Book List Refreshed! 29/03/2011

I have removed:

Power Hungry by Robert Bryce
Rising Powers, Shrinking Planet by Michael T. Klare
The Shallows by Nicholas Carr
Tokyo Vice by Jake Adelstein

I have added:

Econned by Yves Smith
The Holy Grail of Macroeconomics by Richard C. Koo
Making Sense of Life by Evelyn Fox Keller
The Next Decade by George Friedman

When the PAP loses an election, it will be time to leave.

Elections are around the corner. I have not posted anything on the upcoming elections. This isn't because I am politically apathetic. On the contrary, I am politically more aware than most Singaporeans.

The reason why I have not posted anything on the upcoming elections is because I do not think the result is in any doubt. The PAP will be returned to power again. The only thing in question is how big of a majority will they command. Will it be merely overwhelming, or ludicrously so?

And we all know why the PAP is so successful during elections. It has stacked the deck in its favor, shifted goalposts where necessary, subverted supposedly non-partisan organizations, co-opted potential opponents, passed legislation favorable to itself, leashed the media in its service and cultivated an environment where dissent is stifled for fear of reprisal.

You would think that a political party that is so proud of its policy successes (and that never fails to remind us about it!) would be more confident that it would be returned to power at each election on its own merits. Yet, it wheedles for every advantage it can get.

Is this not a sign of weakness? Or is it because the PAP genuinely believes that Singaporeans are too stupid to make the "obvious choice"?

This is not a rhetorical question. How one answers it is an indication of one's view of Singapore and Singaporeans.

With all of its political safeguards in place, it would be a miracle if the PAP is NOT returned to power.

Which brings me back to the title of this post, "When the PAP loses an election, it will be time to leave."

Living conditions in Singapore would have to deteriorate to an extremely serious state for the PAP to lose elections even with all of their incumbent's advantages.

Singapore will never reach such a parlous state, people scoff. We're not Egypt, Libya or Yemen.

Actually, one thing I do agree with our esteemed Minister Mentor is that Singapore, being small and vulnerable, does stand at the edge of disaster all the time. I disagree, however with the remedy.

Our political elite decided long ago that the best solution to the problem of "The little island that could" was to have a powerful government, ruled by the PAP that is for all intents and purposes, THE government. And this government, presumably staffed with the most talented people, would run the country in the best way possible. And politically, this government would be unfettered by irksome little opposition parties that in more democratic inefficient countries, would have to be dealt with, or heaven forbid, accommodated.

That model might have worked in earlier days. Perhaps it might even have been necessary during those uncertain times. But that model is showing its age, just as the ideas, attitudes and perspectives of the ruling party are looking stagnant, unresponsive, disconnected, and worst of all, dogmatic. Any criticism of current PAP government policy is treated as heresy.

A monolithic government such as ours can coast along for a long while without major problems. But a true crisis, a black swan, one that the PAP cannot handle, will lead to catastrophic failure. And without a robust framework in place for orderly transition and change of political leadership, Singapore would fail and fail irrecoverably.

Our politics are as impoverished as our most disadvantaged citizens.

The PAP government has conflated its existence and success with the existence and success of Singapore itself. No less than Ngiam Tong Dow stated, "I think our leaders have to accept that Singapore is larger than the PAP."

By so systematically dismantling and disempowering political opposition, the PAP is planting the seeds of its own destruction. If and when the PAP slips from power, there will be no second chances for it. No renewal for the PAP can come from a desert wasteland if Singapore fails irrecoverably.

In the past few years since the last election, many Singaporeans have wondered if our country has lost its way. It doesn't feel like home anymore. The government appears disconnected from the aspirations and needs of citizens.

If this is what the PAP calls success, I am not sure I would want to stick around to see what failure is like.

If a change in direction is needed in our policies, then it is best that the change be made as soon as possible.

But just as police states everywhere have a nasty habit of tightening controls just as the population gets restive, I have no doubt that the PAP will stack the deck even more heavily in its favor if ever in the future it is at even the slightest risk of losing power.

The PAP is so sure that its policies are the correct course of action that it would persist even in the face of severe opprobrium. The only concession made would be the occasional window-dressing that we are seeing now.

And if anyone believes that current immigration and economic policy is going to be reversed after the election, they will be severely disabused of this notion in a matter of months.

This is a government that has a hard time taking responsibility and criticism even for a minor flash flood, what more a true crisis that might be a result of its own doing, such as the demographic time bomb that continues to tick.

Tick-tock.

When you are in a hole, the first thing to do is to stop digging. The imperial nature of our government is not a sustainable state of affairs for any country, if only because men are proud and fallible. It is even less sustainable in a country like ours.

I can feel the hole becoming deeper.

I am less sanguine than our ministers who flippantly state that if the PAP were to lose its relevance, it will lose the mandate of the people and presumably gracefully step aside for a new party. Everything about the PAP shows that it would sooner change the rules of the game before that happens.

The question is, what will the PAP leave behind for a new government when it eventually does lose power, against all odds? A smoking ruin, or a shattered country?

When the PAP loses an election, it will be too late to leave. The time to leave would have been before.

If you're at all worried about a nuclear meltdown in Japan, read this!

Article can be found here and here.

Quick Thoughts on Sunday Times, 13 March 2011

"Not just an 'ordinary' girl from HDB family" - Think p.37

This article profiled Rachel Eng, a managing partner from the top law firm WongPartnership. Interestingly, Ms. Eng said little, if anything, about social mobility in her interview, but the Sunday Times chose to put a spin on it that way, billing the article as "Rachel Eng: Top Lawyer is a study in social mobility" on the front page sidebar. The writer, Wong Kim Hoh, also started his article by citing her as a prime example of social mobility.

Ms. Eng used the word "lucky", "blessed", and "alignment of the stars" in her interview. Granted, none of the these were in relation to her transcending her humble background to becoming a high-powered lawyer, but more in relation to her current living and working situation. But clearly, this is a woman who knows and counts her blessings.

In contrast, in today's edition, the quote from Ng Eng Hen on social mobility can be found on the next page, Think p. 38, "You are the one who can determine your own success - yes, life might be hard for you, but if you try, you can succeed, and other have."

To relate to a previous post of mine which resonated with many readers, I've found that people who transcend their backgrounds tend to fall into one of two categories. One is exemplified by Ng Eng Hen, who takes the view that "If [insert underprivileged person here] can do it, anyone can." In recent parliamentary proceedings, he used himself as an example.

Ms. Eng fits more closely with the second category. Such a person tends to recognize that while their own talent played a major role in their lives, luck, chance, opportunity and just being in the right place at the right time are also very important. They are more likely to, on seeing someone less privileged, go "There, but for the grace of...".

Ms. Eng's example drew from her own pioneering experiences in the then growing WongPartnership, now one of the largest law firms in Singapore. That must have been a remarkable opportunity for her, and she probably realizes that.

Is there a "correct" view? I am not wise enough to answer that, but I am without question more sympathetic to the latter view, that luck and opportunity are just as great determinants of a person's success as talent. The former view has always struck me as being somewhat narcissistic and presumptuous. Perhaps not coincidentally, Ms. Eng is a woman, while Ng Eng Hen is a man. Make of that what you will.

Needless to say, whichever view a person hews to will have implications on their opinions on what kinds of public policies should be implemented. The fact that we have ministers such as Ng Eng Hen (and Mah Bow Tan) in government who come from very humble backgrounds is no guarantee that they will look out for the little people from their perches. Indeed, the opposite may be truer than not.

"Google Looking for a Bigger Town" - Home p.19

Google Singapore is expanding. But as I realized years ago when I first graduated as a freshly minted engineer, you have a better chance of working for Google in Singapore if you're an accountant or a top sales and business development person than if you are an IT professional.

The same goes for any number of technology and engineering MNCs in Singapore. There are engineering jobs available, but the really interesting engineering jobs are simply not here.

If your ambition is to work in manufacturing, quality assurance, batch testing or any number of technical, ok-paying (and perhaps not even that), but relatively dull jobs, you should have no problems.

But if you want really interesting work, the kind that happens in the Googleplex, you can stop hoping right now.

It's a vicious cycle. Because the interesting jobs aren't here, good students are increasingly not taking up engineering. In my time, engineering was a relatively sought after choice (but many engineering graduates did not end up in engineering). Today, as my interns and psychology experiment participants (recruited from local universities) tell me, engineering is a "dumping ground". It is not even a popular choice of study now, much less working in engineering. Popular majors now are economics, business, banking and finance and information systems.

And because good students aren't taking up engineering, there is little reason for companies to relocate high value work here. Not that talent alone is enough to ensure that; there are a multitude of other reasons why high value work does not come here to Singapore.

Is this necessarily a bad thing? Well, it's bad if you're hellbent on being an engineer. But, than again, this is a situation that artists, musicians, writers and designers have long had to live with in Singapore. And they cope with it as best as they can, either venturing abroad or moderating their expectations here on this island.

Quick Thoughts on Straits Times, 20-21 February 2011

Budget 2011

At the risk of taking this out of context, my favorite quote regarding the budget:

"The return of the 20 percent personal income tax rebate is designed to benefit the middle-income earners most and will be welcomed by all taxpayers. The changes to personal income tax rates are welcome, but with no adjustment to rates for many years, this is long overdue to bring us back to where we started in real terms."

- Ernst and Young human capital partner, Grahame Wright, p.A6, Saturday 19 February, 2011.

What Wright is saying is that we have been paying more income tax in real terms for the last several years due to inflation-induced bracket creep. The latest adjustments serve simply to correct an underlying unfairness that has been present for many years.

The comment should properly be interpreted only within the context of tax rates, but this is my favorite quote because the last clause of his comment so perfectly captures my sentiment regarding the entire budget.

Thank you for this budget. After losing ground for so many years, in real incomes, job prospects, foreign competition, retirement plans, housing, transport, and with the specter of serious inflation on the horizon, I am certain that Singaporeans are grateful to be returned to the starting line again in real terms.

This time around, perhaps you should remind us which direction we should face? I've never liked walking backwards. Easier for you too, you know, post-elections, when you need us to, uh, bend over.

"Never too old to start new businesses" - Invest, p. 30, Sunday 20 February, 2011.

Mr William Ong indicated that his best investment to date has been in commodities, particularly in gold and silver. $450,000 invested in 2006 is now worth $1.2 million, and with lower volatility than equities, if I may add.

I haven't done nearly as well, having jumped onto the bandwagon only in late 2007, and I certainly didn't have $450 grand of capital just lying around back then. But to recap from a previous post on 3 October, when a commenter raised concerns about the precious metals looking toppy, gold closed at USD1315.40 and silver closed at USD20.02 on that date. The most recent close for gold has been USD1388.20 (respectable but unspectacular) and silver USD32.30 (courtesy of a short squeeze).

Again, don't take this as advice to go long on gold and silver.

"Shrink from Shoebox Apartments" - Invest, p. 31, Sunday 20 February, 2011.

As I argued many moons ago, shoebox apartments are NOT a value proposition. My long form comment here.

My view of the property market has become more nuanced of late. I still hesitate to call it a bubble, but I still believe that prices are likely to come down within a matter of months. Not that that will help anybody. It won't help buyers and it most certainly won't help sellers.

Why not buyers? Because I think that prices are going to fall due to a double whammy of lower real household incomes due to inflation (courtesy of the money printing "Bernank") and rising interest rates (which at this point, can only go in one direction). That will really screw with the affordability of property, regardless of lower prices.

If we stir in a recession into the mix due to say, fresh (or rather, not so fresh but emerging from beneath the carpet) economic problems in the US, China or Europe, or an oil crisis due to unrest in the Middle East, it will only exacerbate matters.

Property prices may drift lower in the coming months ahead, but it's difficult to say who will be in the mood to buy then, given why they may drift lower. The only positive factors may be increased supply and the government relaxing the newly imposed restrictions on property transactions.

"Poor pickings in Orchard" - Lifestyle, p. 24, Sunday, 20 February, 2011

I have not been to Orchard in literally months. Too busy with other things. But this sure reminds me of an article I wrote. I wonder whether poor pickings are confined only to F&B outlets, or to a wider swathe of the retail scene. Reader comment welcome.

Crossing the Causeway for Medical Care Affects Everyone

The New Paper had a story on Sunday about patients who cross over to Malaysia for cheaper medical services. Lucky Tan had one take on it, and Mr Wang another.

I had some thoughts on the story, but I had refrained from posting as I felt my thoughts didn't seem like they would be give that interesting of a perspective. Now however, since two prominent bloggers have expressed their views, and I share neither of those views, I think I will speak on the issue.

In actuality, I agree with both of them, but neither of these viewpoints were at the forefront of my thoughts as I read the story in The New Paper. Something else occupied my thoughts.

Like Lucky Tan, I consider the burden of providing affordable, and I mean truly affordable, medical care for Singaporeans as a duty incumbent on the government. But just like Mr Wang, I've long since given up hope on trusting, much less relying, on the state to do right by Singaporeans. The flipside of the Singaporean aphorism "you die, your business" is "the only one looking out for you, is you." In this country, you better believe it.

What occurred to me as I read the article was that the cost differential between medical care in Singapore and in Malaysia would have implications for all of us, even those of us who don't intend to ever travel to Malaysia for medical care.

If fewer patients seek medical care in Singapore, prices for medical services here are not going to fall. Medical services are like university education; the price only goes in one direction.

On the contrary, if more patients seek medical care across the Causeway, fixed expenses (such as building, maintenance and staff overheads) in the healthcare sector will need to be spread among a smaller number of patients. This will mean higher prices per patient even though the number of patients (customers) is falling. This is especially so if whatever subsidy the government claims to be providing the healthcare system is on a per patient basis, per admission.

If you're a hospital CEO in Singapore, you would probably respond to the phenomenon of fixed expenses spread among fewer patients in the following two ways.

The first would be to cut your expenses. This might mean a lower quality of service (e.g. foreign-born doctors from developing countries, which is already happening, cheaper medicines, fewer support staff). This is not so different from SMRT running fewer trains during non-peak hours; there might be fewer passengers, but the trains are just as packed and the commuting experience just as frustrating.

The second would be to pursue higher profit margin business: medical tourists. This might serve to cross-subsidise cost inefficiencies in the hospital. After all, it makes a lot more sense to invest resources in the segment of the business that is the most important from a revenue and cost-recovery standpoint. Medical tourists in their A class wards can expect high levels of attention and service, while the lower class wards would probably experience much less attentive service.

If you are Singaporean, all this will just make the prospect of crossing the Causeway for medical care even more attractive.

Even you are financially comfortable (but not wealthy) and are averse to the idea of traveling far from home for medical care, circumstances may change in the future that may warrant you to give this option some serious consideration.

The other option would be to purchase comprehensive and heavy health insurance coverage so that the expected cost of medical bills is transferred to a third party. For example, it is possible to purchase riders on Shield policies to remove deductibles, co-payments and category sub-limits. Under comprehensive cover, the total inpatient (but not outpatient) bill falls to zero. A patient under such cover would become indifferent to the cost of medical care. Such cover, naturally, comes at a commensurately higher price.

Being a lower income student in an "elite" institution

The Straits Times had an article today, "Non-grad parents, but they made it to top schools". No transcript available, but very briefly, it talked about how only a minority of students today in top schools in Singapore hail from households where parents are non-university graduates. It also had some short interview-like snippets from the minority students.

In truth, the title of this article was disingenuous. It would have been more accurate to characterize these students as coming from low-income households rather than with non-grad parents. Perhaps some editor from the Straits Times wanted to avoid any association with that hot potato issue of income inequality.

Reading some of the students' comments stirred some memories. I too, was a lower income student studying in a top school. My family isn't poor by any measure, but disparities were still stark. Some background here.

The truth is, top schools have had a skewed income distribution for several years now. I certainly felt it keenly almost two decades ago. It is NOT a recent phenomenon.

On the off-chance that one of those kids might read this, here's the two cents worth of my reminisces, and some advice, if they will have it:

It is entirely understandable to feel a sense of being apart from your peers who come from much more privileged backgrounds. I call it that sense of "otherness".

Newsflash: It never goes away entirely. So, deal with it as best as you can.

Here's why that feeling of otherness never fades away entirely.

Today, in secondary school, you might feel inadequate because you can't afford to tote the latest iPod, iPad or iPhone. Or you might decline to join your friends at Starbucks or Cafe Cartel, or wherever it is young folks today hang out.

When you reach JC or in the early years of university, some of your wealthier peers will start experimenting with alcohol and clubbing. A few will start driving when their parents gift them with new cars. You'll probably still be taking public transport.

If you do well in school and decide to take up a scholarship to fully fund your university studies, congratulations, you'll have a fairly generous allowance to live on. Finally, some cash in hand!

Unfortunately, that's about the same time your wealthier peers, who might be studying abroad in the same university as you, start talking about ski vacations at Aspen, Whistler or Lake Tahoe. Or weekend getaways to New York for Restaurant Week (Nobu apparently is a great deal). Not exactly your average student's weekend plan.

[For the record, a scholarship allowance probably could pay for these luxuries in moderation, with cutbacks in other areas. But if you were raised in privation, you would find it difficult to justify the expense.]

And when you finally start working, you might see your better-off peers land prestigious unpaid internships, get a new car as a gift from their parents, or have their lavish wedding or new apartment paid for by family.

If you've been following so far, you would probably start wondering why any kid would voluntarily hang out with richer folk after they've grown up when the risk of feeling inferior is so great.

The problem is, when a student joins a top school, whether they realize it or not, important parameters for their social life are being set that will persist for years into the future.

There's a reason socio goes with economic in socio-economic status.

A person's education and upbringing determine their ambitions, drives, values, concerns and perspectives.

A student that has attended a top school will share a very similar set of characteristics (for want of a better word) as their peer group in their school, irrespective of financial background. But, family finances will impose very practical constraints that prevent the student from truly feeling a sense of kinship with their peers.

On the other hand, while a student attending a top school will empathize with someone who comes from a similarly less privileged background, they won't be able to identify with them because their set of characteristics are completely different.

This is just a very convoluted way of telling those lower income kids who attend top schools that they might find that they don't feel like they truly belong anywhere. Now, and in the future.

I first realized this to true when I had the privilege of serving as a man (that is, a corporal. I sooo did not want to liable until I am 50.) during NS. My platoon mates came from fairly average backgrounds, and their concerns were quite different from the friends that I had in school. Some clearly had family problems, and even today, their worries concern more about things like saving up for their parents' medical bills.

In contrast, friends I know from school are generally concerned with weighty matters like, which are the top MBA programs to apply for, what are the opportunities to work as a quant in a hedge fund, or is membership in One o-15 marina a good investment?

The problem is not that I can't appreciate why no one should attend an MBA program outside the top 8. The problem is that I can. Just like I know that getting Wilmott certification is advantageous for working as a quant. I just don't see myself getting hung up over stuff like that. Nor could I ever see myself discussing matters like this over a mess tin of Maggi noodles with my platoon mates during an outfield exercise.

This incongruity between social and economic status is something that any lower-income kid who attends a top school is going to have to grapple with in the years to come.

Do I have advice for lower-income kids who attend top schools? Absolutely.

First, if at all possible, get a part-time job. It can be at McDonalds, Starbucks or just giving tuition. It's something I didn't do as a kid, and I wonder if I made the right decision.

This might sound like irresponsible advice, but hear me out.

It's enormously empowering to make, and spend, your own money. On a practical note, it gives work experience at an early age, and it exposes you to different perspectives. Even minority lower income kids are cloistered to a certain extent in a top school. For once, you'll meet people who don't view not getting an "A" in Physics as an absolute disaster.

As for time taken away from studies, there is always enough time. It's only a matter of priorities. You don't need to top the class in a subject, especially if there is no financial incentive to go with it. If you were smart enough to get into a top school despite being financially disadvantaged, you're smart enough to wing an "A", if just scraping in. Don't work beyond what's required to get the maximum marginal benefit of good grades. That's valuable time you could be spending on something else.

As for how you might spend your income, there's no need to splash out on designer goods. You probably couldn't keep up with your peers anyway. But it would be nice to pay for the occasional meal out or movie.

And not to have to ask parents for the money to attend the school prom, and to actually have something nice to wear to it, priceless! Really, not having money just makes the awkwardness of the teenage years that much harder to bear.

Second piece of advice comes courtesy of Tim Ferriss, author of the 4-hour Workweek, whom I had the pleasure of transcribing an interview of on mturk not long ago.

Diversify your identity.

This is, in fact, very good advice for anybody. Ferriss advises the start-up founders he consults for to take up at least two activities outside of work, one of which is a sport. The rationale is that start-up entrepreneurs have a tendency to get caught up with and obsess over their companies. If they had a bad week at work because of setbacks, which are common with start-ups, it can still be a good week if they, say, clocked a new personal best for their running, or finally succeeded in their personal project at home.

Diversifying your identity is a way of avoiding or delaying burn-out.

I never experienced burn-out as a student, but I have often regretted spending as much time as I did on studies. I tell myself I should have cut loose and relaxed a bit more when I could.

If you're a lower income student in a top school, you're already under enormous pressure to "succeed", which makes it all the more important that you don't burn-out.

This is why having a job could be useful. If you make coffee part-time at Starbucks, you can be the best barista you can be, instead of just another student.

If not a job, instead of angling for a leadership position in school, take up a CCA just for FUN. If you go to church or temple or mosque, volunteer a few hours a week. It can be very helpful to step out of the bubble that a school, especially a top school, can resemble.

Go widen your social circle a little, get some perspective, and grow in different ways. As a person, you'll grow to become more resilient, not to mention much more interesting.