the new economic reality for the workers

In Today's paper there is an article by William Pfaff on the flaws of the new American economy. Primarily the key issues of concern was the dismissing of the role of workers and their values, and transferring all the benefits to management and shareholders. 'The market settles business morality and you get away wtih what you can get' from the market. This leads to the billion dollar rewards for the executives. All the executives are concerned is how to maximise shareholders' value and their own values. And since raw material and energy cost cannot be controlled, the next thing is to reduce or even replaced labour cost. 'The system of values now governing the US corporation rejects the principle that business should serve the interests of workers and community as well as those of investors and managers.' Thus there is no trickle down effect where the bottom of the food change will get a share of the crumbs, when the workers were excluded from receiving its fair share of the corporate value which it helps to contribute. And according to the new US Federal Reserve chairman Ben Bernanke, he concedes that 'a growing portion of the population feels they are not sharing in the benefits' that American industry and trade produce. The decline in workers family income during years of deregulation and globalisation has reached a point where workers depend on federal food stamps to live, and use hospital only for basic medicare. And Pfaff commented that a corporate model that deliberately renounces responsibility for the well being of its workforce hollows out the domestic consumer market... The above scenario is very familiar as our economy is a carbon copy of the US economy. Our workers did not have federal food stamps to live on, but they now have Comcare and Progress Package to tie over hard times. The Americans are waking up to their heady mismanagement and misallocation of wealth to the small core of top management at the expense of their workers when wealth were piled up like it is their god given right. Would our system continue down this road when $600k income is peanuts while 30% of the population is living on less than $15k annual income and struggling to make ends meet? Will this widening income gap be seen as a social evil and not a normal state of affair in a free capitalist system?

why so difficult to enforce corporate governance?

After one year of review, SGX is still finalising a new set of tougher rules for corporate governance. The SGX seems to be wavering. A lawyer was quoted as saying 'Directors will definitely not be willing to sign off on teh financials and the internal controls unless the lawyers and the auditors go through them carefully.' One view even argued that it would be difficult to recruit more directors as they will be reluctant to put themselves in such a position with so much added liability. My response is that this is bullshit. Many will still queue up and want to have 10 or more directorshis under their belts. As another lawyer said, 'It's not just about collecting directors' fees and coming a few times a year for board meetings and once a year for the annual general meeting.' It used to be like that, with very little responsibilities and collecting fat directorship fees. It is time that they be made to work and be answerable for negligence. Otherwise everyone will be scrambling for directorship appointments, some even asking for it as if it is their right. And the more the merrier. Why not, when there is trouble just quickly resign, wipe their hands and get away scot free? Why should public money be given away so easily?

is the crusade to destroy jobs over?

Fairness in treating the people fairly, allowing people to have a decent means of livelihood, choosing whatever profession they are comfortable with. Not everyone can become a prime minister or an engineer. There will be people who are good enough as a driver or as a hawker or an insurance agent. The govt has a responsibility to create jobs at all levels for the people. The last thing the govt should do is to destroy jobs. Jackson Tai and Tan Kin Lian have openly criticised the lack of a level playing field and big organisations like banks could muscle their way and destroy jobs of self employed. Unfair competition at all levels must be stopped. And decision makers must be genuine and sincere and not say one thing and do another, adopting unfair methods while putting up a front of fairness. The earlier the unfair trading acts or fair competition acts be introduced the better for the smaller guys. There is a need to hang a few heads to ensure a level playing field for all and sundry. The govt should free up the market and allow the proliferation of individual enterprises to grow, allow more free wheelings and dealings, setting the people free to put their talents to the fullest to help themselves. No need or lesser comcare or charity from the govt.

singapore's most valued export

Singapore must think of a new strategy to jump ahead of its neighbouring countries especially China and India. Both giants have been exporting their talents to talent starve Singapore for many years. What is needed is for Singapore to return them the favour. The strategy involves retraining the cheap foreign talents into the Singapore mould of super talents, marked up their market values after they have learned all the sophisticated technology and management style from world class Singapore system, then re export them back at a premium. If these countries cannot afford to pay them the super talent salary of Singapore, the US and European markets will also be good substitutes as they will benefit greatly from our talents, passed our quality control with the Made In Singapore brand. The most marketable and recognisable brand in the world for incorruptibility, honesty and efficiency, and very focussed in profitability. And this will pay for these world class salaries. We will then have a continuous supply of super talents for the world market. And this will be our new revenue source, tapping on China and India to supply the raw material, ie raw talents, and reprocess into super talents Singapore Style. For a start we should re export some of our own truly bred local super talents to make a mark or establish a foothold first. Once the US and European markets are used to our high end talented products, it will be easier for the later batches to follow through. Recently we have seen many super talents being retired at the prime of their careers. We have talents in public transportation, public health system, union management, education, politics and the various industries. This extensive pool of experienced and knowledged based experts would be hot properties for the head hunters to market abroad...the marketing of super talents instead of super conductors...uniquely Singapore.

stroking of the stock market

We have seen the first intervention in the form of an assuring statement by a top MAS official to calm the nerves of investors on Thursday. Then the visiting MD of IMF also added his two cents worth towards the same objective. And on Friday confidence returned to the stockmarket. Not that credit should all go to the two officials for their timely comments. The Dow gained more than 90 points the following night which gave more support and assurance that the world equities markets were not going to go on a free fall. And all these help in their little ways to arrest the slide further down. Despite all the above, it is still not enough if the mutual funds refused to take heed and continue their selling. All it needed was a handful of stocks to register double digit falls and fear will creep in again. And the herd instinct of running for safety during uncertainties will lead to an eventual crash. Our market is so precarious because of its minute size, and more frightening is the lack of any contigency plan to prevent a repeat of the financial crisis. The need and urgency for such plans to be incorporated and be ready to activate cannot be ignored and delayed. The mutual funds and foreign capitals could behave like financial terrorists. And a timely hit can create damages that could be devastating to our economy and would lead to blood on the street. What could happen is for some bad news or rumours to spread. Even without that, all it needs is for a blue chip stock to fall by 10-20% in price and people will scurry for cover. All the weak holders of the stock, the punters or short term traders will just sell out. And the shortists will jump in to accelerate the fall. And the fall deepens. Programme selling kicks in. More sell off. Then margin calls will be triggered, leading to more force selling by the banks. By then the price would have gone more than 20%. When a stock is hit this way, broking houses will impose curbs on trading the stock. Mostly it will be a case of sell only, no buying allowed except with cash out front. It becomes a vicious downward spiral. This can happen to one stock or several stocks or the whole stock market. There must be systems and procedures to prevent such incidents, from a spark turning into an inferno. An example is to halt the trading of a stock or even the whole market. Print out the data on the big sellers. Call up the company of the stock affected to confirm that there is no genuine bad news. Assess the damage and the real contributors to the fall. In the case of a funds selling out, especially shorting of the stocks, a standby fund can be utilised to buy into the stocks. The big sellers should also informed that intervention will come in and be advised to stop their selling. Public statements be made to explain the truth and regain confidence in the stock or market. And when nerves have been calm, sanity returns, the stock or market can then resume trading, maybe the next day or a few days later. This is only a layman's simple suggestion. The people managing the system will have better and more comprehensive ideas to protect the system. The attack on the stock market can be treated and handled like a terrorist attack. Plans can be made in advance. Operational teams and details be worked out, even simulation be test run to measure the effectiveness of the countermeasures. It is reckless to leave the fate of our stockmarket to chance and to the manipulation or assault by foreign financial terrorists. Or should it be licence to kill for the mutual fund operators?