Sunday, February 1, 2009

Let Us Welcome New Year 2009 By Sharing Light Of Knowledge With Those In The Dark

At New Year’s Eve, it is the best time to welcome the incoming year. From STRAIGHT LIGHT to everyone: HAPPY NEW YEAR …!

Straight Light is my editorial column in this popular website [FPC]. It is actually me talking to you … thanks to Ernest Hancock for sharing with me his light of knowledge when I was in the dark trying to get into Freedom Phoenix.

FPC is one of Internet’s numerous lamplighters through which the light of knowledge could be shed to those in the dark who longed to see the light.

While many of us in the world of the quill and the ink share their lights of knowledge with others, straight light is only what I could give out for others to share.

So it comes to pass that at the end of the year, I thank all the blessings that had come my way, and to take note of so many things I could learn from, and even improve where there is a need for improvement.

The most important thing to note is that the light to share always gives room for improvement. In the editorial I wrote on December 28, 2008, we need a lot of light-sharing:

Editorial • Future Predictions -- Straight Light

If you read the comments on this editorial piece at this link Abolish, the praise and pillage, not necessarily on what is written but on the person of the author, badly needs enlightenment.

The author was called unprintable names. Just because in this editorial piece I mentioned outgoing president George W. Bush who was leaving a legacy of his own -- a bequest that changed the political dynamics of the Middle East and that he had embarrassed the radical Left by putting Al Qaeda terrorists on the run since 9/11 – to be judged by history, a resentful bucket kicker thought I am probably on the payroll of President Bush!

The first thought that comes to mind: Does this also mean that this angry guy who hates Bush is in the payroll of Obama and Bill Ayers, the rich socialist American bomber who wants to change America?

As we can clearly see, the logic comes from another planet. It is dark and apparently, retarded. It needs light, and as written in a song, in summer the roses need rain to bloom.

This hostile attitude is jumping on stage only recently. The public had a bad impression of the Media that the Left had taken over in the last election. It trumped objectivity and supported a change for America to take the road towards a socialist democracy.

But not all free journalists were routed in this tsunami of political bias towards ideological change generally believed to be good for the country, although it may be only delusional. Although they may be few, still there are journalist who are holding the forth of free journalism. I share the flak for being one of them throughout the years [more than 45 years]. In this regard, I don’t blame those in limbo who are swinging their swords of hostility in the dart pit of ignorance. The reading public can see this in the comment posted in this link Abolish.

This Straight Light to share is never so critically needed before than it is now, as in this case while we close the year with so much lessons to learn from.

In the comments [again click on Abolish] Lolo ably defended the definition MV = PQ out of Fisher Equation’s MV = PT against the attacks of those who are obviously pretending to be learned economists in this perplexing subject of economics. It is hard to deny that only genuine economists that specialize on fiscal and monetary policies are able to do this.

I noticed that those who were commenting negatively on the editorial I wrote with anger written between the lines, are clearly in the dark on this subject. When they resort to name-calling, we know how and what they complement their argument with, when they ran short of what to say. In this sense, I do not hold them entirely blameworthy for the simplest of all reasons that they actually need help.

My old man once made it clear to me when I was starting college, that when someone falls in a snake pit, the snakes will always fight to get the first bite. That wisdom brings into focus when the author becomes a prey to a feeding frenzy.

But I am here to share a straight light, not to talk about snakes especially when they refer to people outside the art of euphemism and cordiality. I do not welcome the New Year this way.

In the comment box, Lolo already projected what I have learned as a development economist-cum-journalist. The onus of proving it is now on me. Before the bar of public opinion, I am pretty much obliged.

I would like to share what I learned by demonstrating how Quantity Theory of Money works with Ag. D. [the symbol I used in graduate school] as key determinant. This may be denominated as a “Classical Economic Equation of Exchange”. This equation is MV=PQ.

M =Money in the hands of the public. V = Income velocity of money. This is commonly mistaken as “velocity of money” which is not accurate. P = Average price level of output, and Q = Total output of goods and services.

If we want to find V [how many times a $1 component is spent in a year], then we have V=PQ/M. In figures, this is how it looks like:

Suppose we have the following data as an example [B=Billion]:

[1] Q = $10 billion (10B) units of output purchased in the economy.

[2] P= $2 average price per unit.

[3] Thus PQ= $20 billion (20B) [total spending Ag.D]

[4] If M= $5 billion (5B) [money supply], then we arrive at:

[5] V=PQ/M or in figure, 20B/5B = 4B. It means then that we know that the $1 component of the average price per unit was spent 4B times in a year. This is how you find V.

Suppose we want to know M = money in the hands of the public.

Then the definition is: M = PQ/V or = 20B/4B = $5 billion (5B). [It checks out par. [4] above.]

Suppose instead we want to know PQ = Total Ag.D. Then we have this formula: PQ = V x M or 4B x $5 billion (5B) = $20 billion (20B). [It checks out par. [3] above.]

To summarize: PQ = P x Q; Total spending is PQ = V x M; V =PQ/M; and M = PQ/V. #

Thanks for knowledge-sharing.


© Copyright Edwin A. Sumcad. access December 30, 2008.

The writer is an award-winning journalist. Know more about the author by reading his published editorials and feature articles or you may e-mail your comment direct to

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