Economic parallels to England’s World Cup flop

 Posted by on 28 June 2010  5 Responses »
Jun 282010
 

Germany 4, England 1. The English Premier League may be the most popular league in the world with its players paid ludicrous wages, but for all the league’s global mass appeal, the host nation, England, is hard-pressed to deliver a top-class national team.

(Check out the ref’s funny blind spot here.)

The influx of foreign players and coaches and the lack of space in the top clubs for the development of promising English talent have contributed to the stagnation – if not regression – of the England national side. Continue reading »

Pyschopaths on the loose

 Posted by on 27 May 2010  5 Responses »
May 272010
 

GDP growth as a measure of economic well-being tends to serve the interests of Big Business rather than those of ordinary people.


Watch all the episodes of this excellent film ‘The Corporation’, described by many as the best documentary they have seen.

In mainstream economic thinking, there are a few fundamental assumptions that are rarely questioned – and they form the basis of economic theory. These assumptions have been so widely disseminated and taught that very few even think of alternatives. Continue reading »

Let them play golf

 Posted by on 8 March 2010  49 Responses »
Mar 082010
 

We are told that the government is introducing a Goods and Services Tax (GST) to broaden its tax base. Low-income Malaysians and migrant workers will soon have to pay this indirect form of taxation on consumption whereas previously they were exempted from tax.

Obviously, the government is operating under tight budgetary constraints – and these have even affected essential services such as education. Check out the impact here and here.

Ordinary Malaysians are feeling the pinch as the government tries to narrow its yawning fiscal deficit.

One wonders what these low-income folks will make of Najib’s announcement of the immediate abolition of import duty on all golf buggies. The cost of a golf buggy will now drop to RM23,000 from RM34,000. No doubt they will be comforted to know that green trimmers and lawnmowers will now be cheaper as well.

Continue reading »

Is the worst over for the Malaysian economy?

 Posted by on 27 February 2010  37 Responses »
Feb 272010
 

Najib says the Malaysian economy is out of the woods and we are poised to do better this year. From what you see around you, do you agree?

A bunch of bananas in Penang is now RM1 more expensive, char koay teow and roti canai servings have shrunk, and many workers have lost out on increments over the last couple of years. Stress levels have soared as workers have to work longer hours to cover for those retrenched and not replaced. And now we have the spectre of GST looming over us.

The GDP figures did not do as badly as anticipated last year because of the pump priming and fiscal stimulus packages.

Continue reading »

Beyond FDI towards a sustainable economy

 Posted by on 5 October 2009  13 Responses »
Oct 052009
 

A couple of weeks ago, I wrote an article on the Malaysian economy, which also touched on the net investment outflows from Malaysia in recent times: Capital outflows cloud economic outlook (Asia Times).

That prompted a thoughtful response from an analyst who makes a valid point – that we must discard our obsession with securing foreign direct investments (FDI), which has blinded us to alternative paths towards a more sustainable domestic economy. Instead, he says, we need to look at how we can promote domestic investment while assessing qualitatively how beneficial each investment is to the people and to the local economy:

Generally nice article. However, I thought the section on investment flows was somewhat misleading, although the overall question — why are Malaysians investing abroad — is valid and important.

Continue reading »

Economist: Deep recession won’t bottom out this year

 Posted by on 2 May 2009  2 Responses »
May 022009
 

Economist Nouriel Roubini says that an L-shaped near depression may be avoided given the policy measures undertaken by the Obama administration. All the same, in his RGE Monitor, he is now predicting that the current protracted U-shaped recession will not bottom out in the third quarter but will instead continue until next year:

One should recognize that US policy authorities – as well as the authorities of many other countries looked into the abyss of the risk of a near depression – given the free fall in global economic activity in the last two quarters – and decided to start using most of the weapons in their arsenals – bazookas, missiles, rockets, artillery, etc – in a financial policy equivalent of a Powell doctrine of overwhelming force in order to avoid a near depression. This is why now the risks of an L-shaped near depression – like the one that hit Japan after the bursting of its real estate and equity bubble – have been reduced.

Continue reading »

Free market champion admits his ideology wasn’t right

 Posted by on 26 April 2009  16 Responses »
Apr 262009
 

They got it wrong:

  • the regulators who thought the liberalised financial sector would work just fine by itself, and
  • stock market pundits and the financial media who were giving the public a false sense of security ahead of the crash.

“I was shocked”: Alan Greenspan, a longtime ideological champion of free competitive markets and deregulation, admits under official questioning that his model was distressingly flawed, not right, and not working.

Continue reading »

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