Book Review: John Perry, Singapore: Unlikely Power (2018)

I'm about halfway finished with Perry's Singapore: Unlikely Power (2018). Despite a too-flowery start, the book settled down and became much more tolerable to read. Below are a few passages that caught my eye. Perhaps they'll interest you, too. 

History is more interesting than you can imagine.
Scroll all the way down this post for more.

Interestingly, LKY left out housing, another essential item.
For most Singaporeans, the gov is heavily involved in providing access to housing.

LKY was a POW when the Japanese defeated the British
and until the British re-gained Singapore circa 1945.

Today, Singapore is known for its strict laws--including the death penalty--for drug possession. Given its history, Singapore's draconian drug policies make perfect sense as a way to eliminate the former power structure's source of income.

Despite more countries building land-based infrastructure,
the sea continues to be important in the modern economy.

Surprise!

Bonus: in Surabaya, Indonesia, I visited the Cheng Hoo mosque aka Zheng He mosque. (The Bahasa language apparently replaces the "z" with a "c," similar to how Spanish calls the "v" a "b.") The mosque provided even more information about the fascinating seafarer not as famous in the West as he should be. Here is more information explaining some of Zheng He's remarkable feats, including navigating seven(!) journeys: 

From Surabaya, Indonesia

Bonus II: from Clark Winter's The Either/Or Investor (2008). 

pp. 66, hardcover, Random House

Book Review: Jim Rogers' Street Smarts aka Thoughts from a Southern Gentleman

Jim Rogers has had one heck of a life. From a small town in Alabama to the Ivy League to all around the world on a motorcycle, his insights are never preachy. He covers a wide range of topics, including one particularly negative anecdote about his former co-worker, George Soros. (FYI: even back in the day, consent decrees were worthless.) 

Big on commodities, Rogers promotes farming as the job of the future. He reasons food prices have been too low, and--just as in gold/silver mining or oil exploration--low commodity prices usually cause fewer producers and/or lower production, often leading to a crash. As prices and producers decline, new (and presumably more efficient) investors, seeking profits, will enter, rebalancing the supply/demand equation. At some point, prices will rebound, and the higher prices will create a snowball effect for both buyers (no longer concerned with deflation) and producers, especially if banking institutions issue loans. The alternative, a government-controlled economy, is inferior because it generally will not allow entities to fail. An avowed capitalist, Rogers explains, "The cure for high prices is high prices. It always works...." "The Soviets did not have anything because nobody produced anything, and nobody produced anything because prices were set so low." 

To his credit, Rogers realizes the flaws in his own paradigm and lambastes the Federal Reserve's easy money policies. Excessive Federal Reserve economic intervention is harmful, he argues, excoriating both Greenspan and Bernanke. In Rogers' experience, capitalism provides a self-reinforcing mechanism for regeneration aka creative destruction. It's true Rogers is known as a "bear," which means he makes money when companies fail, but the characterization of bias is unfair--every hedge fund manager sells short. 

Readers interested in politics will enjoy Rogers' comments on domestic and international affairs, including details about his new home, Singapore, and his reasons for relocation. 

On the black market.

Two passages stand out: 1) "As recently as 1987 the United States was a creditor nation."; 2) "America is borrowing money to pay for military hardware that sits and rusts in the sun. The man who manufactures the hardware makes money, but after that, there is no beneficiary. The investment does not represent an ongoing source of production, the way a canal or a railroad does." 

There are too many jerks in the financial world, but Rogers seems to be one of the good guys, someone who's never forsaken or forgotten his humble Southern roots. 

© Matthew Mehdi Rafat (2017)

Bonus: Rogers shares a lot of information on Singapore. See below for excerpts.

The "genius of Singapore": public housing programmes for all.

HDB flats in Singapore (2018)

Informational Wars in the 21st Century: the Collapse of Creativity

I should be packing for my upcoming Singaporean trip but instead, I re-watched the finale of Star Trek: Next Generation, and the material still captivates. As any Netflix subscriber will tell you, one good show often leads to another, and the 1987 premiere didn't seem dated, either. It got me thinking: why do I enjoy older movies and older dialogue, whether Hitchcock or Hepburn (Audrey, not Katherine)? Why do I often find the old superior to the new? And how is it possible the American intellect has declined so precipitously over the past 30 years? 

Growing up, I loved libraries and bookstores. Any random selection would do, and within minutes, I'd settle into an incredible story. Later, I discovered college bookstores, and within them were even more incredible stories that challenged my brain and entertained my soul. I knew I would never find myself being bored. 

In 2001, a few years after graduating college, I visited Singapore and experienced an anomaly in the world-literature continuum. A few books displayed never-before-seen admonitions: "For Sale Only in Singapore/Malaysia." Standard operating procedure assumed all governments control their reputations through "information boosting," i.e., ensuring their version of events is placed at the top of the shelf, but I didn't know about trade agreements or intelligence tactics and couldn't have told you the difference between MI5 or MI6. Although SEO wasn't yet a priority for private and state actors, its concept was present in that tiny bookstore, revealing the possibility of artifice. 

It was also in Singapore, a former British colony, where I first learned the power of international designations. An NUS professor revealed Singapore had been designated as a "developed," not "developing," country, excluding it from numerous international grants, even though most of its land mass could be called rural in 2001. After two years in one of the West Coast's most expensive and most diverse law schools, tiny Singapore is where I received my first international perspective. Singapore couldn't help itself; as a port-focused city-state, it had to embrace globalization before the term became fashionable in Western academic circles. 

I returned to the United States for my final year of law school wiser but not warier. 9/11 would happen shortly afterwards, and my next seven years would be spent eliminating over 75,000 USD of student loans during a severe recession. Only later would the issues of globalization and informational warfare return to my mental purview. They arose not willingly, but when I finally noticed no bookstore challenged me, no magazine captivated me, and the new could not compare with the old. I was starting to become bored. 

Today, I googled an unfavorable but famous event in a foreign country that should have been easily found. Instead, my search results contained fake news links designed to capture exactly the search terms I'd used, but in ways that concealed the actual event--and therefore the truth. The links included most of the event's general details, but the female protagonist had been replaced by a fake male one, and none of the names were real. During various hacking episodes, I'd suspected we'd progressed from geographical content restrictions to online bleaching, but de facto censorship of legal activities in America was new to me. Only Yahoo--allegedly one of the worst search engines in America, saved from obsolescence by its investments in Alibaba and Yahoo Japan--had the "right" result in the middle of the first page, a single link surrounded by deliberately engineered fake news. Incredibly, SEO manipulation had, in this instance, made my limited analog brain more powerful than one of America's most valuable technology companies. 

"Everything you see is propaganda," I once told a middle school class, and my opinion hasn't changed. Information wars and actions in furtherance of those wars are more obvious when a book's cover discloses geographical limits or when the most prevalent story about another country involves chewing gum, but unbiased information has always been an endangered species. I am young enough to remember Silicon Valley's battle cry, "Information wants to be free," but they never promised accuracy or context. 

In Star Wars, the engineer's revelation of a design flaw in the Death Star gives the rebels hope. Similarly, once we become aware of the informational flaws we receive daily from public and private news sources, perhaps we, too, can recognize "hidden" manipulation not just in search engine algorithms, but in social and mainstream media and even in the very people elevated into positions of power. If we achieve this higher level of understanding, humanity's hope wouldn't be founded on false optimism but upon the realization our species has evolved in the past and can continue to evolve beyond its self-defeating patterns of scapegoating, wishful thinking, and hyperbole. 

Gene Roddenberry, a military veteran and the creator of Star Trek, built his entire life around the inevitability of human progress. He declared, "The strength of a civilization is not measured by its ability to fight wars but by its ability to prevent them." Sadly, by this metric, the United States has failed its citizens, children, and veterans continuously since Vietnam. Having fought one unjust war after another--losing almost every one of them while economic competitors China and Japan focused on domestic infrastructure--America's current Establishment has little choice but to glorify militarism. Such propaganda requires economic support and job preferences to maintain momentum and, most of all, to bury past mistakes. Once activated, the machinery of militarism rarely sets its own boundaries; an enemy always exists just over the horizon, and more measures may always be taken to promote the appearance of safety. 

Few people in America see the connection between the TSA's expansion, its privatized body scanning machines, and the military's concern with employing returning veterans; even fewer realize the trillions of borrowed taxpayer dollars involved reduce not only America's economic potential but its future flexibility; and perhaps fewer still can conjure an alternative result for those same taxpayer dollars (hint: think Tokyo). Dr. Martin Luther King, Jr.'s prescience is worth remembering: "If America’s soul becomes totally poisoned, part of the autopsy must read 'Vietnam' ... A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death." (From 1967 in, of all places, New York City.) 

Let us now return to the original question: why does the old look, feel, and read better than the new in America when the opposite should be true? Consider that in normal societies, the younger generation is apt to forgo established customs as the older generation's knowledge degrades, diminishing claims to authority. Consider too that in abnormal societies, the old maintain their grips on the future by suffocating change through laws and punishment. And finally, note that diseased societies send their young to die for meaningless purposes, removing opposition as well as potential change agents. I say to you today, if the old appears shinier than the new, it is a sure sign of authoritarianism, evidence the youth are being suppressed or their imaginations stifled. Dr. King answered correctly in 1967, but I will go further: a military/police culture of following orders is incompatible with art, philosophy, nuance--and therefore creativity. 

When little boys and girls are deluged with images linking violence and war to heroism regardless of whether such wars are just, America's adults have replaced responsibility with desensitization and irrationality. 

When the table of brotherhood can only be set if every man reserves his right to a shotgun or a rifle, the spirit of the law has perished. 

When the sweltering heat in which our troops are stationed generates no lasting regional peace but instead parched national pocketbooks, America's vision has been a desert mirage all along. 

When our soldiers claim the ethos of courage while administering death by drones, we are living in a Greek tragedy of our own making. 

When our police officers consider themselves above the law, order becomes subservient to its half-witted cousin, obedience. 

If our judges refuse to read the papers presented to them and instead rely upon secondhand memorandums, the book of justice will remain unused. 

Now is the time to reform our sacred institutions by removing the sacrilegious from their temples and pulpits in Congress, courthouses, police departments, corporate boardrooms, and war rooms. There will be neither cohesion nor stability until each citizen is assured corruption has been driven out and the exorcists given their due. 

To that end, it may surprise you to learn the Muslims had wisdom we lack. They separated civilians, merchants, and the military by placing them in physically distinct areas. The medina was the place of business and barter, and the forts and minarets stationed fighters at a distance. The mosques provided sanitation five times daily in the required act of wudu before prayer, mixing practicality with spirituality. Such arrangements required respect for logistics and infrastructure, not just weaponry. The distance between the two spheres of influence created built-in advantages beyond the freer development of calligraphy, science, algebra, and art; for instance, complaints arising in the medina (aka city) would need time and effort to reach the forts (aka military outposts), increasing the likelihood of legitimacy and thus an appropriate remedy. 

Oman

It may not be easy for an American historian to admit, but the aforementioned separation might have been the only truly "separate but equal" arrangement in modern history. 

Ultimately, if we do not understand some of humanity's problems have already been solved, we will neglect the task of modifying pre-existing solutions to current times and invite a cycle of arrogance. If we compound our error by ignoring history and amplifying propaganda, we will pollute the intellectual waters our children require to swim. Above all, if we are to have a dream worth mentioning, it must be one that facilitates a peaceful transition from old to young as well as a transfer of timeless knowledge. If each successive generation must start the Great Global Novel from scratch, our progress will be needlessly haphazard with no guarantee of reaching the final page. 

Today, the American Dream appears to have been a lie to all but the most talented, the most lucky, and the most likely to inherit. As I seek a better life in Singapore, I hope one day, America rediscovers the generosity of spirit that made it a beacon for honest men and women of a certain character. In the meantime, I'll be in Singapore, taking my chances and charting the unknown possibilities of my existence. May we all live long and prosper. 

© Matthew Mehdi Rafat (2018) 

Flashback to 2001

As newspapers go, so do countries? From July 2001. 

Yes, I misspelled "embarrass." Sigh. 

Why Do the Private and Non-Profit Sectors Exist Anyway? (Comparing Singaporean and American Governance)

Americans and Europeans lack widespread knowledge of civics. I don't mean abstract concepts of government but their practical application. For instance, why shouldn't the government handle all affairs? Is it checks and balances? Healthy competition? 

First-World Governmental Systems Aren't Fundamentally Different from Each Other

Consider that governments already have internal and external checks and balances. Internally, independent oversight exists through a judiciary and/or HR processes removing bad actors. Externally, privatization has become more common but one need only study America's private prisons to see secondary options don't necessarily increase accountability or efficiency. 

American-style corporate privatization hasn't provided superior oversight because boards of directors do not generally question executive decisions, and most shareholders are dispersed or inactive. Neville Isdell, Coca-Cola's former CEO, once described his distaste at a board member's meticulous research into different pay scales, implying the board member's diligence was unhelpful. Mr. Isdell worked his way up from lowly general manager to CEO, becoming one of the world's most level-headed and successful executives. If Mr. Isdell--and some might add Mr. Jack Welch and Mr. Jeff Immelt to the list--was unable to stomach dissenting or different voices on his board of directors, one can see vehicles designed to do x don't necessarily mean x will actually occur. 

Warren Buffett once wrote, "You only find out who is swimming naked when the tide goes out," and Americans appear to have accepted a default system that conceals rule-breakers or excessive risk-takers until after a crime has taken place--despite numerous regulations intending to discover miscreants in real-time. The clues point to one conclusion: systemic checks in the abstract don't matter as much as its participants' willingness to stress-test their ideas in an environment that promotes questions--and change. 

To take an example at the other end of the checks-and-balances spectrum, Singapore is essentially a one-party state run by the People's Action Party (PAP) and controls Temasek Holdings, a massive state-owned investment company. Despite this consolidation of power, no reasonable person thinks Singapore requires more political diversity to improve public responsiveness because the PAP has signaled it will not tolerate corruption. It helps that Singapore's lack of corruption is self-reinforcing--its presumed integrity functions as a powerful competitive advantage in a region with much larger, faster-growing economies. Even so, if almost-absolute power corrupts, why has Singapore succeeded? 

Someone wishing to play Devil's advocate might raise the case of Roy Ngerng, a Singaporean blogger sued for defamation. According to Singapore's Straits Times, "Mr Ngerng's post suggested that PM Lee had misappropriated Singaporeans' Central Provident Fund (CPF) savings [by likening] the Prime Minister to City Harvest Church leaders, who were at the time facing prosecution for alleged misuse of $50 million in church funds." Following a court-issued judgment of 150,000 Singaporean dollars, Mr. Ngerng apparently moved to Taiwan and "described the termination of his employment [in Singapore] as 'politically motivated.'" 

I've briefly perused Mr. Ngerng's blog, and I found his writing terrible. His posts make sweeping generalizations: "I will go quickly through the maths but you don’t have to get too engrossed with the technicalities. Just try to see the whole picture." Unfortunately, Mr. Ngerng's entire line of reasoning often misses the whole picture. He complains that citizens or CPF contributors seeking to withdraw "forced savings"--my term, not his--from the country's common fund to purchase a home must repay the assumed rate of accrued interest on the withdrawal. (For finance geeks, the closest American analogy would be having to pay taxes and/or a penalty on early traditional IRA withdrawals. Think of the American system as a privatized version of Singapore's CPF but without a guaranteed ROI.) 

Ngerng then seems to weaken his own argument by revealing the subsidized(?) mortgage interest rate available to withdrawees: only 2.6%(!). To escape the implications of this wonderfully low interest rate, he adds to it the 2.5% assumed minimum interest on CPF funds, calculating the "real" mortgage rate [as] 5.1%--allegedly "a very high interest rate." I'm not an expert on Singapore, but if you're not able to follow, just know the blog fails to consider complex regulations in light of a centrally-planned economy where the government provides subsidized flats. If I wanted to be critical, I would have argued the Singaporean government should be doing more to build and offer affordable flats for non-married permanent residents and non-married citizens, but that's a separate issue I didn't see anywhere in his analysis. 

Should the government have sued Mr. Ngerng for his poor writing? I think not--he seems more in need of an explanation of his own country's economic system than a lawsuit. If I were involved, I'd ask whether 150,000 Singaporean dollars is worth the risk that Singapore won't produce excellent writers (Kevin Kwan moved to the United States when he was 11) because they'll be too concerned with potential litigation. For a country priding itself on practicality, other approaches would have been more balanced in terms of boosting creativity while punishing lies. 

As for Singapore's allegedly harsh legal system, I'll share a story that should, once again, indicate differences between the American and Singaporean legal systems aren't as vast as you might think: I was personally fined 11,000 USD by a federal judge without being given the opportunity to appear in his courtroom. As a one-person law firm, 11,000 USD is a substantial fine that chilled my speech--in this case, innovative legal arguments and zealous advocacy on behalf of my clients relating to securities laws--and eventually played a part in my exiting the full-time practice of law after investing over 100,000 USD in earning my degree. (It didn't help that a local judge, Socrates Manoukian, initially sanctioned me 1,000 USD for making what he deemed overly zealous and disrespectful arguments in a separate matter.) 

In any case, we now ought to agree types of systems matter when trying to maximize anti-corruption measures, creativity, public responsiveness and accountability, but their implementation is equally if not more important. Stated another way, it is better to live under an honest, wise king and queen than a Parliament, judiciary, and President comprised of fools and drunkards. 

Just for good measure, I'll create my own Singaporean "free speech" test by criticizing the Singaporean government and then alerting official government entities, including the police department, to this post: I'm visiting Singapore in 11 days, and I believe Singapore is making a mistake not accommodating Jehovah's Witnesses on the basis of the group's pacifist beliefs, which forbids them from participating in Singapore's mandatory military service. Refusing to make reasonable exemptions for religious minorities reflects poorly on large entities, whether countries or companies, and also demeans one's ability to claim diversity and tolerance. Singapore's strength is not just its reputation for integrity, but its diversity, and jailing anyone part of a longstanding, established religion for his or her sincere religious beliefs makes it harder to attract the best residents from around the world.

Posted May 20, 2018. I will also demand a durian milkshake when I arrive.

 And that's how it's done, lah? 

Private Sectors Exist to Catch Blind Spots & Incorporate Missing Links into Overall System, Minimizing Fragmentation

Rather than checks and balances, I would argue a private sector exists 1) to improve civic responsibility by delegating authority; and 2) to increase the chances of attracting and developing talent that might otherwise go unnoticed. 

We've all heard it takes a village to raise a child, but the modern-day equivalent is an unfamiliar, foreboding city with numerous institutions disconnected from one other, vying to attract capital and talent. Over time, such an environment prioritizes maintenance of one's own organization and funding rather than the uplifting of one's country. Furthermore, as organizations become larger, they tend to rely on following orders for the sake of following orders, minimizing worker and citizen discretion in the process. 

Modern society has seemingly sacrificed individuality for the sake of the greater good, whether through ill-implemented quality control processes or indiscriminate technological surveillance. Individuals have rebelled by exempting themselves from rules designed to provide order, and along the way, enough factions have developed to render the intent behind most formal rules useless. In almost every case, segregation--a way of avoiding useless rules and building community through "benign exclusion"--has created greater attenuation and thus less accountability. Whether the reduced accountability results from deliberate misinformation by hostile actors because of the greater levels of disconnectedness or more honest reasons, the result is the same: a lack of trust, which leads to less compassion, less tolerance, and less kindness. A society that delegates authority without maintaining informational integrity will find that civic responsibility--and therefore community cohesion--is negatively impacted. 

The private and nonprofit sectors were designed to combat exactly these problems of segregation and misallocation of resources. What the government could not reach, leaders like the Rockefeller family, private schools (LeBron James, Clarence Thomas, etc.), 

But see Becoming Kareem (2017)

or nonprofits (in journalism and public resources, see Pew Centers, Annenberg, etc.) would. Indeed, why allow tax exemptions at all unless the beneficiaries seek out vagrants and unidentified talent and harness their energy to positive or at least non-negative uses? 

Although the private sector lacks a direct tax exemption, its ability to write off expenses or operate at a loss gives it more latitude to pursue different projects as well as hire persons unsuited to a 9 to 6 schedule. The private sector isn't attractive merely because it allows people freedom to experiment in ways less likely by career civil servants; it's also valuable because it can generally fail with less severe consequences (e.g., Sungevity bankruptcy, VW's emissions scandal, but see exploding Pintos, Deepwater Horizon oil spill) than governmental entities (Enron's request to use particular accounting standard, the Philando Castile shooting, Gulf of Tonkin, etc.). 

In the end, competition for talent--wherever it is--will arise between the private and public sectors, but neither sector can succeed without showing clear, tangible gains to the public. Such gains are not maximized unless every group's energy and input are included in meaningful rather than token ways. Generally, long-term costs of exclusion, even if unintentional, far exceed the costs of inclusion on the front end. 

I'm reminded of one of my heroes, Julian Bond, giving a speech in which he skillfully linked the future of entitlement programs to the development of diverse youth today. Since we are focusing on details, I must say I worry about the world's failure to develop leaders like Mr. Julian Bond and Mr. Lee Kuan Yew, who were so adept at advancing the argument that we are all in this together, and if we are not, we may not drown, but we will surely sink. (I heard Mr. Bond speak only once and was mesmerized. I have yet to hear another person who matches his delivery and wisdom, despite the passage of a decade.)

To sum up, the nonprofit sector exists to capture blind spots and bring them into the fold, reducing fragmentation, and the private sector exists to encourage innovation and promote less rigidity. If the public sector seeks to elevate itself above the private sector through more favorable legal treatment, it will lose its integrity by failing to see the reason for its own existence: as a store of unassailable institutional knowledge and as a bulwark against short-term shifts in public opinion.

Without Integrity, Everything Falls Apart by Encouraging Unnecessary Complexity & Division

As the modern economy has become more intangible (bits and bytes) than tangible (a new NASA Space Center in Houston, Texas), governments are hard-pressed to maintain credibility, especially as private and nonprofit sectors compete more aggressively for talent. The way to reverse this trend is not to argue, as President Obama and Senator Elizabeth Warren foolishly did when they said "You didn't build that [on your own]," but to acknowledge any successful economic system is complex and requires all gears to work together to move forward. It helps to have a 10 year budget with contingencies for revenue shortfalls, but many ways exist to blunt the argument that government doesn't care about a particular segment of society or is wasting taxpayer funds. 

Above all, governments must remember they exist not to be "umpires," as the current Chief Justice of the Supreme Court once said, but to create a store of long-term institutional knowledge that excludes the influence of marketing. To act as an objective store of institutional knowledge requires integrity, the sine qua non of any successful enterprise, but particularly in government, which must often act as a mediator or brake against excesses. In addition, without integrity, a government will soon find itself outflanked by the private sector even in areas like space exploration, where R&D may not see investment returns for decades. A government that can tax by force begins with a competitive disadvantage against the private sector; a government that taxes without the presumption of integrity will automatically injury-default to competitors. 

To be sure, a government with integrity has more leeway with the public, reducing the need for fragmentation. Consider the following novel idea: citizen morale can be improved by designating specific ombudspersons under each department accessible by phone and email and required to respond within one week to any citizen question or complaint. Ombudspersons would need to collaborate with each other and inform agency or department leaders of policy decisions, all of which would be publicly accessible. Citizens opposed to any ad hoc policies may then petition each other and local government to reverse decisions not in the public interest, but such reversal should not be based on public opinion. Customers are not always right, and neither are citizens. Ombudspersons would be valued based on abilities to provide and communicate objective, independent, and consistent guidelines and would serve 10 year staggered terms. This is one example of an idea that can only be done in a country where integrity is presumed in governmental ranks. The alternative seems to be a mishmash of rules and regulations no one understands, with the need to hire an expensive (and potentially dishonest) attorney. If legal alternatives become too expensive or onerous, loopholes will be sought, and segregation assured. 

What Will the Future Look Like?

I started this article comparing two countries with two different systems: one allegedly more authoritarian, and one allegedly more free. We should now see labels weren't very helpful in determining which system truly accomplished its goals. 

The deal between governments and citizens used to be straightforward: 1) don't question the King because his power comes from God; 2) in exchange for your loyalty, we'll give you the essentials, including shelter, protection, and food. Over time, more people clamored for greater transparency and participation, and as information and products once restricted to governments became publicly available, governments diverged. Some continued the older model of exchanging economic security or non-interference for obedience (or at least a lack of open criticism) while others encouraged transparency and open discussion. The push and pull between the private and public sectors has always occurred, whether the Dutch or British East India Companies and the House of Habsburg, or Amazon versus state taxing authorities. If it feels different today, it must be our own ignorance of history rather than novel developments. 

Looking ahead, it will be interesting to see how different governance models respond to severe recessions. A government that premises social stability on economic growth and less citizen participation seems to require perpetual GDP and jobs growth or immigration/population restrictions that reduce its talent pools. Today, the more participatory government model is embattled, not because of any inherent flaw but because of a lack of integrity: revelations have proven transparency was often an illusion and so-called democratic models were equally if not more authoritarian than more restrictive models. 

Even without the implicit promise of economic assistance, the participatory model still retains its attraction, indicating some atavistic force. Just imagine two households: in one, the children are always obedient to the parents, work hard, and receive guaranteed jobs in the parents' factory after finishing school. In the other, children are openly critical of their parents and voice their concerns loudly and often. Upon graduating college, they have no employment guarantee. Which scenario would you choose? 

The latter scenario is no longer clearly favorable because of modern-day dependence on debt and the failure to promote honest journalism, whether in the style of Studs Terkel or Edward R. Murrow. If you imagine the same comparison, but without student loans or four trillion dollars of corporate loans maturing in the next five years, the second scenario feels more attractive. Perhaps deep down, we need to know we can howl at the moon, even if our voices won't change its gravitational pull. Or perhaps we know a society that discourages questions will eventually become complacent and decline; segregate itself into a new caste system; or become subservient to a more open society. 

Whatever the style or reasoning, if governments claim to be open and free, they must actually be open and free. Some governments today claim to be anti-royalty while their ranks reek of nepotism or legacy political appointees; to favor merit while allowing loopholes and preferences for ever-increasing factions; and to uphold equality while creating separate processes for rank-and-file employees as well as executives. In the end, 'tis simple: "To thine own self be true"--or be prepared to fail under any system. 

Update on June 1, 2018: I had no issues whatsoever entering Singapore. 

The Internet and North America, Summarized in One Tweet

If a picture is worth a thousand words, allow me fewer to explain the following photo. The problem with modern society is not the internet or technology, but the lack of humility omnipresent in North American culture. Such a culture will provide fantastic entertainment but not much in the way of substance. Are you ready for the most North American comment ever? 

"I'm not a lawyer but this seems quite illegal." It's a Canadian speaking, so one might chalk it up to a desire to politely agree with the principle of equality, except for one thing: the ProPublica article referenced is fantastic. Even if you glean nothing else from it, a high schooler would, after three paragraphs, understand the ADEA is complex. Really, really complex. 

Unfortunately, most North American voters haven't realized they've outsourced justice to hordes of lawyers who continue to add complexity to protect their jobs and fees. Even if conservatives manage to cut laws, civil procedure and evidentiary rules will maintain a bulwark against common sense and the common citizen. It's not surprising democracy is reeling when the model isn't justice for all but deterrence through selective prosecution. 

In 2002, when I studied law in Singapore, also a common law country, I was struck by the humility of the educated class. None of my questions were deemed odd, and the one or two borderline insulting ones (about population control) were answered substantively. Working class citizens were social and content, and the worst a person could say about them was that their warmth exceeded their ambition. Despite lacking urgent reasons to worry about social harmony, Singapore's mostly Chinese elites, not to be accused of a lack of effort, were busy trying different programs to reduce income inequality. I'm not a Singaporean, but this seems quite lovely. 

Would the last intellectual out of North America please remember to turn off the lights? 

Conversation May 3, 2018: 

Me: "Do you know you have no privacy in America?" 

Very Nice 18 Years Old Cashier: "Yes." 

Me: "Does it bother you?" 

Her: [frowns, then shrugs] 

Me: "Do you trust your gov?" 

Her: [shakes head] 

Me: "I guess the problem is there's nothing we can do about it." 

Her: "Yes."

"What is your motto here?"

From University of Maryland research.

From Bloomberg. 

About half of American voters have realized their political system isn't working and are willing to do whatever it takes to be heard.  While many Americans, including myself, mention police unions as part of the problem, the entire system has become so convoluted, little accountability or efficiency exists in politics--not in public education, not in public policing, and not in public transportation. (Fun fact: our local "bullet" train was built by Japan in 1986 and takes about an hour and a half on its normal route to go 50 miles. I live in one of the largest, most affluent cities in California.)

Ideological adherence, regardless of results, has destroyed America's ability to think logically or attain an agreed-upon national character.  Lee Kuan Yew once remarked, "The [Singaporean] system works regardless of your race, language or religion because otherwise we'd have divisions. We are pragmatists. We don't stick to any ideology. Does it work? Let's try it and if it does work, fine, let's continue it. If it doesn't work, toss it out, try another one. We are not enamored with any ideology."  In short, Singapore's ideology is not having one. Singaporeans pledge allegiance to practicality: does it work?  Is it sustainable?  Will it improve lives for the majority of our citizens?  Such an approach requires government to be citizenry-facing and pro-efficiency, admittedly much easier to do in smaller countries with only one border, but even with such advantages, "The bigger they are, the more corrupt they must be," shouldn't be an automatic motto.

America's tried-and-true formula has broken down.  With its vast natural resources, mighty Navy, low population density, two oceans protecting it from invasion, and advanced technology, the stage was set for perpetual success--as long as existing residents didn't get too greedy or selfish. Historically, America's expanding economy has relied on immigrants and treating their children--not immigrants themselves--fairly so they assimilate and sustain not only productivity growth but retirement programs.  I wrote about this phenomenon earlier:

To summarize, the natural progression of modern successful societies is as follows: industrialization; women receive equal rights; birthrates decline; unions are eventually formed; taxes are increased to support government union jobs [and tax or other benefits primarily accruing to natives]; native-born citizens refuse to do certain work, requiring the importation of poor people; the new immigrants create cultural tensions; and either society adapts and is able to welcome the new immigrants like the United States has done, or it fails to assimilate the new immigrants and begins a slow, steady decline.  

I should have added that an inefficient or outdated education system also requires the importation of skilled immigrants, not just poor ones. Being a bit naive, I never expected so many American voters to conflate giving more money to K-12 schools--no strings attached--with better education ipso facto.  Setting aside voter gullibility, why is a good, practical, and cost-effective education so important these days?

First, a bachelor's degree is required to get on track to a decent-paying job, even if the skills taught in school confer no practical value.  Yet, in most service-based or knowledge-based careers, people learn on the job--just like they did decades ago, though back then, an apprenticeship might have been just as good as a college degree.  (It's not just K-12 that has issues--I graduated law school not knowing where the courthouse clerk's office was or how to file a complaint in either state or federal court.)

Second, most college-educated people marry other college-educated people.  In fact, the most relevant factors in whether a marriage will last are age (the older, the better, but not after 32) and a bachelor's degree.  What percentage of Americans over the age of 25 do not have bachelor's degrees?  About 68%.

Now check out the second picture at the beginning of this post.  That's $1.2 trillion--yes, trillion with a "t"--in outstanding student loans.  Let's say you're in the lucky 32% with a bachelor's degree.  If you're ambitious and lucky and find a spouse in college and graduate, you could have non-dischargeable debt--debt you can't clear in bankruptcy court--of about $50,000 at the age of 30 and no assets other than a used car.  And still, college degrees are so in demand, my law school now charges $55,000 tuition for a single year.  Whom exactly does this educational set-up help?

It helps the federal government--which receives interest on student loans it issues directly, even ones targeted to lower income students like Perkins Loans; debt collection agencies and lawyers; consumer lawyers to assist against debt collection agencies; banks, which offer private student loans; universities, which are non-profits; and university employees.  It does not help an ambitious child from a hard-working immigrant family who has not had the benefit of asset appreciation during a time when prices for essential items were much lower, and the gap between wages and such prices much narrower.

Cost matters.  For example, a college education costing $5,000 a year with median entry wages at $5/hr is a much different hurdle to jump than one costing $55,000 a year with median entry wages at $15/hr.  At some point, the number of years required to be in debt delays important economic activity, especially the ability to save, which in turn delays the ability to rely on compound interest to build assets and disposable income.

If prices for essential items are increasing faster than wages, and the ticket to getting a higher wage requires $30,000 or more in debt, then without parental, grandparental, and/or scholarship assistance, the virtuous cycle of debt, sacrifice, hard work, and success is no longer available to a broad spectrum of people.  Even for the most well-meaning participants, the process changes from providing valuable solutions or services to getting along with the people in power so you can get into their club--or at least get a scholarship.

When reaching the middle class requires $30,000 to $50,000 in debt--excluding opportunity costs--most people will try to find loopholes and exemptions because "gaming the system" appears moral when the default is financial slavery.  Naturally, people will lobby politicians to help, but because the system is so profitable for almost everyone, no politician will implement fundamental changes.  Over time, the same problems multiply, such as tuition increases, and eventually the only people doing well are the ones who've convinced the government to give them a loophole, or the ones who've benefited from generational asset inflation and transfers, allowing them to keep up.  Moreover, absent predictable paths to success, cities become hubs of short-term thinking, unable to tame nomads, removing yet another potential check and balance on consolidation of power. In short, the Establishment wins every time, and immigrants and outsiders aren't able to shake up the joint in meaningful ways without being connected to the government's pre-existing objectives.

Welcome to America in 2017: "Here's Charlie facing the fire and there's George hiding in Big Daddy's pocket. And what are you [politicians and vested interests] doing? You're gonna reward [connected, listless] George and destroy [hardworking, middle class] Charlie... Now I have come to the crossroads in my life. I always knew what the right path was. Without exception, I knew. But I never took it. You know why? It was too damn hard."  

Hoo ah?

© Matthew Mehdi Rafat (2017) 

Singapore, Part Deux

My earlier post on Singapore received quite a few hits:

In Defense of Singapore

Here is an article from www.theonlinecitizen.com about Singapore's political system:

http://theonlinecitizen.com/2008/12/current-system-lacks-accountability

The existence of The Online Citizen shows that Singapore does indeed have forums for anti-government debate, and the highly connected nature of Singapore--both communally and technologically--limit the government's power to impose overly rigorous speech codes.

In Defense of Singapore

Investing requires some knowledge of international culture, because a truly diversified portfolio contains shares of international companies. Understanding Asian culture is especially important for Americans and Westerners because the spending behavior of Asian citizens, especially the Japanese and Chinese, may determine how long and deep an American recession will be.

One way to understand Asian culture is through the story of Gopalan Nair, who has returned to the Bay Area from Singapore. I wrote about him and the differences between Singaporean and American culture here: Post on Singapore (June 2008)

Here is what happened to Mr. Nair: http://www.insidebayarea.com/ci_11098813 [Link no longer works, but the following one does: https://www.eastbaytimes.com/2008/11/28/fremont-attorney-released-from-singapore-jail/] 

After Singapore found the Wall Street Journal to be in contempt of law, a Singaporean government official lambasted the WSJ in its own letters section (Dec. 4, 2008, Chan Heng Chee letter). To its credit, the WSJ printed the letter. A report on the dispute is here:

http://www.radioaustralia.net.au/programguide/stories/200811/s2431123.htm

Professor Tan explains the Singaporean government's position accurately:

PROF KEVIN TAN: The position of the Singapore law is that the media should censor itself to make sure you don't have things which are untruthful, defamatory or contemptuous going out there. I think that is indeed the case. Let us put it another way - if somebody writes a letter which is clearly defamatory of somebody else, the editorial ward of the publication should ensure that letter doesn't get published because if indeed the writer of the letter gets sued for defamation then you become an accessory to this whole defamatory process as well, you see, because defamation requires publication.

As I've said several times, Singapore has created an incredibly successful and diverse state and deserves the benefit of the doubt. There are two issues that ought to be discussed whenever mentioning Singapore's speech restrictions:

1. Singapore experienced racial riots in 1964 shortly before its separation from Malaysia. [Note: the previous sentence has been updated since the original posting.]  Singaporean leaders wisely remember their history and the violence that occurred fewer than 50 years ago. American newspapers almost never mention Singapore's history, which has caused it to place a premium on racial harmony over unfettered free speech. Behind Singapore's speech restrictions is a government that feels it would be negligent if it allowed a repeat of its devastating racial riots. Although Singapore's position is not entirely different from Germany--Germany bans swastikas and other racial symbols and speech because of its own recent violent history--Singapore is singled out for its attempts to maximize racial harmony. France has also ruled that its own citizens, such as Brigitte Bardot, may have their speech limited (see BBC on Bardot). Here's another writer's take:

http://library.thinkquest.org/04oct/00301/project%20thinkquest/pages/p8.html

At the end of the day, Mr. Nair is naive if he believes he can refer to any judge in any country as a "prostitute" and not suffer some consequence. American judges have jailed American citizens and sanctioned lawyers for insults much more benign.

2. The East-West cultural divide is neatly expressed in the WSJ-Singapore dispute. One possible reason for the dispute is that Westerners may not understand how much Asian culture values non-confrontation. In many Asian cultures, for example, it is a sign of immaturity to lose one's temper. In contrast, in Western culture, where individualism is highly valued, confrontation is not seen as immature or even terrible per se. This difference in cultural values has led to many misunderstandings between East and West.

At the end of the day, all Singapore is saying is that it does not want someone to criticize its judiciary with unfounded accusations. In other words, if someone is going to criticize its hardworking judges, that person needs to have evidence to support his or her allegations. That is not an unreasonable request in a country that has ranked consistently in the top five worldwide in transparent government practices and which lacks systemic corruption (See Transparency.org 2007 Report). The United States, in contrast, barely made the top twenty in the international government transparency rankings. Furthermore, the United States, unlike Singapore, has suffered several instances of judicial corruption--see, for example, the Dickie Scruggs matter: Dickie Scruggs, Judicial Corruption.

In addition to its world-renowned transparency, Singapore has other unique factors that make it highly protective of its judicial system. The relatively small size of the Singapore population and its even smaller legal population provide self-enforcing mechanisms for good conduct on all sides. The small legal community means that judges and lawyers interact more with each other, which creates a less adversarial system where lawyers are taught to be facilitators rather than zealous litigators. In a cooperative-style system, if Singaporean judges are going out of their way to work hard, read the papers, and to be fair, and there has been no evidence of corruption, why should they be subject to unfounded, baseless accusations?

From an Eastern perspective, the West's insistence on allowing unfounded accusations to harm peaceful, hardworking people is barbarism. The Western system forces hardworking people to spend time defending themselves against baseless public attacks rather than engage in productive activity. In contrast, Singapore's broad defamation laws create an incentive to work together and to avoid confrontation if possible. It is difficult to find fault with such a system in a country that is transparent, affluent, and diverse. Moreover, when accusations of human rights violations are leveled at Singapore from Americans--whose history includes judicially-sanctioned segregation (Plessy v. Ferguson), judicially-approved slavery (Dred Scott v. Sandford), nuclear weapon use against Asian civilians, far more abject poverty, and a sitting President who approved Guantanamo Bay--it must be especially galling.

From an investment standpoint, if you believe Singapore has a bright future, you can invest through the iShares MSCI Singapore Index. Its symbol is EWS and according to Yahoo Finance, it offers a yield of approximately 9.00%.

Disclosure: I own shares of EWS but my positions may change at any time. I am NOT providing investment advice, nor am I licensed to do so. You are responsible for your own due diligence.

Update on December 5, 2008: interested readers should check out the "comments" section of this post. One reader posted this link on Francis Seow:

http://www.singapore-window.org/1028judi.htm [Link no longer works, but the following one does: https://remembering1987.wordpress.com/whos-who/francis-t-seow-2/] 

I am not sure what to make of this and need more information, but it's quite troubling.