The FTC’s wrong priorityWe are appalled by the new antitrust agency chief’s inaugural words. He is promsing to sack anyone who doesn’t remember that the agency’s primary role is to tame inflation. Fair Trade Commission Chairman Kim Dong-soo has turned the clock back to the days of authoritarian rule in the 1970s.
The FTC is an antitrust agency that controls order in the market. Its primary function is to prevent activities that hamper fair market competition and practices. Its role may extend to keeping an eye on price fluctuations that can jeopardize competition. The chief must have gotten his economic textbooks wrong to mistake the agency’s mission as controlling prices.
After just two days in office, the former Finance Ministry official said he plans to set up a task force to monitor consumer items with unstable prices and decide which items to keep tabs on.
Kim said he will devote himself to stabilizing prices and promoting growth and leave the fair trade administration work to his vice chairman. But just because the president has emphasized something, it doesn’t mean that any state agency head should jump up to take on the responsibility.
The government is not a group of school kids trying to score points with the teacher. The words Kim used are also unbelievable. He said he will weed out officials who are negligent in controlling prices and order demotions or other personnel actions.
We are not scorning his work ethic and passion for price stability, but the motive behind them. If a senior official works primarily to make an impression on his boss, he may go beyond his limits. We have seen the fallout from forced price controls in the past.
Moreover, prices cannot be tamed by a number of government officials. Even a former senior FTC official worried on his Facebook page that the antitrust agency has gotten its priorities all wrong, which could bring about catastrophic consequences.
The best way to rein in inflation is a hike in interest rates.
But the central bank is dragging its feet, apparently conscious of the president’s emphasis on 5-percent growth this year. But price stability is the Bank of Korea’s turf. If it does its job right, other agencies don’t need to think about it. Policymakers must get their priorities straight, especially when the economy has challenges.