industries when making policy. You can see this in everything he touches. He even refused to talk about reelection and his potential participation. His party is made up of many the most gnarly animals the DR has, and I mean that in the barbaric sense.

So he's thus far been playing the balancing act, quite successfully I might add.

He sure is getting good at attracting foreign money. He is borrowing. I say it is ignorance when people ignore what the loans are for.

He is turning out to be very little of the platform on which he ran and more like Fernandez. Fill in the tunnel and distribute platanos? We should have known that was facade for the masses.

On the difference between Boca Chica "prositutes and sankies" vs Santo Domigo's collection of the same in a house of "massage. In Santo Domingo, geting laid is the prize. In Boca Chica, the might end up be your next spouse.

 

[mondongo]

By the way, Inflation is properly defined as a sustained rising in prices, not just a raise in prices. This means that a simple price hike, say caused by a temporary phenomena such as a flood, drought, or a hike in oil prices implies an adjustment in the price level, not necesarrily inflation --- although many people (economists included) --- call it inflation. Inflation is properly when you have a sustained level of price increases, every month, every year, no matter at what level; and it is mostly due to a sustained expansion of the money supply in excess of the demand for money.

Dude, you don't understand the term inflation. Read the above post by DR1's own economist,frederic. I will post more after I eat my Breyer's Butter Almond ide cream.

 

[Pib]

did a big cut back, froze pay levels, cut certain pay levels, and raised the pay levels when they were absurdly low?

Would you care to provide a little more proof than your words. I don't think that you are right. I haven't heard of any of such things that you say the government is doing, maybe you have your "sources"?.

The people say things are going backwards? What do they know. Do the roads just appear out of knowhere? The people are generally idiots. That's why they need to be not just led, but ruled.

As a member of the hoi polloi I have to tell you that I know better than you about my situation, so you cannot go out and tell people that they are better. Would you care to explain how exactly we, the idiots, are better now?

Not meant to be confrontational... I just KNOW that things are not ANY better.

 

[Jim Hinsch]

Dude, you don't understand the term inflation. Read the above post by DR1's own economist,frederic. I will post more after I eat my Breyer's Butter Almond ide cream.

You better re-read your post while you eat your ice cream. This is Fredericks's opinion, and he points out that ECONOMISTS also call a rise in prices, inflation, and that's what most people consider inflation to be, a rise in prices.

Whether the rise is an event, or a continuous movement is irrellevent and a matter of definition. In practical terms, it doesn't matter whether the prices increase inch by inch or in one fell swoop.

He went faster. He accelerated. One is a discrete increase in speed, the other is a sustained increase in speed. Close enough for this argument, bucko.

Besides, an increase in oil price DOES cause a sustained increase in prices. You charge me more, I charge him more, he charges you more, you charge me more ... until equilibrium is reached.

Both concepts are discussed within a discrete period of time (until the time when the price is no longe rising), and it is a play on words, a subtle and unimportant difference, for the layman.

After all, the word sustained in and of itself doesn't exist unless you limit the examination to a discrete slice of time and all that matters in the end is the accummulated dollars spent, aka, the integral for you mathemeticians.

Plotting price over time, we have the rate of price change as the first derivative (velocity) and the rate of change of the rate of change of price (accelleration) as the second derivative. The area under the curve is the integral and represents all dollars spent over time, and that's what people care about now. Not where prices are going because nobody knows that. Calculus 201.

There cannot be a change in price without a non-zero velocity (inflation per the definition of sustained price increases) over a small slice of time. So you could say we had a sustained increase in price over the time period of the price increase. I don't know where Frederick gets the year-after-year part of the definiton, but I'd say the time period is irrellavant, and he is making the distinction between adjustment and inflation. Adjustment is the word I should have used, but you see, it's irrelavent unless you trying to extrapolate or quantify. We are doing neither. We are simplying noticing that <b> things cost more</b> and it is <b> because oil costs more</b>.

All we care about is that more expensive oil means more dollars will be spent to live. Continuous, a one time event, who cares.

In a pure sense, inflation of a balloon is the process of increasing the amount of air inside, the act of inflating, a "sustained" entering of more air. If I put more air in the balloon and am done, I inflated the balloon by the act of inflation using a technique called "inflate". In simple terms, when air costs more, the baloon costs more.

Here's a consenus. Search Google using ""oil prices do not cause inflation" and again using ""oil prices cause inflation". Causes wins 8 to 2.

Let me reword the original post however for technical correctness. "Hipo does not control oil prices, and that's the number one reason for <b>the increase in prices</b> right now, not the borrowing."

No charge for the lessons.

 

[Jim Hinsch]

As a member of the hoi polloi I have to tell you that I know better than you about my situation, so you cannot go out and tell people that they are better. Would you care to explain how exactly we, the idiots, are better now?

Not meant to be confrontational... I just KNOW that things are not ANY better.

Reread: I never said things are better. I said the opposite. Things are worse. We are in a downturn. This is not due to Hipolito. In fact, things should be worse than they are in the DR.

You know where you are. You don't know where your government is taking you. The analysts don't need to be told and don't care to be told. They look at the data and look at the plan. They look at the history, and make a judgement. Their judgement is positive. The "idiots" are not capable of making that judgement by living their day-to-day lives.

By the way, anybody who drives slower than me is an idiot. Anybody who drives faster is a maniac. So don't be offended by my offensive choice of words.

 

[mondongo]

Lets first call on some facts. You are the one that mentioned Oil Prices as causing inflation...well, let's see how well your predictor has worked in the past. My data was retrieved from the DR central bank and from my futures broker lind-waldock.com. Here it goes:

1996 Oil increases by 31%
DR inflation drops by 46%
--> Almost perfect negative correlation

1997
January 1997 = US$25 december 1997 = US$17....Oil prices fell 32%
DR inflation 1997 doubled from under 4% in 1996 to over 8% in 1997.
--> Negative correlation in 1997.


1998
Oil dropped from about US$15 to about US$12....20% drop.
DR inflation in 1998: dropped to just under 8%..essentially unchanged.
--> Zero correlation in 1998


1999 Oil increases from US$12 to about US$28...233% increase.
DR 1999 inflation: dropped to about 5%.
--> Negative correlation in 1999

2000 Oil increases about 8%
DR 2000 inflation: nearly doubles to over 9%
--> Positive but disproportionate correlation in 2000

2001 Oil Prices fall by 35%
DR 2001 inflation decreases by 50%
--> Almost perfect positive correlation in 2001

Conclusion: irrespective of what you and I might think of the definition of inflation, in the real world there ZERO predictable correlation between the oil prices and DR inflation. Thats not a coincidence, Jim. I will explain it to you in my next post.

Edited to add: Jim, your posts are too damn long.

 

[Jim Hinsch]

It seems the consensus disagrees, but I've given you that inflation is not the correct term. I restate: increases in oil prices causes a general increase in the price of goods and services.

Pay more for oil, things will cost more. Why not argue the point, which you obviously missed.

You also forget that there is a lag. High oil prices tomorrow won't cause higher cost of goods tommorrow. You have to factor in the time it takes for business to make their adjustment all the way down the chain. It could be many months. And those numbers you report are not likely the cost of goods and services, but the change in the cost of goods and services. Oil goes up 50%, prices go up some percent, but if they go up and hold steady, the reporter is legit in saying inflation is zero. Would your average citizen all that zero inflation? It depends on the time period for which the inflation is measured. If it is measured over the time of the price increase, inflation was not zero.

Remember when the price of gasoline fell back to market rates? Prices for gas went up, and soon after, so did the price of everything. Real world.

Here's a consenus. Search Google using ""oil prices do not cause inflation" and again using ""oil prices cause inflation". Causes wins 8 to 2. I know it is a misuse of the word in the pure sense. But in the practical knowledge of this board, inflation simply refers to higher prices.

Back to the point. People blame Hipolito's borrowing spree for higher prices and they are wrong.

 

[Jim Hinsch]

.

Edited to add: Jim, your posts are too damn long.

I've got to work on that.

Hey everybody, Mondongo caught me in a mistake. I used inflation to mean higher prices. I admit and submit. Now address the real issue.

 

[mondongo]

intentionally left blank

 

[El Jefe]

Just a quick comment on the Games

I hope everything turns out right for the Games. It could be a tremendous publicity coup if they work. The one nice thing about them is that there is a built in audience that will attend/watch the Games simply because of they are sports. Unlike the World's Fair that Trujillo threw and no one came. I really hope that the DR tourism folks will come up with some really impressive advertising and not just rely on the TV commentators to promote the country. They should take a lesson from Jamaica on advertising.

 

[WebDev]

Hey everybody, Mondongo caught me in a mistake. I used inflation to mean higher prices. I admit and submit. Now address the real issue.

Finaly you admit making a mistake!!!
What is next, admit that is the paint fault? You loosing-it Jim.
WebDev

 

[arturo]

I don't even remember which post contained the statement that "borrowing is a form of foreign investment," (I mostly agree with that) and "Leonel did the same thing." I mostly disagree with that Leonel statement because if you look at the interest rates involved (and no, we can't really blame Hipolito for prevailing interest rates) the borrowing doesn't seem so similar. Moreover, the cumulative effect of adding incremental debt to the borrowing that took place during the Leonel years whilst criticizing the original borrowing policies strikes me as rather cynical and hypocritical. The long term damage will be extensive. My opinion of Hipolito is that he is a disaster similar to Hurricane George, from which the country make well take longer to recover.

 

[Jim Hinsch]

Ah, but politics is politics. If one were to do exactly what the people want (a hand out), things would be worse. Hipolito can afford to dig deeper. He has the benefit of an economy that grew rapidly prior to his term. That's why the analysts are OK with it. He costs more, but there is more money available.

I sound like a supporter of Hipolito. I'm not. I just support certain actions and admire the growth I've seen in him. As far as stupid ideas go, I need to look no further than my own back yard back in the USA.

Robert said it very well. It's not so much Hipolito as it is his team that is the problem. They are poor administrators.

 

[Pavan]

Getting back to corruption which in it's basic form is known as bribery....

It does not have to be that you paid 10 dollars at the airport to get 15 bags in full of goodies...it is also sexual favours, a good deal on a trip for the family to Disney Land...and little European excursion.

Even Trujillo looked after families where the daughters were "Committed" to him. That is also corruption.