[Viewpoint]Let the ministers ministerThe late U.S. President Ronald Reagan didn’t know much about economics even though he became famous for his economic policy called Reaganomics. In fact, his knowledge of economics was close to zero.
Donald Regan, who served as the secretary of the Treasury and chief of staff in the Reagan administration, was stunned to see the president’s ignorance on the matter.
Regan later said that Reagan never had a one-on-one discussion on economic philosophy or financial policies.
That is understandable, when looking into the life of Reagan, who started as a mediocre actor and rose to the presidency. He had little chance to learn economics or draw up economic policies. He did not have systematized knowledge on the economy or a decent economic philosophy.
All he had was a strong determination and motivation to restore the U.S. economy.
Apparently, Reaganomics was not masterminded by Reagan.
Reagan’s po;icy is called supply-side economics. It is a macroeconomic theory that if supply is encouraged by incentives such as substantial tax cuts, the economy grows efficiently.
In 1980, Reagan borrowed this idea and made it his pledge. Instead of using difficult economic terms, he gave a new, friendlier name to the theory. It worked. This is how Reaganomics was created.
There is no way to see how much Reagan understood Reaganomics himself.
However, he, as a former actor, excelled in delivering the theory to the public, mostly because he read scripts that his aides had written, over and over.
Anyway, he was considered to be a successful president.
He was good at picking good ideas and finding competent officials and aides. He did not look into the details of economic policies. If he thought a certain policy was good, he left the details to cabinet secretaries and aides.
He then brought the final version to Congress and persuaded the people, jobs that he excelled in.
Korea’s President-elect Lee Myung-bak follows MB-nomics.
The media gave his economic program that name and Lee doesn’t seem displeased with it. MB-nomics is aimed at encouraging growth by easing regulations and cutting taxes.
It is a coincidence that MB-nomics looks similar to Reaganomics.
Lee is also strongly determined to restore the economy.
But these are the only similarities and the rest is different.
First, unlike Reagan, Lee understands the economy well. At least, he thinks he does. He studied business in college and was a successful CEO who started from scratch to rise to the highest rung on the ladder in the actual field of business.
Thus, he is determined to take care of economic policies on his own. But this is precisely why some are worried.
The fact that he knows the economy well doesn’t necessarily guarantee his economic policies will work.
The lineup of the economic team of the Lee administration was released. The composition of the cabinet revealed many flaws and problems, but the lineup of the economic team is likely to remain unchanged. Still, the head of the economic team is nowhere to be seen.
The position of economic deputy prime minister was abolished so the minister of finance and economy can’t be the head of the economic team.
It is said that the Blue House will adjust economic policies and draw mid- and long-term policies but it is doubtful that presidential senior secretaries, which are at the same level as vice ministers, will be capable of undertaking all the tasks.
It is very likely that the president will take charge of deciding most policies, especially the ones in the field that he is good at.
However, once the president makes up his mind on a certain policy, it is difficult for others to oppose it.
A good thing is that the president will have enormous driving force as a commander who fights on the frontline. It will be very efficient if things go smoothly.
However, if a wrong decision is made or results are not good enough the president will take all the criticism. One wonders if it is necessary to take this risk.
A resolution to this problem is to have a buffer to absorb shock. The president can decide a direction to follow and the rest can be left to ministers. Then, the president steps back, encourages ministers and aides to do their best and if things go wrong the president can ask the officials to take responsibility.
Appointing the minister of finance and economy as the head of the economic team is one way to give him more power.
A general doesn’t need to excel in shooting. To train and encourage soldiers to master shooting is a general’s job.
*The writer is an editorial writer of the JoongAng Ilbo.
by Kim Jong-soo