Monday, January 28, 2013

Singapore’s Gradualist Descent to the Welfare State 2: The Rise of “Consultative Government”

Last year I wrote about how the impact of inflationism in Singapore may prompt her to gradually embrace into the welfare state model
Crises emanating from busting bubbles have been frequently used to justify social controls…

Once the ball gets rolling for the feedback loop of tax increase-government welfare spending then Singapore eventually ends up with the same plagues that has brought about the current string of crises, particularly loss of economic freedom, reduced competitiveness and productivity, lower standard of living, a culture of dependency and irresponsibility and of less charity and unsustainable debt conditions. The outcome from politically instituted parasitical relationship would not merely be a financial or economic crisis but social upheavals as well.
It appears that the results of the recent election have partly validated my outlook.

From the Bloomberg,
Singapore’s ruling People’s Action Party lost a by-election with the widest margin in almost three decades, signalling Prime Minister Lee Hsien Loong may struggle to claw back support as the cost of living climbs.

The Workers’ Party’s Lee Li Lian, a 34-year-old sales trainer, won 54.5 percent of votes in the four-way race in the northeastern Punggol East district over the weekend, a 10.8 percentage point lead over the ruling party’s candidate. That’s the most for a district held by the PAP since the 1984 general elections, according to data from the Elections Department.

Record-high housing and transport costs, public discontent over an influx of foreigners and infrastructure strains are weakening approval for the only party that has ruled Singapore since independence in 1965. Its policies, which have helped forge Southeast Asia’s only advanced economy, are now being questioned by voters, many of whom are looking for a government that is less authoritative and more consultative.
I say partly because this is just one development. It remains to be seen if such political trend will intensify.

Yet “consultative government” signifies nothing more than a fa├žade based on the appeal to the majority (social democracy) to justify the use of force to attain redistribution goals

As the 4th President of the US and founder of the US Constitution James Madison in a letter to John Monroe wrote; (bold mine)
There is no maxim, in my opinion, which is more liable to be misapplied, and which, therefore, more needs elucidation, than the current, that the interest of the majority is the political standard of right and wrong. Taking the word “interest” as synonymous with “ultimate happiness,” in which sense it is qualified with every necessary moral ingredient, the proposition is no doubt true. But taking it in the popular sense, as referring to immediate augmentation of property and wealth, nothing can be more false. In the latter sense it would be the interest of the majority in every community to despoil & enslave the minority of individuals; and in a federal community to make a similar sacrifice of the minority of the component States.
And more signs of Singapore’s slippery slope to the welfare state. From the same article….
The prime minister said after the Jan. 26 poll that by- elections tend to be tougher for the ruling party, and he will continue to focus on policies for the longer term that may take more time to yield results.

Last year, his administration cut ministerial pay, sped up construction of homes and made permanent a program to provide cash and medical funds for the elderly and low-income households. This month, it said it will give priority housing to families with children and provide greater childcare subsidies…

The island’s population has jumped by more than 1.1 million to 5.3 million since mid-2004, driving up property prices and stoking social tension as the government used immigration to make up for a low birth rate. Lee, who has led the country since 2004, has also raised foreign-worker levies and salary thresholds to slow the inflow of non-Singaporeans.
Inflationism or the global bubble cycles will continue to bamboozle or mislead the public to the populist welfare trap which will only exacerbate the current political settings in Singapore and elsewhere.

Yet the gist of the problem hasn’t been free market inequality and or immigration, which has falsely been attributed to, but rather central bank policies designed to promote the interests of the banking-political class cabal through financial repression—which includes negative real rates regime and balance sheet expansions.

And the next step for Singapore will likely be a gradualist transition towards a deeper welfare state that will be accompanied by more regulations, more restrictions of civil liberties, higher taxes, protectionism, cronyism and invasion of privacy which eventually leads to more social strains

From the behavioral perspective, I’ll borrow from Italian Statesman and Political Philosopher Niccolo Machiavelli’s observation on why the welfare state deludes the majority or the concensus.
For the great majority of mankind are satisfied with appearances, as though they were realities, and are often more influenced by the things that seem than by those that are.
Sad to see one of my ideal place lose its free market or economic freedom luster.

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