Putting a trivial band-aid over the substantial economic problems of the Isle of Man is a bad idea. We must address the underlying causes, not just the symptoms.
Further, Isle of Man news outlets have reported that Tynwald will be conducting “a behind closed doors discussion on what to do to help people on our island.” Secret meetings are a bad process to use to debate important policy issues in a democracy.
Address the cause, not the symptoms
The famous saying is that the best time to plant a tree is ten years ago. The second best time is now. Of course, the Isle of Man Government should have adopted many of the positive and proactive policies proposed by the Manx TaxPayers’ Alliance earlier this year to combat the cost of living crisis instead of their silly ‘wait and see‘ inaction – but it is better to address the root cause of the cost of living crisis now than later.
The current cost of living crisis is caused by a shortage of fuel, a shortage of goods, and a shortage of labour. Pumping more money into the economy to subsidise demand does not address any of these problems.
If we have a cost of living and inflation crisis caused by constrained supply (constrained supply of fuel, constrained supply of labour, constrained supply of goods) then we are likely to find better and more effective solutions by addressing the productivity constraints, rather than just pumping more money into the economy to fund increased demand.
Increasing government spending to try to cover up the higher costs is a bad idea in an economy with low inflation; it’s a terrible idea in an economy already experiencing high inflation: We can’t just keep spending more money and pretending that our economy has infinite capacity to supply when fuel, labour and goods are constrained.
Increased government spending was plausible to address in the global financial crisis of the late 2000s, because at that time, we had a fall in global demand. Here, we have a fall in global supply. Thus, the best policy solutions are likely to be very different, and we need to find policy answers around improving productivity by addressing the supply constraints of fuel, goods and labour.
Secret meetings of Tynwald are bad
While citizens have a right to privacy, Governments have an obligation to provide transparency. Secretive meetings of Tynwald are bad because they reduce the accountability of politicians, who are supposed to be accountable to the public. Of course there are plausible arguments for Governments to keep some secrets around national security and out of respect for citizen privacy, but policy debates should be conducted in public.