[OUTLOOK]Umpires Shouldn't Join in the Contest

"The government should pay attention to whether the game is lively and if players are observing the rules. But the umpire should not participate in the game. If he does, who would umpire the umpire?"

This is a counter-question that James Ramsey threw out during an economic forum instead of an answer to a question about government intervention in the marketplace. It's common sense that umpires should not be players.

Spectators can jeer at the umpire's bad calls and protest them. But a wrong call usually isn't reversed right away. When the umpire is the mighty government, who dares to judge the umpire?

New stock investment products that trigger disputes about their feasibility will be introduced into the market sooner or later. If employees and self-employed workers buy the new stock products up to a value of 50 million won ($38,400), they will get a tax cut amounting to 5.5 percent of the invested money in the first year and 7.7 percent in the second year.

The ruling party that put forth this plan, the opposition parties that agreed to the plan without active opposition and the government that accepted the plan without complaining, even though it knew about problems related to new products － all of them broke the rules of common sense. Of course, they can explain that the new products are a substitute of "employee stock savings" that will expire at the end of this year. But we have to examine closely who the target buyers of the new products are, taking into consideration that 46 percent of our 10.2 million workers are currently living under the tax exemption point.

In the original draft, if investors were to lose money in the new stock products, the government would have made up for the entire loss. But the ruling party scrubbed that idea from the final draft because of fears about disastrous results. The ruling party once discussed coming up with measures to make up for the loss that investors suffered while investing in start-up companies.

Wow! Korea is a really great country!

If the government compensated for losses from stock investments, all the stock markets in the world would begin to laugh. Then foreigners would feel angry because they could not buy Korean stocks. They would ask the Korean government to grant them the same benefits, citing a World Trade Organization clause that bans discrimination against foreigners. The government would have to give tax money to foreign investors who bought Korean stocks and suffered losses.

The government and politicians from the ruling and opposition parties surely know well that investors themselves have to be held responsible for any losses and gains in their stock investments. Why then did politicians and the government unreasonably try to push the plan through by brute force? Before taking office as Deputy Prime Minister for economy, Jin Nyum said in a round-table discussion with reporters that he would not use any artificial measure to boost stock markets, if I remembered correctly.

At that time, Mr. Jin seemed to see the problems the right way, but these days he mentions measures to boost stock markets whenever he has the chance. I don't know if Mr. Jin studied different economics thereafter or higher powers shattered his convictions.

President Kim Dae-jung issued a plea to Koreans not to sell stocks but buy more stocks after the terrorist attacks in New York and Washington. Accordingly, presidents of security companies campaigned for stock buying. It is praiseworthy that President Kim has an interest in stock investors, because they are also Korean citizens.

But I think there are more urgent problems than coming up with measures to make up for stock investment losses. Rumors are spreading that with the queer plan, the ruling camp is aiming at wooing votes for the elections next year.

I know well how much a stock price surge would positively affect our economy. But if the government boosts stock prices artificially and lures people into stock markets carelessly, it is highly possible to drive people into dangerous speculation, even if by some miracle there were no other long-term bad effects of such a policy.

The umpire should remain as an umpire and should not participate in the game as a player. To tell the truth, stock investment is an act of speculation. So there is no innocent trade in the stock market.

This comment is meant to preempt a common complaint: everyone who suffers losses in stock investments claims he is an innocent victim. He is not. This is not only my opinion, but the remark of Louis Brandeis, a U.S. Supreme Court justice in the 1930s, whose name is widely known as also the name of a prestigious university in the United States.

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The writer is an editorial writer of the JoongAng Ilbo.

by Joseph W.Chung