February
2009
Track Record8
With all the recent budget talk, one fact that jumped out at me was that in the last decade, Singapore has had 4 recessions. We’ve had the 97/98 Asian financial crisis, the 2001 Dotcom burst, SARS in 03 and now the credit crisis in 07. 4 recessions in the span of about 10 - 11 years. All rather huge world changing events, and all externally driven of course. But really can we lay claim to the best economic managers in the world, if the country’s fortunes are that much tied to external events? Does it mean that our economic policies actually have very little influence in the performance of the country.
While everyone in US is screaming for the blood of the bankers, and for their bonuses to be repaid. Should we really still be paying million dollar salaries to our ministers. Our economy is not that unlike business in a US Investment bank, in that our growth is made possible by leverage. We leverage on foreign workers, skilled and unskilled alike, in our pursuit for growth, not unlike IBs leveraging up their balance sheet. And we leverage up big time, 2/3 of all jobs created last year were for foreigners, or look at it another way, we’re leveraging our workforce by 3 times. Also we place big bets on “growth” sectors, not unlike how banks bet with their balance sheets, look at the amount of money we have thrown at the bio-tech sector. What all that ultimately leads to is a more volatile economy, one where booms and bursts are bigger than in other countries.
Our ministers are certainly paid like some of Wall Street’s best fund managers. Of course the fund manager gets paid well in a year where he made money, but if a fund manager had lost money in 4 of the last 10 years, I’m pretty sure he would have been fired, let alone get paid.
Of course the government is busy congratulating themselves on a “good budget”. And in truth it’s not too bad. But if we want to be symmetrical about things, they have taken the credit for the boom times, just look at their salary increases ( again not unlike how fund managers talk about alpha and their rare ability to make money in the equity bull run), should the government not then shoulder the blame for the current recession? After all a lot their counterparts in the big banks ( which incidentally are what they like to peg their pays to) are taking the blame and paying for it with their livelihoods. It’s almost human nature that we like to take credit for anything that goes well, and try to shift the blame when things go wrong.
The beauty of the private sector is that people get rewarded for their ability and for taking risks, that means that when things go right, these people get rewarded a lot. But when things go badly, they bear the consequences as well. On average most people will get paid well for a few years and maybe be unemployed for another few.
Of course that is not going to happen here, because our ministers here get a much better deal than the best in US. They get paid their million dollar pay regardless of what happens. They not only have a golden parachute, they have a golden rice bowl.
Maybe that is why they have lost touch of the reality on the ground. After all why do you have to pay attention to the people and their problems when you get paid no matter what happens. The security provided to our leaders breed not only complacency but arrogance and even contempt for the average person, if the recent comments by our now famous MP is any gauge. The fact that they have to be constantly reminded in parliament to be more humane and sensitive to people, is evidence of their mindset of talking down to people.
Security in power breeds elitism and arrogance. The only way to restore their mortality is strip the government of it’s absolute power. Like what our government likes to tell us, competition is good. If that is true in the job market and business, then it must also be true in government and politics.
