Why adaptive management keeps us ahead

If there is one thing about our local leadership, it is their ability to press ahead and remain adaptive. That is something that Singaporeans should be proud of. Be it the drive into media production like animation and special effects via Fusionpolis, or the life sciences push via Biopolis, these are the little niches that we have attempted to carve for ourselves. Coupled with our continuous push for education (albeit extremely demanding and stressful), it will ensure that our island can keep pace with the world.

It is wonderful that we have understood early that our best resource have been our people. Perhaps the people don't believe that they are valued and would kick up a big ruckuss about our immigration policies or maybe even complain against the education system designed to teach them a life skill of being always able to "fish" (rather than always asking for a fish). Even people outside of our nations have seens the wisdom of our strategy. One example is David Heenan in his book Flight Capital, which talks about the brain drain that faces the United States and how Singapore have been successful in drawing 'foreign talent' (people react viscerably to this word). By the way, David Heenan doesn't like us very much and he doesn't fail to admire us for it.

Comparatively, the United States is in a lot of decline. To put it simply, short-termism has grounded their competitive edge to a blunt tool. It's not just the economy stupid, it's also the other E. Education. Anyhow, populist politics or domestic politics to the U.S. dominates and now we see protectionism on the rise (Not that it wasn't there before). Then of course there was the statement about the Chinese messing them up by currency manipulation. Although there is some truth that the yuan is devalued, it does not hold water as the source of their problems. Here's is a good piece from Foreign Policy.

http://www.foreignpolicy.com/story/cms.php?story_id=4692

Although I might sound harsh, my reason for doing so is simple. Because we are the small boat, we are affected by the wake of the big boats. Plus, we've always been in tow.

I seem to be a Conservative!

After an interesting email sharing from a peer at school I am beginning to find myself classified as a conservative. I've always thought of myself as a merely a pragmatist, believing that government need to govern with some good common sense, regulate when there are issues that free market economies cannot do, let it rest when free market is the best. Educate people if you need, let it rest when people exercise some personal preference and differentiate law from morality (personal only because universal morality is shifting sands).

This author the the below article however tucks all of it nicely into the conservatism tag, of which I'm sure it is what he calls himself. It's unveil satire at its best. Read well and enjoy.

We Blew It

A look back in remorse on the conservative opportunity that was squandered.

by P.J. O'Rourke

11/17/2008, Volume 014, Issue 09

Let us bend over and kiss our ass goodbye. Our 28-year conservative opportunity to fix the moral and practical boundaries of government is gone--gone with the bear market and the Bear Stearns and the bear that's headed off to do you-know-what in the woods on our philosophy.

An entire generation has been born, grown up, and had families of its own since Ronald Reagan was elected. And where is the world we promised these children of the Conservative Age? Where is this land of freedom and responsibility, knowledge, opportunity, accomplishment, honor, truth, trust, and one boring hour each week spent in itchy clothes at church, synagogue, or mosque? It lies in ruins at our feet, as well it might, since we ourselves kicked the shining city upon a hill into dust and rubble. The progeny of the Reagan Revolution will live instead in the universe that revolves around Hyde Park.

Mind you, they won't live in Hyde Park. Those leafy precincts will be reserved for the micromanagers and macro-apparatchiks of liberalism--for Secretary of the Department of Peace Bill Ayers and Secretary of the Department of Fairness Bernardine Dohrn. The formerly independent citizens of our previously self-governed nation will live, as I said, around Hyde Park. They will make what homes they can in the physical, ethical, and intellectual slums of the South Side of Chicago.

The South Side of Chicago is what everyplace in America will be once the Democratic administration and filibuster-resistant Democratic Congress have tackled global warming, sustainability, green alternatives to coal and oil, subprime mortgage foreclosures, consumer protection, business oversight, financial regulation, health care reform, taxes on the "rich," and urban sprawl. The Democrats will have plenty of time to do all this because conservatism, if it is ever reborn, will not come again in the lifetime of anyone old enough to be rounded up by ACORN and shipped to the polling booths.

None of this is the fault of the left. After the events of the 20th century--national socialism, international socialism, inter-species socialism from Earth First--anyone who is still on the left is obviously insane and not responsible for his or her actions. No, we on the right did it. The financial crisis that is hoisting us on our own petard is only the latest (if the last) of the petard hoistings that have issued from the hindquarters of our movement. We've had nearly three decades to educate the electorate about freedom, responsibility, and the evils of collectivism, and we responded by creating a big-city-public-school-system of a learning environment.

Liberalism had been running wild in the nation since the Great Depression. At the end of the Carter administration we had it cornered in one of its dreadful low-income housing projects or smelly public parks or some such place, and we held the Taser gun in our hand, pointed it at the beast's swollen gut, and didn't pull the trigger. Liberalism wasn't zapped and rolled away on a gurney and confined somewhere until it expired from natural causes such as natural law or natural rights.

In our preaching and our practice we neglected to convey the organic and universal nature of freedom. Thus we ensured our loss before we even began our winning streak. Barry Goldwater was an admirable and principled man. He took an admirably principled stand on states' rights. But he was dead wrong. Separate isn't equal. Ask a kid whose parents are divorced.

Since then modern conservatism has been plagued by the wrong friends and the wrong foes. The "Southern Strategy" was bequeathed to the Republican party by Richard Nixon--not a bad friend of conservatism but no friend at all. The Southern Strategy wasn't needed. Southern whites were on--begging the pardon of the Scopes trial jury--an evolutionary course toward becoming Republican. There's a joke in Arkansas about a candidate hustling votes in the country. The candidate asks a farmer how many children he has.

"I've got six sons," the farmer says.

"Are they all good little Democrats?" the candidate asks.

"Well," the farmer says, "five of 'em are. But my oldest boy, he got to readin'??.??.??.??"

There was no need to piss off the entire black population of America to get Dixie's electoral votes. And despising cracker trash who have a laundry hamper full of bedsheets with eye-holes cut in them does not make a man a liberal.

Blacks used to poll Republican. They did so right up until Mrs. Roosevelt made some sympathetic noises in 1932. And her husband didn't even deliver on Eleanor's promises.

It's not hard to move a voting bloc. And it should be especially easy to move voters to the right. Sensible adults are conservative in most aspects of their private lives. If this weren't so, imagine driving on I-95: The majority of drivers are drunk, stoned, making out, or watching TV, while the rest are trying to calculate the size of their carbon footprints on the backs of Whole Foods receipts while negotiating lane changes.

People are even more conservative if they have children. Nobody with kids is a liberal, except maybe one pothead in Marin County. Everybody wants his or her children to respect freedom, exercise responsibility, be honest, get educated, have opportunities, and own a bunch of guns. (The last is optional and includes, but is not limited to, me, my friends in New Hampshire, and Sarah Palin.)

Reagan managed to reach out to blue collar whites. But there his reach stopped, leaving many people on our side, but barely knowing it. There are enough yarmulkes among the neocons to show that Jews are not immune to conservatism. Few practicing Catholics vote Democratic anymore except in Massachusetts where they put something in the communion wafers. When it comes to a full-on, hemp-wearing, kelp-eating, mandala-tatted, fool-coifed liberal with socks in sandals, I have never met a Muslim like that or a Chinese and very few Hispanics. No U.S. immigrants from the Indian subcontinent fill that bill (the odd charlatan yogi excepted), nor do immigrants from Africa, Eastern Europe, or East Asia. And Japanese tourists may go so far as socks in sandals, but their liberal nonsense stops at the ankles.

We have all of this going for us, worldwide. And yet we chose to deliver our sermons only to the faithful or the already converted. Of course the trailer park Protestants yell "Amen." If you were handling rattlesnakes and keeping dinosaurs for pets, would you vote for the party that gets money from PETA?

In how many ways did we fail conservatism? And who can count that high? Take just one example of our unconserved tendency to poke our noses into other people's business: abortion. Democracy--be it howsoever conservative--is a manifestation of the will of the people. We may argue with the people as a man may argue with his wife, but in the end we must submit to the fact of being married. Get a pro-life friend drunk to the truth-telling stage and ask him what happens if his 14-year-old gets knocked up. What if it's rape? Some people truly have the courage of their convictions. I don't know if I'm one of them. I might kill the baby. I will kill the boy.

The real message of the conservative pro-life position is that we're in favor of living. We consider people--with a few obvious exceptions--to be assets. Liberals consider people to be nuisances. People are always needing more government resources to feed, house, and clothe them and to pick up the trash around their FEMA trailers and to make sure their self-esteem is high enough to join community organizers lobbying for more government resources.

If the citizenry insists that abortion remain legal--and, in a passive and conflicted way, the citizenry seems to be doing so--then give the issue a rest. Meanwhile we can, with the public's blessing, refuse to spend taxpayers' money on killing, circumscribe the timing and method of taking a human life, make sure parental consent is obtained when underage girls are involved, and tar and feather teenage boys and run them out of town on a rail. The law cannot be made identical with morality. Scan the list of the Ten Commandments and see how many could be enforced even by Rudy Giuliani.

Our impeachment of President Clinton was another example of placing the wrong political emphasis on personal matters. We impeached Clinton for lying to the government. To our surprise the electorate gave us cold comfort. Lying to the government: It's called April 15th. And we accused Clinton of lying about sex, which all men spend their lives doing, starting at 15 bragging about things we haven't done yet, then on to fibbing about things we are doing, and winding up with prevarications about things we no longer can do.

When the Monica Lewinsky news broke, my wife set me straight about the issue. "Here," she said, "is the most powerful man in the world. And everyone hates his wife. What's the matter with Sharon Stone? Instead, he's hitting on an emotionally disturbed intern barely out of her teens." But our horn rims were so fogged with detestation of Clinton that we couldn't see how really detestable he was. If we had stayed our hand in the House of Representatives and treated the brute with shunning or calls for interventions to make him seek help, we might have chased him out of the White House. (Although this probably would have required a U.S. news media from a parallel universe.)

Such things as letting the abortion debate be turned against us and using the gravity of the impeachment process on something that required the fly-swat of pest control were strategic errors. Would that blame could be put on our strategies instead of ourselves. We have lived up to no principle of conservatism.

Government is bigger than ever. We have fattened the stalled ox and hatred therewith rather than dined on herbs where love (and the voter) is. Instead of flattening the Department of Education with a wrecking ball we let it stand as a pulpit for Bill Bennett. When--to switch metaphors yet again--such a white elephant is not discarded someone will eventually try to ride in the howdah on its back. One of our supposed own did. No Child Left Behind? What if they deserve to be left behind? What if they deserve a smack on the behind? A nationwide program to test whether kids are what? Stupid? You've got kids. Kids are stupid.

We railed at welfare and counted it a great victory when Bill Clinton confused a few poor people by making the rules more complicated. But the "French-bread lines" for the rich, the "terrapin soup kitchens," continue their charity without stint.

The sludge and dreck of political muck-funds flowing to prosperous businesses and individuals have gotten deeper and more slippery and stink worse than ever with conservatives minding the sewage works of legislation.

Agriculture is a business that has been up to its bib overalls in politics since the first Thanksgiving dinner kickback to the Indians for subsidizing Pilgrim maize production with fish head fertilizer grants. But never, since the Mayflower knocked the rock in Plymouth, has anything as putrid as the Farm, Nutrition and Bioenergy Act of 2008 been spread upon the land. Just the name says it. There are no farms left. Not like the one grampa grew up on.

A "farm" today means 100,000 chickens in a space the size of a Motel 6 shower stall. If we cared anything about "nutrition" we would--to judge by the mountainous, jiggling flab of Americans--stop growing all food immediately. And "bioenergy" is a fraud of John Edwards-marital-fidelity proportions. Taxpayer money composted to produce a fuel made of alcohol that is more expensive than oil, more polluting than oil, and almost as bad as oil with vermouth and an olive. But this bill passed with bipartisan majorities in both houses of Congress and was happily signed into law by President Bush. Now it's going to cost us at least $285 billion. That's about five times the gross domestic product of prewar Iraq. For what we will spend on the Farm, Nutrition and Bioenergy Act of 2008 we could have avoided the war in Iraq and simply bought a controlling interest in Saddam Hussein's country.

Yes, we got a few tax breaks during the regimes of Reagan and W. But the government is still taking a third of our salary. Is the government doing a third of our job? Is the government doing a third of our dishes? Our laundry? Our vacuuming? When we go to Hooters is the government tending bar making sure that one out of three margaritas is on the house? If our spouse is feeling romantic and we're tired, does the government come over to our house and take care of foreplay? (Actually, during the Clinton administration??.??.??.??)

Anyway, a low tax rate is not--never mind the rhetoric of every conservative politician--a bedrock principle of conservatism. The principle is fiscal responsibility.

Conservatives should never say to voters, "We can lower your taxes." Conservatives should say to voters, "You can raise spending. You, the electorate, can, if you choose, have an infinite number of elaborate and expensive government programs. But we, the government, will have to pay for those programs. We have three ways to pay.

"We can inflate the currency, destroying your ability to plan for the future, wrecking the nation's culture of thrift and common sense, and giving free rein to scallywags to borrow money for worthless scams and pay it back 10 cents on the dollar.

"We can raise taxes. If the taxes are levied across the board, money will be taken from everyone's pocket, the economy will stagnate, and the poorest and least advantaged will be harmed the most. If the taxes are levied only on the wealthy, money will be taken from wealthy people's pockets, hampering their capacity to make loans and investments, the economy will stagnate, and the poorest and the least advantaged will be harmed the most.

"And we can borrow, building up a massive national debt. This will cause all of the above things to happen plus it will fund Red Chinese nuclear submarines that will be popping up in San Francisco Bay to get some decent Szechwan take-out."

Yes, this would make for longer and less pithy stump speeches. But we'd be showing ourselves to be men and women of principle. It might cost us, short-term. We might get knocked down for not whoring after bioenergy votes in the Iowa caucuses. But at least we wouldn't land on our scruples. And we could get up again with dignity intact, dust ourselves off, and take another punch at the liberal bully-boys who want to snatch the citizenry's freedom and tuck that freedom, like a trophy feather, into the hatbands of their greasy political bowlers.

But are we men and women of principle? And I don't mean in the matter of tricky and private concerns like gay marriage. Civil marriage is an issue of contract law. A constitutional amendment against gay marriage? I don't get it. How about a constitutional amendment against first marriages? Now we're talking. No, I speak, once again, of the geological foundations of conservatism.

Where was the meum and the tuum in our shakedown of Washington lobbyists? It took a Democratic majority in the House of Representatives 40 years--from 1954 to 1994--to get that corrupt and arrogant. And we managed it in just 12. (Who says Republicans don't have much on the ball?)

Our attitude toward immigration has been repulsive. Are we not pro-life? Are not immigrants alive? Unfortunately, no, a lot of them aren't after attempting to cross our borders. Conservative immigration policies are as stupid as conservative attitudes are gross. Fence the border and give a huge boost to the Mexican ladder industry. Put the National Guard on the Rio Grande and know that U.S. troops are standing between you and yard care. George W. Bush, at his most beneficent, said if illegal immigrants wanted citizenship they would have to do three things: Pay taxes, learn English, and work in a meaningful job. Bush doesn't meet two out of three of those qualifications. And where would you rather eat? At a Vietnamese restaurant? Or in the Ayn Rand Café? Hey, waiter, are the burgers any good? Atlas shrugged. (We would, however, be able to have a smoke at the latter establishment.)

To go from slime to the sublime, there are the lofty issues about which we never bothered to form enough principles to go out and break them. What is the coherent modern conservative foreign policy?

We may think of this as a post 9/11 problem, but it's been with us all along. What was Reagan thinking, landing Marines in Lebanon to prop up the government of a country that didn't have one? In 1984, I visited the site where the Marines were murdered. It was a beachfront bivouac overlooked on three sides by hills full of hostile Shiite militia. You'd urge your daughter to date Rosie O'Donnell before you'd put troops ashore in such a place.

Since the early 1980s I've been present at the conception (to use the polite term) of many of our foreign policy initiatives. Iran-contra was about as smart as using the U.S. Postal Service to get weapons to anti-Communists. And I notice Danny Ortega is back in power anyway. I had a look into the eyes of the future rulers of Afghanistan at a sura in Peshawar as the Soviets were withdrawing from Kabul. I would rather have had a beer with Leonid Brezhnev.

Fall of the Berlin wall? Being there was fun. Nations that flaked off of the Soviet Union in southeastern Europe, Central Asia, and the Caucasus? Being there was not so fun.

The aftermath of the Gulf war still makes me sick. Fine to save the fat, greedy Kuwaitis and the arrogant, grasping house of Saud, but to hell with the Shiites and Kurds of Iraq until they get some oil.

Then, half a generation later, when we returned with our armies, we expected to be greeted as liberators. And, damn it, we were. I was in Baghdad in April 2003. People were glad to see us, until they noticed that we'd forgotten to bring along any personnel or provisions to feed or doctor the survivors of shock and awe or to get their electricity and water running again. After that they got huffy and began stuffing dynamite down their pants before consulting with the occupying forces.

Is there a moral dimension to foreign policy in our political philosophy? Or do we just exist to help the world's rich people make and keep their money? (And a fine job we've been doing of that lately.)

If we do have morals, where were they while Bosnians were slaughtered? And where were we while Clinton dithered over the massacres in Kosovo and decided, at last, to send the Serbs a message: Mess with the United States and we'll wait six months, then bomb the country next to you. Of Rwanda, I cannot bear to think, let alone jest.

And now, to glue and screw the lid on our coffin, comes this financial crisis. For almost three decades we've been trying to teach average Americans to act like "stakeholders" in their economy. They learned. They're crying and whining for government bailouts just like the billionaire stakeholders in banks and investment houses. Aid, I can assure you, will be forthcoming from President Obama.

Then average Americans will learn the wisdom of Ronald Reagan's statement: "The ten most dangerous words in the English language are, 'I'm from the federal government, and I'm here to help.'?" Ask a Katrina survivor.

The left has no idea what's going on in the financial crisis. And I honor their confusion. Jim Jerk down the road from me, with all the cars up on blocks in his front yard, falls behind in his mortgage payments, and the economy of Iceland implodes. I'm missing a few pieces of this puzzle myself.

Under constant political pressure, which went almost unresisted by conservatives, a lot of lousy mortgages that would never be repaid were handed out to Jim Jerk and his drinking buddies and all the ex-wives and single mothers with whom Jim and his pals have littered the nation.

Wall Street looked at the worthless paper and thought, "How can we make a buck off this?" The answer was to wrap it in a bow. Take a wide enough variety of lousy mortgages--some from the East, some from the West, some from the cities, some from the suburbs, some from shacks, some from McMansions--bundle them together and put pressure on the bond rating agencies to do fancy risk management math, and you get a "collateralized debt obligation" with a triple-A rating. Good as cash. Until it wasn't.

Or, put another way, Wall Street was pulling the "room full of horse s--" trick. Brokerages were saying, "We're going to sell you a room full of horse s--. And with that much horse s--, you just know there's a pony in there somewhere."

Anyway, it's no use blaming Wall Street. Blaming Wall Street for being greedy is like scolding defensive linemen for being big and aggressive. The people on Wall Street never claimed to be public servants. They took no oath of office. They're in it for the money. We pay them to be in it for the money. We don't want our retirement accounts to get a 2 percent return. (Although that sounds pretty good at the moment.)

What will destroy our country and us is not the financial crisis but the fact that liberals think the free market is some kind of sect or cult, which conservatives have asked Americans to take on faith. That's not what the free market is. The free market is just a measurement, a device to tell us what people are willing to pay for any given thing at any given moment. The free market is a bathroom scale. You may hate what you see when you step on the scale. "Jeeze, 230 pounds!" But you can't pass a law making yourself weigh 185. Liberals think you can. And voters--all the voters, right up to the tippy-top corner office of Goldman Sachs--think so too.

We, the conservatives, who do understand the free market, had the responsibility to--as it were--foreclose upon this mess. The market is a measurement, but that measuring does not work to the advantage of a nation or its citizens unless the assessments of volume, circumference, and weight are conducted with transparency and under the rule of law. We've had the rule of law largely in our hands since 1980. Where is the transparency? It's one more job we botched.

Although I must say we're doing good work on our final task--attaching the garden hose to our car's exhaust pipe and running it in through a vent window. Barack and Michelle will be by in a moment with some subsidized ethanol to top up our gas tank. And then we can turn the key.

P.J. O'Rourke is a contributing editor to THE WEEKLY STANDARD.

The Presidential Race is Sealed... but there are some concerns..

This post is late and was meant to be out right after the final presidential debate. It was a gallant effort by Senator McCain to save his sinking presidential bid but unfortunately, he has been outplayed and conducted too many strategic errors.

The Obama campaign engine was too formidable to beat. It utilised a populist movement otherwise known as 'grassroot' action to catalyse the political momentum, plus it was an powerful electoral campaign funding generator. It commits people to acting on their choice in every conceivable means and it only makes them an even more staunch defender of their political choice.

The McCain campaign was flawed from the start, right from the point of selecting who he wants as a VP on his presidential ticket. Choosing to capitalise on the relating to regular people in hopes that regular people would like a regular VP was a bad choice. At the end of the day, as much as people want their leaders to be able to emphatise and relate to, they want their leaders to be capable and competent to lead. Colin Powell who has now endorsed Obama would have been a much better choice. Plus, he ignored the signs. The economy has been flagging all this while and it was inconceivable that he did not see it coming. Maybe it was a strategic decision to avoid such a difficult issue but like common saying goes, "You've got to face the music" eventually. Hence, the whole initiative was lost and the strategy of the campaign was just purely tactical discrediting of the opponent.

I'm not an American and I have no political affliation and hence I consider myself to be pretty bipartisan. It is therefore in my humble opinion that the race is sealed. We can be certain of a Obama victory.

My bigger question however is, "What's next?" From the onset, I have always believed that it was a choice between the lesser of two (evils). Both did not have a clear plan to save the declining economy.

I have however some deep reservations of Senator Obama for several reasons. Firstly, was his extremely misleading and protectionist showing. In the third debate, he gave an example of contrasting cars sales of U.S. cars in South Korea and Korean cars in the U.S. Because America was unable to sell more cars to South Korea as compared to the the sales in the other direction, he asserts that it was not 'fair' trade and wanted to fix that. Also, he reiterated the policies of punishing U.S. companies for 'shipping jobs overseas' and incentivise companies keeping jobs in America.

The problem of that argument is that it is flawed on several counts. The reason for the trade imbalance was not due to trade protectionism nor dumping by the Koreans. It's just simply because Hyundais are selling better than Fords (I own Ford stock by the way, sadly. But I believe in Mullaly), beating them in price, design, fuel consumption and just every other sales inducing metric. American cars are stuck being nowhere because they cannot compete on the lower end which is dominated by the Japanese and Koreans and yet they are outclassed on the high ends by the BMWs and Mercedes. The U.S. automobile industry therefore needs to pull up their socks and regain some innovative ability to sell cars and if not they will certainly face the reality of failure. Protectionism won't save it.

The same argument holds true when you create policy restrictions to prevent firms from finding the most cost effective means to conduct business. The real solution is really to bump up education and push for job retraining to shift your workforce to niche areas areas that developing nations are not able to compete and take your jobs. Over protection of trade unions are also extremely harmful for businesses and eventually hurt the unions themselves when companies shut down. I might be biased but I have seen how limiting these unions and being pro-business have benefited by country. Basically, protectionism destroys the spirit of enterprise.

The second problem I find is the liberal use of money. Sure, throwing money (especially obscene amounts) can often get the job done. Unfortunately, it is something that the U.S. government needs to conserve more of. The details of the U.S. Federal programmes really needs to be looked into so that they can get more bang for their buck. Cost cutting by centralising certain redundant functions across state departments, instituitionalising cost effectiveness programmes, etc. So sure, use a scapel and make the incisions but please bring the sucking tubes because this is a liposuction that we're doing here. I know I make it sound easy here but what I am proposing is not THE solution because there isn't such a thing as a pancea. All this means is simple to take a step in the right direction and to adopt an adaptive management of government programmes that would continually calibrate itself on KPIs that measure effectiveness.

Last but not least, taxes. I think redistribution of wealth always goes down well with the people and gets you elected, but I think at the end of the day, if you can lower taxes overall it will be even better. More importantly, you want to make sure that your taxes are favourable for businesses. They pull in FDIs, create jobs and of course their prosperity adds to the tax coffers. Taxes of course are important because they pay for your programmes so unless you apply point 2 above, you cannot work on this.

Interestingly, there is a trick or two which Obama can take from the McCain play book (pro-business ideas) and should remember that it's not big government but rather good governance that the U.S. needs.

Free Market Spiral

This is such a momentous period in history. I've often thought about it hypothetically but I never believed that it could happen.

The Free Market Spiral.

Free markets in my opinion are the greatest and most efficient allocation mechanism in the entire world. Using the concept of utility, which is the satisfaction that an individual derives from a good, the market it able to use a price mechanism to indicate their level of utlity and thereby promote the allocation of resources to the production of the good. Using an established demand curve derived from utility and a supply curve derived from cost of the resource, we can attain an equilibrium where the market pays for exactly what that good can provide in terms of utility.

If we're in an agrarian or pure production state, this would have been pretty straightforward.

Then enters the complex world of commerce and leverage. With the establishment of banks that are able to collect deposits and make loans based on the fact that not everyone will draw their money out at the same time, we now have essentially a system that runs excesses or what I call money in circulation. Because of the innate and inherent trust in the system, everything will be fine and dandy.

Unfortunately, this is no longer the case in recent times. With fear at all time highs, the trust to lend has corroded. This seizes up the circulation of the financial system and basically disrupts the price mechanism. Eventually, this will warp the notion of utility and shift the demand curves itself and reset the equilibrium. In real terms, the financial crisis will damage the brick and mortar business as well.

People have been mistaken all this while, thinking that they have a free-market economy but have actually been living with an anomaly which is known as the banking system which is not based on 'real' resources but on a flow model. Hence, the free-market model is not really free and that this banking system is guarded by a regulator which is the central bank, otherwise known as the lender of last resort.

Today however, we witness something quite remarkable which I see as a real paradox. The democratic system (a political equal of the free-market) has been exercised by the people to curtail the government and in doing so tied the hands of the regulator who has been doing the job of regulating and mitigating the quasi-free market/banking system.

The end result is the demise of the effectiveness of the very system and the potential destruction of the ideology.

I guess people have forgotten that it was not idealogy failure that lead to the fall of communism but more of the lack of pragmatism that lead to its demise. It's only attractive when it works.

Hence, I leave you with a nice Op-Ed from the Asia Journal of Public Affairs. The emphasis that good governance is a necessity, because nothing is a given.

http://www.lkyspp.nus.edu.sg/ajpa/issue1/Dean_Op_Ed.pdf

Information Overload

What a wild and whacky two weeks.

I've never be inudated with so much information and so much perspective. I sought to understand. In good naval tradition, I needed to find anchor and get back to first principles. What I found was back on my pet peeve topic of good governance. Righteous, morally courageous leaders who would do the right thing.

It's not about democracy. It's not about free-markets only or government intervention or the lack of it. It's all down to looking at the basic axioms of the problem. In this case it was the root of human nature. That there would be greed that would motivate creativeness and would defeat the most brilliant of legislature. As the good book by Confucius writes in the Analects.

The Master said, “If the people be led by laws, and uniformity sought to be given them by punishments, they will try to avoid the punishment, but have no sense of shame.
“If they be led by virtue, and uniformity sought to be given them by the rules of propriety, they will have the sense of shame, and moreover will become good.”

Anyhow, this was also the week of debate for McCain and Obama on Foreign Policy. Thanks to the superior peer quality, I was directed to this wonderful exchange and debate of their foreign policy advisors hosted by the NBR (National Bureau of Asian Research)

or link here. http://www.nbr.org/asiapolicydebate/apdebate.html

It was also in this speech that a McCain advisor mentions a Washington Post of article by Singapore's founding father, Lee Kwan Yew on the cost of withdrawal from Iraq.

http://www.washingtonpost.com/wp-dyn/content/article/2008/03/07/AR2008030702429.html

I then found a whole slew of recent articles on the current affairs which he has made comments on which continues to illustrate my shared belief of good governance.

On China and bouquets for China:
http://news.xinhuanet.com/english/2008-09/25/content_10107642.htm

On the Financial Crisis:
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_282299.html

A related piece by Inquirer.net, quoting my other role model Kishore Mahbubani:
http://opinion.inquirer.net/inquireropinion/columns/view/20080924-162482/End-of-an-era

On the accepting the Rise of China and India:
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_281940.html

On why I like my brand of customised governance for my own home:
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_281940.html

This really ties in with my Conflict Resolution Theory classes which featured good reading by Mohammed Ayoob (State Making, State Breaking and State Failure) and Edward D. Mansfield and Jack Synder (Why Emerging Democracies go to war) from "Leashing the Dogs of War" - Conflict Management in a Divided World.

I end of with a quote again from the Analects.

The Master said, “To rule a country of a thousand chariots, there must be reverent attention to business, and sincerity; economy in expenditure, and love for men; and the employment of the people at the proper seasons.”

On Capitalism

In warfare, It is common to know of Sun Tzu who proposed 36 strategems of War in his evergreen work known as "The Art of War". One another classic on warfare was written by Carl von Clauswitz who timeless work was known aptly as "On War". These have been familiar works which I have been introduced as a result of my vocation.

Last weekend (on BT Weekend, page 6), I was introduced by my favourite Business Times correspondent Ms Teh Hooi Ling, a parallel in the field of Economics, particularly on the subject of capitalism. He is none other than Joseph Alois Schumpeter. Although, in my life time, I have been more familar with free market economist like Adam Smith and John Maynard Keynes. Ms Teh's coverage of Schumpeter got my attention.

When considering classical economics, the allocation of resources has been reduce to mere mathematics calculation of the interactions between demand and supply. The 'invisible hand' mechanics implies that all social and economic interactions will be resolved based on personal cost and benefits. Schumpter having the benefit of being able to observe the trend in the 19th century notes that a hybridised form of capitalism is present that is as much a social and cultural construct compared to an economic one. In this form, it extracts the value from the free market mechanism in capitalism as an efficiency form of resource allocation and yet able to reconcile the societal needs to minimise and limit the negativity of the fairness of the laissez-faire.

Another key element of Schumpeter's writing covered in the article was his thoughts on entreprenuership. He believes firms that there is a need for a "incessant dynamism" and competitive innovation for standing ahead. Failure to do so and the inability to maintain this entreprenuerial spirit is a key reason why the list of Fortune 500 in past decades would experience a great degree of variance. I quote "without blazing new trails, without being devoted, heart and soul, to the business alone", one cannot expect to remain on top.

Since my background is one of a organisation involved in the production of a public good, it leads me to think one thing. Firstly, how does one promote an entreprenuerial spirit when there is an absence of a "profit motive"? Public policy must therefore facilitate a few conditions to achieve this.

Firstly, a need for a measure to define staying on top. This I envision will come from very concrete measureables of key performance indicators or very realistic benchmarking. In short, policy must mirror free market conditions to exact the cost and benefit relationship so that failure can be real and is a measureable cost.

In the individual front, this means that the individual must passionate and with great commitment to his business and his business alone. To invoke this commitment and passion, the individual must be given a "profit motive". In today's HR context, this would be in form of rewards and recognition. As a policy, we cannot lapse into a "mere husbanding of already existing resources, no matter how painstaking, is always characteristic of a declining position". Call me a government lap dog all you want but this justisfies a rethinking of the rewards of the civil servant and hence my position of a reasonably high and attractive ministerial pay maintains. Of course, creative employment of resources here do not only apply to HR but to all facets of the public function.

Ms Teh has also made mention of entreprenuership in large corporations stating that they require "even more talents". They must "woo support" among their colleagues, "handle men with consummate skill", and give others ample credit for the organisation's achievements. At this juncture, I take this opportunity to honour my personal mentor and another dynamic and amazing senior commander. Both are great leaders that typifies an entreprenuerial description and whom I deeply respect and willing to serve. LTC Thng Chee Meng and COL Harris Chan Weng Yip.

There is a small part of this article that encouraged me greatly, it was a reflection of my current circumstance and it adds further conviction to my decision to travel off the beaten path. It is also my secret hope that Schumpeter is right and that I can truly live up to the ideal of validating it. I quote the whole section that Ms Teh has written.

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On Social Mobility

"The persistence of class position is an illusion... Class barriers must be surmountable, at the bottom as well as at the top." The key to a higher class position is for an individual to strike out "along unconventional paths. This has always been the case, but never so much as in the world of capitalism."

Most industrial families have risen from the ranks of workmen and craftsmen "because one of their members has done something novel", and this is "virtually the only method by which they can make the great leap out of their class".

As Abraham Lincoln noted, singularly talented people almost always strike out in bold new directions. "Towering genius disdains a beaten path. It seeks regions hitherto unexplored... It thirsts and burns for distinction."
>>

I hope in time, I can be counted among the "towering geniuses". Hahaha~!

To wrap this up, I end it with a further quote in the article.
"Innovation itself is primarily "a feat not of intellect, but of will... a special case of a social phenomenon of leadership".

I guess Clauswitz and Schumpeter is agreed on the sword of the spirit and the power of the will.