How has Trump changed the relationship between Singapore and the world

January 4, 2017

Q: What do you think is the most significant change that Trump will institute that is likely to affect Singapore and her relationship with the rest of the world?

A: I don’t know whether it is Trump per se who is responsible for changing the status quo – the reason why I say this is because Mr Trump if you think long and hard about it has changed nothing whatsoever simply because he is yet to assume the office of President – having said that the US and the world has certainly embarked on change in earnest. In the UK you already have Brexit. The same trend seems to be reflected in lesser degrees in both Italy, France and to some extent many of the Nordic countries.

But the question is what exactly has been changed – very often we hear politicians lamenting there are worrisome trends of nativitism and isolationism, but what are they really saying?

And to understand what has really changed – I think it’s important to go right back into history to 1979 when the neo liberals in America hatched Pax Americana in the form of Reaganomics by successfully selling to the rest of the world – their conception of the super duper wealth creating machine that seem to last forever.

Now if you ask me in precise terms what is currently going thru a revisionism – then I will say that particular aspect of the market economy is going thru historical change. That is to say many people no longer believe it is the purveyor of the good life. It may benefit some people, but most fall short. As a consequence many countries are rejecting it because their population are all giving it the thumbs down en masse – but to ascribe all this impetus for change to Trump is very misleading. As the process predates even Trump. So far Trump has not even passed a single directive thru either congress or the senate so how can you say he has changed anything. If anything he just rode on this wave of negative sentiment.

Q: But how will all this relate to Singapore?

A: I think the TPP will be hit as consequence. As it’s always seen as an extension of the neo liberal formulae to grow the wealth of a nation.

Q: Do you think the TPP is well and truly dead under Trump?

A: No. I think it’s just delayed. Eventually it will be tabled for ratification in congress – albeit with cosmetic changes that suggest it could be anything other than the TPP.

Q: You mean to say change occured even before Trump stepped into the picture?

A: Yes. Brexit in my opinion is simply a watershed – but the pressure has been building up for years. As many people all round the world have been steadily marginalized by globalization – you have to understand since 2007 – wages have been steadily declining if not remaining the same while the cost of living has been ratcheting up. So if you take the case of the US – you don’t have a middle class any longer – not one at least that is significant enough to buttress the mass discontentment that has been underscored by Trump.

And one reason is because so much of how corporate America grows it’s wealth requires the emasculation of the American middle class – they keep cannibalising the middle class to feed this wonder machine and it’s abit like Phileas Fog last run for the tape when he strips every last timber on the boat to feed the furnace just to reach Portsmouth.

And since that formulae of wealth creation only benefits a select class of elites at the very top of the food chain – and since it’s essentially an economic theory that requires the systematic destruction of the idea of dignity of labor by destroying the unions – we are simply witnessing a backlash from the disullioned masses.

Q: But can Trump make good on his promises? Can he remake America into a great nation again?

A: When you ask whether he can remake America into a great nation again. What you’re actually asking in a round about way is American influence in the world increasing or declining?

Truth is the US sphere of influence has been steadily declining in virtually every single hemisphere in the last fifteen years. Including it’s own backyard – Obama recently reversed it’s position on Cuba – but what many people remain unaware of is this change in policy has more to do with the rest of South America going it’s own way. As it no longer shares the US position of boycotting Cuba any longer. The same holds true for the Middle East as well – The US has hammered out detente with Iran, but the main reason why that’s has more to do with US limits regionally. Hence it’s a form of capitulation rather than what the US would have liked to do, specifically to balance the power of Shiites against the growing insurgencies that is led predominantly by the Sunni’s in the form of Hezbollah in Beirut to the West Bank and also to placate the Kurds and Iraqi’s – so these to me are signs of an empire that reached a point where it can no longer reliably exert command and control any longer.

One sees the same sad story being played out nearer home with regards to the disputed SCS – Singapore the reliable proxy of the US shouts out to the rest of ASEAN, charge! And when she looks back, no one seems to be following. They all seem to be pretending they didn’t hear the order to charge against China. So that to me is a pithy summary of where the US actually is these days.

Q: How much is Singapore’s destiny linked to US global influence?

A: Singapore is a reliable proxy of the US, so if the US is a dog, Singapore is like a tick lah. That means if the dog is happy so is the tick. If the dog dies – Singapore also die lah.

Q: You have always been highly critical of global free trade specifically in the form of globalization – can you see Trump reversing many of the corrosive aspects of globalization?

A: I am not against free trade. I would appreciate it if you don’t put words in my mouth. I regret to inform you that I am not only aware of the methods of the guild, but I even wrote their book. On record. I am and have always been a red blooded capitalist.

But what I am against is the systematic evisceration of whole communities in the name of the profit motive. This is where I feel free trade has nothing whatsoever to do with free trade – it’s a bloody oxymoron. I don’t necessary ascribe the blame to firms either – because the rule book was thrown summarily at them in dicta – as per, join us or perish, so they are simply reacting to the economic forces. If I blame anyone it is perhaps the intelligentsia in the US who were responsible for promulgating this corrosive economic theory that is called free trade and has nothing whatsoever to do with free trade.

Nowadays you notice – you don’t hear about Michael Porter, Gary Hamel, Paul Krugman or for that matter even Alan Greenspan – they have all conveniently disappeared. Neither do you hear about the ultra neo liberals in both the Republican and Democratic Party either. Again they are all hiding under a rock – and the reason why you don’t hear anything from them is because when Trump won as he did – it’s really a mother of Oh dear! moments for all these conceited intellectuals.

But my point is this was all foreseeable.

I think if America stands any chance of being great again the burden of proof is not on Trump’s shoulders as much as the community of thinkers who created this mess where the world currently finds itself – they have to first jettison their security blanket denial syndrome and come to terms with the awlful reality – while it’s conceivable there was certainly wealth creation to some degree, many of their economic logic has also created a new under class of very angry and marginalized people thru out the world who once subscribed to American economic theory.

My point is you cannot be the world’s most powerful economist, influential columnist, business guru and when so many people give you the thumbs down – you just dismiss them all as crazies or decide to say “it’s got nothing whatsoever to do with me.” By every known definition, the community of thinkers have some measure of responsibility to prescribe a solution to this problem that the world finds itself in right now.

To me the solution can never emerge from the likes of Trump – all he can do is make promises that he will eventually break and the nett result of that would be unimaginably cataclysmic.

My feel is too many people are still stuck in this timeline – they haven’t really played out the various permutations of what is likely to happen when Trump fails to deliver the great back to Americans.

Q: How urgent do you see a need for the Americans to lead the world out of this crisis where so many people are disillusioned with the present economic policy?

A: In polite terms I would probably describe it as a pressing need. In not so polite terms – if the Americans don’t come out with a solution – then the Chinese will provably step in and do it for them.

Q: Do the Chinese have that latitude of influence and power?

A: I think so. You know recently I read for the first time since the Silk Road – goods are going to be freighted by rail from a China to the UK. This sort of news rarely ever gets much mention – but it’s implications are startling – only because it involves not only physical rail tracks and logistics. But just think of how many countries the train carrying these goods have to go thru – consider the sheer quantity of paperwork that requires harmonization along with agreements between China and those transit countries. I think when you see it from that perspective – it will have far reaching implications on an economy like Singapore that is so dependent on seafaring transportation of goods.

The people who run ports and related services in Singapore will have plenty of sleepless nights.

Q: Trump has signaled on numerous occasions he plans to take a stronger position on China. How will this affect trade?

A: That is a very strange statement. As China is so invested in the US economy – China owns more than $1.24 trillion in bills, notes, and bonds or about 30% of the over $4 trillion in Treasury bills, notes, and bonds held by foreign countries. In total, China owns about 10% of publicly held U.S. debt. I mean with that kind of war chest – I really don’t think Trump has much room to get tough on China. I could be wrong – but in the long run it makes far more sense for the US to engage rather than antagonize China. I don’t see any payouts in the latter strategy, none whatsoever considering how much US debt China is underwriting.

Even if you want to get tough – there has to be logic. I see none here.

Q: Obama mentioned recently Russian hacks into the US has been responsible for Hillary Clinton’s election defeat – he has promised to retaliate – do you see this as affecting Asia in any way?

A: Again this is yet another very strange statement. I don’t know who Obama’s target audience is – but they can’t be very well read or informed folks – as it is a fact, the US has been regularly engaged in this sort of clandestine activities, in many cases it is both well documented and factual. Not only just interfering with elections in other countries, but in many cases they are also involved in covert operations to engineer regime change and modulating governments deploying everything ranging from assassinations to funding an outright coup d’état – so now Obama is saying, he’s the guy wearing the white hat and we all supposed suspend disbelief and somehow regard him as pure as spring snow? Are you kidding me?

It’s so stupid that I don’t wish to comment on his nonsense.

Q: How will the cosy relationship between Putin and Trump affect Asia?

A: It certainly looks cosy. I will give you that. But I don’t know whether it’s really cosy cosy, you know what I mean – I really don’t have enough intel to comment on this question.

Q: What do you see as the biggest and immediate challenge for a newly minted President Trump?

A: You really want to know? I think it’s who will be the First Lady – would it be his current wife or maybe his daughter. They both can’t sit on each other on the same chair otherwise people will think it’s a sicko incest family so one has to bow out.

Q: Seriously, please. May I remind you the guilds would greatly appreciate your candor.

A: I think the price of oil and the current slide of commodity prices would be two aspects of the global economy that will require immediate attention – only because these two dimensions of trade command a disproportionate influence over the growing concerns of jobs and upward mobility. Many countries are in the doldrums because of either one or both being at all time lows – as a result the world economy is starved of liquidity that is why the volume in global trade is slowing down and getting smaller – and since these two factors have a direct impact on liquidity, it will affect everything from consumption patterns to housing prices – its very hard for me to see how global trade can possibly improve unless oil prices are put on some kind of stabilizing regimen that only the US and their allies can accomplish thru OPEC or perhaps the IMF. As for commodity prices that’s a far more tricky issue to sort out – nonetheless it too requires US leadership and vision.

As for domestic politics in the US. That will also be the first on Trump’s to do list. The question for me – is whether Trump is able to hammer out a coherent new deal to convince firms that he has a workable plan – I think getting their buy in is key because he has a lot of plans and not all of them are kooky in my humble opinion – his idea of revivifying manufacturing in America might sound naïve. But it’s actually doable. Maybe not for all categories of industries and goods – but for some, it’s certainly possible to reconstitute them back in the US again without incurring big cost penalties – because what many economist have not factored in is the moral aspects of consumer behavior – for example, I like Persian rugs. But if I know that twelve year old Abdul is chained to loom to work in some badly ventilated basement in Pakistan and paid twenty cents a hour while he goes blind. I don’t want it. Because every time I step on that rug. I am riven by guilt. It’s the same shark fin soup. I like it – but if I am conjuring all sorts of images of baby sharks getting killed. Dowan lah. I stick to Campell soup.

Look here. I am not saying the average American doesn’t step on ants or that they’re perfect – but I do believe very strongly many Americans have suffered first hand from seeing jobs pack up and disappearing like a traveling circus elsewhere – so if I am an American and I want to buy a boot, but I know that doing so is going to put so and so in Ohio out of a job and they probably have to live in a car. I rather pay premium – you know what I am talking about is not an abstraction. Increasingly the mantra the lowest cost wins the day is very gradually losing it’s moral appeal. Most people don’t ever register this subtle shift. As for economist they cannot, as that very idea is anathema to them – but I do.

Besides China is no longer as cost competitive as it used to be. To be perfectly frank I think the Chinese planners are all internally convinced it’s a matter of strategic precondition to migrate ASAP from being just low cost build to blueprint manufacturers to higher value added goods – they can’t do the same thing as Singapore and just rubber stamp FDI’s and hope that the whole world just stays the same. Only to wake up one day and tell their population – hey we are takers. PM of Singapore can do that. But if Xi ever does that. If that ever happens in China – there will be a revolution.

I think they are not only mindful of the cost pressures, but increasingly pollution and the constraints of their demographics will at some point force them to migrate upstream technologically.

You know in certain coastal manufacturing hubs in China – they are actually importing foreign labor from Vietnam to do work that the natives don’t want to do or want to do but they demand higher pay.

My point is don’t think China is like Singapore – it cannot ever be like Singapore.

As China is slowly losing it’s cost competitiveness as a manufacturing hub – maybe not now. But certainly in the foreseeable future and based on historical trek record, the Chinese planners are quite good at identifying industrial sectors where they might stand the highest chance of prospering. They’re not like Philip Yeo who spends billions filling a tank with guppies only for them to remain guppies forever only to disappear into a cupboard never to be seen again – conversely I happen to have a lot of respect for the Chinese equivalent of the EDB. As they are a very very serious outfit. rail is an excellent example. Not only have they been able to acquire core competence in this field within a relatively short time. But they have also been able to leverage on economies of scale to good effect to give the Japs a run for their money – all this technological shifts would I imagine transform China not just as a money bag man. But into a nation that is able to synthesize new products for the world.

The outcome may well be a perversion of sorts – where we might actually see the US and China collaborating closely to be the supermarket to the brave new world.

You never know. We live in very interesting times it seems.

Q: You mentioned earlier Trump can only promise, but he will not be able to deliver. Now let us assume he has the power to deliver. What would he need to do to make America great again?

A: When and why was America great? A simple question but one that I find few can answer satisfactorily – now if you ask me was America great because it used to make cars and a lot of things that consumers will buy. I say probably. But that was not the reason why America was great – that is the fruits of being great.

If you look at America, it really only became great after WW2. From 1950 to 1979 – that was the period when American industrial output was at it highest. That was also the period when patent per capita was at it’s most prolific. That was also when new enterprises were most vigorous. But where did it all come from?

The middle class.

In this period I mentioned the middle class was at it’s peak. After 1980 when Reagan took office – the middle class started to regress and has since slowly and steadily disappeared in the US.

The middle class is like organic matter in the field. Every country needs it to grow. Look at Africa. Why is it riven in perpetual debt, poverty and borderline starvation despite years and years of aid? Because it doesn’t have a middle class.

Both Indonesia and India languished in the economic wilderness for years. Why? Again they didn’t have a middle class. And when you ask how so many Americans can vote for Trump. Again it is because there is no middle class to speak of in America any longer.

The middle class is the happy zone – that is why China wants to grow it. As that is where entrepreneurs traditionally emerge from. That is also where upward mobility and risk taking is at it’s most vigorous as they very hopeful.

The short answer is Trump needs to reclaim the territory that the middle class has lost in America – the problem is that’s easier said than done.

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