SCMP Columnist tells BG Lee to stop talking cock & learn economics 101

[Leongsam]

They don't need to vote for the rich ...they could be working for themselves as shareholders or as members of a pension funds that own shares in the business.
The point is that excessive concentration of the wealth at the top hurts society at the social and economic level. That the global economy is still in doldrums after five years is telling us something. The disappearing middle class no longer can provide the consumption needed to boost growth and the rich are not spending enough to compensate. Business, in turn, are not investing because they see weak demand for the products. It all goes back to demand and who provides that demand? Not the filthy rich that you speak so highly of.

Wealth is not a zero sum game. The rich can get richer without the middle class and the poor getting poorer. An analogy is an Olympic sprint event. For Usain Bolt to go 0.2 seconds faster, the last guy does not have to run 0.2 seconds slower. The whole field can progress. It's up to each individual sprinter to lift his game. If the last guy gets discouraged because he can't keep up, it's not the fault of the winner. It's a character flaw he has to deal with himself.

The rich don't generate sufficient growth for the economy to compensate for the loss of consumption by the middle and working class. Europe is in current mess because they have followed the Anglo-American model of giving tax cuts to the rich and corporations, leaving the middle and working class to carry the tax burden.

As I pointed out in my previous post, increasing the taxes on the rich merely makes them move somewhere else. That's what has happened in France.

But they are better off than the rest of the world. And it is less rosy because of right-wing policies. Lesson to be learnt - stick to progressive policies.
Many pointed to economics. Despite our rosy view of Sweden, over the past 20 years there have been huge changes made to "The Swedish Model", of which some of the most significant were enacted by the centre-right Alliance coalition since 2006, headed by current Prime Minister Fredrick Reinfeldt.

The problems in Sweden are caused by mass immigration not right wing policies. It's just not politically correct to say so in black and white in today's PC world. Besides a lot of these articles are written by liberals with an axe to grind so you have to take their analysis of things with a pinch of salt. Distorting the picture is not confined to the Braddell Road whorehouse. Both sides of the political spectrum are just as guilty and it happens throughout the world.

 

[watchman8]

The middle class don't just morph out of thin air. They work for the rich. No society has a bunch of middle class just working for each other.



The steeper progressive taxes do nothing to close the wealth gap in Europe. All they do is change the demographics so that the rich become residents of Monaco, Andorra, Switzerland, Channel Islands and so on. It also fuels the super yacht industry as it enables the super rich to spend chunks the year in international waters thus avoiding tax residency status in their homelands.

As for the Nordic states.. things are not as rosy as they seem. There's an excellent article at http://www.newstatesman.com/economics/2013/06/swedish-riots-what-really-happened

I'm referring to going to extremes of reaganomics. Few people are arguing for communism here. What is more desirable is to have social and govt measures to reduce the wealth gap, instead of allowing a permanent class of rich who can continue to remain rich without continuously working to keep their wealth. The current govt policies are simply too beneficial to the rich.

How many locals are actually employed by the new billionaires in town? Very few in overall scheme of things. Most people are employed in govt, MNC and businesses serving the masses.

Don't talk nonsense about trickle down effect without looking up real statistics.

 

[winnipegjets]

Wealth is not a zero sum game. The rich can get richer without the middle class and the poor getting poorer. An analogy is an Olympic sprint event. For Usain Bolt to go 0.2 seconds faster, the last guy does not have to run 0.2 seconds slower. The whole field can progress. It's up to each individual sprinter to lift his game. If the last guy gets discouraged because he can't keep up, it's not the fault of the winner. It's a character flaw he has to deal with himself.

Your analogy doesn't apply here. It is a zero sum game. When 40 percent of the global wealth is controlled by the 1 percent (if my recollection is correct, about 144), that means there is less money out there used for consumption. This 1 percent when they invest, a good chunk of it is on financial instruments which in themselves don't contribute to aggregate demand.

The system in its current form is flawed and will face collapse as the a restless shrinking middle class demands a fair share of wealth. The middle class isn't working less ...they are working harder with lower pay thanks to globalization. Globalization is not working for the working and middle class. Look for the return of protectionism and nationalism.

As I pointed out in my previous post, increasing the taxes on the rich merely makes them move somewhere else. That's what has happened in France.

Look at the Nordic countries, there are still millionaires and billionaires there. For those who leave, it is not a big deal. The rich DON'T create jobs. It is demand for a product that creates jobs.

The problems in Sweden are caused by mass immigration not right wing policies. It's just not politically correct to say so in black and white in today's PC world. Besides a lot of these articles are written by liberals with an axe to grind so you have to take their analysis of things with a pinch of salt. Distorting the picture is not confined to the Braddell Road whorehouse. Both sides of the political spectrum are just as guilty and it happens throughout the world.

When centre-right policies of tax cuts for corporations and rich are in place, some programmes have to be cut. These are the programmes that would have helped the new immigrants to integrate into Swedish society.
There are more right-wing filth out there than progressives stuff. Right-wing ideas seem logical on the surface but when you go into details, you see that it is full of garbage ...best example, trickle-down ecnomics.

 

[blissquek]

Pinky is NOT an economist.He majored in mathematics at Cambridge.

Whether he is an Economist or a Mathematician......the last 5 years HE FCUK IT UP BIG TIME....

 

[Leongsam]

Don't talk nonsense about trickle down effect without looking up real statistics.

I don't rely just on statistics to draw my conclusions. A lot of it is from personal observation over the years in the various places where I have lived and worked.

In a suburb or city where there are lots of rich people, everyone benefits as long as the rich indulge in conspicuous consumption. I've seen it happen in the Bay area. If seen it in LA. I've seen it in Sydney and I've seen it in parts of Europe.

As I explained earlier, when a rich guy buys a Ferrari, a local salesman gets a huge commission. When he buys a $10 million penthouse, some housing agent receives a windfall. When he spends $10,000 per night on entertaining his friends, the money is distributed throughout the economy. When he buys his mistress a $200,000 diamond ring, someone in Singapore receives that money and it works its way through the system.

If you're telling me that it makes no difference whether Singapore is home to 30 billionaires or no billionaires, I must be missing something because it makes no sense to me whatsoever.

Surely it is much better to have as many wealthy in your midst as possible. All over the world, businesses and countries are competing for the spending power of the wealthy. NZ is currently sending delegation after delegation to attract wealthy Chinese to its shores because they are now the big spenders. They want them to stay for month not days and are removing as much red tape as possible for the PRC billionaires to spend lots of time in NZ.

If the presence rich pricks makes no difference to an economy whatsoever, why bother?

 

[Leongsam]

Your analogy doesn't apply here. It is a zero sum game. When 40 percent of the global wealth is controlled by the 1 percent (if my recollection is correct, about 144), that means there is less money out there used for consumption. This 1 percent when they invest, a good chunk of it is on financial instruments which in themselves don't contribute to aggregate demand.

The system in its current form is flawed and will face collapse as the a restless shrinking middle class demands a fair share of wealth. The middle class isn't working less ...they are working harder with lower pay thanks to globalization. Globalization is not working for the working and middle class. Look for the return of protectionism and nationalism.

Look at the Nordic countries, there are still millionaires and billionaires there. For those who leave, it is not a big deal. The rich DON'T create jobs. It is demand for a product that creates jobs.

When centre-right policies of tax cuts for corporations and rich are in place, some programmes have to be cut. These are the programmes that would have helped the new immigrants to integrate into Swedish society.
There are more right-wing filth out there than progressives stuff. Right-wing ideas seem logical on the surface but when you go into details, you see that it is full of garbage ...best example, trickle-down ecnomics.

I've been around a long time. When I was a kid, there were very few rich people around. They were all household names. There were also far more poor people who literally had no assets to their name apart from the clothes they wore. I don't know what the gini coefficient was at the time probably because it hadn't been invented yet. However, I assume it was lower than it is now as $1,000,000 was a huge amount in those days.

Many years have passed and I fully agree that the rich have got much richer simply because the world has changed so much. It used to take a decade to grow a company from zero to $ 1 million turnover. Now it goes from zero to $100 billion in less than 5 years.

HOWEVER, everyone is better off as a result. "Poor" is a relative term. The poor of today are 10 times better off compared to the poor of yesteryear. The gap between the rich and the poor may be wider but that does not alter the fact that the poor are living in the lap of luxury compared to the poverty that I witnessed in the "good old days".

As for the new immigrants in Sweden let me assure that you it would take a lot more than $$$$ to integrate them. You could give them mansions to live in and they'd turn the area into slums in no time at all.

 

[winnipegjets]

I've been around a long time. When I was a kid, there were very few rich people around. They were all household names. There were also far more poor people who literally had no assets to their name apart from the clothes they wore. I don't know what the gini coefficient was at the time probably because it hadn't been invented yet. However, I assume it was lower than it is now as $1,000,000 was a huge amount in those days.

That was when the wealth was more evenly distributed. And the working and middle class have a real shot in attaining a better life for themselves and future generations. Social mobility was there.

Many years have passed and I fully agree that the rich have got much richer simply because the world has changed so much. It used to take years to grow a company from zero to $ 1 million turnover. Now it goes from zero to $100 billion in less than 5 years.

Greed has made people nuts. Greed is NOT good and will lead to social upheaval. We are heading there now as the rich feels entitled and the lower income feels entitled as well. As more middle and working class folks join the ranks of the lower income, the clash of the classes is inevitable. Social equilibrium was there when everyone acted with restraint.

HOWEVER, everyone is better off as a result. "Poor" is a relative term. The poor of today are 10 times better off compared to the poor of yesteryear. The gap between the rich and the poor may be wider but that does not alter the fact that the poor are living in the lap of luxury compared to the poverty that I witnessed in the "good old days".

Everyone was better off when the middle class wasn't shrinking. It is shrinking. The last decade, median income didn't grow in the US. And we are on the path of a similar repeat if the current doldrums drag on. In the past, downturn was short because wealth was concentrated in the hands of a few.

As for the new immigrants in Sweden let me assure that you it would take a lot more than $$$$ to integrate them. You could give them mansions to live in and they'd turn the area into slums in no time at all.

It depends on how you integrate them. If they are Islamists, I would agree with you as these folks are guided by holy forces. For most people who seek a better life, they don't yearn to be stuck in poverty. They want to be in but just can't make it. That's where government can help.

 

[winnipegjets]

I don't rely just on statistics to draw my conclusions. A lot of it is from personal observation over the years in the various places where I have lived and worked.

In a suburb or city where there are lots of rich people, everyone benefits as long as the rich indulge in conspicuous consumption. I've seen it happen in the Bay area. If seen it in LA. I've seen it in Sydney and I've seen it in parts of Europe.

As I explained earlier, when a rich guy buys a Ferrari, a local salesman gets a huge commission. When he buys a $10 million penthouse, some housing agent receives a windfall. When he spends $10,000 per night on entertaining his friends, the money is distributed throughout the economy. When he buys his mistress a $200,000 diamond ring, someone in Singapore receives that money and it works its way through the system.

If you're telling me that it makes no difference whether Singapore is home to 30 billionaires or no billionaires, I must be missing something because it makes no sense to me whatsoever.

This is one time that statistics is necessary. Yeah, there would be some benefits when billionaires spent but they don't spent enough to make a dent on aggregate demand.
Your observations is right that the spending of billionaire does boost the income of some. But the spending of 1000 people earning $100k each is more than the spending of a billionaire. So instead of crafting policies to attract billionaires, the government should focus on how to raise the income of the middle income. Attracting more billionaires over will have minimal impact.

 

[Reddog]

Uh-oh... incoming defamation lawsuit for SCMP. :(

... but this lawsuit will be lodge in Sinkapore courts only.

 

[Leongsam]

This is one time that statistics is necessary. Yeah, there would be some benefits when billionaires spent but they don't spent enough to make a dent on aggregate demand.
Your observations is right that the spending of billionaire does boost the income of some. But the spending of 1000 people earning $100k each is more than the spending of a billionaire. So instead of crafting policies to attract billionaires, the government should focus on how to raise the income of the middle income. Attracting more billionaires over will have minimal impact.

Nowhere have I said that one does not have to compete in order to benefit but that's what life in the 21st century is all about. It has nothing to do with where a country is on the political spectrum. It has everything to do with the fact that the world is now fully integrated and no country has a monopoly of resources or manpower.

Any attempt to artificially inflate incomes of certain groups is doomed to fail simply because there are so many ways to bypass the system in this interconnected world.

Again I'll use NZ as an example... the left leaning Labour government did a lot of damage to the economy by increasing minimum wages and increasing the taxes of the higher income earners. As a result, a lot of high income earners left NZ to work in Singapore, Middle East and China.

A company that I used to subcontract my graphic design and programming work to lost 3 of its top people who went to work overseas. The quality of the work suffered as a result.

However, despite the fact that standards dropped, they increased their hourly rate from NZD85 to NZD95 citing increased overheads because of a higher minimum wage which had pushed up their costs.

This forced me to search elance.com for someone who could do a better job at a more competitive rate. I found a guy in Nicaragua who could do all my programming and a company in Portugal who could do all my graphics. Turnover was faster, the hourly rate was half of what I was paying. I still use them today.

Accept the world as it is and learn to work with whatever system that presents itself to your advantage. This is the only way to survive in the 21st century.

 

[watchman8]

I don't rely just on statistics to draw my conclusions. A lot of it is from personal observation over the years in the various places where I have lived and worked.

In a suburb or city where there are lots of rich people, everyone benefits as long as the rich indulge in conspicuous consumption. I've seen it happen in the Bay area. If seen it in LA. I've seen it in Sydney and I've seen it in parts of Europe.

As I explained earlier, when a rich guy buys a Ferrari, a local salesman gets a huge commission. When he buys a $10 million penthouse, some housing agent receives a windfall. When he spends $10,000 per night on entertaining his friends, the money is distributed throughout the economy. When he buys his mistress a $200,000 diamond ring, someone in Singapore receives that money and it works its way through the system.

If you're telling me that it makes no difference whether Singapore is home to 30 billionaires or no billionaires, I must be missing something because it makes no sense to me whatsoever.

Surely it is much better to have as many wealthy in your midst as possible. All over the world, businesses and countries are competing for the spending power of the wealthy. NZ is currently sending delegation after delegation to attract wealthy Chinese to its shores because they are now the big spenders. They want them to stay for month not days and are removing as much red tape as possible for the PRC billionaires to spend lots of time in NZ.

If the presence rich pricks makes no difference to an economy whatsoever, why bother?

This video should be enlightening to you

 

[watchman8]

Surely it is much better to have as many wealthy in your midst as possible. All over the world, businesses and countries are competing for the spending power of the wealthy. NZ is currently sending delegation after delegation to attract wealthy Chinese to its shores because they are now the big spenders. They want them to stay for month not days and are removing as much red tape as possible for the PRC billionaires to spend lots of time in NZ.

If the presence rich pricks makes no difference to an economy whatsoever, why bother?

With land mass of Malaysia but a population of Singapore, NZ can afford to have a lot more foreigners without driving up cost of property, cars, food etc by too much.

It doesn't mean that if your neighbour can keep many dogs you can too. One has to look at own household and plan accordingly.

 

[Leongsam]

This video should be enlightening to you

That video was posted here a few days ago and means nothing. I can find videos that prove that the moon landing was a hoax but it doesn't mean that was actually the case.

I base all my conclusions on personal observations and personal experiences.

Wealthy and successful people spawn more of the same. When you associate with winners, the positive attitude is infectious and it rubs off on you. Don't waste your time listening to negativity. Give it a go. You'll be surprised how your potential is unleashed.

PS:The reason why the US has gone downhill has got nothing to with low taxes on the rich. It's because of the emergence of a more competitive manufacturing base called China. The American rich have created millions of new jobs but they've all gone to the Chinese because the economy is now global and respects no borders. Apple and other American multinationals are making tons of money but they're declaring it in other countries where the taxes are lower compared to the USA. If the US didn't have such high tax rates, profits would be repatriated to the US instead and the country would benefit.

I learned all this from the rich Yanks themselves when I was working for them many years ago and Singapore was at its peak as a manufacturing centre for the US disk drive industry.

 

[watchman8]

Wealthy and successful people spawn more of the same. When you associate with winners, the positive attitude is infectious and it rubs off on you. Don't waste your time listening to negativity. Give it a go. You'll be surprised how your potential is unleashed.

PS:The reason why the US has gone downhill has got nothing to with low taxes on the rich. It's because of the emergence of a more competitive manufacturing base called China. The American rich have created millions of new jobs but they've all gone to the Chinese because the economy is now global and respects no borders. Apple and other American multinationals are making tons of money but they're declaring it in other countries where the taxes are lower compared to the USA.

There are a few types of successful people. You should not lump all into one. I associate with wealthy and successful people who understand that their wealth and success are also a result of luck and a gift from society.

Even the pope recently came out against the selfish rich bunch. Is the vatican pope being negative? Or the pope also realises the problem of going to the extremes of reagonomics?
http://www.dw.de/pope-condemns-unemployment-on-labor-day/a-16783274

 

[Leongsam]

There are a few types of successful people. You should not lump all into one. I associate with wealthy and successful people who understand that their wealth and success are also a result of luck and a gift from society.

Even the pope recently came out against the selfish rich bunch. Is the vatican pope being negative? Or the pope also realises the problem of going to the extremes of reagonomics?
http://www.dw.de/pope-condemns-unemployment-on-labor-day/a-16783274

They're all the same. Some have good PR skills and say things others like to hear. A good example is the guy in the video above. He's playing to the audience. If he said what he really felt, there'd be an outcry which would affect his business.

Those rich who truly believe that they are not being taxed sufficiently can always volunteer to pay more taxes. How many actually do?

Judge everyone, rich included by their actions and not what they say in front of an audience.

You have to understand that corporations are just as good as governments when it comes to "wayang". I used to make presentations on behalf of my American rich pricks that were nothing but a pack of lies about how we were good corporate citizens.. supported charities... cared for the environment blah blah blah. It was all a load of bull. I should know I wrote the script on their behalf.

 

[watchman8]

They're all the same. Some have good PR skills and say things others like to hear. A good example is the guy in the video above. He's saying what people want to hear during these hard times. If he said what he really felt, there'd be an outcry which would affect his business.

Those rich who truly believe that they are not being taxed sufficiently can always volunteer to pay more taxes. How many actually do?

Judge everyone, rich included by their actions and not what they say in front of an audience.

there are major differences between a rich man with empathy and one without. It is not about PR skills, but wisdom and empathy. I think the current pope has plenty of both.

 

[Leongsam]

With land mass of Malaysia but a population of Singapore, NZ can afford to have a lot more foreigners without driving up cost of property, cars, food etc by too much.

It doesn't mean that if your neighbour can keep many dogs you can too. One has to look at own household and plan accordingly.

The cost of housing has skyrocketed in NZ in recent years. NZ may have a lot of land but everyone is fighting for the same patches of land near to the cities so it makes no difference.

 

[Leongsam]

there are major differences between a rich man with empathy and one without. It is not about PR skills, but wisdom and empathy. I think the current pope has plenty of both.

If the Pope has empathy, let's see how he distributes the obscene wealth of the Catholic church to those who need it more than the church does.

He can also start changing the rules so that the catholic church has to follow the same tax and disclosure laws as everyone else. I'm not holding my breath.

http://www.slate.com/articles/busin...religious_institutions_are_exempted_from.html

 

[watchman8]

The cost of housing has skyrocketed in NZ in recent years. NZ may have a lot of land but everyone is fighting for the same patches of land near to the cities so it makes no difference.

You are talking about the best regions of capital city, where only a small portion of NZ lives. The bulk of NZ home prices should be very affordable. OTOH, Singapore property prices has substantially risen across the board, and is no longer affordable to many locals. Condos in Woodlands selling at $1000 psf. HDB 5 room flat at $500k in Jurong.

 

[Leongsam]

You are talking about the best regions of capital city, where only a small portion of NZ lives. The bulk of NZ home prices should be very affordable. OTOH, Singapore property prices has substantially risen across the board, and is no longer affordable to many locals. Condos in Woodlands selling at $1000 psf. HDB 5 room flat at $500k in Jurong.

It may be bad in some areas and worse in others but the whole country is affected. The places where houses are cheap are the areas where nobody wants to live because there is nothing to do and no work to go to.

http://www.stuff.co.nz/business/industries/8831586/Housing-affordability-worst-in-three-years

Singaporeans have this notion that the PAP is the cause of all things bad. They don't realise that exactly the same problems or worse are being faced by billions the world over.