Archive for October, 2008

Suggestions not welcome

October 30, 2008

I belong to a strange department. We pride ourselves with a very thorough cycle of quality control and so we are convinced that our final product is flawless, unchallengeable and to be defended till death. So when our users spot issues here and there, instead of being gratuitous and improving on our product, we ask them to post their suggestions to http://www.trash.com. We are not interested in their suggestions to the product, we are only interested in how best they can make use of the product to do their job.

The root of the problem stems from the fact that the product is shown to the users only one week before its scheduled launch so there’s really no time to make changes whatsover. What needs to be done is for the product to be shown to the users one month in advance so that there is sufficient time to gather feedback and improve. It just doesn’t seem wise that the well intention and collective wisdom of so many good users are simply ignored. When the users’ suggestions get brushed aside once too often, they will end up switching off and choose not to say anything anymore. And yet our department wonders why the users are so quiet these days.

The world is evolving too rapidly

October 30, 2008

A short movie clip shown to us recently reveals the extent to which the world is evolving so rapidly that by the time we’ve learnt a new skill that skill would have become obsolete. Nothing comes closer to that description than the IT industry where obsolesence is measured in terms of months, not years.

But that’s not the scary part. The scary part is the conclusion drawn by some renowned educators that since new skills acquired are going to be obsolete any way, there is absolutely no point in learning new skills. Instead, students should be taught thinking skills for if they can think, they can teach themselves any new skills that are required of them in the future. This conclusion is part ludicrity and part wishful thinking.

The ludicrous part is the idea that existing knowledge isn’t useful in forming new knowledge. For example, a brand new programming language may appear in three years time. But that doesn’t negate the benefits of learning current programming concepts and honing in current programming skills using current technology. The consequence of not learning the basics of today while plunging straight into the future is to subject oneself to an even steeper learning curve.

The wishful thinking part is the idea that developing basic thinking skills through Sudoku for example, is the best way to equip students to deal with the specifics of their chosen professions in future. The idea is that since Sudoku helps the student think better, the student can then go on to become a good engineer, architect, scientist, nutritionist, film maker, nurse and so on. So a large chunk of the students’ time is spent doing Sudoku instead of learning the basics of the tools of their trades. How much more self-delusional can we get if we actually think that Sudoku can help students become the master of all trades?

Ultimately, what we ought to do is to help nurture the innate yet diverse talents of people and not subject them to the torture of going through that which they have no interest or no talent in.

Random conversations

October 28, 2008

A recent conversation with a colleague reveals an unquestioning deference to government policies with little regard to whether or not they are right.

Government is right to accumulate a huge surplus

The colleague sees nothing wrong with the accumulation of huge surpluses by the government year after year. What she fails to consider is that in order for the government to earn huge surpluses, it has to extract more money from us, be it through tax, housing, transport, anything you name it. Once we realise that the huge budget surpluses are actually paid for by us, it should become clear that these come at the expense of our own standards of living. We pay more GST means we can only afford less goods. We pay more for housing means we have less disposable income and so on.

Government not advertising their good work enough

The colleague also believes what the PM said in his National Day speech, that the government does not advertise enough of their good work. For example, the government has given so much GST rebates but people forget them. What the colleague fails to understand is that the GST is implemented for the primary purpose of taking more money, not less money. That being the case, even with the GST rebates, it should be understood that in the long run, we the citizens of Singapore, still stand to pay more for our goods and services. In other words, the GST rebates far from compensates the extra price increases that we would be subjected to for the rest of our lives. So rather than naively think that the government has helped us, we should instead realise that we would still end up being fleeced.

It’s like the man who tricks the girl into child sex using small gifts like lollipop. The lollipop is just to help the girl overcome the initial pain. But after a while, the girl gets used to being used and no longer feels pain while the man gets a lifetime supply of cheap money.

Financial crisis and the property market

October 28, 2008

The current financial turmoil is the latest of a series of economic disasters that clearly and unambiguously points to the importance of watching the property market and not letting it run amok.

Japan’s bubble burst in the early 1990s comes after years of unchecked housing price escalation. The 1997 Asian financial crisis was also associated with an unsustainable property boom. Likewise in the current sub-prime financial crisis, it is the unabated fever in the property market that has fueled speculation and securitisation of property at unsustainable prices.

Whether or not property is the cause, it has often been at the centre of these financial disasters so governments around the world should do well to keep property prices in check. The reason is very simple, a property is not only an asset but a liability as well and unless the people are experiencing runaway wage increases, they can’t afford runaway increases in the price of housing.

Not too long ago, Mah Bow Tan was justifiying the price of HDB housing by pointing to housing price increases all around the world. We can now all see the foolishness of Mah’s reasoning. Paying sky high prices for housing is like building castles in the air, sooner than later, it will all come crashing down, destroying dreams. We already had one painful experience in 1997. Apparently, that one lesson is insufficient for Mr Mah.

The government keeps emphasizing to its citizens that housing price appreciation is good for them. But more often than not, it is the other way round. If we look at the situation correctly, housing price escalation impoverishes us rather than enriches us. A simple example shows why:

Suppose you bought a flat 20 years ago and the flat has now appreciated by $200,000. Have you gained a windfall of $200,000? Not necessarily. Suppose you have 3 children who have all gotten married now and have each bought a flat that now costs $200,000 more than it would have had there been no housing price increase. Can you see that your 3 children collectively pays $600,000 more due to the price increases so your family as a whole ends up $400,000 poorer instead?

So if you think not just of your own gains but the losses of your children, you will come to realise that housing price increase impoverishes rather than enriches your collective family including your grown up children. The only way for you to profit is to have no children.

So that is the truth behind housing price gains, what we gain is at the expense of the future generation who ends up paying for our gains.

Rethink S’pore economic growth model

October 28, 2008

ST, 25 Oct 2008

Finally, a local academic who thinks that our current economic stewards are crap …

SINGAPORE should relook its economic growth model in an era of tighter government regulation and multilateral oversight that could evolve in the aftermath of the global financial crisis.
Professor Linda Lim from the Ross School of Business, University of Michigan, told the Singapore Economic Policy Conference yesterday that the growth model that has served Singapore may be out of place in a changed environment.

Prof Lim said the growth strategy – the ‘EDB (Economic Development Board) model of give them a tax break and they will come’ – has both tried to do too much and achieved too little in terms of delivering high and secure incomes and living standards.

‘We’ve 40 years of savings and repressed consumption, so do we throw it at UBS and Citigroup and lose 60 per cent of the value, or do we use it for ourselves?’ said Prof Lim, a Singaporean and a frequent contributor to The Straits Times.

Instead of letting the state make big bets on a few major, capital-intensive, projects dependent on foreign capital, labour and skills in which they have no intrinsic comparative advantage, it might be worthwhile to consider releasing capital and talent to local entrepreneurs, she said.

These people can innovate and create value in smaller but nimbler locally rooted enterprises, she added.

Prof Lim said that a national government, for example, should not use domestic savings to create employment disproportionately for foreigners simply in order to claim success in establishing a particular sector of its choosing that may not be validated by underlying market forces.

Singapore, she said, can become a ‘global model’ for environmentally-friendly buildings and lifestyle.

Other clusters of ‘regionally integrated’ economic activities might be in the creative fields of traditional and modern Asian and Western arts and culture.

Another cluster is social and health services in, for example, developing policies, systems, products and services for an ageing population, Prof Lim said.

‘Don’t think of yourself as an outpost of a declining empire, or a second Shanghai or a second Boston. Why not be a first Singapore?’ she told the audience of economists and academics.