The Elephant Professor Khemraj Walked Past

The Elephant Professor Khemraj Walked Past

      A Reply on Cost of Living, the Cantillon Effect, and the Politics of  Explaining Away

OPINION  BY– HEM KUMAR– August , 2026

Professor Tarron Khemraj’s letter this week (“President Ali, food choices, and the elephant in the room”) does something worth taking seriously before it is taken apart: it distinguishes, correctly and usefully, between inflation as a rate and cost of living as a level. It traces, correctly, how the war-driven disruption of Strait of Hormuz shipping has pushed up global fertiliser and urea prices in a way no Guyanese policy could have prevented. It restates, as the professor has for over a decade, a genuine structural argument about why Guyana’s coastal ecology constrains the supply of non-tradable goods — housing, local transport, construction — relative to demand. None of that is in dispute here, and none of it should be dismissed simply because of where the professor eventually takes it.

The trouble is where he takes it. A learned, 1,500-word tour through monetary theory, comparative political history, and international commodity markets is marshalled, in the end, to defend a single presidential remark: that citizens should cook at home instead of buying restaurant food, offered as a response to public anger over the cost of living. The economics is largely sound. The use to which it is put is not.

AN ELEPHANT NAMED, THEN LEFT ALONE

The professor titles his own key section “The Elephant in the Room” and, to his credit, identifies it precisely: cost-of-living pressure that goes beyond what oil-financed spending alone would produce comes from monetising the fiscal deficit — expanding the domestic money supply faster than non-oil GDP and import capacity can absorb it.

He states plainly that this monetary channel, not spending oil revenue as such, is what worsens inflation and strains the exchange rate.

Having named the mechanism, the professor does not ask the one question a Guyanese reader most needs answered: is that mechanism operating now, under this government’s actual financing choices? A letter that diagnoses the disease with precision and then declines to check whether the patient has it is not restraint. It is the exact point at which analysis stops and cover begins.

THE CANTILLON EFFECT THE FRAMEWORK ALREADY CONTAINS

This is where a reader’s instinct — that stagnant wages sit at the center of this story — deserves to be taken more seriously than Professor Khemraj takes it. Oil- and deficit-financed spending does not arrive in every household’s pocket simultaneously or proportionally. It reaches state contractors, importers, and asset-holders first, bidding up the price of rent, services, and non-tradables well before wage income has any chance to catch up.

That sequencing — the Cantillon effect — is not a fringe theory. It is a standard implication of exactly the monetary-financing channel the professor’s own letter identifies as the elephant.

Framed correctly, then, the cost-of-living squeeze is not merely “the price of success,” borne evenly as the unavoidable byproduct of a growing economy. It is a distributional outcome, with winners who receive the new spending early and losers — wage earners — who absorb the price effects last, after their earning power has already been diluted. Government financing decisions, not household lifestyle choices, determine who ends up on which side of that line. The professor’s own framework has room for this. The letter does not go there.

A letter that diagnoses the disease with precision and then declines to check whether the patient has it is not restraint. It is where analysis stops and cover begins.

AN ANALOGY THAT DOES NOT HOLD

Professor Khemraj places President Ali’s remark alongside Forbes Burnham’s buy-local ethic, Narendra Modi’s Vocal for Local campaign, Jimmy Carter’s sweater speech, and Gerald Ford’s Whip Inflation Now button, concluding that a president urging thrift is neither unusual nor illegitimate. But each of those examples was a proactive national campaign — announced as policy, backed by government programming, sustained over time.

President Ali’s remark was none of those things. It was an aside that went viral precisely because, to a public already anxious about prices, it read as a head of state locating the problem in citizens’ kitchen habits rather than in his own government’s fiscal choices.

Placing a viral gaffe inside a lineage of deliberate national campaigns does rhetorical work. It does not do descriptive work.

“NOT PASSIVE” CUTS BOTH WAYS

To his credit, the professor credits the Ali administration with a real record of relief measures since 2021: zero-rated VAT on key food items, VAT removed on fertiliser and farm machinery, excise duty removed on fuel, freight benchmarked to pre-pandemic levels. Fair enough — these are verifiable and worth stating plainly rather than waving away.

But if the deficit-monetization channel the professor identifies as the real driver of excess inflation and currency strain is itself a financing choice made across these same years, then the same government that earns credit on one ledger owes an answer on the other. A letter willing to list five years of relief measures in the government’s favour but unwilling to ask a single question about the government’s own financing conduct is not applying one standard.                                      It is applying two, and choosing which one to use by which direction it points.

WHAT THIS PUBLICATION  IS NOT ARGUING

This is not a claim that Professor Khemraj is wrong about inflation, about the Hormuz shock, or about the constraints of a small open economy. He is not. Nor is it a claim that a food buffer stock, which the professor proposes and which has real merit, would fail to help. It is a narrower and sharper complaint: a professor capable of distinguishing a rate from a level, capable of tracing fertiliser prices through a war eight thousand miles away, chose not to spend a single paragraph asking whether his own government’s deficit financing is the mechanism turning an oil boom into a wage earner’s squeeze.

That is the elephant. The professor named it, in his own words, in his own headline — and then wrote around it for fourteen paragraphs. This newsroom asks him, and asks the government whose account he was carrying, to walk back and actually look at it.

— The Board