Last week, the Nationalist Party convened a hasty press conference riding roughshod over a statement issued by the Chamber of SMEs. The press conference outlined how difficult it has become for the Labour government to control inflation because one of the PL MEPs asked the EU Commission to look into the practices of the restricted number of Maltese importers and their market dominance within the internal market. During the said press-conference, the Opposition MPs tried to score some political points by associating my name to the statement issued by the Chamber of SMEs. Well, it had nothing to do. Let us leave aside the opposition’s call ahem to control inflation. However, thank you for mentioning me, because serendipitously, I got hold of some important information.
At the outset, I thought they were at a mock press session prior to the live press conference because I could not understand the economic arguments. At some point I truly thought they were kidding, as the economic arguments were totally inconsistent. However, I realised that it was a live press conference. Regrettably, both members of parliament were truly believing what they were saying. Certainly, I was about to reply publicly when they mentioned my name, as a reference to my online vlog which dates back to July. In the same vlog, I tried to explain an ECB report about the attribution of inflation. You know, the decision to mention me was to just mix everyone’s name into the pudding, so perhaps something sticks to someone’s ears. Undoubtedly, lies spread faster than the truth. Surely, what I learned through my unofficial political journey is to not rush.
Nevertheless, I sniffed that something sinister was brewing. Plainly, I realised that there was a strategy behind this press-conference and the reference to my name, especially when I profiled the members of the Chamber of SMEs. Coincidentally, on the same day I was at an event organised by the Water Services Corporation to celebrate the Green Bonds initiative, and several members of the Chamber of SMEs were present for the event. Frankly, I truly appreciated the invitation, and I was glad to attend the event because it marked a new era for the Maltese financial market, that, of opening the green bonds market for the private sector.
The arduous process was primarily to change the Malta Stock Exchange byelaws. Thumbs up to Minister Miriam Dalli as well as the CEO of the WSC, for taking this initiative and to work closely with the Malta Stock Exchange, as well as the Chamber of SMEs. Personally, I respect most of the members of the Chamber of SMEs for their professionality. However, my advice to the Chamber of SMEs is to not let anyone use them for the political advantage of others, who are directly involved in their campaign, as ultimately, they have to work with both sides. The individual interests are different from the collective raison d’etre of the Chamber. They must preserve their independence.
Back to the reference to my online vlog, in my view, I decided to shy away from replying directly and went back to my laptop to watch July’s uploads. The reference related to the interpretation of an ECB report, where it stated that almost 50% of inflation was attributed to profits of large corporations, who were able to pass it onto consumers by increasing prices. In economics, big corporations test whether consumers are willing and able to pay a higher price, especially if they have a dominant position irrespective whether they are regulated. In micro-economics we use what is called elasticity of demand and supply.
The report stated that 50% of inflation was driven by large corporation because they were not ready to reduce their profits. Consequently, prices were easily set higher because the elasticity of demand seemed to be more inelastic in the short run until markets and economic patters adjusted. To break it down, when this happens, it would mean that in the short run large corporations leverage their price setting. As a result, small and medium size enterprises, as well as micro enterprise and self-employed, end up as price takers including passing it to the end consumers. They end up as front-line representatives and resellers of the same products albeit with higher prices. That’s what I actually explained.
Lately, it seems that everyone became an economist. You hear so many dissimilar and inconsistent economic arguments, that Keynes and von Hayek must be rolling in their graves. Beyond, the economic arguments, we are forced to listen to stupid and flawed political arguments by presumptuous politicians, who were sadly foisted on us without proper political training, especially diplomatic coaching.
Every day we have to listen to an irrelevant story and a different gossip. They wake up one morning and position themselves as professionals. They excel in topics – I hope the editor allows me to write this – which I have termed in my banters as the House of Kardashian politics. At times it is like watching the comedy show little Britain. Sadly, I am referring to trivial stories that are reported in the media and a few recycled politicians make it their own story by augmenting it to a higher political level. You see them dispatched to the media parroting what they give them before any appearance.
Behind the scenes I envisage them saying, come let us convene a press conference, to expose their private life. Alas, one of the major political parties pushed Malta’s politics to the House of Kardashian political arguments. Now, even academics on X (former Twitter) joined the chorus. Frankly, I am referring to gossipmongers who must not call themselves politicians. The political discourse is one of, oh, look who messaged who, and the restaurants where politicians wine and dine. It is truly sad. Those who bring such political arguments are just doing a disservice to the electorate. It is fostering a choking sense of despair.
No wonder the mistrust in some politicians. People are fed up with such political narratives. Honestly, we do not care what designer bags our politicians wear, or for what it takes which aesthetic clinics our politicians shape their eyebrows. It is their private life. What we want to listen to is proper political arguments, without descending so low, that to win a political argument a politician resorts to such puerile discourse akin to Hello Magazine. It means they have no technical arguments and economic vision, beyond the monogram shapes of designer bags. And please when a politician starts discussing private lives just tag them as a Kardashian member of parliament, until it embarrasses them to the point that they avoid descending to such stupid and flawed political arguments.
Clint Azzopardi Flores is an economist