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For An Even Closer Shave, Get A Sharper Blade!

2 November 2015

If you’ve been listening to the Fed-speak over the past few months, then you might be forgiven for thinking that some sort of Financial Apocalypse has been hanging around, like some Cape Flats skollie-gangster, just waiting for you to give the wrong signal, or just give the wrong skeef look, and then : Wham!  The next thing you know, all hell breaks loose and you find yourself caught in the middle of some s#*t-storm.  Maybe we should just invite Janet Yellen over to Cape Town and she’ll get such a skrik when she sees the #FeesMustFall students demonstrating that before you know it she has headed off the #RatesMustRise campaign spearheaded by @BillGross and hiked by 2%? Ah, well, we can all dream can’t we?

Except sometimes those dreams are actually nightmares.  Perhaps that could aptly sum up what Blade Nzimande has been going through over the past few weeks?   There he was, walking along, dreaming of his best buddy, Johnny, in hues of black and blue, stomping all over those red overalls, and…Wham! Suddenly, it was he who was being trampled on, shredded and cut to pieces with his own knife.  Ahh, Blade, commiserations…But it’s not the first time that someone has been hoisted by their own petard.  The petard of course being that device that revolutionaries of the past used to blow open the doors of castles, and maybe even gates of parliaments?  We know you are the Minister with Higher Education, but you know, you really should consult with your colleague, Minister of Justice Michael Masutha.  He will tell you certainly that the wheels of justice turns v-e-r-y slowly…perhaps not quite as slowly as in fellow colleague’s Malusi Gigaba’s Department of Home Affairs, where they seem to operate under the motto “Ïf it ain’t broken, you aren’t working hard enough.”  But still, the lesson is that when those still-to-be educated hordes are breaking down the doors, you should pay attention.

The one thing we can learn then from the events over the past weeks is that politicians and central bankers are out of touch with reality.  Even when the so-called barbarians are at the gates, they still won’t get it, and we should not rely on them to find creative ways to solve society’s ills.  Perhaps though we should make an exception for our own SARB Governor, Lesetja Kganyago, who has been brave enough recently to spell out for government the Nightmare on Church Square movie that is going to play out.  We know it’s Halloween time, so maybe it was his version of Trick or Treating his employer by saying : “South Africa’s growth outlook is extremely fragile. Investment plans could be shelved or delayed because of a lack of guarantee of electricity supply.  These constraints had contributed to the decline in our estimate of potential output growth.”  He should be applauded for such bold speech and for laying the blame precisely where it should be.

Increasingly though, the solutions to the questions of our times will come from the private sector and mainstream society, and not from the Department of Whatever. We live in an Age of Disruption, and there are a lot of very smart people out there who are looking to bypass big government altogether.  In the same way, we have seen the rise of what is called “shadow-banking”, where the banking system becomes disintermediated. But never forget that when politicians and bankers see themselves becoming irrelevant they will find ways to regulate themselves back into relevance.  Witness then Blade Nzimande’s response to being outplayed by the students : “Our country, I would like to argue, has enough money to support free higher education for the poor, but the problem is that more resources are in the private sector than in the government fiscus. My own considered view is that government must have the political will to tax the rich and the wealthy to fund higher education. None of us must develop cold feet about the necessity of taxing the rich to fund our children.” Really? Is that it?  Just tax the rich.  If it is so simple then why haven’t you already done it?  Perhaps we shall get some clues when we read that 2012 Report that you’ve been hiding for the last 3 years?  It reminds us then of that clever man Albert Einstein who said the following :

“The difference between stupidity and genius is that genius has its limits.”