Can history teach us anything?
What do the following true stories have in common?
Story One: A Market Crashes
A Japanese friend of mine was arguing with her husband over whether to invest in bitcoin and ether. Her relative living overseas had made easy money, literally hand over fist. She was totally convinced that she wanted a piece of the action. This was the future. And the future was now. Her long-suffering husband spent energy and effort explaining to her that with prices skyrocketing in 2020 and 2021, all the sound and fury indicated a likely bubble, and bubbles eventually pop, so she should be careful.
Fortunately, through luck or persuasion, her husband managed to stop her from putting her hard-earned money into what turned out to be the peak of the market. Bitcoin and ether came crashing down.
Story Two: Spending Singapore’s Reserves
As late as 2018 and 2019, there were some who were calling for a less conservative approach towards Singapore’s reserves. They wanted more data on the reserves to be shared publicly, so that more could be spent while consumption taxes would not need to be raised.
As we all know now with the benefit of perfect hindsight, this was just before the COVID-19 pandemic hit. In 2020, the Government had to put up the largest economic support package since Singapore’s independence. Expenditures dramatically shot up while tax revenues dropped off a cliff.
(After the pandemic hit, I recall the ironic moment when an oft-complaining colleague commented that it was great that Singapore had such a huge rainy-day fund.)
Story Three: Pollyanna
Another friend of mine shared an article written in 2022 where a Singaporean wondered about threats to our security. The writer argued essentially that, given today’s peaceful environment, our current two years of mandatory military service, subsequent ten years of in-camp training, and massive military spending needed to be re-examined and a dialogue opened.
I hardly need repeat what has been written about many times in 2022— Russia invaded Ukraine; China ramped up military exercises during visits by US…