AC Analysis and Comment

facts and leadership resposes

2011-04-19T11:32:00.002+08:00

Fact: Tepco’s nuclear reactor causes heightened radiation levels in Japan, partly caused by slow response of Tepco.
Leadership response: Tsunehisa Katsumata suggested senior executives will resign.

Fact: BP’s deep water horizon well exploded in the Gulf.
Leadership response: Tony Hayward was replaced by Bob Dudley.

Fact: Hewlett-Packard’s standard of business conduct were violated by CEO Mark Hurd.
Leadership response: Hurd resigned.

Fact: Perceived conflict of interest between SGX CEO Hsieh Fu Hua’s appointments at SGX and at Prime Partners.
Leadership response: Hsieh took leave of absence from Prime Partners with immediate effect.

Fact: Mas Selamat was lost by the Singapore Police Force.
Leadership response: Wong Kan Seng remains coordinating minister for national security.

Fact: Youth Olympic Games budget was busted by 300%.
Leadership response: Vivian Balakrishnan remains minister for community development, youth and sports.

Fact: HDB flats insufficient to meet demand (young couples have to queue over and over before getting a flat of their own).
Leadership response: Minister for national development Mah Bow Tan calls WP’s manifesto irresponsible but does not address issue.

Fact: MOE considered reducing the weight of Mother Tongue in PSLE.
Leadership response: Minister for education Ng Eng Hen publicly apologized.
This one I respect. This is a leader.

Fact: The public transport system in Singapore is overcrowded. Too many COEs were released resulting in too many cars on the road. Train capacity is insufficient for rush hour crowds. Cabs are difficult to get during peak hours.
Leadership response: Raymond Lim remains minister for transport.

And they tell me Ting Pei Ling is capable. Give me one reason to believe them.

The Importance of Bilingualism 双语能力的重要性

2010-04-27T02:11:00.002+08:00

by Aaron Chew
周士彦

This article was first written in English and then manually translated into Mandarin by the writer.

THE English language seldom fails me but I am currently facing difficulty in finding an appropriate word to describe my reaction towards the possibility of reducing the weighting of Mother Tongue in the Primary School Leaving Examination. Aghast, mortified or horrified don’t seem to cut it.

Singaporeans are practical people. Reducing the weighting will lead to less attention being paid. The value of learning Mother Tongue to parents and students will be diminished. The competence of students in their Mother Tongue will undoubtedly be significantly reduced.

As Social Studies has taught us since young, Singapore is puny, with no natural resources apart from its geographical location, and its people (an artificial resource refined by education). In a nutshell, bilingualism is one of the few competitive advantages that will keep Singapore ahead in an increasingly globalized world dominated by what is now popularly called the G2 – the United States of America and China.

Full disclosure: I spent 10 years studying in SAP schools, obtained A1 in English language, Chinese language as well as Higher Chinese at the GCE “O” Levels. Looking back, I hated studying Mandarin. It was difficult, time-consuming, and frankly, I thought it was rather useless. It is only now that I see the folly of my opinion and look back in gratitude at the edge that I have gained by virtue of my bilingualism.

I spent two months of the summer in 2008 studying at Harvard Summer School in the USA. People I met – Americans, Europeans, Koreans alike – are always impressed with the standard of English spoken and written by Singaporeans. While I am unequivocal about the importance of bilingualism, I do believe Singapore’s education system is doing a great job in the teaching of English. The focus of this piece is therefore on the importance of the Mother Tongue. I can only speak for my own and hence, I will be focusing on Mandarin.

Last year, I spent seven months in China – five studying and two on internship. It was an eye-opener for me. China is a place of great potential. It is the only major economy in the world that has been recording annual growth of around 10 percent. Business opportunities abound. Top-tier cities like Shanghai and Beijing do not lag far behind Singapore in terms of being modern and cosmopolitan.

Chinese people are brilliant. Singaporeans must remember we are the descendents of poor peasants seeking a better life outside China. The wealthy and scholarly remained in China. Having said that, one thing the vast majority of the Chinese lack is competence in the English language. As I was studying at Tsinghua University, I realized that fluency in English was the edge I had over the Chinese. My ability to speak and write in Mandarin also gave me an edge over the Americans and Europeans.

During my internship stint in Shanghai with a foreign company, it was this very edge that aided my work performance. I was able to translate pieces written in Mandarin quickly into English. I was able to communicate with both the European bosses in English, as well as potential Chinese business partners in Mandarin. Singapore with its bilingualism is uniquely and perfectly positioned to be a bridge between China and the West.

Recognizing the importance of China on the world stage, Westerners are also picking up Mandarin. A case-in-point would be Australian Prime Minister Kevin Rudd, who is fluent in the language. My internship supervisor, Dr. Zhang Xiaolu, was previously a professor at the East China Normal University (which trains teachers), who specializes in “Teaching Mandarin to Speakers of Foreign Languages”. There is a big and growing market for it out there!

I met a Chinese teacher from a high school in New Jersey, USA, Dr. Wu Weiling, who played a recording of her American students speaking Mandarin. Their enunciation would put most Singaporeans to shame!

The world wants to learn Mandarin. In Singapore, we are yellow-skinned Chinese people. Do we really want to throw our heritage down the drain? If the West can learn Mandarin, so can Singaporeans!

Along with the language comes its culture and value system. Traditional Chinese values like filial piety, loyalty to country, diligence and the ability to take hardship should be treasured and imbued into Singaporeans via the teaching of Chinese language and culture.

Reducing the weighting of the Mother Tongue at the very initial stage of education would be a myopic decision that would cause detriment to Singapore as a whole. I urge the Ministry of Education to consider carefully before making any hasty decision.

报章报道，教育部考虑减低母语成绩在小六会考的比重。本人觉得惊讶与遗憾。新加坡人很实际。一旦减低母语成绩的比重，父母以及学生就会轻视母语。母语能力自然降低。新加坡学生从小就学到新加坡除了地理位置和人口没有资源。在今天这个国际化的世界里，美国与中国越来越强盛。国人的双语能力能让我们占优势。

本人在特选学校读了十年书，在中四会考英文，华文，以及高级华文都考A1。回想当年，本人非常讨厌读中文。读中文难度较高，需要稍微多一些时间精力，而当时，我还觉得中文根本没用。到了今天，我才发现当年多么天真无知，非常感激双语能力给我的优势。

2008年，我在美国读了两个月的书。无论遇见美国人，欧洲人或韩国人，他们都认为新加坡人的英文能力较高。我虽然注重双语教育，谈到英文能力，新加坡的确给国人打了很好的基础，所以我将把焦点放在母语。

去年，我在中国读了五个月的书，花了两个月在外企公司实习。这七个月可说是让我大开眼界。中国的潜力非常大。中国的经济增长得非常快，每年大概增长百分之十。上海与北京不比新加坡落后，和新加坡一样国际化。

中国是一个卧虎藏龙的地方，中国人非常厉害。新加坡人要记得，我们的祖先是平民百姓，到新加坡寻求更美好的生活。富裕的，受教育的都留在中国。但中国人虽然机灵，他们的英文能力欠佳。在鼎鼎大名的清华大学读书，唯有我的英文能力让我占优势。而我的华文能力让我和美国人，欧洲人相比时，占优势。

在上海实习的时候，我的双语能力派上用场。我能够很快的把中文翻译成英文。我能够用英文与来自欧洲的老板沟通，也能够用华文跟中国生意伙伴交流。新加坡，因为有双语能力的优势，特别适合成为中国与西方之间的桥梁。

面临一个越来越强盛的中国，西方人开始学中文。澳大利亚陆克文总理是一个很好的例子。我在上海实习的上司，张晓路博士，之前在华东师范大学教书,从事对外汉语教学和师资培训。对外汉语教学的市场正在增长。我也遇见了在美国中学教华文的吴葳玲博士。她播放了她的美国学生的朗读，发音还比我们新加坡人标准呢！

世界各国的人都想学中文。身为华人的新加坡人真的要把中华文化的优良传统就这样放弃吗？如果西方人能够学华文，新加坡人也能！学华文不但学会语言，中华文化的美德，如孝顺，爱国，刻苦耐劳都通过学语言而灌输。

减低母语成绩在小六会考的比重会影响新加坡的前途。我恳请教育部慎重考虑。

China - love it, hate it, deal with it.

2009-11-16T14:55:00.002+08:00

Having spent seven months of 2009 in China, Singaporean Aaron Chew looks back at his time and writes a commentary from his personal experience and perspective.

CHINA, Asia's rising star, the world's awakening giant, is undoubtedly a country of immense potential. There is no doubt it will be one of the biggest players (if not the biggest) on the world stage in time to come.

Beijing and Shanghai are highly developed. Other cities like Shenzhen, Guangzhou, Nanjing are not far behind. But the vast majority of the country and population are still poor. The government is doing a great job creating jobs for the workers, who will be the labour behind the urbanisation of China. The people are brilliant (remember that us Singaporeans are the descendants of landless peasants from China) and it is no wonder that they have brilliant statesmen, economists, engineers, businessmen.

As for the uneducated people, they are highly resilient. They are able take a train for more than one day to get to another city to seek employment (I got a sleeper ticket, i.e., one with a bed, when I took the train. Some of these people get standing tickets, standing all the way!!). They are willing to work hard in harsh conditions. So it's good for the country really. These peasants make a living by becoming cheap labour and as a result, China is urbanised.

Things in China are really cheap. As an expat, I enjoyed a high standard of living without spending too much money (because I know their language and know how to bargain with them). Beijing, where I spent four months on exchange and Shanghai, where I spent more than two months on internship, are modern and so it is possible to live hygienically (whereas in a lot of the other parts of China, one may find conditions less sanitary).

On the flipside, Chinese people can be rude and abrasive. You constantly hear honking on the roads, fights are common. You need to shout for your waiters because everyone is shouting and so you cannot get their attention otherwise. All these are tolerable.

But Chinese people tend to cheat as well. When they sell you things, they tend to exaggerate and lie to extract a higher price from you. Some unsuspecting tourists may end up paying five or ten times more for their item if they don't know the right price or are inept at bargaining with them. There are also many crooks. I have actually been robbed in broad daylight before!! No passerby actually cares because fights are so commonplace in China.

I lodged a police report twice - once for the robbery, once because my friend lost his wallet. The police don't give you a copy of the police report (I tried asking for one) - isn't this very clearly room for corruption?

The Chinese government also takes a very firm hand on running the country. Stability is prized and hence, human rights are readily infringed. From arresting dissidents readily to something as small as banning youtube - it's an annoyance.

Things were calm in China when I arrived in February. But over the course of the year, a Tibetan documentary appeared on youtube, the first anniversary of the Sichuan earthquake arrived, as did the 20th anniversary of the Tiananmen Incident, and the Xinjiang riots occured!!

So one by one, youtube, blogger, twitter, facebook were blocked. There were even days that ebay, google, hotmail and MSN messenger were down because the government was so worried of the "negative influences from the West". It was so frustrating trying to keep in touch with the world outside China.

The Financial Times is a fierce critic of the country and I do not blame them. Influenced during my junior college days by eminent educators from the hippies era who marched on the streets against the Vietnam War, I made a trip down to Tiananmen Square on the the 4th of June, the 20th anniversary of the Tiananmen incident.

The whole place was eerily quiet. There were soldiers, policemen and even plainclothes policemen (who all had a badge and an umbrella each) were on patrol. I later read in the FT that protesters had been rounded up in the morning. Since I was there only in the afternoon, I had missed the action.

The rich-poor divide in China is very evident. The rich Chinese hence despise the poor. Akin to E.M. Forster's A Passage to India, the expats can generally be divided into two groups. One group mingles among the Chinese, is willing to learn more about their culture and show respect for them. Another group simply despise the Chinese, abuse them verbally, make fun of them.

It's quite sad because these Chinese are not lazy, they just did not have the opportunity back home (in the rural parts) to be educated. Hence, they seek cheap employment in the cities. Hopefully their children will get a chance to be educated and break out of the poverty cycle.

Overall, China leaves one with mixed thoughts and emotions. Sure, problems are coming. Social unrest is inevitable in a diverse land with minorities seeking independence, a severe rich-poor divide, and a government that is more concerned with form than substance and unabashedly rules with an iron fist.

But the land is undeniably rising to take its rightful place on the world stage, economically first, then politically. Ignore China at your own peril.

Swine Flu Might Be Singapore's Break

2009-05-03T16:06:00.000+08:00

FACED with a predicted nine per cent fall in GDP, how should Singaporeans react to the news of the spread of the swine flu virus?

A nine per cent fall negates three years of three per cent growth. It also means that it is likely that one in every ten persons loses his job. In addition to that, thousands of graduates from the universities and polytechnics are due to enter the work force once semester ends, right about now. Unemployment has been on the steady rise.

According to official figures, as of March 2009, unemployment for the resident population stands at a whooping 4.8 per cent! The situation is likely to get worse in the coming quarters.

Negative growth, increased unemployment, what could be worse? So should Singaporeans react to the swine flu with disdain? This economist doubts the swine flu will affect Singapore too badly. After all, Asia as a continent has only been tainted with a few cases so far. Death and sickness should not be taken lightly and should not be used as a tool for economic growth.

Yet, economic growth could be a byproduct of the sickness. Pharmaceutical companies in Singapore will benefit (recall the Japanese firm that received a sudden order of thousands of thermometers from the Singaporean Ministry of Education when SARS hit). The government will spend money. The economic slide will slow.

Unless the swine flu situation in Singapore becomes serious enough to warrant a stopping of activity (like in Mexico or Texas), otherwise the overall economic impact of the virus on the Singaporean economy could well be a positive one.

All-too-subtle Government Messages

2009-03-24T10:00:00.004+08:00

HAVING lived in the People's Republic of China for the past month, I have been endlessly tickled by the efforts of the central government to bring its messages across.

A statue of former Chairman Mao Zedong is on practically every university campus. In my own school, big gold words "为国家健康工作五十年", translated, "Work healthily for the country for 50 years" run across the exterior of the sports center. All university students are required to take three modules on Mao, Deng and communist leaders.

This sounds all too familiar to Singaporeans, who have been force-fed with information about the stability, ability and incorruptibility of the Singapore government from primary school, all the way to university, whereby undergraduates are required to take at least one Singapore Studies module.

In China, the straw that broke the camel's back for me came in the form of "新闻联播", or "Joint News Broadcast". For half an hour every evening, all the channels on television that would like to show news must show news from the same source, China Central Television. So regardless of what channel you flick to, the news message is the same.

The template is rather standard. The first 10 minutes would cover victories and breakthroughs in China, the second 10 minutes would be an update on Chinese communist leaders and the third 10 minutes would focus on negative stories from other countries.

The governments of China and Singapore are not the only ones who go through great lengths to ensure the right information is passed to their citizens. The Japanese governments rewrote history to make Japan a victim of the second world war. The North Korean government tells its citizens they are living in paradise.

The people of a young and immature society are easily led to believe what their leaders want them to believe. As the society matures, so do the citizens. For how long can governments keep up their all-too-subtle propaganda? It remains to be seen.

You can lie to all of the people some of the time, you can lie to some of the people all of the time, but you cannot lie to all of the people all of the time.

*The writer would like to stress that his minor disagreements with the afore-mentioned governments' methods does not change the fact that he has utmost respect for them.

Taming of the FDI-Driven Tigers

2009-03-21T00:33:00.000+08:00

LAST July, I did a presentation at Harvard Summer School, whereby I did a comparison between the European Celtic economy of Ireland, and the Asian Tiger economy of Singapore.

Apart from their physical size, there are startling similarities between the two countries and their economies (see table below, info from 2007, source: CIA). Of particular interest to me was the fact that both economies were driven by foreign direct investment (FDI).

I lauded the foresight of the governments in attracting FDI into their countries as a viable long-term development plan that will ensure not just economic growth but sustainability too.

However, recently released GDP growth forecast figures seem to suggest that the tigers are losing their growl. A Reuters poll indicates that the Singapore economy is likely to shrink by close to 5 per cent in 2009. A European Central Bank Official predicted that the Irish economy will see a 6 per cent contraction this year.

By any standards, the figures are poor. By the roaring standards that have been set by Ireland and Singapore in the past few decades, the figures warrant a state of emergency to be declared!

Although the economies of both countries cooled in 2008, growth figures were still positive, albeit marginally. Why have the two countries been so badly hit by the financial meltdown?

In the Irish case, one reason lies in their severe housing slump. As for Singapore, it is particularly reliant on trade and hence, in a time of a worldwide slowdown, a decrease in exports is bound to hit the country.

With that said, even a housing or export slump should not have such a drastic effect on the economies. To better understand the reason behind the downturn, one needs to divert one's attention to driver behind the economic growth of the two tigers - foreign direct investment.

I advocate attracting of FDI because investment drives the economy - the demand side in the short run and the supply side in the long. In addition, there is a transfer of technology from the investor to the host country.

Because FDI is long term, a slowing of the economy should not have too drastic an effect on FDI. However, this financial meltdown has been touted as the worst downturn since the Great Depression.

We live in extraordinary times. Big companies, once supposedly infallible, are failing, owing to the folly that can be attributed to either themselves, or fellow corporate conglomerates. Governments have their hands tied up in rescuing their own economies.

Hence, this inevitably results in a fall in FDI-growth. Even if current investors stay put (which is a possibility but not so much a probability), the fall in FDI-growth means that Ireland and Singapore faces a fall in one of their key growth drivers.

My suggestion for the Irish and Singaporean government? Look inward for investment (read: a big fiscal stimulus package) to boost the economy, ride the recession out, and continue to attract foreign direct investors thereafter.

I am hearted to see that the Singaporean government has been active on that front and one can only hope that the Irish government similarly sees the wisdom of such a move, and soon.

Singaporeans, Be Proud of the Heartlands

2009-01-05T13:54:00.003+08:00

heart⋅land [hahrt-land, -luhnd]
–noun
1. the part of a region considered essential to the viability and survival of the whole, esp. a central land area relatively invulnerable to attack and capable of economic and political self-sufficiency.
2. any central area, as of a state, nation, or continent: a vineyard in California's heartland.

IN SINGAPORE, heartland is a term used with disdain, or even disgust. Heartlanders, a term popularized by former Prime Minister Goh Chok Tong in 1999, refers to the masses in Singapore - the less education, less refined crowd. They general live in the Housing Development Board flats. They are unlike the cosmopolites who live in condominiums and landed properties.

Yet, look up the meaning of heartland in the dictionary and you will see that it actually refers to the economic and political center of a country. If one thinks about it, it is true that the masses in Singapore form the basis of our economic and political survival. They are the lifeblood of our country. 80 per cent of our population live in HDB flats.

While it is undeniable that they are more plebeian in their words and in their actions, they should not be viewed with the contempt. They are not just an integral part of our country, they are a very important part of our country. There is certainly room for improvement in terms of their education and economic standards and the nation should continually work towards raising them.

But for now, the perspective of heartlands needs to change. Heartland should not be a derogative term, heartlanders should not be held in little regard. Respect the heartlands, be proud of the heartlanders (or in the case of 80 per cent of Singaporeans, be proud to be a heartlander).

2009-01-05T02:12:00.000+08:00

http://www.nytimes.com/2009/01/04/opinion/04kristof.html?th&emc=th

flagrant disregard for human dignity.

Usher in 2009

2009-01-01T18:05:00.001+08:00

The old has past, the new has come. Aaron Chew looks back on 2008 and looks forward to 2009.

AS FAR as the world is concerned, a new year as dawned upon us. As far as time is concerned, however, it is simply a continuation - from 2359h on 31 Dec 2008 to 0000h on 1 Jan 2009.

Hence, events that shook the world in 2008 will have a lasting effect on us in 2009. Here's my pick for top three.

1. Barack Obama's rise to power

It was a phenomenal victory for Obama, who is set to become the first African-American President of the United States of America. If one word was chosen to sum up Obama and all that he stands for, it would be, say it with me, "CHANGE!"

Obama is the change. He has done something unprecedented. He is a living testament of the American dream. He embodies the message that every young American can aspire big. He is proof of the power of education. His grandmother was illiterate but just two generations later, he is going to be the 44th President of the United States.

Obama has stood for change, he is the change, but the truth is, he has not changed anything. When he becomes the President in 19 days' time, he comes into office at a difficult time for the world economy. He needs to make decisive change. He needs to fulfill the promises that he made to the American voter.

His priorities should be to save jobs and grow the economy. This is a good opportunity for him to be Mr Popular, because he gets to spend more money, and do the things that help the public. Investing in education, healthcare, infrastructure.

On the international front, Obama needs to tread very carefully as he attempts to pull America out of Iraq and Afghanistan. While I fully endorse the effort, I urge caution. The insurgents must not be underestimated. Withdrawal needs to be systematically thought out and executed.

After eight years of President Bush, let's face it, the world hates America. The President-elect needs to repair the damage done. He can only do this, not by merely being the change, but effecting change. Change that will bring a better America, and a better world.

2. Worldwide Financial Crisis

The world can be summed up in four words, "People respond to incentives." In the case of the financial institutions, they responded to incentives, in a manner that is undeniably wrong. Greed got the better of the bankers, and this has finally led to the meltdown we see today.

Nothing happens overnight. The crisis is a buildup of greed over the years. It is a shame that this has happened but it is nothing more than mere human nature. Self-interest predominates.

My take on the financial crisis is that we have not seen the worst. Hence, the main street crisis has not even started yet.

My hope for 2009 is that the crisis (finally) bottoms out. I do not foresee the economy moving towards recovery until 2010. But I do hope that the worst of the financial crisis will be over.

3. Milk Powder Scandal in China

On the 8th of August 2008, the world watched with bated breath, as China went all out for their biggest PR stint ever - the Beijing Olympics. The world was blown away as China put on a spectacular show for the opening ceremony.

One of my esteemed friends, Mr Elisha Ong, was indignant as I told him, "China has a long way to go." True enough, it did not take long before the milk powder saga shook the world.

This only goes to show that there is still a great disparity between the developed world, and the developing. While the less-developed countries of the world (spearheaded by powerhouses China and India) are growing rapidly economically, they need to work harder, not just on quantity, but on quality too.

My hope for the third world in 2009 is that it continues to grow, but focus on the right things. Long term development should be the priority, not short term growth numbers. Short term growth numbers proved to be the downfall of some of the biggest Wall Street Institutions and could prove fatal for countries too.

May 2009 be a better year for everyone.

The writer wishes everyone a happy 2009!

Let The Rich Keep Their Money

2008-12-06T01:00:00.002+08:00

AM I upset that I barely have US$50 in my bank account at times and Bill Gates has US$50 billion in his? That's billion with a b. That's 5 and then 10 zeroes behind it. Yes of course I do feel the injustice of economic imbalances at times, but I do not agree with those who are decrying that the government should tax the rich heavily so that "equity" is restored.

Equity, which means fairness, and equality are two different. Making the world more equitable could mean making it less equal. Making the world more equal does not necessarily mean it is more equitable.

I agree with the fundamental principles of progressive taxation, whereby the heaviest tax burden should fall upon the fattest bank accounts. Those who make more money out of society should give more back in taxes, which in theory, should go towards the betterment of society as a whole.

However, I cannot help but disagree with those who call for taxes so heavy that it will bring the rich down to the level of the masses. The argument is simple. Why should they own multiple houses and cars when we need double income to support our mortgage?

When I say the argument is simple, it's a euphemism for hollow. More often than not, the superrich do society a lot of good. They work hard, just like everyone else, but are gifted with some level of brilliance to do something extraordinary - which explains their wealth. Bill Gates and Steve Jobs revolutionized information technology. Warren Buffet has the right eye for the right stocks. In Singapore, UOB's Wee Cho Yaw built an empire out of his father's bank.

While we can call them evil capitalists who exploit the poor proletariat (i.e. us), there is no denying that they have made a positive contribution to society. As a whole, we have moved forward because of them. We need people like these to continually have their sparks of brilliance to propel society forward so that we can all enjoy a higher standard of living.

To ensure they have the incentive to produce, we need to let them make money - and keep most of it. So tax them, and tax them more because they earn more, but don't overdo it. After all, these people make the biggest contribution to society. Never kill the hen that lays golden eggs.

*Acknowledgment: This post is the result of a discussion with founder and president of uJ*designs, Mr Elisha Ong Yu Jie.

Exercise Caution With Stimulus Packages

2008-12-01T20:28:00.000+08:00

IN THE wake of the worldwide financial crisis that has led to a global recession, governments have decided it is necessary (or perhaps fashionable) to announce fiscal stimulus packages. The world's biggest economies, i.e., the United States, Europe, Japan and China, have all announced their own packages. While the details may differ, the essentials of packages remain. Government spending is increased and taxes are cut.

While it is every government's responsibility to soften the blow of the meltdown, I strongly urge that they use fiscal packages with caution. Governments need to pay for their spending. In an ideal world, government funding would come from tax collections. Governments collect a surplus in good years and spend it during the bad years.

We live in a world that is far from ideal. The United States and Europe have consistently run budget deficients - even in the boom years. In the absence of sufficient tax collections, governments have resorted to borrowing. As it stands, the United States owes more than US$10.6 trillion in debt.

Whether personal or governmental, debt is always reduced by one of two ways. They are either written off (usually due to bankruptcy), or paid off with future income. Hence, borrowing out of a recession is actually eating into a country's future income. Every dollar borrowed will have to be repaid, with interest, in future. As it stands, the United States government is already borrowing to repay past debts. This recession will take the country further into the red.

While fiscal expansion would do the countries good, caution should be exercised when working them out. Governments need to take a broader perspective and remember that debt will eat into the next generation's income and wealth.

2008-11-15T23:19:00.001+08:00

editorial from the new york times that does share some opinions. :))
http://www.nytimes.com/2008/11/15/opinion/15sat1.html?th&emc=th

The White House Should Bail Detroit Out

2008-11-12T01:32:00.001+08:00

THE big three Detroit automakers General Motors, Ford and Chrysler's plead for a bailout package by the government has gathered more steam now that President-elect Obama has thrown his weight behind them.

The question that begs answering right now is whether the automakers are worth saving. There has been talk of GM not lasting till the end of the year. That sounds like a very weak company. Clearly, the Americans have lost the comparative advantage in the automobile industry. Free trade proponents would cry for the industry to be closed and for the workers to be moved to other industries where America holds the competitive edge.

Bring a free trade proponent myself, it might seem surprising that I support a Treasury-backed bailout of Detroit. However, John Maynard Keynes himself, was a strong advocate for protectionism. We must keep in mind that the benefits of free trade come in the long run, but the benefits of protectionism, in this case, bailing the big three out, are immediate and practical. Keynes lived in the times of the Great Depression, hence his famous adage, "In the long run, we're all dead."

While we may not live in as depressed times as the 1930s, things seem to be heading downwards, and what started in the money economy is set to hit the real economy, and hit it hard. The auto industry accounts for close to half a million American jobs, and with those half a million jobs, millions of American livelihoods. With the downturn, it would be a near impossibility for the rest of the economy to accommodate these half a million workers, should the big three collapse. Even if only one collapses, it seems likely to be GM, which accounts for 266,000 jobs - by no measure a small number.

The government should allow Detroit to dig into the $700bn that has been set aside for the financial sector. However, the government must keep a keen eye on the way the money is spent. After all, the money belongs to the American taxpayer. Hence, in the event of the bailout, GM, Ford and Chrysler have a responsibility towards the taxpayer. Executives should not be lavished with generous bonuses. Wasteful inefficiency should be cut. Detroit needs to be forced to progress towards lower costs and higher fuel-efficiency.

As the economy picks up, Detroit should pick up together with it. When the rest of the economy is booming and the automakers are still struggling to survive, as they have been in past years, that would be the time to apply the theory of comparative advantage and allow the demise of some of the great symbols of American industry.

Young Workers Need Resilience

2008-11-11T00:21:00.001+08:00

YOUNG, sheltered and pampered, the younger generation of workers, commonly dubbed Generation Y, are in for a shock as a worldwide recession hits.

I'm referring to those born in the late 1970s and 1980s who have recently entered the workforce. Born into relative prosperity, this generation has not seen much hardship. Most of them were not in the workforce during the Asian Currency Crisis of 1997. Fresh out of school, they received multiple job offers with good perks. Retrenchment was not a word in their dictionaries.

However, with the financial crisis set to turn into a worldwide recession, many will start to realise their jobs are not as secure as they are used to. To weather this storm, this generation needs to show they have a characteristic often associated with past generations - resilience.

In Taiwan, the term "Strawberry Generation" was coined to describe this generation. Strawberries bruise easily and rot quickly thereafter. Hence, it was felt that the young could not take hardships. What will set the survivors apart from those who fall behind during this crisis will be the ability to bite the bullet and wait for the crisis to subside.

Measures that some need to take would be taking up lesser positions with lower salaries. Common to the older workers during previous recessions, this is a big nono for the young worker.

Ultimately, the one who can swallow the bitter medicine gets the remedy.