THIS informal business on the Pan-American Highway survives where some of the nearby ones have not. Do we send in cops and a demolition crew because it’s on the public right-of-way? Instead of insisting that the rich pay their share of taxes, do we make them hire lawyers and accountants, make them get a tax reporting register and otherwise impose expenses and taxes that put them out of business? What’s realistic in our culture and economy, what alternatives are people given and who can pay how much become crucial public policy matters. Archive photo by Eric Jackson.
Consider the hole into which Panama has fallen
In July of 2019 Nito Cortizo took the reins of government in a country that was in serious economic trouble. Then, early the next year, the COVID epidemic hit us.
Those small businesses that account for most of the formal jobs in this country? More than half of the smaller formal businesses folded during the pandemic.
So, what do you do when out of a formal job, with few prospects for a stable and acceptable new one? You find a source of something to buy and sell, or some service to render, and generally on foot, in one’s home or in some public space join the informal economy. MOST working Panamanians are in the informal economy, actually. It was almost a majority before COVID hit us, it’s definitely a majority now, but the government figures are not precise. A business has to be formal, with lawyers and CPAs hired to file papers with the government on a regular basis, to be counted or to count for much. Informal businesses are not allowed to have bank accounts or post office boxes in their names.
Panamanian tax law has sort of adjusted to this reality. People who earn less than about $1000 a month don’t have to file or pay income taxes, or keep business records.
If ever the informal economy should prosper, the government is called upon to step in. Small formal businesses in the city might reasonably complain that informal vendors are taking the sidewalks in front of their shops. People with personal stakes in reducing competition within the informal sectors, and those with no financial state but old hatreds, will insist upon occasional sweeps to drive the foreigners out of informal businesses in Panama. Every now and then the police move in on Panamanian-owned micro-businesses that are set up on the rights-of-way along the roads or on public sidewalks – for whatever “real reason.”
Above all this on the economic scale, all sorts of middle class people, especially those practicing the learned professions on their own accounts, are partially or completely off of the government tax collectors’ radar. And then “the families” who are the donor bases for most of the politicians and are sometimes the politicians themselves – they have set up the system so that they pay relatively little in taxes, and they are the ones who “qualify” for the juiciest government subsidies.
Now Panama faces a monumental debt crisis, some of it run up due to the epidemic and then the global food inflation flowing from the Ukraine War – not really this PRD government’s fault. We can, however, legitimately argue about emergency steps taken or not taken, or insist that certain acts of corruption that were waved in our faces by public officials during the troubles be punished in a reckoning to come.
We should understand that shoddy construction, questionable deals and so on may properly lead to penalties for future reference, but for the most part that money is gone. We are not going to be able to dig ourselves out of the debt hole assigning and collecting debts for such stuff. Maybe we might do so to some small amount at the margins. Perhaps there can be a measure of justice for a population tired of all the abuses and double standards, but class war passions, no matter how justified, can grow out of control on either side or on both sides, to hardly anybody’s benefit.
The numbers vary with the accounting and accountant, but Panama is more than $47 billion in public debt.
Do we sell off part of the country as a foreign mining colony? Do we sell off Panamanian children into slavery, or that special sort of slavery, prostitution? Do we cut off food and health care to the elderly, and leave those without family resources to just die and quit bothering us? We saw some of those questions, and the spirit of all of them, answered in the protest movements of the past two years. We have our PRD, business lobby and/or mining company trolls screeching about “terrorist” protesters but no matter – most Panamanians have a much more refined sense of dignity than to fall for that stuff.
But still, we have this huge debt. The drought and new competition are cutting into our canal revenues. Mining hustler Richard Fifer is in prison with a toxic hole left behind, First Quantum is being run off, leaving an ever larger and more toxic hole behind. We will have to defend against lawsuits, and sue for damages to Panama, but litigation doesn’t make a proper economic plan for this or any other country.
The next government will have to take some austerity measures. This government is about to leave office, it’s election campaign season and bitter pills will be kept carefully hidden away by those who are looking for votes. ACTUALLY, the PRD caucus in the National Assembly is proposing to make the eventual pills even more distasteful by appropriating more money for thinly veiled campaign spending, and running up future debts by moves like creating more political entities to be funded by the Republic of Panama and staffed by the usual patronage seekers.
There will be many more candidates offering bags of groceries in exchange for votes than there will be candidates talking frankly about responses to the debt. But one of the first strainers in our selection process is to filter out the candidates who speak dishonestly about the debt and its severity. Then, for those who admit that there is a problem, there is the reality test of proposed solutions. Separate out the charlatans and the extremists with that.
There actually are crooks running. Scratch those off the lists of possibilities, but don’t fall into this “They’re all a bunch of crooks so it really doesn’t matter” mode of thinking. It matters. Panama matters. We have a big problem, and let sincere citizens from all walks of life, all philosophies and all stations on the social and economic spectra have a civil and adult discussion about this.
One take on Trump’s road show, not the only one that makes this point. Commentary by Ring of Fire.
A symptom of the problem
An $83.3 million judgment for taunting and defaming a woman whom he sexually assaulted, talking gibberish on the campaign trail, and still they cheer him. What MAGA is all about is Donald Trump validating the primitive hatreds of perhaps one-third of Americans, a set of notions that a large majority of Americans reject as repugnant or at least ridiculous.
It’s no use arguing with people like that. They must be defeated if the United States is to remain a great nation. That doesn’t solve all of the country’s problems, but it’s a necessary step toward addressing many other serious issues.
Graphic posted on Twitter by DonkConnects @donkoclock.
Bear in mind…
Choose your friends carefully. Your enemies will choose you.
The young people of my country have the unavoidable duty to build a truly sovereign homeland. For this they will need courage and this courage cannot be acquired in books nor can it be borrowed. Each one has to find it in his or her own heart.
I am definitely a Slav, but I hope a European first.
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