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Topic Review (Newest First)
19-03-2009 05:00 PM
levent--
4357

armchair,

I will not say "letting private actors make those decisions based on market forces" is the best in any country in any circumstances but what you have said ("Free market forces with absolutely no regulation led to the collapse of their economy and dragged down the rest of the world") is not quite true.

What happened in USA is a large central bank (FED) artificially played with the price (interest rate) of one of the most important commodities in the world (money, USD) to avert a relatively mild recession (2001 dot com bubble and 11/9). A small group of people led by Alan Greenspan decided what interest rates should be and against market forces they lowered it to zero.

Second, the problem was not "lack of regulation" but "lack of risk". In a free market, "probability of loss" naturally regulates the "desire to take risk". Risk in money is usually reflected in interest rates. When Alan Greenspan and his team lowered interest rate to "zero" levels, they effectively destroyed natural regulation through "risk" because they transferred the risk from borrowers/lenders to the shoulders of tax payers including savers (currently we are witnessing the realization of promised risk transfer, risk takers are bailed out by tax payers).
29-01-2009 07:46 PM
Weise--
3941

US advocated a free market with relatively less government regulations and believed that market forces will regulate and steer the economy towards efficiency. Whether that has a direct link to the finacial turmoil we are seeing now does not diminish the fact that their policies and beliefs are questionable and were questioning conventional theories - the role of a government especially in time of market failure.

In an economic point of view, any incentives to boost consumption will only lead to more leakages out of the economy since we consume mostly imported items such as food, hps, cars etc except education which is a form of human capital investment. Moreover, Singapore is too small to rely on consumption for growth. Thus, I believe it is more productive to spend on expenditures that could attract investments including FDIs, and education so that our labor force is better equipped and competitive.

But on the other side of the coin and in a social point of view, government is right and benevolent to give income tax and GST rebates to households, not to boost consumption for growth, but to help them to survive the ordeal.
28-01-2009 09:19 AM
armchair--
3940

I especially detest:
"Better to let private actors make those decisions based on market forces."
Free market forces with absolutely no regulation led to the collapse of their economy and dragged down the rest of the world. Even their ex-Fed chairman admits his mistake now.
28-01-2009 09:16 AM
armchair--
3939

jimmy: to clarify, what i meant was that this economist sitting at his desk in his cosy office in the USA has no right to say how Singapore should manage their economy, as USA's economy is in tatters right now with trillion dollar deficits and failing industries left and right.

I think Singapore should do okay.
27-01-2009 11:59 AM
jimmy--
3931

Tatters? So serious meh? With everyone saying the budget is good and all that, I don't think the econ is in tatters.
27-01-2009 08:46 AM
armchair--
3930

I don't listen to "expert" commentary from a armchair economist whose home country's economy is in tatters. It's just laughable.
25-01-2009 06:50 PM
par golf--
3918

Agree with you more can be done on domestic consumption side, which should help the economy.
But regarding paying millions, on one hand you said paying needless millions doesn't help, but on the other you ended your comment saying we should pay millions for talent. So should we pay or not?
25-01-2009 04:31 PM
gonegolf--
3916

This crisis have demostrated a lot of points which from 1997, we should have learnt -

(1) having a large foreign reserves do not protect the value of your currency [neither do you want your currency too strong],
(2) Regionalisation - you decide,
(3) paying ministers millions in salary serves nothing, just let them live in a way that is divorced from the mass population,
(4) Storing wealth via property is not really a good idea - housing is purely a social policy and harms the mass population by tying up significant wealth in a illiquid and "beg the bank" condition.

We definitely need to stimulate domestic consumption, whether it will result in a leakage or not, needs to be done. Even if we import, there is value added that stays in the country - no one sells at cost. It will mean that we, as a nation, will hopefully, be subjected less, not none, to the vagaries of the international world.

It is a tough problem to solve, that is why, we pay millions in salary for the best and the brightest to serve us. Otherwise, we can just pay them the amount that the US government is paying, why pay more?
25-01-2009 08:12 AM
kevin--
3912

As mentioned also in the other forum, the WSJ article is not well-researched, and IMHO, missed the most important point in the budget, which is the company rebate for a portion of their employees' CPF.

Being a city-state, it is rather hard to argue for a consumption model. Assume that CPF are all given out in cash, and people do buy more, majority would go out to consume imported goods that depreciate significantly over time vs the current model where the most logical choice to place CPF is in real estate which does not follow normal depreciation. One of the significant contribution to wealth of our current generation of retirees is the significant appreciation of real estate value and the fact they own (had invested) in them many years back.

On the rich-poor divide, the rich will get significantly richer during the good times, so with bad times, I suspect the rich-poor divide will be brought up less.

My suspect is that the more pressing concern for the government is the threshold point between poor and middle income. There should not be any significant growth in the poor, which will result in civil unrest and political instability.
25-01-2009 07:50 AM
kevin--
3911

In Depth: World's Best Places For Real Estate Buys
Ten cities investors will target in 2009.
By Matt Woolsey

http://www.forbes.com/2009/01/21/investment-obama-realestate-forbeslife-cx_mw_0121realestate_slide_2.html?partner=email

Well... Forbes, no less, is saying Singapore is the tenth best place for real estate buys in 2009.
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