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Brexit: Lesson for the PAP?/ Eternal truths

In Political economy, Political governance on 04/07/2016 at 7:09 am

Here’s an interesting comment from a FT reader commenting on (What else?) Brexit.  He’s saying that Brexit (and the Eurozone  crisis) should be blamed on cuts to the benefits of what conservatives, the PAP (including Tharman) and the majority of S’poreans (self-included) would call the “undeserving poor”. (They (and me) would be in favour of helping the “deserving poor”.)

The UK is a federation of sorts. On 23 June, it essentially failed. It failed because London had allowed (over a period of ca 30 years) swathes of the country to become impoverished. The transfer union which once existed had been rolled back so much that living standards of the majority of voters had fallen.

London has been rolling back this transfer union because “the elite” has been making the argument that a transfer union makes people lazy. “We must cut benefits (transfers) to encourage people to get on their bikes!” – sounds familiar?

So here’s the problem: … the eurozone will fail if it cannot improve the living standards of its citizens BUT the observation about the dependency transfers induce also holds. The challenge for the eurozone (as much as all our social democracies) is how to square this particular circle?

The Roman emperors got it right. Bread and circuses for the Roman mob, whether deserving or not. Preserving the peace and maintaining power, were more important than rewarding the “deserving” and punishing the “undeserving”. Now that’s an eternal truth.

And here’s another eternal truth: it’s more efficient to help everyone in need whether they deserve it or not http://gladwell.com/million-dollar-murray/.

Trying to differentiate between the “deserving” and ‘undeserving” ends up costing more.

Post said that the man had been sober for several months. But he could relapse at some point and perhaps trash another apartment, and they’d have to figure out what to do with him next. Post had just been on a conference call with some people in New York City who run a similar program, and they talked about whether giving clients so many chances simply encourages them to behave irresponsibly. For some people, it probably does. But what was the alternative? If this young man was put back on the streets, he would cost the system even more money. The current philosophy of welfare holds that government assistance should be temporary and conditional, to avoid creating dependency. But someone who blows .49 on a Breathalyzer and has cirrhosis of the liver at the age of twenty-seven doesn’t respond to incentives and sanctions in the usual way. “The most complicated people to work with are those who have been homeless for so long that going back to the streets just isn’t scary to them,” Post said. “The summer comes along and they say, ‘I don’t need to follow your rules.’ ” Power-law homelessness policy has to do the opposite of normal-distribution social policy. It should create dependency: you want people who have been outside the system to come inside and rebuild their lives under the supervision of those ten caseworkers in the basement of the Y.M.C.A.

That is what is so perplexing about power-law homeless policy. From an economic perspective the approach makes perfect sense. But from a moral perspective it doesn’t seem fair. Thousands of people in the Denver area no doubt live day to day, work two or three jobs, and are eminently deserving of a helping hand—and no one offers them the key to a new apartment. Yet that’s just what the guy screaming obscenities and swigging Dr. Tich gets. When the welfare mom’s time on public assistance runs out, we cut her off. Yet when the homeless man trashes his apartment we give him another. Social benefits are supposed to have some kind of moral justification. We give them to widows and disabled veterans and poor mothers with small children. Giving the homeless guy passed out on the sidewalk an apartment has a different rationale. It’s simply about efficiency.

Funny that the PAP administration’s cost-benefit analysis don’t show this? Not really, because “costs” and “benefits” are in the eye of the beholder i.e. figures can always be fudged. Now that’s another eternal truth.

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  1. 3 key issues that contributed to Brexit:
    1) Uncontrolled immigration
    2) Rich/poor divide and widening
    3) Poor prospect for the younger generationa.

    These same issues are plaguing Singapore

  2. UK has simply been going back to its roots of a class society over the last 30 years. This time based on financial assets & earning power, instead of birthright or force of arms.

    BTW, I talked with my 3rd world foreign colleagues regarding those homeless, destitute, insane, or simply dirt-poor people in their home countries. What do their countries or agencies do about such people? Everyone of those 3rd world foreigners said, basically those people are cannon fodder, can be whacked & killed at your whim & fancy. And either no legal repercussion or simply a slap on the wrist. No such thing as IMH or Pelangi Village or MOH-subsidised nursing homes for them.

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