[INSIGHT]Think Politically, Get Economic Results

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[INSIGHT]Think Politically, Get Economic Results

The "discomfort index" is based on temperature and humidity levels. The discomfort reading is high these days in Korea - but it's not just because of the weather. The discomfort index I am talking about has been exacerbated by friction between Korea and Japan, the government and the press and among different press organs. Uneasy politics adds to our sensation of discomfort.

Economists also recognize a "misery index," calculated using unemployment and inflation rates. Households and companies cannot help registering a high misery index these days, as the economy sags and there is no sign of recovery.

The two indexes feed off each other. When there's a high misery index, it adds to the discomfort index. If the government feels itself under pressure to resolve economic problems and achieve progress with North Korea, the discomfort index will rise.

The relation between the misery and discomfort indexes has a big influence on the economy. If a regime which feels a high discomfort index picks out a scapegoat to blame, the misery index goes up, which causes the discomfort index to rise further - contrary to the regime's expectations. If a regime tries to lower the misery index awkwardly or clumsily, the regime may be rewarded with short-term relief on the discomfort index, but problems will be passed along to the next regime.

The experience of a senior secretary to the president for economic affairs - who was especially exposed to the discomfort index - illustrates the relation between the misery and discomfort indexes.

During the Kim Young-sam administration, a senior secretary for economic affairs found himself on the receiving end of a harsh four-letter curse from the president after speaking frankly to him about the economic situation. Other secretaries were treated almost as roughly.

President Kim Young-sam did not have any senior secretaries for economic affairs whom he trusted fully, and the economy was not his top priority. This, I believe, led to the consequent financial crisis and passed along the high misery index to the Kim Dae-jung regime.

Former President Chun Doo-hwan saw the economy as his top priority and gave his full trust to his senior secretary for economic affairs, even dubbing him "the president when it comes to economic affairs." President Chun did not change his economic secretaries often, and the next regime inherited an economy in reasonably good shape - though he was not so successful in other areas.

With every new regime, the economy fluctuates, and right now it is causing the current regime some major discomfort. As the misery index of households and business swells, the regime prickles ever more with discomfort.

What I am wondering now is about the weight given to the role of the current senior secretary to the president for economic affairs. In the midst of the economic storm currently afflicting our region, I wonder whether the president and the economic secretary are eager to put the economy on the top-priority list and to act to lower the misery index fundamentally, even though it will require time. Or perhaps they are more interested in constructing a flimsy curtain to temporarily shield the public from discomfiting sights?

When a regime changes, former senior economic secretaries are usually at risk of becoming a victim of the new regime. Their bank accounts are investigated and some of them are punished by law. Perhaps they are being made a scapegoat for high discomfort with the former regime.

If they have done nothing illegal, the policy judgement of officials could be the basis for legal punishment. Fingering officials for the crimes or failings of a regime means those who follow in their footsteps will be afraid to act - and will be powerless to prevent the people's misery index rising.

Only by reducing the political discomfort index will people be allowed to act to reduce their misery.


The writer is the economic news editor of the JoongAng Ilbo.

by Kim Su-gil

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