The Street Strategist is a popular column in Businessworld that appears weekly on Thursdays. It has gained a following among business executives, economists, investors, journalists, politicians, activists, and riff raff like myself. People like Senator Serge Osmena and Labor Secretary Art Brion ask for copies of its latest issues. CEOs of Philippine corporations tell their secretaries to compile the articles. Former NEDA secretaries-general Felipe Medalla and Dante Canlas are forced to respond to its points. What's the Street Strategist all about?
Well, the Street Strategist is unlike any other column. It is not a preachy screed like what that leftist bore Conrado de Quiros is fond of writing. It is rib-ticklingly, can't-catch-my-breath, there-are-tears-in-my-eyes, I'm-wetting-my-pants funny. (Ok, I didn't quite wet-my-pants, but you get the drift). It is written by Thaddeus Bentulan. I know Thaddeus. He's a friend of mine from college. He was always a funny guy, and very very smart. His fund of knowledge is encyclopedic. I used to compete with him in quiz bowls and he was always a formidable opponent. He's the kind of guy who wins TV game shows like Who Wants to be a Millionaire. He is a genius.
Fast forward X years later and here I am critiquing his Businessworld column.
The curious thing about Thaddeus' column is that its topics are not the typical material used for comedy. You won't read about the foibles of Kris Aquino here. It is not an entertainment column. Its subjects are in fact quite dull: accounting, bank runs, bonds, contracts, debit and credit, minimum wage, and - for the life of me - ice cubes. This kind of material typically elicits yawns from most normal people. You have to be so into bookkeeping or refrigeration for this stuff to appeal to you. Average newspaper readers like myself usually head for the sports, entertainment, comics, or classified ads section first. Only when there's nothing else to read there do we stray into the business section.
But the Street Strategist is different, and this is testament to Thaddeus' brilliance. He has managed to turn boring topics into eye candy. He has successfully sexed up such things as "debit and credit", "contracts", and "ice cubes" to the point of winning fawning accolades from female admirers from around the world. At least that's what the Street Strategist himself says, and I have no reason to doubt it since he has published these fan mail on Businessworld. Surely, the man gets hate mail too (NEDA economist Felipe Medalla wrote that he should get psychiatric treatment), but this kind of reaction only underscores the fact that the Street Strategist has gained enough of a following among influential circles to be viewed as a growing threat that needs to be swatted.
I'm writing about this since I was recently drawn into an online discussion concerning one of Thaddeus' columns. You see, I am a lurker in his online discussion group. He had invited me to join this group about a year ago but I never participated in it because I was then too busy reviewing for my recertification exam in medicine that we internists are required to take every 10 years. Anyway, I've since passed the exam and that freed up my schedule. So I went back to his group and checked the discussions they've had over the past year.
I learned that the Street Strategist wrote a stunning 33 week series of articles in Businessworld in 2005 on Hyperwage Theory where he laid out his proposal to cure poverty in the Philippines and the rest of the Third World in one stroke. It was a very ambitious piece. It claimed to supplant the entrenched theories of neo-classical economics and Keynesianism on which modern capitalism is anchored. It was a scathing condemnation of the economic policies promoted by the World Bank. But it was written in a tongue-in-cheek sort of way that it made me wonder whether Thaddeus was merely pulling everbody's legs. Imagine this non-economist (Thaddeus has a degree in engineering, not economics) purporting to overturn the received wisdom of John Maynard Keynes, Milton Friedman, and the like - and demanding a Nobel Prize for it! Yet he had the econometric data and airtight logic to back him up.
Naturally, the series generated a lot of flak from professional economists whose thinking is mostly in line with World Bank prescriptions. This is the same piece which earned that snarky "go see a psychiatrist" remark from Felipe Medalla.
It turns out that the Street Strategist had sent me a PDF copy of Hyperwage Theory (which is now a book, by the way) last year which I never read because of my tight schedule. Last weekend, I sat down and plowed through the entire 300 or so page opus. It was very entertaining, to say the least. It was sexed-up economics - a far cry from what I remember my college Econ 1 used to be! Reading it was like reading an econ textbook where every other page contained photos of sexy nude women. A real page turner.
Thaddeus reviewed basic econ concepts like gross domestic product (GDP) and how it is calculated. He explained that the major driver of GDP is consumption. He demonstrated how the effect of consumption is magnified throughout the economy by way of the Keynesian multiplier, citing Gaussian geometric progression as the underlying principle of this. The idea is that P1 of consumption adds P5 to the GDP. His point is that if the Philippine economy is to grow, Filipinos must consume more goods and services. There are graphs and formulas to support his presentation.
Sounds good so far. The only problem is, Filipinos don't have the money to buy these goods and services. The Street Strategist's solution: give them the money. Hence hyperwage. Hyper as in "jet boosters". Thaddeus recommends boosting the minimum wage to P20,000 a month. That's the wage that he wants domestic helpers to get paid. He uses domestic helpers as his threshold occupation since he thinks they represent the poorest of the poor. Thus, by giving them P20,000 a month, he automatically boosts everyone else's wages. Why P20,000? He bases this on the "global market price of labor" which is equivalent to the US federal minimum wage of $7.50 per hour.
Filipino domestic helpers will now be earning close to American wages. They will be able to afford 5 cellphones instead of one. This will start a chain reaction that stimulates economic growth. The increased purchasing power will then reverse many societal problems. For instance, the brain drain will be stopped. Filipino plastic surgeons who've migrated to the US will now make a U turn back to the Philippines where many domestic helpers - now flush with cash - will be waiting to get their nose lifts and breast implants. Ok, the author didn't really say that, I made it up. But his general implication is clear.
Domestic helpers with brand new boobs. This will stimulate the limp Philippine economy. Who's going to object to that? It turns out, the professional economists do. They are worried that the excessive stimulation will lead to hyperinflation. Of the economy, that is.
In the next installment, I will discuss how the Street Strategist addresses the problem of hyperinflation.
