Monday, February 1, 2010

Let the truth be told

Most democratic governments around the world watches two socio-economic factors very closely - namely inflation and economic growth. Hence you get the the likes of RBA hiking rates repeatedly recently to pre-empt unnecessary inflation (predominantly housing inflation) in Australia, and the US Feds trying to balance their imminent hawkishness on interest rates (also to temper inflationary pressures) with continued dovishness to spur economic recovery and growth.
Heck, even a communist country like China is recently reigning in bank lending by increasing reserve ratio to bring down housing inflation, a problem faced by more and more Chinese citizens in recent years, to prevent any political hiccups due to social unrest.

Cutting the story short >>> high economic growth + low inflation = GOOD ECONOMIC GOVERNANCE. Singapore recently experienced the biggest spike in housing inflation during its worst economic downturn. That is bad economic governance, plain and simple.

Singapore's current leaders, instead of owning up to a bad performance, attempts to do their job using the cheapest instrument - words. They insist repeatedly that housing is affordable on one hand, against everyone's common sense, and yet they also claim that the rapid climb in Singapore's housing prices is a positive and purposeful result of PAP's good work in growing our economy and that is where your wealth and your kids' future wealth will come from. (Remember that when the economy is not doing so well, the fault is put squarely on global economies.) To dive into explaining that our recent growth has been merely a result of the blatant increase in population (hence no real net growth) will be asking too much of me at this late hour.

And to top it off, Lee Kuan Yew put forth the assumption that should Mah Bow Tan be ousted from Tampines GRC, everyone should sell their flats because it will become worthless???? I beg you, the reader, to spend some thoughts on how ridiculous the whole situation any case, 80% of us live in HDB flats; what percentage of us have a second investment property? Can you really cash out on your expensive flat? Where are you going to live? Who benefits from property inflation? Your kids? Or millionaires with multiple real-estates in Singapore and their kids? Think.

Maybe it is time for Singaporeans to reflect upon why Singapore's current leaders run our country with such different approaches as the rest of the democratic societies. Are our collective intelligence really this low? Can you imagine an alternate reality where Singaporeans are able to build up their wealth by saving and not by betting most of their hard-earned money on further asset inflation down the road?

I hope our ministers can start giving some honest and intelligent answers that are not merely aimed to stem the loss of support votes. Let the truth be told, and maybe we can find some redemption.

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