Where are the MB-nomics?The government’s economic policies are contradictory, oftentimes sending messages that have exactly the opposite meaning.
The baseless “September crisis” rumors are one of the reasons that our economy is stumbling. The external climate has worsened, with oil prices skyrocketing and insecurity in the international financial market.
But as important macroeconomic factors, such as the exchange rate, consumer prices and the growth rate, keep fluctuating, government policies don’t seem to be taking any effect. They are simply not working.
Regulations governing exchange rate policies are being changed. A tax cut plan has been revealed, but the market hasn’t welcomed it as expected. The core change, a cut in corporate taxes, has been postponed, so the effect has been reduced. The administration’s promise to be business-friendly is now ringing insincere. In principle, unfair practices by companies should not be tolerated. However, it is hard to understand why the prosecutors’ office and the national tax office are targeting companies when the economy is in such bad shape.
The policy on easing regulations in order to induce investment in equipment also makes little sense. What companies want most is fewer regulations in the metropolitan area, but that is not included in the plan.
Some policies appear incomplete. Tax cut measures must be followed by policies to make the government smaller.
But priorities such as reducing the number of civil workers and privatization of public corporations have become stuck in a political quagmire.
In the last six months, the grand concepts of advancement and pragmatism have been tarnished. Advancement has lost its meaning as the administration addresses a cross-country waterway project, which reminds people of the president’s bulldozer-like governing style, and as the government pursues a policy to sustain the bubble economy in the real estate market.
Confusing economic policies make pragmatism look like nothing but a temporary measure. Economic insecurity is likely to continue for a long time. It can be resolved only when the financial chaos in the United States is settled and oil prices go down.
The government must go back to principles: its MB-nomics. It must forget political excuses and instead concentrate on easing regulations and carrying out reforms in public corporations to change the market for the better. Only then will companies increase investment and create more jobs.
It may be painful, but now is the time to focus on improving the characteristics of our economy. Confusion in the policies only increases pain and cost. The government must sort out its contradictory and confusing policies.