Hornbill Unleashed

May 21, 2014

No more bailout, allow MAS to fail

Filed under: Politics — Hornbill Unleashed @ 7:00 AM
Tags: , , , ,

Medecci Lineil

In market economy, there are always firms and families struggling to make ends meet. MAS, a government–linked company, is no exception to this rule.

Now here’s the thing. For years with each bailout, Malaysian taxpayers were told this was in the best interest of the nation. And we were told this bailout was necessary to save the jobs of thousands of Malaysians in MAS. That is what MAS and government would have the public believe.

And I don’t believe that.

Something has to be done now.

I prefer MAS bankruptcy. I wonder why they have waited so long to declare bankruptcy.

Bankruptcy is a free market solution. Allow MAS to fail and shift resources such as capital, labour, travel and insurance to marginally more productive activities.

It means the liquidation of bankrupt MAS and the sale of their remaining assets to more competent owners will correct debt and capital dislocation in the economy.

Changed hands and workers get employed in a different and more useful sector of the economy.

That, in turn would open up new companies, new opportunities, new jobs and new market competition.

This process of bankruptcy and liquidation without the correction of interest rate – which is itself a price and artificially low whenever the government steps into the picture – will not help MAS and the aviation industry to recover from unwise use of capital in the past.

My concern here is that the government has the power to intervene on behalf of bankrupt MAS to keep them from handing over their capital goods to more competent owners.

Malaysians need markets to work because they reward good businesses and punish bad ones. Efficient and nonpolitical.

To Malaysia Airlines System Employees Union (Maseu), if you really want to serve your customers by asking for government intervention to save MAS, then you are heading in the wrong direction. Failure is not the end of the world.

So don’t worry, it is abundantly clear Malaysians love to fly and travel with or without MAS.

People with sound economic sense know that this is true.

Maseu must remember that bailout is a very bad policy to prop up weak institutions – it sends a bad message to the market that you can take huge risks during the good times and keep all that profit, then get bailed out during the bad.

Bailout is a short term plan, prolonging the crisis rather than solving it.

So I really hope Malaysians will start thinking more about the long term, letting weaker companies fail so that the rest of us can get back to business

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16 Comments »

  1. EPF contributors can seek court order to stop EPF from bailing out MAS. Stop buying MAS shares.

    Comment by Martin Jarau — May 23, 2014 @ 11:07 PM | Reply

  2. When Singapore GLCs earn less profit the government is very concerned but in bodohland governed by Umnoputra idiots and crooks when MAS and other GLCs make less losses the government is bragging about how good they are. fcuk this stupid and highly corrupted Umno Baru dominated BN government.

    Comment by Mat Som — May 21, 2014 @ 7:03 PM | Reply

    • i could be wrong, but remembered a malayu wanna be chinese PIG ever said: if you dont like this country, please leave…LOL, then pui him !

      Comment by tiuniamah — May 22, 2014 @ 8:57 PM | Reply

      • Reduan Bin Abu Pig you mean?

        Comment by Martin Jarau — May 23, 2014 @ 11:09 PM | Reply

  3. In any business entity one need to profit in order to survive and sustain business operation. If you run any government linked corporations the same mode government servants operated the civil services it sure to fail in no time.Mismanagement of fund and lackadaisical attitude and aptitude on workplace is a sure ingredient to falling and bankrupting in any business entity. Save jobs for whom ? In any business there is no guarantee of any job security. It either you work hard for the money or you are left out losing your job. MAS need to learn from Tony Fernandez, the Airasia boss.

    Comment by otak bodoh — May 21, 2014 @ 1:55 PM | Reply

  4. MAS is like the prodigal son……. BN will be a forever a sucker

    Comment by Just concerned — May 21, 2014 @ 12:22 PM | Reply

    • The vanishing act of MH370:

      Comment by Richie — May 21, 2014 @ 1:37 PM | Reply

  5. Unanswered questions surrounding MH370, according to blogger Anil Netto (anilnetto.com):

    – Why did the Malaysian side initially refuse to hand over the cargo manifest to the Australian investigators? Why did it take so long for the cargo manifest to be released? We still do not know the origins of the lithium-ion batteries and the mangosteens that were supposed to be in the cargo.

    – If the RMAF radar showed the plane turning back over the peninsula, why did the search continue at the South China Sea, wasting time and resources?

    – Why were the Malaysian military told to merely keep an eye on the plane? and why were jets not scrambled to follow the plane to its destination or force it to land? Why was it allowed to leave Malaysian air space and radar detection? What was the chain of command in issuing the instruction to merely “monitor the plane”? (Hishammuddin’s explanation that the fighter jets were not scrambled because the authorities had no intention of shooting down a plane deemed to be friendly is tne of the most ludicrous statements I have heard. And he expects us to swallow that. Doesn’t he know that air force jets could have escorted the plane to safety or at the very least tracked it to its final destination?)

    – Why did the preliminary report fail to examine what happened at the RMAF radar centre in Butterworth and what instructions were issued to them from Putrajaya/KL? Why was the disclosure that the military were told merely to keep an eye on the plane and not to trail it not mentioned in the preliminary report?

    – Why was the search and rescue operation launched so late, after many hours had passed?

    Comment by Richie — May 21, 2014 @ 11:15 AM | Reply

  6. Sarawak Government should buy over MAS and we can develop our own link with the outside world rather then having to rely on the Federal Government who don’t understand the problems we are facing.

    Comment by sipaigong — May 21, 2014 @ 11:02 AM | Reply

    • No need to buy MAS lah. Sarawakian has already owned Malindo – Capt Ahmad Johan staying next to Satok Bridge. He also owns Airod. What for taking over a trouble company – you will disappear in a bottomless pit if you do.

      Comment by Ali bin Abu — May 21, 2014 @ 5:58 PM | Reply

  7. Talk only and testing the reaction of the majority … I bet they will U-turn with the excuse that it is the wish of “BodohLanders”

    Comment by tigerykey — May 21, 2014 @ 10:44 AM | Reply

  8. When the UMNO Baru Malays wanted to manage and grab the opportunity to have their hands in all GLCs this is what happening. All the GLCs shall fail but the appointed management team become multi millionaires . This has been what Mahathir wanted when he took over as PM.

    Comment by Bidayuh Headmaster. — May 21, 2014 @ 10:29 AM | Reply

  9. No more bailouts! Malaysia had lost too much on bailouts especially to Mamakutty related companies. Unnecessary wastage of taxpayers money. To Hell with it!

    Comment by Sharpshooter — May 21, 2014 @ 7:15 AM | Reply

    • Aiyaaa…..Just sell MAS to SIA lor. Better still change MAS to SIA……..Guarantee win win one. I believe PAS got no problems with stewardess wearing singapore kebaya

      Comment by looes74 — May 21, 2014 @ 12:09 PM | Reply

      • Ya lah sell MAS to SIA – Sibu International Airline. We have ready pilot- song koh – who have been injected out of soup.

        Comment by Ali bin Abu — May 21, 2014 @ 6:04 PM | Reply

        • we have a ready Major from air force to fly, he is now facing prosecution.

          Comment by tiuniamah — May 22, 2014 @ 9:16 PM | Reply


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