Saturday, October 01, 2011
We will never be able to get enough people here to "occupy" Raffles Place but I suspect in the coming months events will occur around the world and perhaps in Singapore that will get people thinking more about the world and system we live in.
2 postings ago I showed a video called "Money as Debt Part 2" that attempts to explain the banking system we have today. While there are some flaws and oversimplification in the video, it is popular on YouTube because people have began to ask about the system we live in and the recurring economic crisis we have to face every few years. There is also great unhappiness over the rising income gap and pressure on the middle class.
Remember when Obama ran for president, his campaign slogan was "Change We Can Believe In". When he took office he was faced with a mountain of economic problems left by 2 decades of unbridled capitalism. The financial crisis threatened to turn into a depression and Obama didn't have much of a choice but to bailout the banks and in effect rescue the some of culprits of the economic problems America was facing. To get the economy going he spend a ttrillion or more on a stimulus package. He tried to address the problems with the healthcare system, the widening income gap and the US budget deficit. However, there were just too many problems that coverged during his term as president at a time. Severe problems began showing up in Europe - again related to banking and debt. Thesee problems that took years if not decades to get to their current magnitude will not be solve in a year or two. The current approach to print money (QE1 & QE2) and kick the can further down the road only serve to postpone the day of reckoning. In the 1930s, it was the severity economic pain that brought about an acceptance of complete revamp under The New Deal. Today, post Great Recession, with economy sluggish and unsatisfactory, but still holding up it is hard to follow through with major disruptives changes - USA's financialised economy has to be restructured. However, high unemployment persists groups such as "Occupy Wall Street" start to emerge and grow.
At this point, some readers might be asking "What has all this got to do with Singapore?". actually plenty...Singapore has done many things similar to the US. The housing bubble for example - even at the height of the US housing bubble, the median price of a US home is lower than what it is in Singapore today. We accept idea of 20 or 30 year mortages as if they are as natural as the sunset. However, these are capitalistic creations ...remember "money as debt". In the 60s and 70s, people bought homes with cash. Even if you allow such mortgages, you would rein in the free market by making sure that housing prices do not outstrip median income gains. Strangely, our esteemed govt saw little problem with rising home prices....and defended it, just after the problematic collapse housing bubbless in Ireland, Spain, US crippled their economies and we always have the classic example of Japan that saw a drag on its economy from the 80s housing bubble that lasted for decades. We deregulated our banks just like the Americans. We merged our banks believing that the bigger they are the better - now the lesson learnt from the American financial crisis is not to have entities that are "too big to fail". We allowed the expansion of consumer lending - credit cards, unsecured loans, money lenders (licensed and unlicensed). The govt brought in Las Vegas in the form of 2 casinos euphemistically called IRs. The income gap in Singapore is larger than USA and we don't have the corresponding social programs to address the rising poverty we are seeing in our society.
People everywhere don't think much about the system they live in as long as things are going smoothly. It is when problems start to start to show up that people begin thinking and checking what goes on in the system. For years, Singaporeans have been apathetic about the political and economic system they live in but problems are starting to show up - income inequality, poverty, structural unemployment, rising cost of living - and we are seeing a political awakening among Singaporeans. The relentless import of people to keep the GDP growing stretches the transport and housing resources overcrowding the island - we now have the highest population density in the world after Hong Kong and Macau. Singaporeans are asking why is necessary for us to bring more people per capita than anywhere else in the world - is the system sustainable? A some point, just like those Americans occupying Wall Street, we too will come to realise we cannot continue as we have done so for the past few years. All the imbalances in our system will one day coverge to heighten our desire for change,
Posting Time 11:01 AM
Posted by Lucky Tan