My Dad sent me a link the other day about entitlements, and how some of the most popular google searches in recent months have been people looking for ways to sign up for government benefits like unemployment, disability, etc. Also there was something about how a large fraction of Americans now depend on the government for at least part of their income. I don’t have a full understanding of these complex issues but here are some ideas about it floating in my head.

I agree that the entitlement system is unsustainable in the long-term. I’m reading a book right now called The Forgotten Man about the Great Depression that strongly argues against the New Deal, which was basically the start of the system we have today. The author argues that FDR’s heavy-handed, government oriented approach, which was partially inspired by observations of socialist policies in England, and to a lesser extent those of soviet Russia, stifled private sector innovation. She instead thinks Wendell Wilkie would have done a better job as president. On the other hand, according to this article, the historical origin of the entitlements was not out of the beneficence of the elite but rather a concession to avert European-style class warfare which could have led to an even more radical outcome (revolution), like it did in Russia and China.
“The Gilded Age plutocrats who first acceded to a social welfare system and state regulations did not do so from the goodness of their hearts. They did so because the alternatives seemed so much more terrifying.”
So as far as I can tell we are stuck between a rock and a hard place. Keeping entitlements undermines the strength of the national economy due to excessive tax burden on workers and investors, but eliminating them could lead to violent unrest among those who cannot make ends meet. I have no idea what the right solution is, but it seems likely it would have to involve some way of improving peoples’ training and education levels so that they can have the skills that are needed to survive. Here’s one social-entrepreneurial example along those lines that I admire: http://www.khanacademy.org/about . Another interesting, related question is, to what extent does technological change affect unemployment?

 

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26 March 2008 (click here for photos)

Singapore lived up to its reputation for cleanliness and efficiency. After taking the stunningly modern metrorail from the spotless airport, I got off in “Little India” and stayed at a hostel surrounded by Tamil (South Indian) businesses. My first dinner at a Tamil restaurant was so spicy, the sweat was pouring down my face, but it was delicious, with curried lamb and many unusual vegetables. One highlight of visiting Singapore was meeting Dixi, a brilliant Filipina friend recommended by AM in Manila who was studying environmental engineering at Nanyang Tech. We met for dinner (I tried stingray for the first time!) and walked over to take photos with the Mer-Lion, the mascot of Singapore. It was great to share a conversation ranging from Biblical exegesis to carbon sequestration and the burgeoning local water engineering industry. We were joined later by the intriguing Shahirah, who shared stories about her work in public relations (did you know Singapore has the world’s largest Ferris Wheel?), and her Muslim faith. On another day, an enthusiastic Singaporean couchsurfer named Geraldine showed me around the city. I was very impressed by her encyclopedic knowledge of her city, and she was particularly fond of the wide variety of architectural styles found here. For example, within a one mile walk, we passed a Hindu Temple adjacent to a Chinese one, behind which a massive skyscraper was under construction. Further along, a shiny bronze hotel with an Ayn Rand theme abutted a Mosque. Finally, we passed by the fortress-like central police office; the courthouse, which looked like a UFO was landing on top; and the spiky, irregular, durian-shaped convention center. In fact, the durian, a pungent, creamy fruit resembling a spiny green basketball, is a great metaphor for Singapore’s two salient features:  cultural diversity and authoritarian governance. While ethnic “Straits Chinese” make up 75% of the population, they manage to coexist with sizable Malay and Tamil minorities, as well as more recent immigrants from the Philippines, Indonesia, and Europe. While racial tensions did spur Singapore’s secession from the Malay Federation in 1965, they have since abated, although as Geraldine explained it is still rare to see intermarriage between different ethnic groups (in this way, it reminded me a lot of the United States. We are still more of a “patchwork quilt” society than a “melting pot” society). Despite their cultural differences, almost everyone in Singapore loves durians, and it has been incorporated into all kinds of fascinating culinary creations unique to each neighborhood, from ice cream to fish curry. Similarly, the durian fruit illustrates the draconian force of law in this city-state: carrying one on a subway car or metrorail is banned, and carries a hefty fine!

After a long day of walking, Geraldine, whose hospitality was as expansive as it was spontaneous, invited me to join her family for dinner, which I thoroughly enjoyed. Her Mom was an excellent cook, and her Dad an engaging interlocutor; he encouraged me to return to my family “by hook or by crook” because it’s not good to be far away from home for too long. I found this strong, traditional emphasis on “family-first” to be a widespread ideal in many Asian nations. Geraldine’s younger brother Aloysius was very curious about US History, and I tried to objectively describe the conquest of the Native Americans, and the shame of the slave trade, as well as our ideals of free enterprise and individual freedom. While Singapore is probably an even greater exemplar of capitalism than America, it starkly differs in personal liberty. As Aloysius explained, most middle-class Singaporeans such as his family cannot afford to own or drive a car due to onerous taxes. When I replied that they have an excellent public transportation system, and that taxes on cars and automobile fuel reduce congestion and pollution, he elaborated that personal mobility has an important, almost spiritual significance for a young person, no matter which country they live in. Indeed, one of the favorite pastimes among guys his age is to go over the border to Johor Baru (Malaysia), where the laws are laxer, and drive a fast car on a back road. Furthermore, Formula-1 racing is as popular in Singapore as NASCAR is in North Carolina! Finally, discussing the sub-prime crisis in the economy, we all agreed that it was caused by people borrowing too much to finance excessive consumption. Both Geraldine and Aloysius expressed concern that despite Singapore’s current economic strength (2nd busiest container port in the world), younger generations may become decadent and less pragmatic. Aloysius even compared Singapore to Venice, fearing that it too may someday sink into the water and become a relic of past glory. Nevertheless, my own impression of this bustling, diligent citadel on the tip of Asia was a refreshing departure from the organic chaos that marks so many other Southeast Asian cities. While I don’t think I could live in a city that bans chewing gum (indeed, I even found myself missing the acrid fumes of the streets of friendly Manila at times amid the sterile Singaporean causeways), it was very pleasant to visit, and I can see why so many people find it a great place to do business, receive medical care, or get a world-class education. I suppose in the end there is a trade-off between stability, efficiency, and safety versus individual freedom to engage in “creative destruction”, and one has to simply decide which spot on the continuum is most satisfying. Hopping on the bus to Kuala Lumpur, I felt fortunate to have experienced both ends of the spectrum in one lifetime.