Thursday, July 19, 2012

COE prices make history

Barrier breaking COEs. The right to buy a small car now cost more than what such cars used to command just less than three years ago.

Savor this moment of motoring history in Singapore.

You can teach all the character values you want to the kids but they will learn that what really matter especially when they are starting out is to get rich as quickly as possible. This will only lead to the scenario of the Tragedy of the Commons for anything that is non-tradable.

The government have ambitious plans to improve public transport but I think well good, they are still not good enough.

More than ever, the car as a mode of transport will become even more significant as a status symbol. Paradoxically, I do not expect a backlash but that is a scenario many years away. Instead the young might just give up on car ownership. At some point they are beginning to start telling each other it is stupid to own and maintain a car. Perhaps in years to come, cars and taxis would in indistinguishable. As we cannot live in the future how might we view this?

If you leave it to the market which is the current COE system, you will get feast and famine extremes. It is no different from currency board systems. To stretch is a little beyond, that's why I am never a fan of the Austrian school. It assumes that human kind are so tough and resilient to take the swings. Eventually the COE system will be hated by almost everyone. You will be very unhappy to be priced out and those who could afford it would feel cheated paying the huge sums. Only the very rich few do not bat an eyelid.

Government cannot continue to make policies on false assumptions about human behavior. People are only rational within limits. If their response to policies take them beyond that, a right policy could end up as a vote loser. You can't quarrel with the people over this. It is all part of being human. Singaporeans are more rational than others in Asia, just as the Germans are in Europe, but foremost we are all humans and not Homo Economicus. If we were not overall more rational, the government would been voted out long ago. Don't push your luck.


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