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This Time, It Really Is Different

Without any real scalable sources of wealth, modern monetary theory is the belief that manufacturing wealth by driving increases in asset values which works as long as someone else is stupid enough to pay more than the last person. This escalator is fueled by immigration. A common denominator of these zoonotic diseases is the pathogen thrives in human density and interactions. Disinfection of surfaces is false sense of security. Without wishing to sound like a prophet of doom, things are bound to get far worse. COVID-19 is merely the precipitating event; the rot in our system is the fundamental problem that was destined to fail sooner or later.

In 2001 it was tech workers, 2008 was finance….big losses for an economy. Now it’s mostly hotel workers and waiters. Many of us also realize that most of the jobs “lost” in tourist industry this year ain’t coming back. Not simply because of the collapse and slow recovery – but because many of those workers don’t want to go back. Many are deliberately opting out of jobs they didn’t like, or more appropriately – didn’t like them.

The trouble with being a “service economy” is that most services are delivered by people to other people so productivity is low because there are fewer opportunities for scale economies. The service industry will never go back to the pre-Covid condition.

This is just more evidence that we live in a world in a permanent over-supply of people and labor. The pandemic, automation and the structural changes to the economy have all come together in the last 6 months that point to a future of fewer jobs and even fewer good jobs.

As long as we’re still in pandemic mode, there will be disruptions to supply chains, employment, economic activity, and prices. We should be thinking about how to hold things together for an extended period of time. This is a marathon, not a sprint.

First it would be low wage workers. But right on the heels of those, come middle and upper income workers who will be replaced by a digital economy with automation, which is where all the investments are going now. The question is: will these workers have enough time to adjust or are we in for chronic high unemployment in the years ahead? The Government must proactively provide these workers with opportunities to improve their skills and find new jobs in more future-secure roles.

The length and depth of the recession will be determined by 2 factors: how long the virus continues to disrupt at a high level and how much we support unemployed and small businesses as they struggle to survive.

The gig economy needs to be thrown out of the window: people need to be given real jobs again – jobs with some benefits and some security.

I liken this virus to the asteroid that killed off the dinosaurs. We don’t know what the next age will be, but it will be different from today’s. Eventually, a vaccine will be available to try and restore us to the previous age. Then the next pandemic, maybe virus X appears, even more virulent.

What happens then?

 

SojoüRner

 

 

yyy
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38 Responses to “This Time, It Really Is Different”

  • oxygen:

    @ Sojourne

    A TRULY INSIGHTFUL PIECE again. Yes, service economy is NON-SCALABLE (I haven’t thought of this previously) and I might add see falling productivity too. Expensive suppliers of service won’t find customers as consumers’ wallets can’t be generous of spending habits of the past. Revenue productivity across the board will shrink.

    Rent seeking economy built on heavily debt-financed leverage won’t survive much longer.

    Google abandoning a new Dublin office signals change for the commercial property markets.

    https://www.cnbc.com/2020/10/02/google-abandoning-a-new-dublin-office-signals-change.html

    Big population is funeral economy – too many people, too few and low-paying service jobs. Automation drives wages lower. Amazon etc hires a lot but mostly cheap labor. Who can afford pricey housing mortgage among its employees?

    Technology is NOT solution. It just DISRUPT AND CHANGES our lives – the older generation will be left zombies in a bewildered maze. Banks failed security will walk away from its fiduciary obligation of protecting customer’s saved deposits or account balances – we already seeing that in “INDIA-bank” of twisted tongue rubbish talk to customers whose money in deposit/account have been fraudulently withdrawn by technology-savvy crime rings..

    Insurance won’t pay for obligations. Stockbrokers cut services to clients – ALL COSTS REDUCTION strategies as each attempts to survive at the expense of the other. Those who got retrenched after living a YOLO lifestyle of orgy of spending and castle-dreaming mortgage will go bust for certainty. Developers will sold 10% to 20% of each of the projects already undertaken of construction as the labor market in all strata collapse.

    I see forward increasing societal anomie of normlessness, decaying morality, and maybe unsafe streets in broad daylight.

    In LEE-jiapore at least, the economy already sinking fast BEFORE THE ONSET OF PANDEMIC. Present Tense told peasants in 2015, our economy MAXED OUT.

    What undamaged is left of salvaging? I wonder.

    AND YES, THIS PANDEMIC IS DIFFERENT – the virus mutation process is ongoing. The vaccine might not be able to play catch-up.

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  • Tremendous:

    Good article. The chiefs from a certain group are only talking about gig economy to the rest of the villagers but not for them. As far as they are concerned, they and only they will still be in the Garden of Eden. Fertility rates for next years will take another plunge from rock bottom to bottomless pit. The village will not survive in six years’ time. Forget about plans beyond that.

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  • Cunt:

    There is also a few trillion dollars USD worth of money just floating around, held of course by the above average Joe all around the world.

    With tons of labour ( India, Phillipnes, China, Latin Americans)… supply of money & labour is just overwhelming. Obviously, manufacturing cannot absorb all of them, neither can all the other sectors in total.

    So, we have abundunt labour & money chasing very little work.
    The price of labour & money will drop to near zero…
    We will be in this situation for a very, very long time.

    Unless World War 3 starts and we kill about 1 billion people…then things can be balanced…

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  • HoHoHo:

    You are right about the last part. All the damages done thus far is a continuation of unravelling( break up/down and failing).

    It is the deconstruction and destruction of Babel(the foundation of such a city) world wide.You built it up and it will be set on “fire”.

    SIN is no exception in fact, a PRIME TARGET because of its unjust wealth and tremendous pride and abuse of the law.

    Ignore prophecy but it will not stop the process, the mechanism and the movements.

    Popcorn anyone?

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  • Jman:

    Ya, this time is really different.

    Because there are too many too big to fail Governments, too big to fail companies and banks all over the world. If they fail, there will be too much financial hardship for too many ordinary folk, too much unemployment for too many young people, which is likely to lead to much longer and protracted periods of zombie economies and populations.

    Even with all this MMT, there are going to be a lot of zombie economies and companies and populations. If this MMT bursts, the zombie period will just be that much longer and affect that many more people.

    There are no good options on the table right now. Not with enormous ageing rich populations everywhere. Now we just have hard and harder choices, worse and worst outcomes.

    With all this hardship on the horizon, personally, I think not going to war would be a good outcome. It has only been 12 years since that 2008 credit crisis meltdown. Already so many people are setting their institutions ablaze out of frustration. If this goes on long enough, what’s there to stop it from spiralling into armed conflict?

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  • Chow private do as I say.....:

    (re: The gig economy needs to be thrown out of the window: people need to be given real jobs again – jobs with some benefits and some security.)

    We’re trapped in non-recoverable crony papeconomics’ military oligarchy that comprises the Pompous Avarice Perversity. Self-entitlement elitism fed by state (pap) sponsored scholarships.

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  • Oxy misses:

    Property crash never happen lay ? …. More than 10 years oredi. Off track liao!

    So chance every opportunity to “Schadenfreude” ?

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  • Prof Wei Shin YU:

    Fantastic postings!
    But the vaccine is not going to solve our problems:
    1.What will the vaccine cost, how many jabs are needed and how long will it last?
    2.Suppose the above is no problem for SG and everyone is healthy as before.
    What about the rest of ASEAN and the rest of the World that we earn money from?
    They may never recover, and even if they do eventually, many have no money to trade with us, causing many biz failures in SG!
    The consequence: prolonged serious unemployment, in an over-populated island nation? And Gov cannot do miracles!

    But instead of being doom & gloom, let’s think of the skills/jobs that our young need to survive, and start preparing them now.
    Can we look at the Swiss model of survival, or the strategies adopted by Chinese provinces/cities to attract & grow startups through international competitions (1st prize 5m yen,2nd prize 3m yen, 3rd prize 2m yen, free 1000sqm office space, free housing,guaranteed bank loans, co. & personal tax relief, etc)

    WS

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  • Prof Wei Shin YU:

    Dear SojoüRne & Oxygen
    Care to predict the scenario in SG in: 2 years’ time? 4 years’ time?
    What do you suggest the Gov should do to reverse the declining economic situation?

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  • xoxo:

    i hope no VIRUS X but its just a sincere humane hope for the increa$ingly inhuman human race?

    I oso hope COVID19 can be overcome somehow.
    Healing a WEAKENING ECONOMY is easier than finding a cure for unknown diseases and requires only humility and REAL CREATIVITY;SEEKING A CURE for an UNKNOWN DISEASE IS MUCH HARDER.

    We can only RID OFF our economic ill with a sincerity to CHANGE AND ACCEPT CHANGE.GROUP-THINKING IS PLAIN STUPID AS IF THE *LEEder* errs,the REST too?!

    Lets hope we can find a cure /vaccine for resolving COVID19 and lets be determined to EFFECT CHANGE for our society.

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  • Harder Truths:

    What happens now? Simple. Just follow what happened to nay of these during the lats 50 years. Venezuela, Greece, Cyprus, Brazil, Argentina, Italy, Zimbabwe, South Africa.

    History always repeats itself when fools think they are smarter than everyone else.

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  • oxygen:

    @ Oxy misses

    HILARIOUS Sotong (cuttlefish) is blind of financial mathematics. If your borrowing cost is 2% over 10 years horizon (compounded annually) for an amount of $1,000 and your property does not rise in nominal term, your sunk costs of interest paid for no gain in value of your principal outlay (assumed also to be) also $1,000 is $218.99.

    Try this table for calculation verification.

    https://www.rapidtables.com/calc/finance/compound-interest-calculator.html

    If your capital value (property) depreciates by 10% over 10 years, you would in real term lose over 30% of your property investment.

    Instead of putting your $1,000 into property but in a corporate bond for an annual interest rate of 2%, you would have gain $218.99 over 10 years theoretically instead.

    Oxy misses: Property crash never happen lay ? …. More than 10 years oredi. Off track liao!

    So chance every opportunity to “Schadenfreude” ?

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  • SojoüRne:

    Prof Wei Shin YU:
    Care to predict the scenario in SG in: 2 years’ time? 4 years’ time?
    What do you suggest the Gov should do to reverse the declining economic situation?

    The so-called Phase 3 trials and outcomes are due by the end of this year or the beginning of 2021. But even though one or more of these attempts works, a vaccine does not end the pandemic. We appear to be focusing on creating a form of vaccine that could well prevent the disease of Covid-19, but that does not do enough to avoid the spread of SARS-CoV-2, the virus that causes Covid-19.

    All of humanity want to know what the future has in stock for us. But it is a dangerous game, especially without regard to the rules, such as confidence metrics, error analyses, and likelihoods of various scenarios. The fact of whether one can accurately predict political, economic trends indigenous to foreign nations is almost impossible to do it.

    There will be a rethink of how much any country wants to be reliant on any other country,” As I see it, the economic consequences of the world’s reaction to COVID-19, is exactly what is need for a global realignment on so many fronts. What is the biggest source of cognitive dissonance plaguing the world? In this crisis it was the supply chained globalized economy and our technological complacency.

    This is not the end of globalization by any means. Instead, there will be an acceleration in the shift to computerization, robotization, and automation of everything and anything that limits the dependence on humans and human interaction. Robotic manufacturing, automated processes, autonomous vehicles, etc. It appears that AI, 5G IoT devices, could not have come of age at a more opportune time…

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  • oxygen:

    @ Professor Wei Sin YU

    I KNOW IT IS CRYSTAL BALL GAZING but based on economic data on hand, I am pessimistic. My take is that it is going to be tougher than today for SG 2 years from now – the external environment is threatening to overwhelm beyond Covid-19 pandemic.

    Central Banks have taken over the rescue of global economy when Draghi (fmr ECB boss) tried “whatever it takes” fortification fight and failed. EU have not recovered. CBs are now buying corporate bonds beyond flooding liquidity, and almost insuring sovereign govt’s deficit spending which neither the sovereign govts nor CBs finds it bearable to shoulder much further beyond today. Spend now and next generation pay stupidity can’t last.

    SG already told peasants this- we can’t continue to draw on reserves for subsistence support of population and economy. Covid-19 pandemic disrupt global economies – slower revenue for govts and consumer spending power. Govts budgets are increasingly stretched and HSK already warned of budgetary deficit ahead.

    So taxes must rise even as peasants got paycut or unemployed or underemployed.

    LIFE WILL BE A LOT HARDER in 2 years time.

    What lies ahead beyond? Depends on structural political and economic reforms – a lot of our institutions and dogma are discrepit – CPF/Public housing, SWF and population recycling economics has to be reworked. GRC and CECA dismantled, maybe. Is the political souls willing??

    Prof Wei Shin YU:
    Care to predict the scenario in SG in: 2 years’ time? 4 years’ time?
    What do you suggest the Gov should do to reverse the declining economic situation?

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  • ALLGOVrTERRORRIST:

    The desperation that has driven Donald Trump to leave hospital prematurely – while still talking down the threat of a disease that has killed 210,000 Americans and turned the White House into a Covid hotspot – gives some measure of how dangerous the next four weeks will be.

    Many students of Trump’s life and career have warned that he would be prepared to sacrifice anyone – even those closest to him – to spare himself the humiliation of a one-term presidency, but even they surely could not have anticipated how literal that sacrifice would be.

    FROM THE SHORES OF US OF A, COMES A TERRORIST PRESIDENT !!!

    YOUR LIFE IS OF NO VALUE…..

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  • This is true:

    In Singapore, property prices will go up. It is for real.
    Singaporeans aspire to own private properties.
    PAP will control and manage the number of HDB flats and private properties through land sales and building.
    Migrant workers want to buy resale HDB flats or private properties – rent is expensive, interest rate is low, property prices will appreciate.
    That is why many want to be PR.
    PAP will continue to import foreigners and convert them to PR and citizens to grow the economy and its cronies wealth.

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  • Prof Wei Shin YU:

    Our illustrious ex-URA architect gave an excellent prediction of the post-Covid 19 SG/World; but that was from the view point of an architect.
    It would be great to get a similar prediction for SG from an economist’s angle, based on projection of the current situation and assuming no miracles,

    A few years ago, I remember LKY said that SG’s reserve was not as great as what many people think: only enough to pay for 6 months of imports!
    Q: What happens after that?

    Also,due to the small market, high capital and biz costs plus shortage of experienced Application Engineers* in SG, it is not very realistic to expect “…an acceleration in the shift to ……., robotization and automation of everything and anything that limits the dependence on humans and human interaction. Robotic manufacturing, automated processes …”.

    * As a measure of the no. of experienced Application Engineers in SG:
    Since independence, there were only about 3500 Professional Engineers on the PE Register for Mechanical Engineers of all sub-disciplines (e.g. M & E. structural). Today, 2020, I believe this figure is only around 4000!

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  • Yes, Oxy misses:

    oxygen:
    @ Oxy misses

    HILARIOUS Sotong (cuttlefish) is blind of financial mathematics. If your borrowing cost is 2% over 10 years horizon (compounded annually) for an amount of $1,000 and your property does not rise in nominal term, your sunk costs of interest paid for no gain in value of your principal outlay (assumed also to be) also $1,000 is $218.99.

    Try this table for calculation verification.

    https://www.rapidtables.com/calc/finance/compound-interest-calculator.html

    If your capital value (property) depreciates by 10% over 10 years, you would in real term lose over 30% of your property investment.

    Instead of putting your $1,000 into property but in a corporate bond for an annual interest rate of 2%, you would have gain $218.99 over 10 years theoretically instead.

    The rich will rent out their properties at a decent yield of 3-5%.
    The property price of a new suburban condo is now $1,500 – $1,700 psf.

    20 years ago, it was about $400-500 psf, 10 years ago, it was about on the average $800 psf.

    PAP will stop land sale for private property development should price drop by say 10% all of a sudden, it did during the Asian Financial Crisis and GFC.

    Follow the smart money. How many properties, bungalows, condo do PM LHL own? GCT need only to liquidate a fraction of his properties holding to bail out his son who was sued over $150 million. Anyway this is a moot point as the outcome has already been more or less “determined”.

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  • Oxygen procduces CO2:

    oxygen:
    @ Sojourne

    A TRULY INSIGHTFUL PIECE again. Yes, service economy is NON-SCALABLE (I haven’t thought of this previously) and I might add see falling productivity too. Expensive suppliers of service won’t find customers as consumers’ wallets can’t be generous of spending habits of the past. Revenue productivity across the board will shrink.

    Rent seeking economy built on heavily debt-financed leverage won’t survive much longer.

    Google abandoning a new Dublin office signals change for the commercial property markets.

    https://www.cnbc.com/2020/10/02/google-abandoning-a-new-dublin-office-signals-change.html

    Big population is funeral economy – too many people, too few and low-paying service jobs. Automation drives wages lower. Amazon etc hires a lot but mostly cheap labor. Who can afford pricey housing mortgage among its employees?

    Technology is NOT solution. It just DISRUPT AND CHANGES our lives – the older generation will be left zombies in a bewildered maze. Banks failed security will walk away from its fiduciary obligation of protecting customer’s saved deposits or account balances – we already seeing that in “INDIA-bank” of twisted tongue rubbish talk to customers whose money in deposit/account have been fraudulently withdrawn by technology-savvy crime rings..

    Insurance won’t pay for obligations. Stockbrokers cut services to clients – ALL COSTS REDUCTION strategies as each attempts to survive at the expense of the other. Those who got retrenched after living a YOLO lifestyle of orgy of spending and castle-dreaming mortgage will go bust for certainty. Developers will sold 10% to 20% of each of the projects already undertaken of construction as the labor market in all strata collapse.

    I see forward increasing societal anomie of normlessness, decaying morality, and maybe unsafe streets in broad daylight.

    In LEE-jiapore at least, the economy already sinking fast BEFORE THE ONSET OF PANDEMIC. Present Tense told peasants in 2015, our economy MAXED OUT.

    What undamaged is left of salvaging? I wonder.

    AND YES, THIS PANDEMIC IS DIFFERENT – the virus mutation process is ongoing. The vaccine might not be able to play catch-up.

    I think Oxygen has been away from Singapore for too long and is out of touch with the reality in Singapore.

    Luckily, he did not advise readers to invest in SIA MCB that yields 4-6% annual interest.

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  • Police CLOSE DOWN:

    Singapore a service economy? Don’t make me laugh. People are way too proud, not humble enough to serve! Their face or lack of it is more important.

    Basically all want to be Indian Chiefs.

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  • Police CLOSE DOWN:

    At this rate all those safe entry stuff is going, lots of places will end up like Lucky Plaza.

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  • TUMASIK Patriot:

    As I see it having been around for almost 80 years the Curtain is coming down on an ILLUSION Created…

    it was too good to be TRUE with the tru-Blu Core Foundation paves the way…

    And a Rotten to the Core taking over in the 80s… Will there be a 80 National Day Celebration?

    or a Malaysia Day???

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  • Cathy:

    Who asked us to put fire cracker into pineapple.

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  • My good friend alfred:

    Virus will become good if infected person is a good person.

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  • oxygen:

    @ Yes, Oxy misses:

    OI OI OI, definitely no “Schadenfreude” here for certainty, mate.

    What alarms me is your retinal/cognitive detachment from reality. Property prices fell by a lot more than 10% in the Asian Currency Crisis and GFC and slightly smaller fall since MAS introduced the property cooling measures.

    Here is the objective third party confirmation by way of INTERACTIVE chart of Singapore Residential Property market since 1975 (if you set your time frame to “maximum”.

    https://tradingeconomics.com/singapore/housing-index

    Before the turn of century, bond yields and interest rate were a lot higher. If your claim of rental yield of 3% to 5% (for what undisclosed period???) is correct, you would have lost a lot of money investing at peaks before the downturn of ACC and GFC. It is almost 20 years since 2000, the financing costs of no-gain investment would have busted your butt by now.

    And if you really got the same yield now against the costs of borrowing funds of 2% or slightly lower – ALL THE PROPERTY LAUNCHES BY DEVELOPERS before Covid-19 WOULD HAVE SNAPPED UP without soft launches, Buyers would beg on their knees to get any unit or better still bigger unit.

    Has this happened or IS THIS HAPPENING NOW?

    And who would take risks in any other business sector when property development is such a lucrative opportunity?

    Nobody will buy SGX-listed shares with money all flowing into property.

    Come on, don’t play kid’s mind to delude public naivety! That is my call and pleading to you.

    Yes, Oxy misses: The rich will rent out their properties at a decent yield of 3-5%.
    The property price of a new suburban condo is now $1,500 – $1,700 psf.

    20 years ago, it was about $400-500 psf, 10 years ago, it was about on the average $800 psf.

    PAP will stop land sale for private property development should price drop by say 10% all of a sudden, it did during the Asian Financial Crisis and GFC.

    Follow the smart money. How many properties, bungalows, condo do PM LHL own? GCT need only to liquidate a fraction of his properties holding to bail out his son who was sued over $150 million. Anyway this is a moot point as the outcome has already been more or less “determined”.

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  • SojoüRne:

    Prof Wei Shin YU: Also,due to the small market, high capital and biz costs plus shortage of experienced Application Engineers* in SG, it is not very realistic to expect “…an acceleration in the shift to ……., robotization and automation of everything and anything that limits the dependence on humans and human interaction. Robotic manufacturing, automated processes …”.

    My only hope is we get a better handle on how to co-exist with this virus which includes many structural changes in our economy (as this virus lingers maybe for years?) We won’t be returning to the retail binge economy. Companies who fail to change with it will fail. We will learn to live more at home (not a bad thing).

    It’s impossible to value something if we can’t measure its impact and the many micro-businesses operating in the shadows are far more important than we think.

    Indeed there is a case for local communities to not only celebrate digitally enabled small ventures but to think outside the box to digitally enable many other local small business that are technologically challenged.

    Then on top of that, there will be a global recession. Almost all of the G-20 is shut down now, and even in places where the virus is under control like South Korea or New Zealand, they can’t lead the global economy if everyone else is shut down and not moving. It’s a global trickle effect with the lack of demand all over the board.

    There is a huge divide between who we think we are as a nation (plucky free enterprise capitalists) and what we actually are (corporate drones too scared to lose what social net there is by striking out on their own.) I should know, most of the small businesses here seem completely unprepared technologically (and financially) to weather these challenging times.

    For an economic system to function, it needs to benefit most of the participants. If everyone sees only a specific group of companies benefiting and others no longer are, why would those people continue to cooperate with the existing system? Whether a business is working informally for cash, selling merchandise through eBay or Etsy, or selling food through UberEats and Skipthedishes, the money they make is more likely than not spent at home. If we can keep that money circulating quickly in our community, instead of being sunk in investments, real estate or going to some billionaire’s bank account, we can create a lot of wealth/economic activities for everyone.

    Though it’s difficult to see how these small businesses can make any real impact on their economies, unless it’s keeping them from the unemployment roles.

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  • oxygen:

    @ Oxygen procduces CO2

    NICE AD HONINEM attack there. You haven’t rebut any of my contention in your quote.

    I am curious why you didn’t suggest I “advise” peasants to buy Hyflux bond of even higher yields. And for the record of truths, I would assert :

    - I don’t give “advice” to anyone on investment, whatever points I presented in forums like this is just a personal opinion or data observation. and

    - it mystifies me completely how you “discovered” the fiction I got fascinated with investing in bonds when my adrenaline rush is for the volatility of equities in that “casino”. Bond yields give me no excitement, too boring.

    Oxygen procduces CO2: I think Oxygen has been away from Singapore for too long and is out of touch with the reality in Singapore.

    Luckily, he did not advise readers to invest in SIA MCB that yields 4-6% annual interest.

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  • Prof Wei Shin YU:

    Thanks SojoüRne & Oxygen for your great insight!

    But even if SG go for “structural political and economic reforms” and have “GRC and CECA dismantled”, we still need to trade with the outside world to earn foreign exchange and make a living. SG cannot be self sufficient like China, which transforms desert into farmland, grow sea water rice and manufactures everything it needs.
    Unfortunately, what is left of the manufacturing industry (e.g. electronics, biomed, petrochemical) is not very competitive, and we cannot rely on tourism or the financial services to feed 6m mouths.

    About 11 years ago, I (and Prof Ghista) proposed to LHL and several ministers to establish a high tech rehab industry, offering personalised rehab services for stroke and other chronic disorders to locals and ASEAN citizens, as well as R&D of high tech rehab systems/devices for worldwide sales — and creates many high skill jobs!
    Unfortunately, several weeks later, I received a “no thank” note from a lowly MoH clerk!

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  • SojoüRne:

    Prof Wei Shin YU: About 11 years ago, I (and Prof Ghista) proposed to LHL and several ministers to establish a high tech rehab industry, offering personalised rehab services for stroke and other chronic disorders to locals and ASEAN citizens, as well as R&D of high tech rehab systems/devices for worldwide sales — and creates many high skill jobs!
    Unfortunately, several weeks later, I received a “no thank” note from a lowly MoH clerk!

    Firstly, there are a couple of problems I have with the way the government is dealing with this phenomenon of accelerating automation. Second, our society is not set up at all for the kind of economy we have one foot in. And a particularly harsh reality is the differential treatment in estimating risk and allocating capital.

    When profit is the ultimate motive, the momentum is towards conclusions that are unacceptable to society and insensitive to the human being. For a great overview of this, see this book:

    “The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future”
    http://www.amazon.com/gp/product/1448659817

    A free PDF is also available here: http://www.thelightsinthetunnel.com

    Also see the author’s blog at http://econfuture.wordpress.com.

    Thank you too!

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  • Jman:

    As “Chow private do as I say…..:” said, the gig economy needs to be thrown out of the window.

    But this is far easier said than done. We are so many years into a system where corporations have grown so large that govts are beholden to corporations. And Govts show absolutely no sign of having any backbone to do what needs to be done for the good of the general public, and keep parading the stale past statistics of globalisation having brought us more benefits than drawbacks.

    While it is undeniable that globalisation has been good for all of us in general, this is just the past. And the trajectory of globalisation in the future doesn’t look to benefit a large swathe of the general public, but more for a narrow clutch of shareholders.

    The bottom line is this – we cannot count on Govts to do what needs to be done. Govts are impotent, at least for now.

    So what is needed is public consumer pressure. If corporations abuse their position (like Big Tech), abuse their workers (by putting everyone on gig arrangements), there should be consumer boycott of such companies. But the real question is whether or not we have the discipline to do this, or will we (as usual) succumb to all the cheap tricks they use to retain us as customers? My personal view is that we just don’t have it in us to do this.

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  • My good friend alfred:

    Sg cannot afford to get sick!and see what is sg happening when covid 19 comes knocking.

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  • oxygen:

    THE DELIBITATING IMPACT OF COVID-19 pandemic is enduring, the political acrimony simply aggravates the risks escalation.

    oxygen: Central Banks have taken over the rescue of global economy when Draghi (fmr ECB boss) tried “whatever it takes” fortification fight and failed. EU have not recovered. CBs are now buying corporate bonds beyond flooding liquidity, and almost insuring sovereign govt’s deficit spending which neither the sovereign govts nor CBs finds it bearable to shoulder much further beyond today.

    Yesterday, I warned of these lethargies. Today I read of these confirmations.

    Dow drops as Trump calls end to fiscal stimulus talks until after election

    https://www.marketwatch.com/story/stock-futures-mostly-lower-ahead-of-powell-speech-11601983218?mod=home-page

    Powell says U.S. economy needs more fiscal support

    https://www.marketwatch.com/story/powell-says-u-s-economy-needs-more-fiscal-support-11601995205?mod=home-page

    If Trump is re-elected for another term, I shivers in fear for the global economy. He has no respect for medical science nor economic practicalities, ever willing to wreck all the invested political and financial capitals of central banks around the world trying to stem out a raging economic inferno.

    The Trump dictated world is today’s calm and upheaval of incomprehensible mess tomorrow. There is chaos in order (Trump’s) as there are order in chaos.

    Technology cannot conquer Trumponomic terrorist-like economic predatory behavior adding to the pandemic-caused damage.

    I glance at US stocks for lead economic indicator clues. And it is NOT hard or surprise that some sectors are doing very well – a pointer to new paradigm of stay-at-home economy predominance. I watch the stock peaks of Mastercard, Visa (payment system and example of technology CHANGED our lives but not the solution) lurking at year high. The same is for Weyerheuseer, Home Depot how DIY home renovation takes hold BUT BANKING SHARES LIKE GS, JP MORGAN, CITIBANK, BANK OF AMERICA LANGUISH (still trapped in bad loans to the “old” economy of property development, manufacturing, agriculture, trade and mining i.e. technology have not save them).

    Even cutting edge technology like Netflix, Tesla, Microsoft, FB, Google, Apple, Cisco, Nvidia, Intel, AMD are 10-15% off their September 2020 high. This give hint that – despite technology – there is rolling pain.

    Technology does not take over or provide ALL the solution to civilisation’s economy and society. It is still the same building/construction, manufacturing, agriculture, mining, except that it improve efficiency or offset risks to a limited extent.

    Economy, central banks and politics are the key drivers of our salvation.

    Thank you abundantly Prof. Wei and Sojouner for this interesting discourse.

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  • oxygen:

    I AM DEEPLY TROUBLED by Trump’s incomprehensible reckless political punting gaming this – at risks, is the US and global economic stability until his expected/threatened fight-to-the-death election outcome while Jerome Powell is pleading for more stimulus support to shore up a worsening Covid-19 spread across America.

    Jerome Powell can see that McDonald’s shares have been heading relentless up the direction of North Pole whilst in urbanised New York, Trump seems to be cognitively and visually blind of restaurants shutting down every day and cash-rich Exxonmobil is retrenching 11% or 1600 of its European staff shortly (noting that wage cost is a drop in an ocean of Exxonmobil operating costs).

    ExxonMobil To Cut European Workforce 11% With 1,600 Layoffs

    https://www.barrons.com/news/exxonmobil-to-cut-european-workforce-11-with-1-600-layoffs-01601924104

    J Powell is the “economy” or at least knowing of the economy.

    What about that “GONAD” Trump boy?

    The Covid-19 Pandemic is DIFFERENT from all other as @Sojourner pointed out.

    For one, global corporate have never been so deeply of financial leverage, I see US dollar falling, but gold not rallying. Witness in LEE-jiapore, we see Singtel, SIA, Keppel Corp, Capitaland as example of debt leverage or at least never been in such tight financial spot before the GFC.

    What Trump done risks terrifying the banks into timidity of lending. And if confidence collapse in the global corporate bond market, ALL HELL BREAK LOSE – never mind what clever HSK thinks or plans for us.

    Global economy including LEE-jiapore is walking on egg shell – DON’T CRACK IT!

    oxygen: Today I read of these confirmations.

    Dow drops as Trump calls end to fiscal stimulus talks until after election

    https://www.marketwatch.com/story/stock-futures-mostly-lower-ahead-of-powell-speech-11601983218?mod=home-page

    Powell says U.S. economy needs more fiscal support

    https://www.marketwatch.com/story/powell-says-u-s-economy-needs-more-fiscal-support-11601995205?mod=home-page

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  • oxygen:

    @ Prof. Wei Shin YU

    I ALWAYS TELL MY AH TIONG FRIENDS THIS – if China lost 60% of its population and economy, the other 40% enterprising will rise up to the challenge and regrow to full blossom – FAST.

    Remember China transformed itself from Deng’s agrarian economy to an economic power house at a speed not replicate in economic history. I doubt any other country can do that.

    If LEE-jiapore lose 40% of our population and economy base, the rest will be drowning and take generations to recover.

    Having said that, I am of strong views that much of our institutions and dogma is outdated but remain an albatross on our neck inhibiting national development – CPF/HDB/Population Recycling economics/CECA/ GRC.

    Are the political souls willing of soul searching and transformational change to open the doorway of escape for all in this economic trauma?

    Prof Wei Shin YU: But even if SG go for “structural political and economic reforms” and have “GRC and CECA dismantled”, we still need to trade with the outside world to earn foreign exchange and make a living.

    I say this in all serious contemplation of harsh realities. Is Changi Airport going to enliven to its old glory and Changi Jewel ghost re-incarnate from its graveyard. SIA might fly again, but its memory of past vanity is ancient I suspect.

    Take population recycling economics, we relied on massive importation of cheap foreign labor displacing local PMETs and lower-skilled service positions (unscalable of positive impact or export relevance) is a BIG MISTAKE.

    Lim Hn Kiang said we can’t be a first world economy paying 3rd world wages.

    Basic economic model first princple says

    Population + productivity = growth

    Our formula?

    Population + more cheaper foreigner displacing productivity = growth.

    The rest of the world caught up and we are sinking.

    BIG POPULATION as I said is

    oxygen: Big population is funeral economy – too many people, too few and low-paying service jobs. Automation drives wages lower.

    This has to go!

    Look at Australia, it cut back on migration intake, revamped its temporary foreign skill labor class 457 visa intake and now read this.

    Population growth has come to an end. It will weigh on the economy for years to come.

    https://www.theage.com.au/politics/federal/population-growth-has-come-to-an-end-it-will-weigh-on-the-economy-for-years-to-come-20201002-p561g5.html

    Likewise, I see the intended massive influx of foreigners to create demand and refreshes our infrastructure spending IS NOT ECONOMY. WE CAN’T SELL THIS AS SCALABLE AND REPEATED PRODUCTION to sell to the rest of the world.

    To do so is to repeat our mistake of past now wrecked by virus pandemic.

    NOT CLEVER!

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  • oxygen:

    in 1962, Prof. Alfred Chandler presented the world with this SSP model of strategy structural performance fit in which he asserted

    Strategy + Structure = Performance

    That is strategy and structure optimality fit drives performance or failed performance if alignment is poor.

    THAT IS TO SAY strategy and structure is the driver and performance is the outcome.

    Prof. John Child and others dispute this model – they argue that it is PERFORMANCE that drives strategy and structure. In other world, performance as the environmental-driven outcome forces organisation to shift its strategy and reshape its structure.

    In a “stable” or at least environmentally less hostile external environment, I suspect Prof Chandler is right.

    In the world of environment turbulence, it must BE ENVIRONMENTAL TURBULENCE is the main driver of strategy and structure. GFC and Covid-19 pandemic , I believe, “proved” Prof. Child thesis.

    None of our discrepit institutions have changed in the last 50 years – THIS IS SHOCKING TO ME. There is no internal challenges or tolerance of dissenting voices – the incumbency just assume that it has the monopoly of all information and wisdom.

    How does establishment knows that GRC throws up the best crop harvest of political and leadership grooming. Good administrators are not necessarily good thinkers of strategy and structural shifts when environmental pressures builds up externally.

    If the contrary is true, GRC backdoor entry of untested economic leadership (our survival imperative), how can’t we are caught so badly shaken up in this pandemic outbreak – stuck with high asset funding costs/inefficient giant home-grown corporate, CPF burden that obstructs the employability of local PMETS and housing costs for the masses have to reality match to income capacity/living costs and an “asset beautification” economy??

    Former Trade and Industry minister, Lim Hn Khiang knows this fiction is unsustainable.

    We were promised that by 2012, we did be enjoying Swiss standards of living. Come 2015, we were told – our economy has MAXED OUT.

    So what has changed of progress development since 1990s? Behemoths of discrepit dogma and institutions needing transformational change in a world rocked by escalating environmental turbulence.

    Or is it not?

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  • @Chow private do as I say.....:

    Hello @Chow two small “lampars” on your shoulders, go reposition back your two “lampars” to its’ proper place before you qualify to talk to me.

    Chow private do as I say.....:
    (re: The gig economy needs to be thrown out of the window: people need to be given real jobs again – jobs with some benefits and some security.)

    We’re trapped in non-recoverable crony papeconomics’ military oligarchy that comprises the Pompous Avarice Perversity. Self-entitlement elitism fed by state (pap) sponsored scholarships.

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  • SojoüRner:

    oxygen: Thank you abundantly Prof. Wei and Sojouner for this interesting discourse.

    Oxy, Thank you!

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  • Prof Wei Shin YU:

    Thanks SojoüRner & Oxygen
    As a very concerned and patriotric ex-Singaporean, let me end this discussion by offering the following ventures to SG before offering to China,even though I know the Authorities won’t be interested:

    1. Automated ship repainting system, which will drastically improve the productivity and work quality, reduce the ship lay-up time, and hence increased customers, throughput and profit. It will also allow Keppel to start such biz in other parts of the world.
    We (www.appledrobotics.com.au) will need S$1m to construct a prototype for live-trials in a shipyard.

    2. Automated sewing of airline seat covers, to replace the current manual operation in Changi. A few years ago, we were commissioned by Norway to invent a similar system for furniture covers, for US$2m.

    3. International Rehab Technology R&D & Therapy Centre. Apart from product and technology R&D,this will also train many techno-savy therapists, and support the rest of ASEAN.
    It appears the RISS set up in TTSH about 5 years ago has become just another pure academic research centre, with little commercial takers(?)

    The way things are going, It looks like I will be spending my remaining years in China, where my skills and experience are highly sought after for:
    high-tech nursing homes, elderly falls prevention technology and stroke rehab system.
    Also, we are in the final of a startup competition for our internationally patented Intelligent Multi-rehab Function Wheelchair System (1st prize 5m rmb).

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