[EDITORIALS]Fix flawed policies firstThe government again came up with a new real estate policy yesterday, only a week after it announced the previous one. It adds another anti-speculation measure to more than 30 small and large such policies since the incumbent administration took power. It is now almost impossible to count how many measures have come out. Given that the government has kept announcing new countermeasures since its Aug. 31 measure, which was considered the most definitive ever, it seems evident the administration’s anti-speculation policy is a failure. However, when the government has already bombarded the country with regulations and taxes, an admission of failure seems meaningless.
The reason the countermeasures have proved ineffective is because there has been no prescription or reflection. That has led to a vicious circle of false measures and stopgap prescriptions. Policy administrators, giving no consideration to the effectiveness of measures or complaints from the public, have followed what the president says, like a herd of oxen rushing ahead with no fixed direction. The policymakers have run for a while and have now been reprimanded for being on the wrong path, but have no idea where they went wrong.
The fundamental reason for the failure of the real estate policy is that the government targeted a wrong goal and stuck to regulation-driven policies, ignoring the market. Looking back, at the time this administration was launched, the real estate problem was not as dire as now. It was just that prices of some apartments in Gangnam, or southern Seoul, kept going up. The government also said that phenomenon was confined to a highly restricted area. However, the issue suddenly became the biggest policy task as President Roh Moo-hyun proceeded with a project to challenge the notion that housing prices in Gangnam would never go down. The countermeasures that have come out so far are the result of efforts that the government has made at the risk of its existence to quell housing prices in Gangnam, which bear no relevance whatsoever to a stabilization of house prices for ordinary citizens. A variety of regulations and punitive levies and taxes were mobilized to pressure the market. In the hide-and-seek game between the market and the government, the government was defeated resoundingly.
The government should drop its hastening mindset in the first place. Instead of sticking to existing policies or coming up with new ones, modifying those that went wrong should come first.