How to balance a budget

The process of “zero-based budgeting” is familiar to everybody who has ever been involved in starting a private business, and to most people who have bought existing businesses. All it means is, justifying every dollar spent. Right away, you can see why it’s not popular with government bureaucrats.

Every new venture of theirs starts with plenty of cash in hand and with instructions to spend it all. Their job is to provide the authorised service within the authorised budget; it is not to minimise expenditure. For existing government services, each annual budget is based on the preceding year’s expenditure. New expenses are required to be justified, but no existing line-item has to be justified ever again until the end of time. It is presumed to be justified, even when it obviously isn’t justifiable.

Whenever bureaucrats say they have cut back on expenses, they mean they have cut back on budgeted expenses, not actual ones. That’s the way they think. “We have cut expenses 10%! Are we being ruthless, or what?” Well, no, the reduced expenses are below the budget for the current year, but higher than last year’s actual. “Government accounting” is a different beast from real-world accounting. The former doesn’t even have to justify a purpose. That, too, is presumed to be justifiable, however many years or decades since it was originally justified.

Zero-based budgeting would require the closing down of Cayman Airways, for instance. Its formal purpose – bringing tourists to Cayman – could be served by paying foreign carriers a few million a year to guarantee a certain number of flights. Five million dollars, tops. We’d still be saving twenty or thirty million each and every year. Is Cayman Airways worth raising taxes for? Oh, please.

The formal purpose just wastes time and money; yet it goes on and on like the Everyready bunny. The true-but-unacknowledged purpose is to provide free trips to and from Florida for the families of government employees, past employees, friends, friends of friends, old Uncle Tom Cobbleigh and all. It’s simply a variation of the petrol-card scam – free use of the public’s assets.

(The total of all the Cayman Airways subsidies – overt and covert – over the years is about equal to the entire Public Debt. That’s irresponsibility of a very high order, surely.)

All these years, you know – all these years! – Cayman could have been running substantial Budget surpluses, not deficits. Ours is a wickedly rich little Island, and we should have no public debt at all. Our local representatives have acted with all the restraint of kids running wild in a candy store.

Well, now the British FCO has turned up and demanded that our local politicians and bureaucrats balance their budgets. Now, they must actually set aside some of the vast sums of taxes and fees that come in. They must stop borrowing. They must face the reality that Public Revenue may not increase year after year after year, and that new taxes are not the best option.

Let’s hope that the visiting FCO team has enough experience and wisdom to apply the concept of zero-based budgeting to all the state bureaucracies. If they don’t, then increased taxes will strangle our economy, sooner or later.

Some readers of these words may never have heard of zero-based budgeting before now, but it’s not a concept I pulled out of my hat. There are hundreds and hundreds of accountants here on the Island who could tell the FCO how it’s done. Those accountants are almost certainly all in the private sector, but the visiting team shouldn’t hold that against them. Come on, you FCO chaps: think outside the box!

Cyprus and Cayman

So. Creditors of Cyprus’s banks and government have destroyed the country’s Offshore finance sector, and probably the entire economy. Until last week, not everybody in Cayman had even heard of Cyprus, let alone knew it was an Offshore tax-haven. Not a sophisticated tax-haven like Cayman’s is now, but very like Cayman’s used to be thirty or forty years ago.

Could it happen to Cayman tomorrow? Yes it could. We have all the same weaknesses and vulnerabilities.

Could our local commercial banks become so insolvent as to need bailouts by government? Yes. Could our government become so indebted as to need bailouts by Britain? Yes, indeed. That’s why the FCO people are down here at the moment, to stop that happening.

The British government is itself woefully incompetent in the management of its financial affairs. It too – like Cayman’s – suffers from crony-corruption among its politicians and senior Civil Servants. It too has borrowed on the security of its future revenues – revenues that are now projected to fall a long way short of expectations. Our local rulers are not alone in pledging our grandchildren’s incomes as security for irresponsible borrowings – borrowings that finance our bloated civil service and its fat pensions and unlimited lifetime healthcare.

In Cyprus, irresponsible governance required a levy of 10%-40% on individual and corporate bank balances, to assuage the creditors. Could it happen in Cayman?

Yes, it certainly could. All the talk in our government circles is about increasing taxes. The alternative – cutting wasteful government expenditure – receives no serious attention. There is no real intention to go in that direction. Not one single candidate for election has identified one single dollar that could be eliminated from the government budget. From among such cowards will come our next rulers.

But would our elected rulers ever actually steal money from the accounts of bank customers, the way Cyprus’s elected rulers did? Damn right. The legislation and regulations are already in place! You didn’t know that? Think “dormant accounts”. Already, our government has authorised our banks to steal 100% of all accounts they deem “dormant” – inactive for 12 months, I think it is. If that’s not stealing, what is?

To date, the banks have been kind enough to let us re-activate dormant accounts for free. But the law doesn’t say they must. One day they might decide to levy a fee – 10% of the balance? 40%? – and it won’t even need a change in the law. Exactly as happened in Cyprus.

In Cyprus, all Pension Funds will be forced to invest in bonds issued by the government or any of its agencies. Could it happen in Cayman? Could our Pension Funds really be made to buy shares in or lend to Cayman Airways or The Turtle Farm or Pedro’s Castle? Huh. You betcha!

Back in 1987, when the ruling politicians of the day first proposed compulsory pensions, they drafted a law that required all contributions to be handed over to government, for investment by its cronies. I read the draft law; I know what it said. That’s what all the fuss was about with the Chamber of Commerce, back then. (See Confessions of a subversive in this blog’s Archives of last October.) I bet that old draft is being dusted off right now, even as we speak.

The essential difference between Cayman and Cyprus is that we are a British colony and they’re not. As an independent nation, Cyprus had no restraints on its politicians’ and Civil Servants’ incompetence. Britain monitors what our politicians do – belatedly, it’s true, but better late than never – and its FCO team is currently rescuing us from the mess incurred by our two political parties. God save the Queen, eh?

Bullying and bad manners

The difference between bad manners and bullying is only a matter of degree, when you think about it. Speaking on a cellphone during a meeting is bad manners, shouting on one (except in physical isolation) is bullying. Jumping a queue is bad manners; using force to do it is bullying.

Dog-owners who turn a deaf ear to their animals’ incessant barking are ill-mannered yokels; their failure to stop the nuisance crosses the line into bullying when the beasts wake the neighbourhood every morning. Bullying is leaving a person no peaceful option but to let the bully have his way.

I admit to something of an obsession with barking dogs and their irresponsible owners. Some people with Dog City values moved in across the fence from us a few months ago with two yappy yard-dogs. (“Dog City” is one of our Islands’ noisy slums.) Over the road is a dog that barks off and on all night, owned and uncontrolled by yet another bad neighbour. Actually, she is a wonderful neighbour in many ways. But she has a moral blind-spot when it comes to her bullying dogs. Sigh.

(A recent public petition here in Cayman called for a ban on the importation of Paraquat, which is a strong pesticide used by local farmers against weeds. It is the local householder’s weapon of choice against barking dogs. I wouldn’t use it, but I understand why others do. They (those others) should adapt the slogan of America’s pro-gun lobby. They could brandish placards proclaiming, Paraquat doesn’t kill dogs; sleepless neighbours kill dogs.)

Adult bullies have usually picked up the trait during their childhoods – from families, playmates, schools, and now Facebook. Sometimes their DNAs drive them towards psychopathic cruelty. For members of violent criminal gangs, bullying is a necessary means of survival – as is allowing themselves to be bullied, of course.

Legal gangs of one sort or another practise the art of bullying even in some of the more sophisticated of nations. Today’s police and soldiers (all too often dressed like stormtroopers, in their Star Wars regalia), other uniformed state employees, and of course priests... not all of them, of course, but plenty!

For a priest who has been trained to tell congregations who will and won’t go to hell and suffer eternal torment by the agents of God, it is a small step to tell children to take their pants off and submit to the will of God’s earthly agents. Why should we be surprised that it happens so often?

As we know from media reports from the world’s conflict-zones, whole tribes and nations can take on the aggressive behaviour we associate with criminal gangs. Military invasions and occupations are pretty much inevitable, by cultures that tolerate bullying and extreme bad manners in their communities.

Soldiers who, or whose units, commit atrocities naturally feel superior to any pussies who hold them accountable. Bullies feel contempt for their victims. Contempt dehumanises the victims. Thus, drone-pilots feel no compunction about wiping out villages full of civilians, any more than Air Force bombers and field-artillery gunners did in earlier invasions.

Ah well, war crimes are a far cry from shouting on cellphones in public, and barking dogs at midnight! However, the principle is the same. Bullies are bullies, regardless of circumstances. The meek might indeed inherit the earth, as the Christian Bible tells us; but short of Judgment Day it’s the bullies who hold all the title deeds.

1984 revisited – “Airstrip One”

This is my second post called “1984 revisited”. The first, in November 2010, complained about the American TSA’s operations against passengers in US airports, specifically its practice of grooming young children in such a way as to weaken their resistance to sexual predators. The TSA was and remains today the employer most favoured by child-molesters of both sexes, and its hiring policy doesn’t discriminate against them.

Since I discovered that policy, I have forbidden my Norwegian family from flying through the US to or from Cayman. (That is, I forbid them to fly that way if I am paying for the tickets.) Their other options are via Toronto, Havana, Jamaica or Honduras, from either London or Madrid. London-Nassau-Cayman and back costs me $1000 more each time, but protecting my granddaughters’ private parts from paedophiles is well worth the expense, of course.

Now it looks as though London Heathrow may have to be taken off the list. “Airstrip One”, George Orwell’s dismissive name for Britain in his novel “1984” looks set to fall into line with some of the US master’s practices.

Not the child-molesting, I hasten to say. The UK Border Agency tried that a few years ago, but backed down when threatened by the European Court of Human Rights. Not yet the rubber gloves stuck up selected orifices (the gloves are changed twice daily, whether they need it or not), and not yet the cancer-inducing “backscatter” radiation machine.

What the UK Agency is doing (so far) is testing the public’s resistance, and bearing down hard to see what it can get away with. Hastening to catch a connecting flight to Norway the other week, after an 11-hour overnight flight the other week, our nine-year-old granddaughter forgot to surrender her full bottle of water at the checkpoint in the in-transit area.

With insolent and exaggerated slowness, Big Brother’s goons inspected every single item in the whole family’s carry-on luggage, until the departure-time for the connecting flight had passed. Then they let them go. It was a clear victory for the storm-troopers, causing maximum stress with minimal effort. Well done, lads: gallantry medals all round!

This small incident would be nowhere close to the worst that occurs, I’m sure. But it illustrates the sheer banal nastiness that lies in wait for visitors to Airstrip One. One is left to wonder why British officials do that sort of thing. The actual luggage-searchers are jobsworths, of course, but how did their supervisors earn their stripes? Are they made to rip the legs off live frogs to earn their promotions? What will happen when they are given tasers, as is bound to happen sooner or later?

Cold-blooded, unprovoked meanness to defenceless strangers is not natural to most people. It’s not normal behaviour. It’s the kind of behaviour one expects from Blackwater bullies in Afghanistan and Iraq – savages, who have been trained to reject their humanitarian feelings. Why are people like that hired to harass innocent airline passengers? How did they get their jobs ahead of normal, decent, men and women who applied for the jobs? There must be a reason.

An attractive and cheerful nine-year-old with a bottle of water is not fair game, sleepy or not. Humiliating her was an act of petty meanness that is not easily explained. What a sad fate awaits ordinary visitors in transit at Heathrow, if checkpoints require weary children and their weary parents to run the gauntlet. What a sad place England will have become, a few years from now.

Such a waste! (Cayman politics)

There is widespread disenchantment with the Party system in Cayman politics, and nostalgia for the Good Old Days of independent MLAs. Party-politics is blamed for corruption, fiscal mismanagement, low standards of education, and everything in between. In the days before Parties, MLAs were honest and fiscally prudent, their policies produced well-educated school-leavers, and so on and on.

Huh. As if!

Whether in Parties or not, all native-born Caymanian politicians are populists, and always have been. To a man and woman, they decline to identify themselves with anything that could be called a policy, other than protectionism and entitlement for their fellows. They all refuse to espouse any specific fiscal policy. “I will do the best I can”, is their entire electoral platform. Plus, of course, “I will protect you from better educated foreign workers.”

Our government schools are charged with baby-sitting bloodline Caymanians until they are old enough to join the workforce. Thereafter, our Immigration authorities ensure they are given jobs in the private sector if they want, while the Civil Service gives lifetime tenancy to those who can’t hack it in the private sector. My February blog-post “Protection versus Education” sums the situation up pretty well.

As a general statement, any entitlement culture scorns the concept of productivity and responsibility in the workplace. Neither aptitude nor attitude is a factor in populist philosophies, anywhere in the world.

Our electorate traditionally awards victory to candidates whom it trusts to maintain the culture. Some of the candidates are patently honest, and they usually lose gallantly. Some are patently dishonest, and buy their way to positions of influence. “Here, let me lend you $500. You can pay me back after the election if I lose. If I don’t lose, you don’t have to pay me back at all. Deal?” “Deal!” That deal has been common in my 35 years of residence. The old-time political integrity is largely a myth.

Anti-expat sentiment is holding Cayman’s development back in all kinds of ways, and it’s a shame that it is set to continue for the foreseeable future, whoever gets elected this time. In April 2011 I posted, in “An Angered Caymanian”, the text of an abusive email that illustrated the hostility held by a great many of our native-born towards immigrants who (as they see it) have destroyed all that was valued. They brush aside the betrayal of their own political leaders during the past forty years.

Two months from now, there will be 18 MLAs in our Legislature. Every one of them will be a bloodline Caymanian (the FCO insists on that, for its own reasons), and all will have been elected on the promise of protecting “real” Caymanians from competition for jobs. Nobody seriously believes the MLAS will make more than token efforts to educate them instead. Sigh. What can you do?

Some of the candidates are famously xenophobic (or infamously, depending on the viewpoint), and some of them even participated in the ethnic-cleansing** during the hateful retrospective-rollover regime.
**A harsh word, but no other word fits the deportation of thousands of foreigners domiciled here.

So. The replacement of Party hacks without proper policies by independent amateurs without proper policies will not improve the quality of our governance one little bit. Except for the MLAs’ faces, nothing will have changed. Such a waste!

The Hebrews (revisionist history)

 My post The Children of Israel, January 2012, suggested a more plausible origin of the tribe than the Books of Moses did. The famous escape from “the land of Egypt” was more likely a pell-mell desertion of the coast and hinterland of northern Phoenicia than a single dash from the Egypt of modern maps.

Phoenicia was overrun turn and turn about by the armies of Egypt, Hattia (the Hittites) and Assyria for several generations. Moses was either one man or several, who welded the divers groups of refugees into the Taliban of their time – a synthetic tribe united by a fanatical loyalty to its synthetic god.

He, the Moses – the word meant Prince, in Egyptian – invented a new god for the new tribe out of the diversity of their existing gods. (The Christians did the same, in their turn – Christ from Horus, etc.) All tribal gods have to be ruthless, if their tribes are to survive. The periodic slaughters of religious backsliders among The Children were meticulously recorded, as a warning to others who might be tempted. Blind loyalty to the new god was given pride of place in the basic creed. Thou shalt have no other gods before me: believe that, or die.

The first four of The Children’s Ten Commandments set that fearful loyalty in stone. The last six reinforced the tribe’s internal loyalty. None of the Ten were ever intended to apply to outsiders. Tribal priests always endorse murder and mayhem against foreign tribes. Their job-security requires it.

The fictional Israel was chronicled as the human father of the dozen or so groups that comprised the Children and whose Biblical names reflect their respective gods. The names’ origins are lost to us now; after all, they are all transliterations into English from the dialects of the Phoenician parent-language. Anybody at all familiar with language-dialects knows how far any spoken word can vary from its original rendering. Vowels and consonants can become all but unrecognisable, over time.

Yet transliterated names are all we have to work with. Plausibility is our only tool. Take the Hebrews, for instance. It’s pointless explaining their name as something to do with Eber, a Biblical character of whom nothing is known. It’s simple-minded to claim that their name originated with the habiru, a generic term throughout many centuries for peoples similar to modern gypsies.

Much more plausibly: the Hebrews were the inhabitants of a city situated within the land controlled from time to time by the Egyptian empire in northern Phoenicia (now north-western Syria), at the western end of an ancient trade route. That city was Ebla – alternatively Ebuwa, by the same dialectal variation by which the English city of Bristow became Bristol, and back. Consonants w and l are interchangeable in the dialects of most languages. The people of Ebuwa were the Ebuwa-im, and Ebrium was a legendary king.

Between Israel and Abraham (Isuwa-ili and Ebrium/Ebuwa-im) in the chronicles, comes Isaac – whose name contained the first syllable of the same god that named Isuwa. If that were the case, one of the two patriarchal names (Israel and Isaac) would have to go. I think the explanation lies in the name Jacob/Yakov, the more favoured of Isaac’s twin sons. Why was Jacob’s name changed to Israel?

One can’t say exactly how any names were pronounced 3000 years ago in totally different language-families. The only clues we have are their European-Aryan transliterations in Roman script. Without the vowels, there is negligible difference between YKV and YHW(H) – Yakov and Yahw(eh)/ Jehov(ah). Yahweh may have been a late choice for the new tribe’s new god. Naturally, it was the patriarch’s name that would be changed in the greater interests of the tribe. Jacob disappeared from the story.

It remains to wonder what path Abraham’s pre-Hebrew ancestors followed, to get to Ebuwa/Ebla from the mountains of Ararat, after the Flood. I will leave that speculation for another day.

Protection versus Education

There are several earlier posts on this blog criticising education in Cayman – Indentured Servitude in January 2011, Bamboozled and Tribal Jostling the next month, and others later. They deplored the failure of the British FCO and its local agents to educate enough native Caymanians to the point where they could compete on equal terms with expats. Regrettably, nothing has changed.

When it first set up the Cayman tax-haven, did the FCO deliberately keep the locals under-educated and under-developed, in Britain’s national interests? Why did Caymanians never demand a decent education system? Why did they prefer to rely on protectionism, which trapped so many of them below the glass ceilings of their office workplaces?

The Caymanian Protection Law of 1973 may indeed have been well-intentioned, on Britain’s part. When the FCO first planned to move its regional intelligence headquarters from Nassau to Cayman, an Offshore tax-haven was reckoned to be essential camouflage. A basic Offshore tax-haven – which Cayman was, in the beginning – doesn’t need hordes of professional experts; but it does need hordes of office clerks who are literate and educated.

The natives comprised a community of fisher-folk and dirt-farmers, plus a few small-island shopkeepers, and sailors employed on American cargo ships. Except for the sailors, very few of the 8000 Caymanians had any exposure to the world beyond Cayman’s isolated shores, or to the self-discipline required by non-Caymanian employers.

The Law was ostensibly intended to protect the Islanders from exploitation by the foreign employers whom the tax-haven would attract, and to keep the locals “in the loop” until a network of government schools could make good the educational deficiencies. As the skills-deficit shrank, the need for protection would shrink. Within a generation, surely, Caymanians would be able to compete on equal terms with expats in all aspects of commerce. It didn’t quite work out like that.

Employers were obliged (by the Law) to hire Caymanians ahead of expats, and to advance the careers of all Caymanians on their payroll. Well, that was the theory. In practice, the employers and government enforcers all cheated – as noted in Everybody’s Cheating in December 2010. The issuance of indentures for each migrant worker was the responsibility of a Caymanian Protection Board, whose members were appointed by the local politicians. It doesn’t take much imagination to guess what happened next.

In the schools, generic curriculums were adopted that made no allowance for the absence of an underlying culture of education. Native-born children went off to school woefully ill-equipped to absorb the lessons – and with not the slightest incentive to absorb them. After all, Caymanians were a protected species, now, guaranteed first dibs on all jobs for which their Protection Board deemed them qualified. Why did they need to do the homework assigned to them? Huh!

Exposure to overseas experience and the Western work-ethic were dismissed by the Protection Board as worthless. A blog-post of mine in November 2010 compared the resulting attitude to an indigenous cargo-cult that Linda & I encountered during our years in the New Hebrides in the South Pacific.

Filled with Island pride and awash with revenue from the tax-haven, an assertive and expansionist government appointed itself the employer of last resort for Caymanians. For those with even the most trivial and basic of diplomas, government was the employer of first resort. In effect, the FCO in 1973 offered Caymanians a choice between protection and education.

In effect, the Caymanian politicians chose protection and allowed education to wither on the vine. Today, forty years later, the educational standards of the average native Caymanian are dire, according to our local newspaper headlines. Unless the original choice is revisited, they will still be dire forty years from now.

Expats in the family tree

An expat is someone who lives in a foreign country, right? And an immigrant is one who lives in a foreign country until it’s his home and not foreign to him any more. Those are my definitions, and they’ll have to do.

Linda and I have several families of expats and immigrants among our ancestors. She & I began as Australians, and have ourselves been expats in England, Canada, Bahamas, New Hebrides and Cayman. Technically, we morphed into immigrants some time during our 35 years in Cayman, but we’re not sure when. Ever since this blog began, I’ve written about the native-born Caymanian community’s resentment of incomers, and it’s hard to feel at home when you don’t feel welcome.

We were 37 and 38 when we came here. Our son Ross in his 37 years has been an expat in Cayman, England, Australia, Mexico, Guatemala and Norway. For the past nine years he has lived the life of a Norwegian father. If the Government of Norway weren’t so stingy with its citizenship grants, he would be a Norski by now.

Linda’s mother was an English immigrant in Australia; my Barlow grandfather was too, after a stint as an expat in New Zealand. He had two brothers who had earlier died in Madagascar and Queensland, respectively – as expats, not immigrants. Another brother stayed in South Africa after the Boer War, and eventually settled there; his child moved to Zimbabwe and her grandchildren are now immigrants in Texas.

Linda’s sister was an expat in Canada and Bahamas before settling in Monaco as a Permanent Resident. (Monaco doesn’t grant new citizenships.) One of my brothers was an immigrant in Malaysia before returning to Oz. My mother emigrated to England at age 70. We’re an international bunch.

Further up my family tree, off on some of the branches, were English expats in Britain’s Indian Empire. Cousin Arthur was a “political” in the Indian Civil Service (it would be MI6, today) in Calcutta, Persia and Sinkiang for 20 years until the creation of Pakistan and India Bharat. His Uncle Harry had been the official tutor to the son of the Maharaja of one of the smaller Princely States up near the Himalayas. He married a Branson girl from Bombay and died of cholera on his way down from the hills in 1909.

In the 1790s there were an Andrews and an Atkinson ancestor, brothers-in-law, in Trincomalee, Ceylon, in charge of the East India Company’s pearl-fishing fleet. It was a thrill finding the draft transcript of Atkinson’s trial for falsification of accounts to the tune of 31,512 Pagodas (12,000 pounds), in The India Office archives in London. He had diverted some of the pearl-harvest to his own account. In his defence, he claimed that the proceeds were (in these exact words) "an allowable though not an avowed emolument". The court made him pay back half the money, and demoted him to a judge-ship. Oh, the disgrace!

Sherlock Holmes in A Scandal in Bohemia made a passing reference to "the singular tragedy of the Atkinson brothers at Trincomalee." I wish I knew where Conan Doyle got that bit of intelligence from, and why he bothered to mention it.

One day our Norwegian grandchildren are going to ask Linda and me, “What was wrong with you both, that you kept moving, when you were young?” I’ll tell them, “It’s in the blood.” Our 19th-Century British ancestors upped sticks and left for one or more of the Australian colonies – all as free settlers, to the best of our knowledge. I’m not 100% convinced that my Hickeys’ departure from Ireland was voluntary, but I like to give them the benefit of the doubt.

Death of a Tax Haven

A recent post of mine (Lunching with the Stars) harked back to The Good Old Days of the tax-haven in Nassau, Bahamas, and my youthful part in its goings-on in the late 1960s. We lived in Nassau from April 1967 to September 1970, and they were the happiest days of our lives. Plenty of things to do and places to visit, and money to burn.

Paradise on earth. Linda taught Home Economics at the JFK Secondary School, until the kids fell under the influence of the local Black Power movement and began harassing the white teachers. Then, she took the Sylvia Gill secretarial course and worked in a law firm. I spent the whole of our time in Nassau with a major trust-company owned by a consortium of British and Canadian banks.

Early on, we invested 90% of our Canadian savings in a little sports-car – the only new car we have ever owned. We flew off the Island every ten weeks on average, during our whole time; that was a more sensible use of our wages than wasting the money at restaurants and bars. We were so scandalously overpaid that we quit work and headed for the caves of Crete, via Perth, Australia. (My Zorba the Greek post of January 2012 reported how that dream ended.)

The tax-haven began collapsing soon after we left. The long-existing tensions between the black and white native-Bahamian communities were one major factor, the drive for political independence from Britain another. Young white expats tended to be sympathetic to the civil-rights cause of the local blacks, and indeed many of them (the expats) had helped the all-black PLP political party to a wafer-thin victory in the watershed elections of January 1967.

Unfortunately, it suited the strategy of the PLP of the time to foster the notion that the white expats could not be trusted to maintain their support. The Party was probably right in that belief. We all reckoned that the drive for independence would cost the Islands their prosperity. And so it proved.

Expats in the tax-haven sector were pushed out of their comfort zone, and packed up and left. The banks and trust companies set up subsidiaries in the Cayman Islands. Some of their Offshore clients followed, one by one, and new clients were diverted to Cayman by their domestic tax-advisors. Public Revenue dropped alarmingly, and government finances found themselves in a downward spiral. The country’s loss was Cayman’s gain, down to the last penny.

In view of our Caymanian politicians’ increasingly vocal loss of confidence in our British connection, more and more of us expats here fear that our tax-haven may be sacrificed on the same altar of populist foolishness that killed Nassau’s. The omens are very much the same. We don’t have the black-white racism, but the perpetual fostering of native Caymanians’ resentment and mistrust of expats exactly mirrors the Bahamian experience of forty-odd years ago.

If Britain were to pull the plug on Cayman (read Trouble in Paradise, December), where would the clients go? To the new and revitalised Nassau? Or to the BVI – that long-patient bridesmaid-in-waiting? Offshore types have been sniffing around BVI for years now, and don’t like what they see. It’s not developed enough! It doesn’t have the infrastructure! But most of the sniffers are too young to know how woefully undeveloped Cayman was, at the time of the Nassau exodus in the 1970s.

Linda and I spent a weekend here in 1968, a bit before the Bahamian banks started shifting their business here. Unpaved roads, mosquitoes, four or five scruffy tax-haven professionals, and more mosquitoes. BVI today is infinitely better prepared to take our business than Cayman was to take Nassau’s back then. It would be stupid to dismiss it as a suitable successor.

I wish I could say that neither the FCO nor the C I Government were stupid enough to shrug off the danger. Regrettably, I can’t. I know they are.

Monopoly Money and the Gold Standard

Not long after our family’s working vacation in The Big Apple, I bumped into Ian in the supermarket. “I’m just back from Singapore on business”, he said, “and I saw Ross on one of the cable-TV channels there, in my hotel room one night!” Our son had grown up with Ian’s son, and I was glad somebody had caught Ross’s fleeting moment of glory.

Linda and I were there on the spot, but we didn’t see any of the TV coverage. The opening day of the tournament coincided with an earthquake in Mexico that was later estimated to have killed at least ten thousand people. Every TV station in New York City turned its entire transmission time over to reports from Mexico. The 1985 World Monopoly Championship in the ballroom of the Waldorf Astoria was ignored utterly.

Ross had lain fifth at the end of the first day, in a field of twenty, and was on track to make the cut for the final table. Aged barely ten, he was what a French magazine called “le benjamin” – the youngest competitor. The US champion – Jim Forbes, a CPA from Florida – explained to the prospective US audience that the mental pressure would prove too much for a child, and he was right. Ross blew out to tenth during the next day’s play. Although – who knows? – maybe it wasn’t the pressure at all; maybe his luck just ran out. Jim also missed the cut, and he was the oldest competitor, in his late 30s.

It was a nine-day wonder here at home, when a (then) nine-year-old beat out several local bankers, lawyers and accountants to win our Islands’ first formal Monopoly Tournament one Saturday morning. I had dropped him off and gone shopping, so as not to cramp his style, and it was all over by the time I got back to give some post-game comfort to a gallant loser. The adults were standing around looking sheepish, and the boy was being told where and when he could collect his prizes – airline tickets to New York and accommodation at the Waldorf Astoria.

Winning at Monopoly is 90% luck and 10% skill & awareness. Landing on Mayfair and Park Lane (Boardwalk and Park Place in the US version) requires pure luck; bankrupting everybody else inside twenty minutes requires quick wits and some gambling skill. Think of poker, but with less money and less time. (The 1983 World Champion came second in 1985, by using his experience to maximise his luck.)

It wasn’t so easy in New York. No casual Saturday morning in shorts and flip-flops, but hot lights and hubbub in the ballroom of the Waldorf. Spectators wandered around the tables speaking in tongues while watching the champions from twenty nations do their thing. It was fast-paced stuff. The bankers enforced the tournament rules strictly. Minimal stoppages were allowed for the consummation of property deals, but all negotiations had to be conducted on the run while keeping an eye on the continuous movements of dice and tokens – all within a ninety-minute limit.

There was real money at stake: US$15,140 to the Champion, winner take all. $15,140 was the total of the Monopoly Money sold with each game. Most games in existence still have that amount, and its purchasing power is unchanged - in the game. However, the purchasing power of the US$15,140 prize money has greatly depreciated since 1985. Take a moment to think why that is.

The game’s bankers use “hard money”. What a contrast to the real-life Central Bankers who have screwed up their nations’ real-life economies by financing asset bubbles with money created out of thin air. Monopoly Money’s value is maintained by not allowing any inflation of the money-supply. Monopoly Money is disciplined in a way that actual currencies aren’t. In effect, it adheres to a gold standard. It’s a good thing Monopoly games don’t involve Central Bankers. I mean, imagine the chaos.