Political strategist James Carville coined the tine, "It's the economy, stupid" for Bill Clinton, who repeatedly used this famous 1992 campaign line to topple George Bush, Sr.  Americans, at the time, were experiencing the effects of a slowdown in the economy that started in 1990.

Even while the economy was on its way to recovery, people only saw the growing fiscal deficit.  Bush Sr. lost because economic dissatisfaction set in a year and a half after he liberated Kuwait from Saddam Hussein.  Bush's handlers could have weathered it, but they simply failed to manage perception and their communications.

The present political crisis will inevitably boil down to the economy as the real issue that will ultimately bring down the Arroyo Administration.  What we are hearing from people close to the Palace is that the TRO issued by the Supreme Court on the EVAT is the real reason why 10 Cabinet members, specifically Cesar Purisima and Johnny Santos, resigned.

Cesar Purisima further pointed out that her decision-making process has adversely affected the economy.  The frustrated economic team felt that GMA had actually influenced the Supreme Court to issue the TRO to postpone the bad effects of the EVAT on prices purely for her political survival.

If indeed that is true, then it just confirms that our present political system has really gone from bad to worse.  What I found disgusting is that the plotters, especially Cesar Purisima, sounded like Judas Iscariot.  They could just have simply resigned without making a spectacle out of it.

As Time magazine's Tom Spaeth wrote, "This has been a week in hell for the President."  The past week was swirling with so many rumors.  In fact, even our friend, British Ambassador Peter Beckingham's meeting with the opposition was misconstrued as part of a plot.  That is absolute nonsense.

Diplomats are supposed to move around and get a sense of what's really going on in the country so, they can report this to their home office.  Definitely, there are more spooks or political operatives running around the country monitoring the situation. 

By the way, our sympathies go to the British people for the London terrorist attack.  The London bombings have not taken center stage in this country for obvious reasons.

The mounting calls for GMA's resignation have clearly knocked the wind out of her sails.  What is disappointing is that there are those sanctimonious people who are demanding her resignation, but at the same time, maintaining that the rule of law and due process must be followed.

As her position becomes more untenable, GMA may want to consider FVR's formula that could possibly be a win-win situation for everybody.  It could also serve as a graceful exit for her.  If the present system remains in place, it would only mean a change of faces.

As pointed out by our political analyst friends, the system is not working and simply dysfunctional.  If we are to survive this political storm, a major overhaul of the present system must take place.  This is probably the silver lining in this cloud.

Asian Development Bank President Haruhiko Kuroda said that if the Philippines wants to achieve prosperity, it should be prepared to make substantial changes while focusing on three priorities: Fiscal consolidation, improving the investment climate, and improved governance.

Among the three priorities, the most important is improved governance because it would be impossible to achieve the other two without it.  The perception of instability and corruption must be addressed, as well as perceptions of an inefficient judiciary, weak regulatory systems and inadequate infrastructure, Kuroda pointed out.  With her leadership in question, can GMA still be able to do this?

The political crisis has caused the economy to rapidly deteriorate.  Ultimately, this is what will bring the country to its knees.  No one will be spared when the economy takes a nosedive.  Argentina is an example of how the economy can affect the leadership.  Having regained democracy in 1983, succeeding democratic governments failed to bail out the country from its huge international debt.

By 1989, inflation had reached 200 percent per month.  By 1998, unemployment had risen, capital flight increased.  By 2001, many of Argentina's rich had transferred over $15 billion out of the country in anticipation of a crisis.  Economic Minister Domingo Cavallo imposed the corralito or the little coral, which limited bank withdrawals to 250 pesos a week in attempt to stop bank runs.

By mid-December 2001, people were looting supermarkets and what started out as noise barrages eventually became violent and bloody demonstrations.  Calls to abandon debt payment mounted and the ensuing crisis saw Argentina having five presidents in quick succession in just a matter of days.  Argentina finally decided to suspend payments on $155 billion of its public debt in 2002.  As a result, foreign investors took flight and capital inflow just stopped.

God help this county if that scenario happens here.  By then Kapitan Lucio Tan's prediction of the peso-dollar exchange rate reaching P100-$l will most likely come true.  All hell will then break loose.  No constitutional process or resignation can save this country from anarchy.

The only saving grace is that we won't have butterfly senators and congressmen flitting around from one administration to another.  For the moment, GMA is right in saying that if she resigns the next president could just as easily be made to resign without due process and there will be no end to E0SA uprisings.

As a matter of fact, we have already been branded by Time magazine as the "clown of democracies."  As Senator Dick Gordon rightly pointed out, we will never put the fundamental laws of this land to a test if we don't see the process through to the end.  No matter how painful or how long, the rule of law and the constitutional process simply must prevail.

The bottom line, however, is that GMA and GMA alone will have to decide with her conscience on what is best for the country and spare the people especially, the poor from this recurring political ordeal.  At the end of the day, the economy should ultimately make her decide.

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