The mind of a banker
Posted: 16/03/2007 - 08:49 AM
Author:
“Mr. Fonseca has been talking too fast for most of us. He has to slow it down so that we beasts of burden can understand the bills we have to pay. If he is unable to control his supersonic behaviour, well then, constitutionally speaking, we just have to hold on as tight as we can, and pray.
“Those representatives we have elected who have been named to Cabinet, seem unable to do anything themselves. Every now and then they themselves have to go traipsing, cap in hand, into Mr. Fonseca’s office to assure the receipt of the moneys publicly budgeted to their Ministries. They tell us they can’t do anything about the present state of affairs because the Minister of Finance functions with the blessing of the Prime Minister.
“Well, we, the newspaper, can do nothing except to say what we believe the people of Belize are thinking. Mr. Fonseca is certainly a man of extraordinary abilities. One wonders why he is not in the private sector, where no holds are barred. But he is, in the private sector, that is, except that the dice he rolls are backed by public moneys. This is the rub.
“If you have to feel trepidation about discussing your own money with a man, then you are in bad shape. It means your money is, for all intents and purposes, his money. And that means you have no rights, and power to the people then becomes a masquerade.”
- Amandala editorial, April 11, 2004.
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On Friday, March 9, and Tuesday, March 13, 2007, Belizeans got an opportunity to see into the minds of two bankers, courtesy of the Development Finance Corporation commission of inquiry. PUP bankers, Ralph Fonseca and Glenn Godfrey, have used political power to convince those whose money they are abusing, that they are for the people. In fact, it may be that Godfrey and Fonseca have actually convinced themselves of such a fantasy, because Mr. Godfrey said as much on Tuesday morning. He wanted to help the people.
Classically, a banker’s job is to take care of other people’s money. Banks are supposed to be secure places where people’s savings and valuables are stored. A banker pays you a percentage for the use of your money, let’s say 7 percent, and then he lends that same money to someone else who will pay him, the banker, say 12 percent, for money which is not his, technically speaking. The 5 percent difference in interest is what the banker uses to pay himself, his employees, his bills and declare as his profits.
The rest of us humble citizens sweat in various kinds of work to pay our bills. We give the bankers any surplus we generate, because the banks are supposed to be the safest place to store your money. Most of us are not aware that the money we save in banks, is almost never inside the banks themselves. Our moneys are usually being loaned out to people who are supposed to pay back the bankers, both the principal loaned and the interest payments which will create the banker’s profits.
In the marketplace, the key to banking success is trust and confidence on the part of the depositor. If all the depositors lost trust and confidence in a bank all at once, and went to that bank all at the same time to take out their money, that bank would crash, because, to repeat, the bank will have very little of your money available within the bank at any given time.
Ralph Fonseca and Glenn Godfrey are not two individuals as would have inspired overwhelming trust and confidence in people who want to give their money to someone for safekeeping, so they entered politics under the banner of the most successful political party in Belize’s history. Classmates in the 1966 class of St. John’s College, Ralph and Glenn had the distinct advantage of being favorites of PUP icon, Rt. Hon. George Price, from the time of their childhood. So Fonseca and Godfrey rose to the very top of the party and the government. In Cabinet they discovered a banker’s dream – an unlimited stash of tax moneys which they could use and for which they did not have to answer with personal liability. In fact, it was better than that. When they used it and did not want to pay it back, they used a sovereign government guarantee to get more tax moneys to pay the loans for themselves and their cronies. As slick politicians, they called this “growth economics.”
This growth economics worked very well for Fonseca and Godfrey until the people of Belize became aware of what was happening at the Social Security Board in July of the year 2004. Remember that in early April of 2004, presented with facts which alarmed us, this newspaper wrote an editorial which was a siren of warning – PUBLIC FINANCES, PRIVATE DOMAIN.
That April 2004 editorial was a burdensome exercise, because, at that time, we still considered ourselves in alliance with the ruling PUP. More than that, the publisher of this newspaper had an enduring friendship with the man who had the ultimate and constitutional responsibility for the public finances of Belize – the Prime Minister, the Right Honorable Said W. Musa.
As it is today, the Prime Minister would do the nation of Belize well by calling general elections as soon as possible. In 1998, we saw that the UDP Prime Minister, Rt. Hon. Manuel Esquivel, felt that he would spite the nation of Belize by taking his term past the five-year limit. The reaction of Belize’s voters was 26-3 for the PUP. Esquivel was so distressed, he resigned from politics!
Why would Prime Minister Musa continue an administration which has messed up so badly with public funds? It is because he is hoping and praying for a political miracle. They say hope is a thing which springs eternal. But as Mr. Musa waits for a miracle, the anger of the Belizean people is growing. The size of the miracle, in other words, has to be that much greater with every passing day.
Power to the people.
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