Noh Omar Housing Solution- asymmetrical information, Lemons Problem and Moral Hazard

A theoretical economist would look at the recent Noh Omar’s housing solution from his chosen angle. For example, he may choose to look at it as a problem of asymmetrical information or George Akerlof’s lemons problem.Finally it will lead to the case  of adverse selection. 
The problem is this- the explanation seems to excuse the only interest of the developers- sell houses and make money and invites us to accept that the ensuing results are all caused by free market forces. Greedy businessmen cant help themselves- they are molded and shaped by market forces beyond their control. 
In actual fact, the consequences- burst of housing bubble, bail outs and mounting debts are all caused by deliberate policies and politics of the reigning government, represented by Noh Omar.

Noh Omar was only interested to help developers dispose of their stock of houses masking the intention behind the noble idea of supplying affordable houses.

Maybe the developers have more information about the real worth of their unsold houses just like the lemon of a car. Then it is a case of asymmetrical information.

But he was silent on solving the lemons problem- whether the houses intended to be disposed of are good houses. Noh Omar ought to have included the idea of having all the houses evaluated and assessed by independent professionals- architects, engineers, valuers.

Look at the integrity of the houses. The houses may have been in the market for a long time.  Unused houses, if we observe can deteriorate quickly. The value of the houses must be determined first. Don’t just sell lousy houses. People who are desperate may buy these houses. Unsolved and unsorted, we have the lemons problem.

Because, the buyers do not have full information as to the worth of the houses, they may buy at the mistaken average price of the houses. The buyers may thus still end up selling at above average, while the buyer, under the mistaken idea that average price is good, ended up with lemons- bad houses.

The entire spectrum of the property industry- brokers and developers will fleece the buyers. They will push the lousy and less worth houses to buyers just to clear up their inventory.

I don’t mean to appear patronising, but I think, this is a perfectly valid tool to rationalise and explain the proposal. And I saw a good writing from a good economist on this this.

But I want to look at the issue differently; I want to look at the issue as a proposal of the 1%, by the 1% for the 1%. Noh Omar is a member of the government which creates policies favourable for big businessmen. He has a position as urban wellbeing minister to propose that. The benefits will go primarily to members of the government- the civil servants enforcing the policy, probably Noh Omar himself and the housing developers.

There is also a moral hazard problem. The developers may be aware that of the borrowers cannot pay, they can count on Noh Omar or his successor to propose the government takes over all outstanding debts. The housing developer will still be saved.

With that kind of information, they can afford to take all the risks and give out loans to undeserving borrowers without worrying about the cost of taking risks.

Establishing an honest government and ridding of a dishonest leader is our overriding objective.

I wanted to write something about this topic earlier but decided to be patient a bit. Patience pays. Its rewarded by having additional material to work on. The topic I wanted to write about was of that ‘historic handshake’ between Anwar and Mahathir.

Then Mahathir did another astonishing thing- he met up with the YDP Agong and presented to the Agong, the document containing the signatures of 1.4 million people. People signed and many more who did not but support, the Declaration that in order to save Malaysia, Najib must be removed as PM.

Dr Mahathir as well as Malaysians know the Agong and the Malay rulers cannot do anything to dismiss Najib. But they are handed over a moral imperative to do something and the country will be watching, on whose side will the Malay rulers be.

We will comment on that in a later article, hopefully.

When Dr Mahathir went to court, he did that to lend support to an action brought on by Anwar to secure a court declaration that the NSC law ought to be rescinded. They shared the same convictions. They met and they shook hands. Today, they have issued a joint declaration. It was signed by Dr Mahathir and Anwar Ibrahim.

That episode in court, provided many people with the stuff to create many narratives. The PKR people were naturally euphoric and read into the handshake, a harbinger of many good things in the future. Many people, of differing political temperaments, welcomed the event. Some say it brings closure to the animosity or bad blood between the two. After all Mahathir was the person who dismissed Anwar from being DPM and later the court found Anwar guilty on the charge corruption. Anwar was imprisoned for many years. Many saw the jail time as excessive. Many more believed, Anwar got caught out by trumped up charges.

That making peace with one another will form the basis for the unification of all political forces that are seeing a common objective- that of removing Najib.

Everyone agrees that the engine to remove Najib must be a united front of the opposition. That idea must override everything else. The handshake could provide the basis to unite DAP, PKR, Amanah, Bersatu and others.

Well that is fine. But here is the thing. If we want a united front, there must be no preconditions such as insisting Dr Mahathir apologise to Anwar. Indeed, one of Anwar’s daughter set this condition as basis for further talks. And someone said that any formal pact between PKR and others must be done by Anwar’s leave.

These conditions setting, is a little disturbing. Why do we insist on a formal apology? And why put up a requirement that in order to start anything, it must be done by Anwar’s leave too?

Having said that, we are not taking away anything from Anwar’s family. No one can really understand and empathise fully with the suffering and ignominy the family had to endure for 18 years. The children deprived of a father, the wife denied the comforting embrace of a husband. Anwar could have been PM earlier.

But let us not turn this into a personal issue. And not treat the struggle of opposition parties as all about Anwar. It is about the removal of   a dishonest leader and his thieving government. Najib is stealing the future from us. He is the barbarian who walks into the village taking our wives and children away.

Let us not get distracted from believing that what people want most now, even if they have not already realised it,  is the formation of an honest government by way of a united front of the opposition parties. An honest government needs honest people to run it.

If we can read into the handshake so many positive things, why can’t we apply the same positive approval on Mahathir’s conduct? Here is a 91 year old former PM who made a physical appearance in court to give support to Anwar and shook hands. That conduct itself is an expression of supreme apology already. We can’t do a Shylock and demand the pound of flesh and blood at the same time.

When and if Anwar becomes PM, jail Dr Mahathir for all we care. Or tie the old man up the tree and free the fire ants on him.

Those things will be considered trivial compared to the overriding objective of ridding Najib and his thieving, corrupt and dishonest government.

Jangan Tipu Orang Melayu.

 ekonomi B40 

lwn

Ekonomi T20

 






 Politik dan dasar kerajaan menghasilkan kesan begini.



Dari EPU, kita dapati perangkaan berikut:-

Jadual 1: PENDAPATAN PURATA ISI RUMAH MELAYU, T20 , B40, 1970-2014.

PENDAPATAN	20% TERATAS (T20)	40% TERBAWAH (B40)
1970	444	57
2014	12630	2367
Kenaikan %	2844.59%	4152.63%
Kenaikan x ganda	28.45	41.53
Kenaikan mutlak	12,186	2310

Apa yang dinyatakan dalam jadual diatas, ialah dari tahun 1970 ke 2014, pendapatan purata isi rumah kumpulan T20 naik sebanyak 28.45 kali ganda. Sementara itu, dalam masa tempoh yang sama, pendapatan kumpulan B40 meningkat 41.53 kali ganda.

Sekali pandang, ini akan mengembirakan semua orang. Pendapatan B40 naik dengan kadar yang lebih besar dari kenaikan pendapatan T20. Politisyen BN  kata- lihat, pendapatan kali ganda golongan miskin lebih hebat dari pendapatan golongan kaya.

Kita pembela bangsa Melayu. Kita pembela rakyat marhaen. 

Tidak dapat dinafikan kenaikan pendapatan tersebut memang suatu yang boleh dibanggakan. Pendapatan purata RM2300 sangat dihargai oleh golongan miskin. 
Namun hari ini, dunia melihat kepada pembangunan dan agihan pendapatan. Bagaimana merapatkan pendapatan golongan bawahan dengan golongan atasan. 

kita lihat umpamanya, kepada kenaikan atau tambahan secara mutlak. Dari RM444 naik kepda RM12,630, pendapatan T20 bertambah secara mutlak sebanyak RM12,186. 
Menakala pendapatan B40, walapun menunjukkan kenaikan kali ganda sebanyak 41.53 kali ganda, hanya mencatat pertambahan mutlak sebanyak RM2310.

Cuba pembaca jawab, adakah RM2310 itu lebih berharga dari RM12, 186? Yang mana  agaknya, orang miskin mahu?

Jawab nya tentu tidak. Atau dari segi kenaikan peratusan, walaupun pendapatan T20 naik sebanyak 2844.59% yakni kecil dari kenaikan peratusan kumpulan B40 sebanyak 4152.63%, pertambahan mutlak itu yang lebih penting.

Ertinya nya? Orang miskin tidak mementingkan pertambahan peratusan atau kali ganda, yang mereka mahu ialah kenaikan mutlak.

Lihat sekali lagi pada jadual diatas. Jumlah kenaikan mutlak pendapatan untuk kumpulan T20 dan B40 ialah RM12, 186 + RM2, 310=RM14,496. Dari jumlah ini, kumpulan T20 telah memperolehi RM12,186 atau 87% dari jumlah kenaikan pendapatan mutlak. 
Satu cara melihat perkara ini ialah menyedari bahawa setiap tambahan RM1 pendapatan keseluruhannya, 87 sen dibolot oleh kumpulan atasan. Yakni, bahagian terbesar daripada kenaikan pendapatan dibalun oleh golongan T20.  

Kenapa demikian? Oh kerana itulah akibatnya pemainan pasaran bebas kita tidak ada kawalan. Salahkan pasaran bebas. Sebab itu kita mahu GLC control ekonomi Melayu; sebab itu kita mahu UMNO berniaga atas nama bangsa, agama dan negara. 
Malah ramai orang yang tidak faham akan memarahi dan menyalahkan pasaran bebas.

Tapi seperti disebut oleh ahli ekonomi pemenang hadiah Nobel, George Stiglitz, pasaran bebas tidak ujud dalam ruang kosong. Yang menentukan pasaran bebas ialah politik dan dasar kerajaan. Dasar kerajaan , polisi mereka dan politik mereka menentukan pasaran dan menentukan hasil pasaran. 
Dalam tahun 80an, suatu pendekatan dasar yang dijalankan ialah supply-side economics. Secara tiorinya, ahli ekonomi memikirkan, cara untuk membangunkan ekonomi ialah melalui memanipulasi penawaran agregat. atau sesiapa yang belajar ekonomi, ini dicapai dengan mengalih kelok penawaran/supply curve ke kanan. GDP naik, inflasi pun turun. 
Bagaimana melakukan nya? dengan mengurangkan cukai peribadi, mengurangkan cukai korporat, mengurangkan belanja kebajikan, melakukan deregulasi keatas bisnes dan meningkatkan perbelanjaan keatas pertahanan. 
Politiknya, ia bermaksud mengayakan segelintir kumpulan yang diharapkan mengembangkan ekonomi. Kek ekonomi mengembang dan walaupun ia menyebabkan kesenjagan pendapatan, orang miskin mendapat bahagian kek yang lebih besar. Jika tidak, mereka hanya mendapat bahagian kek ekonomi yang kecil. Polisi yang diambil termasuklah mengurangkan kadar cukai keatas golongan kaya supaya pendapatan yang lepas dari cukai akan dilaburkan oleh sang kaya. 
Supply-side economics ini adalah lanjutan dari trickle down economics sebelum itu- yakni dasar yang secara deliberate mengayakan segelintir kumpulan terpilih, supaya golongan terpilih ini, akan mengujudkan titisan ekonomi kebawah.
Sejarah membuktikan bahawa yang kaya tidak peduli apa yang berlaku dibawah sana, dan pendapatan yang terlepas dari cukai, tidak dilaburkan. 

Golongan kaya akan terus kaya, sebab dasar yang kerajaan UMNO jalankan akan memenangkan golongan atasan supaya menjaga kepentingan mereka dan penyokong mereka. Memang benar, golongan bawahan akan memperolehi sedikit bahagian dari kek yang lebih membesar, tapi bahagian terbanyak akan dibalun oleh golongan atasan.
Metos perangkaan. 

Kekeliruan atau silap mata yang serupa digunakan oleh menteri kewangan 2 untuk menutup kelemahan Malaysia.

Dengan bangga nya dia menyatakan bahawa ekonomi kita tumbuh sebanyak 4% berbanding dengan Singapura sebanyak 2%. Demikian juga dengan pertumbuhan peratusan negara2 industri  yang maju..

Yang dia lupa hendak beritahu, seperti juga dalam contoh pendapatan dalam jadual kita, ekonomi Malaysia tumbuh dari base yang rendah manakala ekonomi Singapore tumbuh dari base yang tinggi. Pertumbuhan peratusan yang rendah Singapore itu lebih bererti dari pertumbuhan Malaysia.

Pendapatan perkapita singapura ialah USD58,000 manakala pendapatan per kapita Malaysia ialah USD15,000. 2% tambahan pada USD58,000 menghasilkan pendapatan USD59,160. Tambahan 4% kepada USD15,000 memberi pendapatan  USD15,600.

Peratusan kita tinggi, tapi perbezaan per kapita antara Malaysia ( kadar pertubuhan 4%) dengan Singapura( kadar pertumbuhan 2%) ialah USD43,560.

Pendapatan perkapita orang Sinpapura bertambah sebanyak USD1160. Pendapatan per kapita orang Malaysia naik sebanyak USD600 sahaja.

Pendapatan actual dalam tangan itu lebih berharga daripada pendapatan peratusan.

Kita ek dengan pertumbuhan 4%, tapi kenaikan USD600 itu pudar berbanding dengan USD1160.

Lagi pun bandingan dengan negara2 maju tidak tepat. Mereka ini tergolong dalam negara dunia perindustrian dan dunia pertama. Manakala standard Malaysia sama seperti Vietnam dan negara Africa. Indonesia mencatat kadar pertumbuhan yang lebih pesat. Indonesia negara dunia ketiga.

Malaysia dahulu nya, tergolong dalam ekonomi harimau. Hari ini akibat dasar dan politik Najib, Malaysia menjadi negara huru hara.