[EDITORIALS]Prescription for growthThe government is working on economic policy for the second half of the year as prospects for recovery seem increasingly distant and growth continues to lag. We have probably just gone through the worst labor disputes that have shaken the country this year. The president himself has said it is time to concentrate on the economy. So we hope the government is determined to pull its resources together to help the economy.
Prospects for growth are good, with the U.S. economy poised to pull out of its downturn, and severe acute respiratory syndrome under control. But uncertainty over the domestic economy sustains the decline in consumption and investment. Labor-management conflicts and wavering on policy caused some people to wonder whether the nation’s economic foundation was in worse shape than during the financial crisis of 1997-98.
The problem with a situation like this is that it is inherently difficult to gauge clear signs of a recovery within short intervals. But it is necessary to try to maneuver for a soft landing by adjusting the rate of consumption and decline in investment, factors that could stall the economic engine. The government is pushing for a supplementary budget and a tax cut on automobiles, but there should be additional measures for the second half of the year to encourage spending and investment.
This government brought some of the problems on itself early in its term by mishandling some social issues, such as the labor disputes. If it is indeed serious about the economy, the government should make sure some other problem does not aggravate the situation. For a start, the government should stand firm on future illegal labor strikes and make clear to unions its position on the 40-hour workweek and the treatment of temporary workers.
It should rally around the deputy prime minister for economic affairs and show leadership. Politicians should stop squabbling and work on the free-trade agreement with Chile, which awaits ratification, and other bills that affect the economy. This would stop criticism that politics impedes the economy.
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