It Is Never Too Late to Do Right

Op-Ed

People usually ignore economy until it goes wrong. We start fretting about it only at times of runaway inflation, rampant unemployment, arrested growth, frightening recession, financial crisis, supply and demand falling out of harmony, or gasoline prices and interest rates going through the roof. Otherwise, we feel warm and comfortable.

The politicians running for office get scared if something goes wrong with the country’s economy during their electoral campaigns because their vulnerability is directly proportional to economically-driven public moods and attitudes. When it comes to fiscal notions, many of us non-economists, come off as ignorant. For example, when we hear on the radio or television about the government’s debt, we almost want to laugh it off because we are never aware of its actual meaning, having no idea that the governmental indebtedness might be worse for the nation’s future than our own being in the red. The currency exchange rate is another example of a person’s lack of knowledge in matters financial: when national currency goes up or down, we all gape ignorantly at the currency boards, having no idea who is doing it to us or why; our thoughts are on the prices of various commodities: we only know that they go up, and never down, but have no clue of the mechanism of price increases. We then just put up with the recurring facts of price increase. The same with inflation, and this is something that never leaves us in peace to enjoy life to a reasonable extent.

And the worst part of the whole thing is that our economic ‘commentariat’, so to speak, uses arcane language to explain the ongoing processes, making us look even more stupid than we actually are.

I am not an economist and I feel for those like me: we want to hear in plain language what we come across on a regular basis as part of our daily lives. Our general understanding is that saving is good, but what we don’t realize is that saving and not borrowing from the banking system is an anomaly that forces interest rates to drop drastically, meaning spending becomes almost nonexistent. And if people don’t spend whatever they’ve earned or borrowed, life stops developing.

Anything overdone is bad: too much saving, too much borrowing, too much spending. All of this done moderately and regularly might create a substantial prerequisite for development without fits and starts. I did not know that that my manner of borrowing, spending and saving earnings made that much difference. So I applied to pertinent literature to learn how to navigate the deep and murky waters called economics. Not easy! Having shuffled through the economic truths of life, I have reinvented myself as a living participant in the processes that are shaping my wellbeing with newly detected opportunities. The conventional wisdom is to honor the importance of the compatibility between politics and economy. Even then, in the weird era of socialism, we were taught that a bad political decision can lead to bad economic consequences, and vice versa, with incorrectly applied politics opening erroneous economic prospects.

The economy will always need to take the political test, and its failure may end in general poverty. The resulting pains are always dealt to us, the people, seeing us suffering the consequences of a mistaken economic decision, made against the wrong political background. Georgia cannot operate independently in a globalized world. Any significant international shock has an impact on our wallets: somebody shoots a rocket in the Middle East and we see the petrol prices going up here in Georgia. So, a little self-imposed briefing on economics might be helpful so as to better predict when and where a threat is coming from.

By Nugzar B. Ruhadze