Feudal Capitalism

Reading the TodayOnline : Nation or Hotel Singapore ? You decide.

Came across this comment -

" ... The Chinese imperial examinations always has a top scholar, and that man has always been the most intelligent. He deserves the abundant wealth that comes with that post, and it is his right to live of the taxpayer's money. If you are still unhappy, it is not the PAP's policies that needs to be changed. It is the order of nature that you seek to change. " - Sigh @ 09:57 PM February 24, 2011

i have no doubt that not quite a few people here think like sigh. What does the world think? It will be a sad future if such idea goes unchallenged. China is feeling her way and engineering an attempt to feed not only its people but the world with an alternative worldview, a confucius consciousness. With her status of a rising power, nothing less than a tetonic shift of the Judea-Christian worldview, shaken to its core, to that of an alternative is imminent. Not withstanding the merits of Confucius thought, whom i admire for his tone of peace and harmony of man and nature, the signal of an iota of promoting this two-thousnad-five-hundred year old sage is enough to give fits to the above "ideology".

Maybe China don't have to look so far back in her history to justify taking her place not too far from now. Least she has forgotten that a great people has already transcent feudalism and was on the road to emancipation. Please don't go back when you become rich.

China has a right to prosper and seek "progress" for her people. China can rise for all i care. But with her rise ...

Meanwhile in the land-of-the-free

NY Times: Paul Krugman

"It's like Cairo has moved to Wesconsin."  &  Will you sign this employment contract ?

" ... “Notwithstanding ss. 13.48 (14) (am) and 16.705 (1), the department may sell any state-owned heating, cooling, and power plant or may contract with a private entity for the operation of any such plant, with or without solicitation of bids, for any amount that the department determines to be in the best interest of the state. Notwithstanding ss. 196.49 and 196.80, no approval or certification of the public service commission is necessary for a public utility to purchase, or contract for the operation of, such a plant, and any such purchase is considered to be in the public interest and to comply with the criteria for certification of a project under s. 196.49 (3) (b).” "

Someone told me: " ... but this is how the world works... "

No. The world is changing. And it is not for the better.

If God cannot help us, then we have to help ourselves, and pray (oxymoron me) that this NEW WORLD ORDER never arise.

26 February 2011

The rise of Feudal Capitalism

No Country For Old Man ?

Straits Times: Libyan uprising a 'foreign plot': Gaddafi's son



i like the way he point his finger ...



 CAIRO - SAIF al-Islam Gaddafi, the son of strongman Muammar Gaddafi, said on Monday that Libya was on the verge of civil war and branded the unprecedented protests against his father's rule a foreign plot.

Blaming Arab and African expatriates of fomenting unrest in the country, he said the violence was aimed at installing Islamist rule, in a speech on television.

'At this moment there are tanks being driven by civilians in Benghazi,' Libya's second city and an epicentre of the unprecedented protests against Muammar Gaddafi's iron-fisted rule for nearly 42 years.

'We have arms, the military has arms and the forces which want to destroy Libya have arms,' he said. Mr Gaddafi, speaking in Arabic, also pledged a new constitution and new liberal laws saying the north African country was at a crossroads.

In the tough-talking, finger-wagging speech, Mr Gaddafi's son blamed foreign media of inflating the death toll, which he repeatedly put at 84, and warned that any uprising would be ruthlessly suppressed.

'Libya is not Egypt, it is not Tunisia. There are no political parties in Libya,' he said. 'We will take up arms... we will fight to the last bullet,' he said. 'We will destroy seditious elements. If everybody is armed, it is civil war, we will kill each other.' Mr Gaddafi said his father would lead the fight against the protesters, adding: and 'we will win.'-- AFP

Well, at least in a democracy ( or a semblance of it ), there is room to step down and avoid bloodshed to the people.

But in an authoritarian regime, it will be bloody and a fight to the death...

21 February 2011

New World Order II

NY Times: When Democracy Weakens

By Bob Herbert

As the throngs celebrated in Cairo, I couldn’t help wondering about what is happening to democracy here in the United States. I think it’s on the ropes. We’re in serious danger of becoming a democracy in name only.

While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.

So what we get in this democracy of ours are astounding and increasingly obscene tax breaks and other windfall benefits for the wealthiest, while the bought-and-paid-for politicians hack away at essential public services and the social safety net, saying we can’t afford them. One state after another is reporting that it cannot pay its bills. Public employees across the country are walking the plank by the tens of thousands. Camden, N.J., a stricken city with a serious crime problem, laid off nearly half of its police force. Medicaid, the program that provides health benefits to the poor, is under savage assault from nearly all quarters.

The poor, who are suffering from an all-out depression, are never heard from. In terms of their clout, they might as well not exist. The Obama forces reportedly want to raise a billion dollars or more for the president’s re-election bid. Politicians in search of that kind of cash won’t be talking much about the wants and needs of the poor. They’ll be genuflecting before the very rich.

In an Op-Ed article in The Times at the end of January, Senator John Kerry said that the Egyptian people “have made clear they will settle for nothing less than greater democracy and more economic opportunities.” Americans are being asked to swallow exactly the opposite. In the mad rush to privatization over the past few decades, democracy itself was put up for sale, and the rich were the only ones who could afford it.

The corporate and financial elites threw astounding sums of money into campaign contributions and high-priced lobbyists and think tanks and media buys and anything else they could think of. They wined and dined powerful leaders of both parties. They flew them on private jets and wooed them with golf outings and lavish vacations and gave them high-paying jobs as lobbyists the moment they left the government. All that money was well spent. The investments paid off big time.

As Jacob Hacker and Paul Pierson wrote in their book, “Winner-Take-All Politics”: “Step by step and debate by debate, America’s public officials have rewritten the rules of American politics and the American economy in ways that have benefited the few at the expense of the many.”

As if the corporate stranglehold on American democracy were not tight enough, the Supreme Court strengthened it immeasurably with its Citizens United decision, which greatly enhanced the already overwhelming power of corporate money in politics. Ordinary Americans have no real access to the corridors of power, but you can bet your last Lotto ticket that your elected officials are listening when the corporate money speaks.

When the game is rigged in your favor, you win. So despite the worst economic downturn since the Depression, the big corporations are sitting on mountains of cash, the stock markets are up and all is well among the plutocrats. The endlessly egregious Koch brothers, David and Charles, are worth an estimated $35 billion. Yet they seem to feel as though society has treated them unfairly.

As Jane Mayer pointed out in her celebrated New Yorker article, “The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry — especially environmental regulation.” (A good hard look at their air-pollution record would make you sick.)

It’s a perversion of democracy, indeed, when individuals like the Kochs have so much clout while the many millions of ordinary Americans have so little. What the Kochs want is coming to pass. Extend the tax cuts for the rich? No problem. Cut services to the poor, the sick, the young and the disabled? Check. Can we get you anything else, gentlemen?

The Egyptians want to establish a viable democracy, and that’s a long, hard road. Americans are in the mind-bogglingly self-destructive process of letting a real democracy slip away.

I had lunch with the historian Howard Zinn just a few weeks before he died in January 2010. He was chagrined about the state of affairs in the U.S. but not at all daunted. “If there is going to be change,” he said, “real change, it will have to work its way from the bottom up, from the people themselves.”

I thought of that as I watched the coverage of the ecstatic celebrations in the streets of Cairo.

If not, God help us all ... NEW WORLD ORDER

21 February 2011

No One Washed A Rented Car

TodayOnline: Out of touch, out of time

by: Thomas L Friedman

Watching President Hosni Mubarak addressing his nation on Thursday night, explaining why he would not be drummed out of office by foreigners, I felt embarrassed for him and worried for Egypt. This man is staggeringly out of touch with what is happening inside his country. This is Rip Van Winkle meets Facebook.

The fact that the several hundred thousand Egyptians in Tahrir Square reacted to Mr Mubarak's speech by waving their shoes - they surely would have thrown them at him if he had been in range - and shouting "go away, go away", pretty much sums up the reaction. Mr Mubarak, in one speech, shifted this Egyptian democracy drama from mildly hopeful, even thrilling, to dangerous.

All day here, there was a drumbeat of leaks that the fix was in: Mr Mubarak was leaving, the army leadership was meeting and Vice-President Omar Suleiman would oversee the constitutional reform process.

The fact that this did not turn out to be the case suggests there is some kind of a split in the leadership of the Egyptian army, between the anti-Mubarak factions leaking his departure and the pro-Mubarak factions helping him to stay.

The words of Mr Mubarak and Mr Suleiman directed to the democracy demonstrators could not have been more insulting: "Trust us. We'll take over the reform agenda now. You all can go back home, get back to work and stop letting those foreign satellite TV networks - i.e., Al Jazeera - get you so riled up. Also, do not let that Obama guy dictate to us proud Egyptians what to do."

This narrative is totally out of touch with the reality of this democracy uprising in Tahrir Square, which is all about the self-empowerment of a long-repressed people no longer willing to be afraid, no longer willing to be deprived of their freedom and no longer willing to be humiliated by their own leaders, who told them for 30 years that they were not ready for democracy.

Indeed, the Egyptian democracy movement is everything that Mr Mubarak says it is not: Homegrown, indefatigable and authentically Egyptian. Future historians will write about the large historical forces that created this movement but it is the small stories you encounter in Tahrir Square that show why it is unstoppable.

I spent part of the morning in the square watching and photographing a group of young Egyptian students wearing plastic gloves taking garbage in both hands and neatly scooping it into black plastic bags to keep the area clean. This touched me in particular because more than once in this column I have quoted the aphorism that "in the history of the world no one has ever washed a rented car".

I used it to make the point that no one has ever washed a rented country either - and for the last century Arabs have just been renting their countries from kings, dictators and colonial powers. So, they had no desire to wash them.

Well, Egyptians have stopped renting, at least in Tahrir Square, where a sign hung on Thursday said: "Tahrir - the only free place in Egypt."

So I went up to one of these young people on garbage duty - Mr Karim Turki, 23, who worked in a skin-care shop - and asked him: "Why did you volunteer for this?" He could not get the words out in broken English fast enough: "This is my earth. This is my country. This is my home. I will clean all Egypt when Mubarak will go out." Ownership is a beautiful thing.

As I was leaving the garbage pile, I ran into three rather prosperous-looking men who wanted to talk. One of them, Mr Ahmed Awn, 31, explained that he was financially comfortable and even stood to lose if the turmoil here continued but he wanted to join in for reasons so much more important than money.

Before this uprising, he said, "I was not proud to tell people I was an Egyptian. Today, with what's been done here" in Tahrir Square, "I can proudly say again I am an Egyptian".

Humiliation is the single most powerful human emotion and overcoming it is the second most powerful human emotion. That is such a big part of what is playing out here.

Finally, crossing the Nile bridge away from the square, I was stopped by a well-dressed Egyptian man - a Times reader - who worked in Saudi Arabia.

He was with his wife and two young sons. He told me that he came to Cairo on Thursday to take his two sons to see, hear, feel and touch Tahrir Square. "I want it seared in their memory," he told me.

It seemed to be his way of ensuring that this autocracy never returns.

These are the people whom Mr Mubarak is accusing of being stirred up entirely by foreigners. In truth, the Tahrir movement is one of the most authentic, most human, quests for dignity and freedom that I have ever seen.

But rather than bowing to that, retiring gracefully and turning over the presidency either to the army or some kind of presidency council, made up of respected figures to oversee the transition to democracy, Mr Mubarak seems determined to hang on in a way that, at best, will slow down Egypt's evolution to democracy and, at worst, take a grass-roots, broad-based Egyptian non-violent democracy movement and send it into a rage.

The new York times

12 February 2011

Free Flow III

Temasek Review:

Income Inequality and How to Not Fix It

By David Ng

The spectre of income inequality (“the rich get richer, the poor get poorer”) has never been greater in recent years. This is not a problem confined to just Singapore, but a good chunk of the developed world as well. The dialogue of income inequality has been raging across the media in the US, UK and even China. Not one statesman can deny that it has been a problem, it is now a problem, and if unchecked can prove to be an immense problem.

The UN Development Program produced a report recently with a portion that takes a good look at worldwide income inequality. Rankings are made based on a couple of factors like GDP, percentage share of income/expenditure amongst the richest and poorest 10% including the Gini coefficient. The Gini coefficient is an income inequality index named after Italian statistician, Corrado Gini. It measures income inequality from the scale of 0 where everyone has the same shared equal income, and 1 where one man owns all income. Scandinavian nations (Sweden, Norway, Denmark, etc.), Japan & the Czech Republic have the lowest Gini scores. Guess who’s on the big 3?

Hong Kong: 0.43

Singapore: 0.42

USA: 0.4

No wonder MM Lee told SMU students to ignore the Gini coefficient.

A recently-published book, “The Spirit Level” has a steadily growing following, which speaks of how countries with greater income disparities tend to fare worse on many social indicators. Now that we’re No. 2 on the global scale of income inequality, with Hong Kong also beating us for the top spot of lowest fertility rate (depressing, really.. Singapore ought to be #1 in all things, right?), I cannot say that I agree fully with “The Spirit Level” – it has conveniently left out several factors and nations that could mess around with its thesis. But it has a point about income inequality causing trouble for society. The UK occupies #7 on Gini with 0.36 and I’ve personally witnessed the atmosphere of social decay in England where badly-dressed chavs (we know them as “Ah Bengs” here) loaf around, harass and mug people for the purpose of purchasing Burberry, and chavettes (“Ah Lian”) are renowned for amongst other things, pumping out 4 babies by the time they’re 18. That was the result of the Davos consensus that inequality itself was less important than ensuring that those at the bottom were becoming better-off. Tony Blair personified that consensus by famously saying that he was “intensely relaxed” about the millions earned by David Beckham provided that child poverty fell.

As any random undergraduate will point out, the crucial ways of alleviating the problems of income inequality are:

1. Increase in social services
2. Decrease in taxes that affect the low and middle classes
3. Increase in taxes for the rich to pay for #1 and #2.

There has been the implementation of Workfare as a manifestation of #1. But it’s not enough. It doesn’t adequately help our lower classes and as much as I recognize Workfare as a somewhat effective solution, no, I am not advocating a minimum wage. Nor am I advocating an efficiency wage. What I advocate are those three points above.

What are the social services that can be implemented, however? There is so much that can be done that will not cause the upheaval in the job market like a minimum wage could. Things like heavily subsidized healthcare, free childcare centers, disability help, elderly help, et al. It is not as if Singapore is lacking heavily in such services – most of the crucial work done is carried out by charities and they deserve a massive jab of funds in the form of grants. Not to worry about where the funding may come from – that will come in the outlining of #2.

#2 should be a decrease in GST, so that the low and middle classes won’t have to spend as much when it comes to purchasing goods for everyday life. But the claim to increase GST to “help out the poor” is difficult to believe, for anyone with a basic knowledge of economics. The principle of redistribution is sound only when more money is taken from the wealthy to be redistributed to the poor.

On 2007, our GST was hiked from 5-7% predicated on the promise of using the marginal revenue to fund social services for the poor. It was not the most convincing plan to me, but there’s no use crying over a policy that was in force since 3 years ago. Here are some figures for us to consider, kudos to Tony Tan from the Reform Party for crunching these figures from the Ministry of Finance

GST Marginal Revenue [increase in revenue] after increasing to 7%

2007 – $1,028m
2008 – $1,853m
2009 – $1,903m

Govt Expenditure on Social Transfers, Subvention by MCYS, Workfare, GST Credit, Senior Citizen Bonus

2007 – $539m
2008 – $766m
2009 – $299m

I hate to sound like a broken record here, but I have to echo Dr. Chee: where has our money gone to?

Normally, nations that suffer from catastrophic national debt like Greece or the UK tend to resort to sales tax increases in an attempt to pay it off. Even in the US, it can be foreseeable that the Obama administration, or perhaps a government after this current term will have no choice but to raise sales taxes in order to pay off their immense debt owed to China. Our national finances are in the pink of health and looking at the figures, if we have raised our GST by 2% on the pretext of helping the poor with increased social services, let’s do it. This is no call for wanton waste, but such stinginess is just as needless.

As for #3, I think Adam Smith, the father of modern economics and capitalism put it best in, “The Wealth of Nations”

The necessaries of life occasion the great expense of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expense of the rich, and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house-rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be anything very unreasonable. It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.

But not everyone agrees with this line of thought. Jack Lin, a Young PAP member majoring in Economics in National University of Singapore (NUS) had this to say in the Young PAP Facebook page in a discussion thread about this very topic.

Each of those measures that Davin propose, comes with a tradeoff, solve a evil, create a bigger one. Often policy makers are stuck between a hard rock and a very hard place.

#1 increase in social services can also increase incentive for people to contribute less to the economy, as leisure-work tradeoff increases.

#2 GST is a consumption tax. A consumption tax is often fair. By increasing consumption tax, the govt has actually reduce income tax and corporate tax as a mitigation. The poor already don’t pay much income tax. The govt also requires a budget to work on, through good times and through bad, its not possible for them to be running a deficit forever, infact a healthy surplus with some going into the reserves or for active investment is encouraged

#3, increasing taxes for the rich comes with its own set of problems, many of the rich can just pack up and go, and there is no lack of countries welcoming them. Robert kiyosaki, a renowned author, has often question why the rich, that often puts in more effort and more creative thinking, are taxed. Increasing tax for the rich may then deter people many from working too hard and setting up businesses. The rich also creates jobs through companies, fuels demand which in turn fuels more jobs. Overall a win-win situation if the rich has incentive to stay and not unfairly taxed.

For the uninitiated, what Jack Lin espouses is “trickle-down” economics. Otherwise known as Reaganomics, or supply-side economics, it’s the policy of giving tax cuts and/or benefits to the rich and businesses in the belief that the freed-up money will indirectly benefit the broad population. One may also note that the term, “trickle-down” was attributed to Will Rogers, a Depression-era comedian who said that, “money was all appropriated for the top in hopes that it would trickle down to the needy.”

“Trickle-down” economics proponents claim that this extra money will be funnelled into more investments in business infrastructure so that it will facilitate job creation. But that has not been the case, especially in the US in recent years. 8 years of Bush-era Republican policies filled with “trickle-down” economics policies have resulted in the giant bloated bonuses, and “golden parachute” CEO severance packages we have been reading about for the past three years. Robert Kiyosaki, whom Jack Lin cited frequently, is the author of the well-known, “Rich Dad Poor Dad” book, and is known to subscribe heavily to “trickle-down” economics.

“increase in social services can also increase incentive for people to contribute less to the economy, as leisure-work tradeoff increases.”

The fear of implementing any form of increase or improvement of social services is a widespread state ideology that serves to freeze our people in fear at the very mention of it and triggers an immediate catharsis of the oft-heard response of, “increase incentive for people to contribute less to the economy”. Can we deny that the low income folks need help? Can we deny that the mentally-ill and -handicapped who need not be institutionalized and yet lead somewhat typical, happy lives with a decent sum of financial assistance? Can we deny any help for all low-income kids who cannot afford textbooks, stationery and proper school bags?

There is nothing wrong with increased and improved social services like all these. It is morally and ethically wrong to give unemployed people $8,000/month to sit at home. This is true, but there are other social services that are heavily in need of extra funding. What we have right now that we call as “social services” on the national level is a job that rightfully belongs to the government, gets delegated and deferred to small-scale private and religious charities. Under the bleak, dark shadow of hopelessness, a thousand tiny pinpricks of light provided by these small charities is insufficient – the entire canvas of shadow has to be ripped away to avail that hope. It’s time we stop kidding ourselves that spending money for this sort of assistance to lower income families will leave the state in severe disrepair – it’s not as if we’re in huge national debt and can hardly afford to spare the money for this endeavour.

“GST is a consumption tax. A consumption tax is often fair. By increasing consumption tax, the govt has actually reduce income tax and corporate tax as a mitigation. The poor already don’t pay much income tax.”

GST is not a “fair” consumption tax. Considering how consumption as a percentage of the rich income group’s total income is substantially lower compared to the lower and middle classes, to increase the GST will be a pound of flesh exacted from the lower and middle classes, as opposed to the tiny pinprick on the rich. After all, it is the rich who offload most of their income into further investments into other businesses and such in order to avoid the income tax.

“increasing taxes for the rich comes with its own set of problems, many of the rich can just pack up and go, and there is no lack of countries welcoming them.”

If the rich are so concerned about maintaining their businesses here, they would’ve had an appreciation for our favourable business environment of decently transparent bureaucracy when it comes to business, a location mostly free from natural disasters and a relatively low threat of terrorism and/or military agitation. Hurting their pocketbooks in this manner will not matter if they’re here for the long haul – a decent, well-run business here will yield more income than they will lose through increased taxes.

The real problem when it comes to taxes for the rich in Singapore isn’t about consumption tax, or income tax: it is capital gains tax. That’s where it really hurts the rich, where the substantial dividends and whatever money you make off investments can be potentially taxed by a capital gains tax. Singapore has no capital gains tax, and Western nations have substantial capital gains taxes, which they use to pay for a proportionately substantial amount of government expenditure.

All in all, one may observe that Jack Lin’s advocacy of “trickle-down economics” sounds a lot like what we have in Singapore. This is true. Many American financial writers cite us to have the freest economy in the world, even if they have no great love for our lack of political freedoms. But that lack of love should no great surprise or news to us – American governments have often chosen to turn a blind eye to this lack of freedoms as long as it is to their economic or military benefit. Examples are legion in their attitude towards Egypt, Turkey, Jordan, a collection of authoritarian African nations and here in Singapore. Striving for a better life for all Singaporeans remains in our hands, and we don’t owe our political freedoms to anyone but ourselves.

Not even the Americans.  ( Potomac-Two-Step [Singapore Edition] )

Free Flow II
Free Flow

07 February 2011