Saturday, November 25, 2006

Unemployment Is Good

Chua Mui Hoong’s recent article in the Straits Times (Review, 24 Nov 2006) contains a spirited defence of the various fee hikes instituted by the government since this past general election: June-electricity tariffs up by 2.3 per cent; July-taxi fares went up, flag-down fare increased by $0.10 cents to $2.50, peak hour surcharge increased from $1.00 to $2.00; August-Electronic Road Pricing fees at 6 key expressway gantries raised; October-bus and train fares go up by 1 to 3 cents; December-local postage go up 9%; Next year-GST to go up from 5% to 7%.
Her basic argument is as follows:
“If price hikes were severe after elections, then inflation rate should go up a year after elections. But the data show otherwise. Since 1980, the inflation rate has consistently gone down one year after all elections.”
The article considers the history of fee hikes after each general election, and attempts to refute the politically “seductive argument” put forward by “cynics” to the effect that fee hikes have always been the consequence of PAP win at the polls. It is also notable her statistics also show that as unemployment goes up, inflation goes down. Ergo, unemployment is good for the economy.