Article by Soong See Choo
The property developer asked: “Who stole my profits?” In his mind he is interested in maximizing profit.
But then, who is stealing his profit?
This is a theoretical example. To build a flat it costs only $100,000. However, the property developer wants a profit of $300,000. The selling price of this flat must not be least than $400,000. When he could not find a buyer, he complained, “Who stole my profit?”
His CFO explained, “Nobody buys means two things. One, the selling price is too high. Two, he is not taking a bank loan.”
The property developer replied, “No, I am not going to reduce my selling price. That is stealing my profit. I go and ask a bank manager to give prospective buyers a mortgage loan.”
The bank manager explained, “It is very easy for me to dish out a housing loan. I just need to satisfy two conditions. First, it is the repayment period. If the repayment period is 5 years, 10 years or 15 years, the loan amount is going to be small. Definitely, the prospective buyer cannot afford to buy your flat. Second, it is the mortgage interest rate. If the interest rate is low, the quantum of loan can be much higher.”
The property developer said, “This is my stand. First, I cannot reduce the selling price of my flat. This will take away my profit. Please extend the loan period to 50 years.”
The bank manager said, “The underlying condition behind a 50-year loan is subjected to the age of the buyer – the applicants age should not be more than 80 years old at the end of the loan tenor.”
The property developer kept his mouth shut. In his mind, he was thinking, “That means the buyer has to work until 80 years old in order to repay the loan. Come on, who works beyond age 65? Even the government retiring age is set at 64 years old. So long no one stole my profit I don’t care about the bank’s decision.”
The bank manager further explained, “If the buyer takes a 50-year loan at age 30 and retires at age 64, he has to depend on his children to follow up with the repayment of the mortgage for another 16 years.”
The property developer said, “I am interested in making sure no one steal my profit. I don’t care if his son or grandson has to foot the monthly installments.”
May I ask a few questions?
Q1. Who stole the property developer’s profit?
Answer: No one did. It is purely out of his voracious greed.
Q2. Who allow a 50-year mortgage bank loan?
Answer: The bank CEO. This is purely out of his voracious greed.
Q3. Do you think the property developer is a smart person?
Answer: Indeed, he is witty. He is passing the burden to the bank to collect the monthly installments over 50 years.
Q4. Do you think the bank CEO is a smart person?
Answer: Indeed, he is cunning. He designed a 50-year loan in order to maximize his bank’s profit.
Q5. Do you think the National Development Minister, Khaw Boon Wan is a smart person?
Answer: He is hideous. He freely allows the witty property developer and the cunning bank CEO to abuse their intelligence to draft out a crafty 50-year mortgage loan.
Let me sprinkle some salt into an open wound by drawing upon chapter 65 and 77 of DaoDejing (道德经), authored by the most revered Chinese philosopher, Laozi (老子), who wrote this book 2568 years ago.
第65章：古之善为道者，非以明民，将以愚之。民之难治，以其智多。故以智治国，国之贼。不以智治国，国之福。
Here is the English translation for chapter 65.
Since time immemorial, leaders who are vested with the authority to lead its people do not explain clearly to his people why he is implementing a specific project, or program or policy but rather use his authority to mislead his people.
The people in general are difficult to rule because they are smart, witty, cunning, crafty, hideous and etc. This implies those leaders who try to be smart, witty, cunning and crafty and hideously plots to implement government projects, programs or policies because of their wimps and fancies they are the betrayals of the nation. If the leaders do not allow these crafty and hideous plots to be implemented, it is a fortunate nation and its people are said to be well taken care of.第77章：天之道，其犹张弓与。高者抑之，下者举之。有馀者损之，不足者补之。天之道，损有馀而补不足。人之道，则不然，损不足以奉有馀。
Here is the English translation for chapter 77.
He who leads for the sake of everyone in the country is akin to a game of archery where he shoots arrows with a bow at a target (target archery). To those people whose standard of living is higher than the average, it is necessary to suppress their standard of living a little. To those people whose standard of living is far below that of the average people, it is necessary to raise their standard of living. It is absolutely necessary for the higher income earners to pay income tax. On the contrary, the low income earner or people with no income should be supplemented with subsidies or financial help or corresponding assistances. He who leads for the sake of everyone in the country taxes the relatively wealthy people and thus, subsidizes the poor people.
On the contrary, he who leads for the sake of his personal interests does not do likewise; he tries to inflict greater losses to those who are already poor to benefit those who are already rich.
Q6. Is Khaw Boon Wan a betrayal of Singapore?
Answer: Chapter 65 says definitely he is a betrayal of the nation. He merely said, “I don’t think that is very wise.” That means in his heart, he wishes the best for the property developer and the bank CEO. Does he care for the prospective buyer and his children or even his grandchildren? No. If he does, he must have stopped all kind of smart, witty, crafty and hideous plots that raid the pockets of the buyer, his children or grand-children. He merely talks the talk, and does not walk the talk. Do you think we should continue to pay him >$1 million a year to encourage the property developers and bank CEOs to raid the average citizens’ pocket for 50-years? A betrayal of the nation must be fired immediately.
Q6. Do you think we should allow any other minister who leads for the sake of his personal interests (minimally, >$1 million annual salary) to be in office?
Answer: With reference to chapter 77, there are two key points. First, “He who leads for the people taxes the relatively wealthy people and thus, subsidizes the poor people.” This is true leadership. Second, “He who leads for the sake of his personal interests does not do likewise; he tries to inflict greater losses to those who are already poor to benefit those who are already rich.” This is false leadership.