The AIG fallout

The stubborn persistence to be paid huge bonuses even when the company was going bust and needing US$185 billion in public money to keep it afloat is the height of plain stupidity and abusive arrogance. The House Ways and Means Committee Chairman Charles Rangel called it 'Near criminal indulgence.' The Americans were outraged. But will the expectation of high and exorbitant pay and bonuses continues to be the way of life or will they see the end of an era of robbers and thieves? Paul Heng, the MD of NeXT Career Counsulting here thought that it could be the beginning of the end of big, fat, obscene bonuses. Singapore is not free from such near criminal indulgence. We have been blindly and greedily following the Wall Street thieves in their daylight robbery and extortion of public money or shareholders money. And the best part is that we are proclaiming that our pay is still too low, not enough, they needed to be pay more. How much more? How much is enough? When an employee can throw away $50k for a cooking course, you cannot be so blind not to know that he is obviously being paid too much that he can't wait to burn it away. As a public policy, it is of great importance to pay the employees well, especially the talented, for them to live well and contribute well to society and country. But when paying well becomes excessively well, something must be gravely wrong. Then there are other consequences in the formula. High pay, high consumption, high cost of living, high cost of everything that needs higher pay is like a dog chasing its own tail. The workers are working just to keep paying for their food and essentials. At the lower end, the high cost of living is just that. No money left for anything, not even for retirement. And forget about an expensive cooking class. The govt has a very important responsibility to grapple with high cost and high pay controversy. What it should least do is to add to it and make this vicious cycle turn even wilder. The workers can never earn enough when other agencies are all waiting, counting how much they have in their pockets and CPF, and price their products and services to make sure that every cent is taken away from them. This is called affordability pricing or market pricing. A way to make sure that what you earn is just enough for them to take away. Many still cannot see the woods from the forest and think all these high property prices and high pay is a good thing. So the high HDB price, the high medical fees, education, etc are all affordable and good. The high rentals that the landlords are charging the shops and businesses are paid by the consumers, every cent of it. What is important is to curb the growing cost that often is unncessary and self inflicted. When cost is lower, the people can live more comfortably with lesser pay. The value of money is not eroded away that fast. Otherwise the money in the CPF, even a few hundred thousands, may worth nothing when it is time to take them out. And if the cost of 2 or 3 bungalows continues to go up, the public employees will demand that they are not paid enough and want to be paid in 10 or 20 millions. Hold the madness. Stop the dog from chasing its tail. It is never ending. It is unrestrained greed. The best part, the balloon must burst one day.

CPF savings not enough for retirement

I fully agree with Aaron Low, ST's political correspondent, on his view that CPF savings will not be enough for retirement. At the rate inflation is eating up the value of the savings, many will be hard push for money to pay for their basic expenses. The question is why CPF savings, about 40% of a person's life time income is not enough. Oh, they have been buying affordable housing and paying for affordable hospitable bills. Ok, these are affordable expenses and reasaonable to spend them. So how to make sure that after spending on these affordable items at affordable prices the retirees will still have enough money to live on? One way as suggested by Aaron, is to give up the idea of leaving something behind for the children. Have an inflation pegged annuity plan that will ensure that every cent is used up. Nothing to be left behind. I have another brilliant idea. Raise CPF contribution to 60%. This should work for a while if inflation is still at 6-8%. But if the price of housing and medical bills keep going up according to market prices, or if inflation is higher, this may still be short. If that is the case, we can raise it to 80%. It is prudent to save for the future. Tighten the belt if need be.

Time of Great Opportunities

The world financial crisis has thrown open the door to great opportunities if we are prepared to take a step back and assess how best we could benefit from it. One area that we can seriously take a relook is the policy on foreign talents. Now is the time to go out there and mount a major recruitment exercise to bring in the real talents from America. We can go for the top notch talents instead of the third or fourth rate talents we were getting in the past. We could go for the best 200 or 300 CEOs to replace all the CEOs in GLC linked companies. The CEOs of Citigroup, AIG, GM, Ford Motors, Fannie Mae and Freddie Mac, the financial institutions and the airlines, the aerospace industry etc, all are available at a price that is now affordable. We can than go ahead and acquire the Citibank Asia operations, AIA, replace the CEO of HDB with Fannie Mae or Freddie Mac, build car factories in JB, Batam and Bintan with the help fo GM and Ford Motors. The experts and top talents from Wall Streets can replace the local talents in our finance industry, and the possibilities are just enormous. Go and get them before it is too late. And we can truly transform ourselves into really world class. Our corporations all headed by the best foreign talents and supported by the best local talents. We will be world beaters.

The motorists are angry, very angry

The high insurance cost now, and the coming future, is making many motorists angry. And the fact that this is a mandatory requirement really is a pissed off. It is like legalising daylight robbery. It is not the point to tell the industry to reduce the insurance premiums. The govt must step in to stop the malpractice as the legal requirement for car insurance is from the govt. How can this thing be left to the insurance industry completely to decide how much they want to charge when it is obvious that frauds, abuses and malpractice are the cause. And don't forget that pay is also a major concern. How much is the cost going to the pay of the industry players? Big pay means big cost, don't ever forget that. Someone must pay for it. 8 month bonuses or 12 month bonuses or more?

Newton BBQed

It is good that the Newton BBQ stall has been suspended from business for 3 months. That is what the Singapore Brand is worth. I thought the Singapore Brand is worth more than that. But I hope all the tourists would avoid Newton altogether. The locals should avoid the place as well. And another big mess in Sim Lim and other shopping centres are about to unfold. Maybe the shops will also be suspended from operating for 3 months if they are caught fleecing their customers. In the case of Dr Clemen, he did not fleece his customers. They came willingly to give him the money.