It’s The Best Of Times, And The Worst Of Times

Source : The Straits Times, Dec 15, 2007

WHEN the talk of the town turns to who’s getting bigger bonuses, hotels and restaurants being fully booked for the festive season, and the rising prices of coffee shops and the hawker fare sold there, you know the economy is red hot once again.

Not only is the cost of a bowl of noodles rising, but so too is just about everything else, from taxi fares and school bus fees to Housing Board flats with million-dollar views.

Even so, around town, Christmas shoppers are bagging gifts and setting tills ringing.
The drink of choice for today’s young and trendy is champagne, no less, as a story in the Life! section of this paper reported recently.

We have been here before.

In previous boom times, such as the 1990s, when wages, bonuses and prices were on the ascent, it was the best of times, but also the worst of times.

For every one out celebrating at never having had it so good, there was another moaning that he was not having it as good as the next guy, or that he was being squeezed by prices, and expectations rising even faster.

Three things, however, distinguish the boom this time from that of expansions past.

First, growing demand - for food, resources, housing, talent - is being felt just about everywhere and is running up against short supply, fuelled by the relentless rise of China and India, with millions of new capitalist middle class wannabes seeking to acquire the modern consumerist good life.

The result is higher global prices, with very local effects.

Secondly, even as more people are feeling the pinch from rising prices, the widening gap between the rich and poor in just about every society around the world means that some people are going to find it harder, and increasingly so, to cope than others.

The front page of The Sunday Times a few weeks ago said it all, perhaps oblivious to the irony. It had a poster picture of a cash- strapped man, with the headline declaring ‘Belt tightening times’. Yet, above this was a blurb across the page for a bumper special report on hot properties to buy.

Clearly, some people were tightening their belts, while others were reaching for their cheque books.

Set against this is the growing concern about the natural constraints of the planet, as well as the environmental impact of relentless growth, and with it energy consumption and greenhouse gas emissions which cause global warming and climate change, which must surely be the buzzwords of the week, and even the year.

So, what to do? How are Singaporeans to cope with the downsides of rising prices, mounting expectations, and widening gulfs in society that come with these boom times?
Memories are short. But there are some lessons to be drawn from the last time we were faced with such a go-go economy. Here’s five:

Don’t panic: Just as prices will rise, so they will fall.

At times like this, this might seem a little hard to believe. Yet twentysomething Singaporeans, sitting in trendy bars in Dempsey Road lamenting that they are being priced out of choice housing in land-scarce Singapore, need only look up from their drinks and take in the sights around them.

Imagine all that land in Dempsey Road cleared for new housing projects, swanky condominiums, or leafy estates. The fact that it has not been - yet - should be reminder enough that there is land for further development, even on this tiny island.
No one should rush out to buy in a panic. Those who disbelieve this, should talk to one of those who are only just emerging from the unhappy position of sitting on properties which languished for years at prices below what they paid during the last property rush in the 1990s, as highlighted in a recent report on negative equity in this paper.

Don’t shoot the statisticians: One of the first targets in any price spiral has usually been official statistics.

Since people sense prices are rising rapidly, they question why official figures on inflation do no shoot up as well.

In the 1990s, this set the country off on a needless tangent relooking the accuracy and veracity of the Consumer Price Index, or CPI. It proved to be a red herring, with the number crunching process here done in line with the best practices elsewhere.

Because the CPI is an aggregate or omnibus figure, some things in the

For a more meaningful gauge, look also at the more micro indices, such as the CPI for various housing types or income groups.

Whatever the case, bashing up the statisticians, just because no one likes the effects of the rising numbers, is a fool’s game, which will not get anyone very far.

Don’t just ask what the Government is doing about it: The Government can, and should, do more to help the less well off cope with rising prices, ensure they have roofs over their heads, food on the table, and their children continue to be able to go to school.

But, let’s face it, just how much the Government can do depends on how willing society is to pay higher taxes to finance greater state largess.

A more direct way to do this would be for the better off to give directly. They could adopt a cause, a charity - you need look no further than The Straits Times School Pocket Money Fund - or even a child.

The extent to which a society’s better off are willing to dig deeper into their pockets to help others along the way is often a good gauge of how much taxpayers are really willing to pay to finance grand government welfare schemes.

If they are not, then simply calling for more state welfare - presumably financed by taxing someone else - is just so much political grandstanding.

Don’t scrimp and cut corners: This applies both to consumers and service providers.
The next time you are out at a fancy restaurant enjoying an expensive meal, spare a thought for the service staff, who also have families and are coping with rising costs. Leave a generous tip. Never mind that you are already paying a service charge, which the management will pocket.

If you really believe that the gap in society needs to be closed, well, put some money on the table.

Not only will you be doing your part, you might also enjoy better service, and give service standards here a boost.

For those at the receiving end, who run a service, such as a restaurant, don’t be tempted to cut corners and short-change customers, just because the queues are back. Customers have long memories. Those establishments that look after their clients, even when they do not need to, are likely to be patronised even when times take a turn for the worse.

Don’t hanker after what you don’t have: It was just three or four years ago that graduates left schools with no jobs waiting, companies slashed bonuses and payrolls, and businesses cried out for orders and customers.

That might all seem so last century now. Yet when times are good, it is tempting to lament about what we don’t have, rather than savour how much we do.

But that would be such a waste of what should really be a good end of the year for most, if not all.

Season’s greetings to one and all.