Saturday, February 26, 2011

Tea Party vs Public Unions

Wow, cool! Governor Scott Walker has made his decision to curtail collective bargaining to all his state civil servants. He said, like most state in America which currently in ‘broke’, as elected official; he has to make tough choices such as cut pensions, cut state spending and reforming budget. This decision again is necessary to address huge deficits and most commentary says Governor Walker is attempting to rebalance the monopoly government union which faces no competition. Teachers on protest day, claims the government decision did not represent the majority of state civil servants in Wisconsin. I don’t know about the other states, are they doing well despite spending cuts policy? I am quite surprise too, when the Tea Party Movement has rally supporting Government Walker’s plan. Well done Tea Party! How about Malaysia? Does the government have the courage to do exactly the same to CUEPACS? No guts? What about Pakatan Rakyat? Oh, I almost forgot! They will distribute RM500 to teachers if they elected to Putrajaya, am I right? As mentioned below, I attach Adam Smith’s view in the case of Wisconsin protest;

From IV.2.43 of The Wealth of Nations:

“The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to thwart them, neither the most acknowledge probity, nor the highest rank, nor the greatest public services can protect him form the most infamous abuse and detraction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists.”

Saturday, February 19, 2011

MRT: A Boon Or Bane

Mass Rapid Transit (MRT) is on the headlines again since its intensive study in 1998. It’s going to be implemented very soon, ground breaking in July this year. My organization, KPRU has released official statement mainly about the possibility of MRT fees based on mathematical calculation and we also questioning the government refusal to publicly emphasize specifically, its estimation of MRT fees. No one knows about it except the government. It is a bit strange to discover, when I asked one of those in charge for exhibition, he simply told us the government will decide the fees when the project is up soon. I went to MRT exhibition at Majlis Bandaraya Petaling Jaya (MBPJ) last Tuesday with my colleague. The moment I arrived, it's just like myself as Dagny Taggart, going through the details of MRT’s project with so much interest. But unfortunately, MRT is a conclusion of friendly partnership of government and business while Atlas Shrugged is quite the opposite, the clash of government and business interest.

Details, big figures, technical drawings, engineering drawings, and the simulation of MRT operation also have been demonstrate, well, to convince us, the public on its viability. I guess not so many people know exactly what are the organizer attempts to promote apart of relying on pretty map of MRT. All the public know is the spill over the project involving thousands of job creation and extra opportunities. I’m still skeptical because my big worry is the process, market, subsidies and the owner of MRT; government or business. My personal view on MRT as below;

Central planning, again, to accumulate all knowledge from millions of MRT users is technically impossible. A single authority namely Suruhanjaya Pengangkutan Awam Darat (SPAD) has not being able to supervise and under limited oversight, this authority also can't ensure specific objectives will be met in proper order. Remember, SPAD also has been centralized from several transportation agency in Prime Minister Office, there is a clear evident of bigger role of this authority, and therefore, of course, they will confront many issues from the beginning of the implementation and I must say, more impending bureaucratic, more time, more resources being wasted if SPAD losing their focus. Public transportation frustration is too big for SPAD to address alone. After all, what happen to Terminal Bersepadu Bandar Tasik Selatan that operates under its capacity since the opening early this year? There is more for SPAD to take care of including bus services, LRT maintenance and operation, taxis, licensing, enforcement and regulations. SPAD is expanding the insanity of central planning as widely possible with little hindsight.

Secondly, I definitely disagree with mathematical calculations in deriving estimated fees for MRT systems. I understand the sentiments of getting ‘political attention’, by doing comparison between countries without absolute acknowledgement the differences such as purchasing power, duties, transportation cost, inflation and so forth. The level of prices is completely different. The people in that particular country also have their own valuation and pricing process, so I, from free market perspectives, conclude that monetary calculation in intimidating the MRT fees is specious and delusionary. What we can do, don’t preoccupied our single mind to think the future prices because I don’t know how the future looks like, uncertain and the price does not reflects our infinite human action.

Thirdly, Austrian School of Economics always right about the complexity of human actions and its ramification. There is news recently says rich people don’t need MRT because they got own cars, but poor people are well receives the benefit of MRT. Government also fixing up (statistically) the number of passengers in phase of MRT’s project upon completion. The management of SPAD had visited Hong Kong and Singapore to learn their rails system and as usual, one size fits all, imaginary figures, engineering approach might somehow influencing the implementation of MRT in Malaysia. But let us go back to the basic that no individual man could explain the relationship between actions and preferences of 400,000 ridership per day. It is fundamentally error for any one, including government to constantly believe regulating million of consumers and alter their tastes and choices in using MRT as main mode of transportation. I see cars and motorists on the highway whenever I go to office everyday, lots of them and different direction until at one point, I couldn’t figure out what is their destination, at what cost, at what purpose, in what type of cars, and more impossible, what is their knowledge possession. No institution regulates them, but yet they successfully coordinating themselves without intervention. Similar things goes to the government, it can’t, but market can do it. This is the reason why I always propose if the oil prices reflect market origin; it will become more expensive as more spending is expected just for filling petrol in the vehicles tanks. What shall we then do? I want to save more (expensive petrol prices), I prefer MRT as my mode of transport. On the contrary, I have to spend more (expensive petrol prices) if I refuse to use MRT. Ultimately, the choice is belong to the consumers. Free market shall show you the way. As F.A Hayek said in great essay The Use of Knowledge in Society“…Economic problem arise always and only in consequence of change. As long as things continue as before or at least they were expected to, arise no new problems requiring a decision, no need to form a plan”

Tuesday, February 15, 2011

Monetary Policy and Jobs

Below is the Ron Paul’s Subcommittee Hearing: Can Monetary Policy Create Jobs recently in US Congress. Let’s watch what we’ll find out from this testimonial.

Saturday, February 12, 2011

Rahmanian Or Road To Serfdom

Last Tuesday, I had attended the commemoration birthday of Almarhum Tunku Abdul Rahman Putra and Institute for Democracy and Economic Affairs (IDEAS)’s first anniversary at Memorial Tunku Abdul Rahman Putra, Kuala Lumpur. I would like also to congratulate IDEAS for making this ceremony remarkably successful. Well done! It was a commendable effort too. When two party system taking, so called ‘bipartisanship’ in devoting bigger role of government, bigger fiscal policies, bigger intervention into private individual and worst, dictating our economy, it’s timely for libertarian to begin the eradication of both ideals with the hindsight of Tunku Abdul Rahman. Such event was only the beginning of truly change. More and more people are witnessing the intense of freedom promotion and the future is bright. I was surprised when Dr Zainal Aznam Yusof from National Economic Advisory Council (NEAC) disparaging government decision to appoint politician as Chairman of FELDA. Common thoughts in every mind of free market, why must politician be appointed? He then said, power tends to corrupt and everybody's applauded. A true change is no government meddling in business. No government is allows to regulate its citizens. Freedom is no gift from government; it is instead a gift from Creator!

It is disgusting to see both sides, “to socialists all parties” be it Barisan Nasional or Pakatan Rakyat competing for a greater welfare state philosophy materialize. I don’t think I could recognize differences between them anyway. They are indeed disgraceful! Barisan Nasional is adamantly claims implementing policies under New Economic Model despite lack of political will, become pro business which have supplanted crony capitalism, and makes profit appear disreputable. The truth is new economy but old delusion. Pakatan Rakyat is famously manifests itself taking the wealth from A and giving it to B. Renationalize all the highways and water infrastructures and others, bribing teachers with RM500 and finally mooting central economic planning policy? Promises government type, a skill of every politician in this country compulsory to possess and as consequences, millions of people have arranged their lives in the expectation of various forms of government support that will be mathematically impossible to provide. Look, I bet no politician in this country who boldly declared that government is the problem and government is not the solution.

Those who study French classical liberal Frederick Bastiat for example may recall this as “Legal Plunder”. He was thinking the greater the scope of the state over the economy, the more entrepreneurial energy will be misdirected into lobbying for special privileges and loot, and less into ongoing efforts to please the consumer.

In general, Austrian School of Economics shall tell you, central economic planning won’t work. Thus, what would exactly Tunku Abdul Rahman think if he still alive at present day? I’m afraid, I’m working under the condition of artificial economy and freedom that at any time, this will be taken away by impotent government.

I ultimately believe, Malaysians must participate together reversing this country’s journey. Like I said, Americans historically are proud of having Thomas Jefferson or better known as Jeffersonian in their meaningful nation’s destiny. It lies in every perseverance they committed, but Malaysians too, don’t forget Tunku Abdul Rahman visions were comprehend into economics freedom policy, rule of law, and individual liberty. And these principles, therefore I urge that all of us should uphold no matter how and no matter when because eventually liberty will prevail! No, really? Was he embraced classical liberalism? No, this wasn’t taught to me in classroom. His line of thoughts does not appear in school textbooks! Yes, it only happens with the government present in every classroom across the country. Here are some of precise thoughts of Tunku Abdul Rahman which I gladly to share with the readers with the absence of government particularly on free market, limited government, rule of law and individual liberty. Thanks to a libertarian, Lenard Lim Yangli (IDEAS) for his awesome compilation in Tunku’s Great Ideas.

Proclamation of Independence, 31 August 1957

“…with God’s blessing shall be forever a sovereign, democratic and independent State founded upon the principles of liberty and justice and ever seeking the welfare and happiness of its people and the maintenance of s just peace among all nations”

Rule of law

In an interview with former Far Eastern Economic Review Kuala Lumpur Bureau Chief Veerasingam Kukathas better known by his pen name K. Das, Tunku Abdul Rahman had this to say when asked to define the rule of law:

“You must observe the law, respect and uphold the law that is how it is supposed to be. To respect the rule of law, you don’t have to be a lawyer. We know the rule of law is supposed to provide justice and so on. We know all that, but there are certain questions that have to do with justice with fair play…That is the main thing – natural justice”

Limited government

This is from an interview with Halinah Todd. It published in New Straits Times, February 8, 1983.

“In my time we had a Cabinet of 13 Ministers. Even they didn’t have enough work. What they do now with 45, I don’t know”

Imagine Tunku’s disgust to find out that Prime Minister Dato Seri Abdullah Ahmad Badawi, the size of the ministerial ranks more than doubled to an all time high of 93!

Free market

Hence, when commenting on the news of Bumiputera Malaysia Finance (BMF), a unit of Bank Bumiputera Malaysia Bhd losing US$1 bilion, Tunku Abdul Rahman could only express his disappointments:

“I have always maintained that the government must not indulge in business. This must be left to the business community. There are many losses incurred by the government of late and this should be a good lesson to our leaders no to mix politics with business”

While giving his speech at the opening of the Japan Trade Fair in KL, February 13, 1960

“In Malaya, we welcome fair competition, even if it competes with our own industry”

Tunku Abdul Rahman even pointed fingers at the corruption created by the New Economic Policy:

“Razak started all this – only those who support UMNO get anything”

Individual liberty

“For instance, in Malaysia, it is unthinkable that the people here would prefer a regimented life; naturally they would never accept any policy that would restrict their right to choose the form of government they like of follow a way of life to which they are not accustomed” The Star, 5 May 1975

One must think wisely, do you want to leave everything to government or leave everything to yourself and manage own affairs? Please, I definitely don't want to walk through the road to serfdom. Defend liberty!