THE ECONOMICS OF CLUELESSNESS

This week’s main news has nothing to do with the jockeying for the Speaker’s post in Parliament but with the government’s perpetual economic floundering. What needs to be done is pretty obvious. As I stated elsewhere way in back 1994, this country needs to radically rethink the role of government, cut it to the bone (or at least back to what it can really afford), and use the money thus saved to revamp the tax structure in such a way that it is worthwhile to provide (and invest in providing) goods and services for profit in the light of day, not in the shadows. To spell it out, this means closing down half the government starting with the sectoral ministries, because if you have really private and profitable machine building, you just don’t need a Ministry of Machine Building and neither the government nor the society called on to pay for it can afford it.

Consider on top of that the fact that in China, everybody’s socialist success story, an estimated half of all state-owned enterprises lose money. I doubt Ukraine’s state sector is any better (probably a lot worse) off. Well, let’s bring in the bean counters from, say, Price-Waterhouse to identify the third most hopeless enterprises and shut ‘em down. Paying the workers unemployment insurance would be much cheaper than paying the utility bills of structures which are not producing anything anyway.

And one last candidate for the pink slip, Deputy Premier for the Economy Serhiy Tyhypko. Maybe he can run a bank, but as this week’s materials show, he sure can’t run the economy. The main political-economic tragedy of the last year is that Viktor Pynzennyk, who at least understood something about this problem, is out, and the man who represents everything wrong is in.