HK Chief Executive says democracy “would produce policies skewed toward the poor”

Those on the Left have been sympathetic to CY Leung and critical of the protestors. Would CY’s honest words on how the system favors the rich trigger a rethink?

Hong Kong Leader Reaffirms Tough Stance on Elections and Economic Discontent, NYT :

HONG KONG — The Beijing-appointed leader of Hong Kong, Leung Chun-ying, said Monday evening that allowing his successors to be chosen in an open election based on who won the greatest number of votes was unacceptable in part because it would produce policies skewed toward the poor.

Not sure if CY Leung meant that all the European welfare states are doomed to go down the drain. He should consult at least champions of neo-classical Economics: The Economist and Douglas North. E.g., North, Wallis, and Weingast (2009, 266) say:

The logic of a median voter model suggests that widening the suffrage in a democracy to include more low-income voters will likely result in populism and other forms of zero- or negative-sum redistributive politics emphasized by Meltzer and Richard (1981). If the median voter makes less than the average income, it is in his or her interest to transfer income from rich to poor people. Such an analysis, however, ignores the incentives for redistribution that exist if the government is able to deliver redistribution impersonally. As Lindert (2004) shows, the social costs of redistribution create incentives for the poor and rich to redistribute in ways that have the least negative effects on society as a whole. They create strong incentives to redistribute opportunity to poor individuals through the provision of education, public health, and public services rather than strictly cash. When public goods enhance human capital, the ability to provide impersonal policies allows open access orders to respond to citizens in ways that complement markets rather than undermine them. In this way, open access orders sustain democracy as a positive-sum game. Of course, if the government cannot credibly deliver impersonal public services, then the poor have every incentive to use their votes to transfer cash now and are susceptible to populist appeals from factional leaders. This is the dark side of democracy, a side often visible in natural states.

is there anything to fears that economic populism will lead to economic disaster? Not really. Lower-income voters are much more supportive than the wealthy toward policies that benefit people like them, and they generally support higher taxes at the top. But if you worry that low-income voters will run wild, that they’ll greedily grab everything and tax job creators into oblivion, history says that you’re wrong. All advanced nations have had substantial welfare states since the 1940s — welfare states that, inevitably, have stronger support among their poorer citizens. But you don’t, in fact, see countries descending into tax-and-spend death spirals — and no, that’s not what ails Europe.
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In Hong Kong, the problem is collusion between the government and the super rich.

John Burns, Protesters want a rethink of Basic Law bargain between Communist Party and big business

In the Basic Law bargain, the party offered big business in Hong Kong economic benefits on the mainland and business-friendly policies in Hong Kong in exchange for loyally supporting party policies on and in Hong Kong.

Why only genuine universal suffrage can solve HK’s deep-seated problems: 只有由普選產生的特首才可解決社會矛盾 As an illustration of the close government-tycoons relations, the official New China News Agency published a commentary entitled “Hong Kong tycoons reluctant to take side amid Occupy turmoil” on Oct. 25 :

Sitting next to Tung at the meeting with President Xi was Li Ka- shing who made a statement on Oct. 15, calling on the Occupy protesters to go home and not to “let today’s passion become tomorrow’s regrets.” The Asia’s wealthiest man did not make it clear whether or not he agrees with the appeals of the protesters… Other Hong Kong tycoons, such as Lee Shau-kee, nicknamed “Hong Kong’s Warrenn Buffett,” Kuok Hock Nien known for his sugar refineries in Asia, and Woo Kwong-ching whose businesses range from Hong Kong’s cable TV to the Star Ferry, have all remained mute… none of the tycoons at President Xi’s meeting has expressed support to the police’s handling of the demonstrations and Chief Executive Leung Chun-ying’s government.

This commentary generated such a storm that it was promptly taken down. Here is a saved copy: tycoons reluctant to take side amid Occupy turmoil – Xinhua | English.news.cn In any case, the commentary already served its purpose as the named tycoons swiftly complied. An analysis of elites who support CY Leung in Chinese: http://hktext.blogspot.hk/2014/10/hong-kong_24.html See also “targeted boycott

A related analysis by David Webb: “Broadly representative of wealth“—–

In other words, he claims that if the Election Committee was a fair cross-section of the population, then we would be economically doomed, so we must instead ensure that tycoons or at least wealthier people have disproportionate weight and that poor people are under-represented on the committee. There are several counter-arguments to this:

  • Leung and previous Chief Executives have substantially increased welfare spending anyway – lacking a popular mandate results in trying to buy popularity with hand-outs, such as the infamous Scheme $6000 handout to every permanent resident, electricity subsidies for all, repeated waivers of rates and waivers of (already low) public housing rentals, the increase in non-means-tested “fruit money” for over-70s, the $2 fare scheme for anyone over 65, and loan guarantees for small businesses, to name just a few.
  • Article 107 of the Basic Law requires the HKSAR to both balance the budget and keep the budget commensurate with the growth rate of its GDP – in other words, spending as a proportion of GDP should not rise. Any deliberately spendthrift or tax-and-spend socialist Government would thus expose its budget to judicial review;
  • The current electoral structure tends to result (as illustrated in sports above) in massive infrastructure spending to favour vested interests in the Election Committee, much of which spending is economically questionable, such as the HK$72bn Express Rail Link to Shenzhen, the road bridge to Zhuhai and Macau, the likely HK$150bn for the third runway and associated infrastructure at HK Airport and the HK$8.2bn Kai Tak Cruise terminal. Oh and let’s not forget the Cyberport and the massive waste of land that is HK Disney-landfill. Would a democratically-elected CE be any worse?

CY’s black hole

57pc of Hongkongers ‘do not want’ Leung Chun-ying re-elected, poll finds Over 56% of HK people don’t want second term for CY Leung: poll

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Meanwhile, Capitalism Is Making China Richer, But Not Democratic

As far back as the early 1990s, Washington thought trade and investment eventually would make China more democratic. In the past couple of years, though, the Communist Party has doubled down on repression at home and become more aggressive overseas.

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Who is CY Leung and why do the Hong Kong protesters want him to resign? As Occupy ends, CY Leung performance rating falls Leung’s approval ratings continued to decline in early 2015: http://hkupop.hku.hk/chinese/release/release1229.html

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CY Leung and his wife are mocked in Hong Kong’s Lunar New Year markets

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China Has Seized 8,000 Rolls of Toilet Paper With the Face of Hong Kong’s Leader intended for sale at the New Year market

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大埔舊墟公立學校小學作文 最尊敬的人指定梁振英

如梁振英下台或因老左發功 若梁連任政治矛盾激化 本土派將壯大

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2 responses to “HK Chief Executive says democracy “would produce policies skewed toward the poor”

  1. Pingback: A Social Media Movement — and self-censorship by most mainstream HK media — and excellent coverage by international media | Hong Kong's Umbrella Movement

  2. Pingback: Foreign forces at work in Hong Kong? | Hong Kong's Umbrella Movement

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