Fixing Capitalism - BBC Debate, Davos 2012

[ChaoPappyPoodle]

allowing only sale of hdb new and resale to citizens only. even more drastic, cpf goes back to roots and cannot be used for housing, or maybe lower the proportion for housing. but need political will to do that. so far the pap has no will, want to please everybody but in the end displease everybody.

Allowing sale only to citizens is good. ALso, new citizens that sell their homes when they return home will not be allowed to enjoy an asset gains. Public housing costs must reflect the cost of building it and not mean to be a profit center for the garment. Once prices reflect this, the use of CPF will be minimal. THose that have purchased previously at high prices will have their values and loans reflect the changes.

IT is not easy but it is also not difficult. The garment is just returning money that it earned by overchaging its citizens. About $100B will be spent and the money can come from Temasek.

Those jiak liao bees at GLCs and Temasek and fuck off and start earning a honest income by doing an actual job.

 

[ChaoPappyPoodle]

Thank you for being honest and frank. Yes, my essay will fail miserably as there is no focus - starting with capitalism, moving to labour but ending with property price. I will put in more practice and hope to improve.

Your suggestion in resetting the economy by reducing property prices is ideal. However, it will be difficult to implement, which is why I equate the current high property price to riding a tiger. When price collapsed, damage will be confined to property owners if everybody has already fully paid up for their properties. However, in reality, many have borrowed for their purchases. Some have used their properties as collateral to borrow more. Banks will be directly affected and the collateral damage propagates. As such, depressing the property price in the current situation is a no no especially because of the uncertainty in the economic outlook. Perhaps the only way to reset the economy is for a depression to strike and everybody will be in the same shit.

The local banks make more than enough. In fact the only one to lose is the garment. They will have to return to home purchases the excess charges. Banks will lose only on interest charges but these can be overcome when these banks actually do some work to earn their money instead of having the government and themselves to leech on the low and middle income Singaporeans. This is lazy money. Banks should be able to earn much more if they actually did some real work.

A depression will not work because the government owns 100% of all land used for public housing. THe government also owns a very large percentage of private land. Each land parcel sold to developers require the developers to complete their projects at determined times. This allows the garment to control prices effectively. As long as the PAPpies are in power, the price of property will always be on a upward trend over an 18-month period. As long as property prices are high, SMEs and real economic growth will be stunted. Only GLCs can grow because they have monopolistic haven and receive land and buildings from the garment at huge discounts.

The only way forward is to remove the PAPpies and make huge changes to the way property is transacted and the prices they carry. In other words, we have to correct the problem at the root and then start again. But this has to be done quickly while at the same time programs must be in place to help SMEs to expand here and overseas through innovation and productivity gains.

 

[Fook Seng]

The local banks make more than enough. In fact the only one to lose is the garment. They will have to return to home purchases the excess charges. Banks will lose only on interest charges but these can be overcome when these banks actually do some work to earn their money instead of having the government and themselves to leech on the low and middle income Singaporeans. This is lazy money. Banks should be able to earn much more if they actually did some real work.

A depression will not work because the government owns 100% of all land used for public housing. THe government also owns a very large percentage of private land. Each land parcel sold to developers require the developers to complete their projects at determined times. This allows the garment to control prices effectively. As long as the PAPpies are in power, the price of property will always be on a upward trend over an 18-month period. As long as property prices are high, SMEs and real economic growth will be stunted.

This is an interesting but very complex problem of reducing the cost of housing in Singapore. While being the most direct, I don't think the Govt, any govt including an opposition govt, would want to come out with a $100 billion to pay back the over valuation of existing HDB flats. As private property prices will also be affected, under such a scenario, the govt will have to cover a lot more than the $100b.

The biggest problem in dropping property prices is the possibility of negative equity. One way to go about is either to maintain an unchanged price over a 10 years period and if income is allowed its normal growth, then at the end of year 10, the price of property will in effect be half (approximately) relative to income or have a reduction over the same long period.

As HDB prices are directly controlled by the govt, they should just focus on this and leave the market to take care of the private sector. Under such a scenario, there is no negative equity as the banks would have discounted some 20% in the valuation when granting the loan.

If we want to be even more ambitious in the reduction, we can go for a 20% cut in price over 10 years. The bank might find a need to do a re-evaluation of the property and might have difficulty continuing with the loan. One way to overcome this is for the govt to underwrite this loan with a guarantee, very much like what we did with Spring loans during crises - with no real money coming out unless there is a default but it allows the banks to continue funding the properties. Of course there are a lot of related issues that need ironing out but I think it can be done.

 

[Fook Seng]

This issue of bringing back fairness amidst the impact of capitalism is different from the movement that gave rise to Arab Spring or the Edsa Revolution (People's Power) in the Philippines. These latter are political movements with the aim of changing political power, in the hope of achieving better economic results.

The movement of achieving fairness in a capitalist system as manifested in the various "Occupy" demonstrations goes deeper into looking at the unfairness in society and the large income inequality that, over time coupled with increased international competition brought about by the breaking down of international trade barriers and cross border mobility of talents and cheap labour, causes hardship of the common people to reach its threshold.

The groundswell from this movement can even develop into something amounting to a tsunami as the self interest of the common people is directly touched upon. The problems raised have to be urgently addressed. If not managed well, it could lead to political change.

 

[Leongsam]

The movement of achieving fairness in a capitalist system as manifested in the various "Occupy" demonstrations goes deeper into looking at the unfairness in society and the large income inequality that, over time coupled with increased international competition brought about by the breaking down of international trade barriers and cross border mobility of talents and cheap labour, causes hardship of the common people to reach its threshold.

Life is never fair. The idiots of the "occupy movement" need to come to terms with the simple fact that it's a dog-eat-dog world out there.

Millions of years of evolution have fine tuned an eco system which perpetuates an environment whereby the top dogs get a lion's share of everything. That's simply the way it's supposed to be.

Those who find themselves wanting need to either try harder or accept defeat.

The idea that an artificial system needs to be implemented whereby the wealthy and powerful have to bribe the losers of society with an allocation of resources that they do not deserve is simply ludicrous.

 

[Fook Seng]

Life is never fair. The idiots of the "occupy movement" need to come to terms with the simple fact that it's a dog-eat-dog world out there.

Millions of years of evolution have fine tuned an eco system which perpetuates an environment whereby the top dogs get a lion's share of everything. That's simply the way it's supposed to be.

Societal coexistence can only come about when there is a fair degree of fairness. Then each can play its part. If there is no fairness, then everything will just revert to the law of the jungle.