TR EMERITUS

John Boehner, Speaker of the House of Representatives Editor's note: Rep. John Boehner, R-Ohio, is speaker of the House of Representatives. The opinions expressed in this commentary are solely those of the author. (July 6, 2014)    Every member of Congress swore an oath to preserve, protect and defend the Constitution of the United States. So did President Barack Obama. But too often over the past five years, the President has circumvented the American people and their elected representatives through executive action, changing and creating his own laws, and excusing himself from enforcing statutes he is sworn to uphold -- at times even boasting about his willingness to do it, as if daring the American people to stop him. That's why, later this month, we will bring legislation to the House floor that would authorize the House of Representatives to file suit in an effort to compel President Obama to follow his oath of office and faithfully execute the laws of our country. The President's response: "So sue me."   Read more:  http://edition.cnn.com/2014/07/06/opinion/boehner-obama-lawsuit/index.html?hpt=hp_c2    Read More →

Yaacob Ibrahim, Minister of Information and Communications, has weighed in on the NLB controversy. 1. According to him, this is not the first time NLB has banned books. Yes Yaacob, that's what Jasna Dhansukhlal, assistant director of Public Library Services, had said at the Press Conference two days ago. We have no issue if you ban books that stoke racial or religious hatred but books about swans and three penguins? 2. Yaacob explained that the decision was guided by community norms, which public libraries ought to consider since they serve the community. Well Yaacob, are you saying members of the LGBT not part of the community? And what constitutes community norms? Thousands of young adults are being exposed to the tawdry sex of 50 Shades of Grey and the violence of The Hunger Games. And not forgetting Harry Potter and the subject of witchcraft. Are these community norms? Why do you choose to censor one set of norms and not the other? 3. Yaacob then weighs in on the content of the books by saying: “The prevailing norms, which the overwhelming majority of Singaporeans accept, support teaching children about conventional families but not about alternative, non-traditional families, which is what the books in question are about." Yaacob, have you read the book? "And Tango Makes Three" is about love. It's about how two male penguins learn to hatch an egg and nurture a baby penguin that would otherwise have not made it to this world. Most of all, the books teach acceptance. Acceptance of people who are different. Isn't that part of our community norms? 4. Finally, Yaacob notes that "NLB has to decide what books should be made readily available to children, who are sometimes unsupervised, in the children’s section of our public libraries." Yaacob, don't you know there is a system for such books to be placed under restricted borrowing scheme over the counter, so open-minded parents can borrow to share the gems with their kids?   The Alternative View [source]: https://www.facebook.com/pages/The-Alternative-View/358759327518739      Read More →

Mr Kenneth Jeyaretnam I was quite shaken by my trip  to Parliament yesterday to watch the CPF “debate”. There wasn’t really any debate at all. Our Finance Minister, Tharman made a speech that was full of  irrelevancies and gaffes and what he did admit to worried me considerably. I sat in the spectators gallery where it was noticeable that the MIW were MIA. Thank goodness that Eugene Tan is there to remind the Speaker and Deputy Speaker how parliament works. Even some WP MPs were missing and came in an hour after the debate had started. No one picked up on anything that Tharman said and he was  given an easy ride for his monologues. This is why I have put “debate” in quotation marks. Plenty of questions were asked about CPF such as. Whether members could be given an early warning as they approached 55 that their money would be locked up and could no longer be used for housing? Could special consideration be given to allowing those with balances below the Minimum Sum to use part of it to service their housing loans? What is the average amount used for housing as a percentage of CPF Ordinary Accounts of members aged 55 and above? How many Singaporeans who turn 55 are inactive members? But these were all questions about the mechanism of the  system and accepting it as PAP presented it.  No one asked the questions uppermost in our minds at the moment: Why does the Government need to hang on to our money at 55 if it is making such colossal surpluses amounting to some $30-35 billion a year? Why does it keep increasing the Minimum Sum? Is GIC losing money? And all of this leads the people to wonder, “is GIC even possibly insolvent?” The closest that any  questions came to  touching on the issues we all want answered were asked by Gerald Giam and Low Thia Kiang and I congratulate them for asking. Gerald Giam asked how many years in the last 20 years GIC had been unable to pay the interest on the Special Singapore Government Secutities (SSGS), what were the returns on GIC’s portfolio after accounting for interest in each of the last 20 years and what extraordinary measures were taken if that was the case. All good questions. When Low Thia Kiang’s turn came he said that as CPF members’ balances were substantial at $300 billion why were CPF members’ balances not separated and managed separately from GIC. An eminently sensible question. I will restate here what Tharman said yesterday as a reminder of the convoluted and opaque route by which our CPF monies are invested. All CPF members’ balances are deposited with the MAS. They are then used to buy SSGS that are matched to the interest rates that CPF pays on Ordinary and Special Accounts. The money from the SSGS is then managed by GIC together with the Government’s other assets. I found Tharman’s answers to Low’s and Giam’s questions to be evasive and even nonsensical but with the advantage of observing from the gallery I could spot that he also made some revealing and worrying admissions. These are some of the assertions and answers that Tharman made that set off alarm bells in the minds of anyone who knows anything about how the investment process should work and about transparency. For example, If I was an investor doing due diligence I would run a million miles rather than invest my funds in GIC. Tharman said: CPF is an absolutely safe investment since it invests in securities issued by the Singapore Government, one of the few countries left in the world that is still rated AAA. AAA rated! That is an interesting admission. You may remember that after I visited his CPF forum Hri Kumar went to his Facebook page and denied that he had ever said that CPF was a AAA investment. Let’s ignore Kumar as an ignoramus because, according to Tharman, CPF is safe because it lends to the Government. which is AAA rated. However the Government then takes our CPF money and pools it with the Government’s net assets. The total is then managed by GIC. GIC is able to take a lot more risk than CPF would be able to as a stand-alone entity because it has the government’s net assets to act as a buffer. The level of security would depend on the size of the buffer and the riskiness of the assets. In the financial crisis of 2007-2008, having a large buffer of subprime mortgages which had to default before they lost money, did not help the holders of AAA rated Collateralized Mortgage Obligations. The downtown in the housing market was so severe that even the AAA rated securities ended up worthless. In the same way if we lend our money to the Government and it then uses it to invest or speculate in risky assets then this could happen to our CPF. It is like depositing your money with what you thought was a very conservative, low risk financial institution and then discovering that the conservative low risk institution you chose was in fact giving your money to a high risk player to gamble with. But it is not even  like that for us Singaporeans is it? As a private investor  you would have  a choice at least over where you put your money and  how much risk you wanted. You could move it around if you were not happy with where it was invested. Most importantly you could demand absolute transparency, a full explanation of the risk profile and investment rationale and methodology of the fund managers. if you even suspected smoke and mirrors or just did not like the manager’s face you would be free to go somewhere else with your pension fund. Some might say that you can diversify your risk through the CPF Investment Scheme. You have the option of investing up to $60,000 of your CPF money in a number of options including unit trusts and shares. However, as the investment is made through CPF, your money is still at risk if CPF becomes insolvent. In 2008 highly rated banks and institutions almost went bust and had to be rescued by governments worldwide because they had used their depositors’ money to invest in highly risky assets. Citibank, UBS, Bank of America, RBS, Lloyds, and AIG are just some of the institutions that had to be rescued by their countries’ taxpayers. Please note that AIG used to be rated AAA while the others were either AA or AA+. These institutions were investing in or guaranteeing supposedly AAA financial instruments (like sub-prime collaterized mortgage obligations) that ended up worthless. Temasek and/or GIC had significant stakes in some of these institutions. Can you see why I am worried? Tharman said that our CPF assets can be put into a larger porfolio that takes more risk because the Government’s net assets act as a buffer. How big a buffer do the Government’s net assets represent before we are at risk of losing our CPF money if GIC squanders the funds it is given through poor investments?  I will not go into detail here and will publish my calculations as a separate note.  However if the Statement of the Government’s Assets and Liabilities issued every year as part of the Budget is accurate and includes Temasek as well, then there may not be any buffer left. Can you see why I am worried? In fact the Government will already need to dig into the cash reserves it holds with MAS or force Temasek to sell assets in order to pay back CPF holders. If GIC loses money then the Government will have to raise taxes or print money. Can you see why I am worried? If Temasek’s assets are not included  in the Statement (which would surely be a breach of the Constitution since both Temasek and MAS are Government-owned corporations just like GIC) then there may be a buffer of up to 30% of total assets within GIC before the Government has to make up the shortfall from other sources. This is still not reassuring as a downturn in global markets of the severity of 2008 could easily cause equity, bond and real estate values to decline by 30%. The Government has a large net cash reserve of some $140 billion but it would need to keep a large part of this with the MAS to fund their operations. MAS is not allowed under the Constitution to lend money to the Government which would amount to printing money. Can you see why I am worried? Tharman made some comment about GIC’s higher returns benefiting all of us. Really? What benefit do Singaporeans get if GIC is able to achieve higher returns than the Government pays on CPF by taking more risk? We have yet to receive any benefit from enduring years of austerity and low rates of return on our forced savings. The so-called Net Investment Returns Contribution is a scam since it does not represent actual spending but only a shuffling of money from one account to another. This is the question that Hari Kumar dodged at his forum and condescendingly said “we’re dealing with the real world here”. What real world is that, Mr. Kumar? One in which the PAP government continually pulls the wool over the eyes of its citizens. So despite Tharman’s reassurances we can say that our CPF is only AAA because the Government (which means Singaporean taxpayers) are guaranteeing it. This explains why the Government keeps on harping on the need for taxes to rise. Can you see why I am worried? Kenneth Jeyaretnam * As a blogger, KJ hopes to help imagine a model for a New Asian Nation to bring about a free and fair future for Singapore. KJ is a Cambridge trained economist who could be broadly described as from the Keynesian school. He is also a successful ex-hedge fund manager and a liberal opposition politician who contested in the 2011 General Election with his party. He is currently the Secretary-General of The Reform Party. He blogs at Rethinking The Rice Bowl.  Read More →