Chitchat Why Jamus Lim join Workers' Party ?

[jw5]

Jamus Lim​

7h ·
I’m away this week and part of next, accompanying residents from #Anchorvale and #Buangkok for a tour of Hokkaido. But I seized the opportunity to fly in a couple of days earlier, as I managed to wrangle a seminar at the Institute of Monetary and Economic Studies at the Bank of Japan (the country’s central bank), kindly arranged by an old PhD mate, Ryota.
I won’t bore you with details about the paper I presented—for what it’s worth, it was on the implications of dollar liquidity on economic growth in third countries—but since I went on a morning run around the Imperial Palace, I thought it would be helpful to share some thoughts about the place.
The park is located in the heart of Tokyo, close to the financial district. The residence was built around Edo Castle (Edo is the historical name of Tokyo), and isn’t very large at all; the entire area amounts to just a little more than 3.4 square kilometers. From an economic perspective, however, this land holds a fascinating story.
See, at the height of the great Japanese asset price bubble in 1991, the land on which the palace sat was valued at an insane price: as much as all the real estate in the state of California. While the royal grounds were, of course, never for sale, comparable prices around the vicinity (in the Ginza district) went for amounts as high as $1.5 million USD per square meter. Doing the calculations, the palace would have been worth $5.1 trillion, just a little less than the entirety of Japanese GDP at the time, and not far from estimates of California’s on-market real estate (appropriately rebased; you can see one version of the computations here: https://amaral.northwestern.edu/.../how-much-was-japanese...).
All this is, for me, a reminder that land valuations can go out of whack, and when they do, they may do so badly. As an economist, I’m inclined to believe in the overall efficiency of markets, in general. But economists also know that certain ones—especially in labor, health, the environment, housing, and finance—are more prone to failure. Real estate markets, which combines elements of both finance and housing, are especially vulnerable to bubbles. We saw it in Japan in the late 80s and early 90s, Spain/Ireland/the Western U.S. in the mid-noughties, and China in the 2010s (and beyond).
It’s hazardous to try to bet on (or even call) a bubble; it’s one of those things where hindsight is often far more prescient. Still, I fear that our own approach to inferring land valuations—typically from a residual of transaction prices for comparables, after netting out construction costs and developer profit (with some site-specific adjustments)—implicitly assumes that market-led real estate prices reflect true value.
Regardless of whether we’re talking about private or public housing, this methodology relies on a belief that transacted prices aren’t subject to some sort of self-reinforcing bubble dynamics: when I am willing to pay a price higher than fundamentals would justify, so long as I can offload it to someone else at an even more inflated price. If, however, a bubble component gets embedded in prices, the self-referential nature of this approach runs a greater risk that all this comes crashing down, eroding a major source of Singaporeans’ savings and wealth.
Personally, I’d prefer if we adopt a land pricing strategy that decides that land for public housing shouldn’t be inferred from market prices, but from a predetermined base price, closely tied to either median incomes or per capita GDP. HDB effectively targets this anyway, and makes up the difference with grants and subsidies to keep public housing affordable. But this is circular, since losses that HDB incurs are made up by draws on the budget, where surpluses go into reserves anyway. Easier, in my view, not to introduce this artificial “protect-the-reserves” constraint, with the side benefit that we keep land pricing, especially for public housing, much closer to true fundamentals.
Postscript: for those who might be interested in how deviations from covered interest parity can serve as a proxy for dollar liquidity constraints—and what what this means for macroeconomic variables like GDP growth, inflation, and the exchange rate—you may find a draft of the working paper here (it’s currently being revised for resubmission to an academic journal): http://jamus.name/research/if13.pdf

 

[jw5]

Jamus Lim

and Abdul Muhaimin Abdul Malik
​

4d ·
This most recent meet-the-people session, I was grateful to have one of the #Sengkang4, Abdul Muhaimin Abdul Malik, step in for me, as I was accompanying residents for our #Anchorvale and #Buangkok Hokkaido trip.
One of the neat things about working within #SengkangGRC is that we have the option of tapping on teammates to help with such cover. We had previously done the same, when Min was performing daddy duties after the birth of his child. It’s also why #TeamSengkang has two different days for MPS for half of us; so that this substitution is possible.
More generally, it has been wonderful to see Min blossom as an MP. Although I’m only in my second term, I do feel just that little bit more laojiao, and having the next generation —Min is more than a decade younger than I am—seize the reins is a great reassurance that the ship is being steered by steady hands (pardon the mixed metaphor).

 

[jw5]

Jamus had a delicious meal.

Jamus Lim​

6d ·
Every now and then, I am the fortunate recipient of kindness from those around us. On Monday night, a resident-volunteer at our #Anchorvale vegetable gardens cooked up a delicious meal, which included naibai from a recent harvest. I had skipped dinner prior to the usual meet-the-people session, and the grub helped see me through the evening. Another resident also dropped off some (very spicy!) chilli, which he had made from scratch, using fruit he harvested from his garden. And of course, the many volunteers who show up, week after week, to serve the community and keep the show on the road. Small mercies such as these—together with the occasional successful appeal for a constituent in need—are a big part of what keeps us going on what is a long and often lonely journey. Thank you!

 

[jw5]

Jamus will be chatting with residents this weekend.

Jamus Lim​

23h ·
The past weekends have been a little chock-full of other activities, but this weekend, we’ll make our way to the 330 #Anchorvale coffeeshop, to chat with residents in the morning. If you’d like to touch base, feel free to pop by! This coffeeshop’s breakfast offerings are a little more limited, but for me, the meepok tah is among the best in town. #TeamSengkang #SengkangGRC

 

[jw5]

Jamus Lim​

4d ·
Much has been written about the 38 Oxley matter. I won’t spill much more electrons over this, but from my perspective, the main tension comes from what it means when the government exercises its right to take over a private property, and what sort of circumstances would justify doing so.
Typically, the economic case for eminent domain—the legalese term for actions of this nature, where the state takes over private property, for fair compensation—is that the public interest more than trumps individual rights. This principle alone can’t be sufficient, however; after all, if so, then we would suffer from all sorts of insecurities in society that would come from the tyranny of the majority. So there should be some overwhelming efficiency case, too. Usually, this is why the power is generally exercised for taking over land for schools, hospitals, public housing, or highways.
This is what makes the Oxley property a little different, because the public interest element is less measurable, and stems from the intangible benefit of preserving something of historical and national significance. That’s why the property isn’t being preserved under the Land Acquisition Act (an older law that dates back to 1966), but a newer one, the Preservation of Monuments Act, which was passed in 2009. Moreover, in this case, the property owner has objected to the gazetting. This is novel, and in this sense, then, the events unfolding are unprecedented.
Like the #workersparty, I won’t take sides in
what I believe, ultimately, is a family dispute that is best settled privately. My interest is more in ensuring that the institutions of the state are not inadvertently being corralled to functions they should not be involved in, and—to the extent that a sizable number of Singaporeans do hope for some means of preserving the memory of Lee Kuan Yew and our nation’s heritage—that a compromise solution is found. I made one such suggestion in Parley, but I’m sure there are others. #workingforsingapore

 

[jw5]

Jamus recommends a good school.

Jamus Lim​

3d ·
Outram Secondary was founded in 1906. This makes the school more than a century old, and one of the oldest in Singapore. In its earliest years, it was a primary school, and served as a feeder school for Raffles Institution. Eventually, it evolved into a secondary school, which it remains till this day.
The school has seen its share of illustrious alumni, including our fourth president, Wee Kim Wee (apparently the comedians Gurmit Singh and Irene Ang also went through those gates). Owing to changing demographics, however, the school relocated to #SengkangGRC this year, and starting next year, will take in its first cohort at the new location (the two campuses will run concurrently for a few more years, before fully entrenching into the new home).
Singaporeans sometimes make too much of a fuss about one’s school pedigree. When I was younger, I was guilty of this myself. As I’ve grown older, however, I’ve come to see that that the place we spend our formative years matters far more for the relationships and life lessons one builds—almost always outside the classroom—than in the halls of academia, no matter how hallowed (after all, schools almost always use the same textbooks and teach from similar syllabi).
I’ve also learned to find self-confidence in what I know I can actually produce and achieve, rather than lean on the shadow on my alma mater. One’s track record—whether in sport, studies, work, or even something as blunt as earnings—should eventually speak for itself, far more than where you attended school as a child or teenager.
Of course, this view doesn’t detract from how it is an absolute honor for #Anchorvale to now host this august, historical institution. This morning, I “gatecrashed” (sensitive word these days) the school’s open house. In addition to gawking at swanky new classrooms, labs, and learning hubs, I also discovered that the school’s sport facilities—such as football and basketball courts—will also be made available to residents on weekends, under ActiveSG. At the same time, I’m aware of residents’ concerns over traffic flow at Anchorvale Crescent, and will keeping an eye out for potential bottlenecks. Welcome to Sengkang town, OSS!