[Viewpoint] Spurring growth to generate jobs

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[Viewpoint] Spurring growth to generate jobs

Advocating for ordinary people is the mantra in politics today. Both the ruling and opposition parties swear by it, hoping it will give them an image that is as voter-friendly as possible. The new head of the ruling Grand National Party declared that the party will compete with the opposition on policies catering to ordinary people.

Next year’s general election in April and presidential election in December will likely turn into populism contests. The government is also part of the chorus. In fact, the Lee Myung-bak administration could play the lead, having cited policies for “ordinary people” as a top priority on the domestic front.

The government attempted to reverse its falling poll numbers by putting forth populist measures from the second half of 2009 after it was hit with a nationwide protest against American beef imports and the global financial meltdown in 2008. The first measures were raising the supply of affordable housing and providing microfinancing for the self-employed. By borrowing the popular “for-the-people” banner cry from the opposition, the government was rewarded with higher approval ratings.

But last year’s by-elections and local elections earlier this year turned the tide in favor of the opposition, which was rewarded when it renewed its promise of free school lunches. The ruling party struck back by proposing to cut college tuition in half with government subsidies.

The populism contest is out of control. With political parties and the government all competing to come up with ever more populist policies, ordinary Koreans should be the happiest people on earth. Their days of toil and frustration may be over.

What it basically comes down to is policymaking focused on ordinary people to make their lives better in every way. Populist or not, if the policies genuinely improve the lives of ordinary people, nothing could be better.

But the question is, what genuinely benefits ordinary people? Will offering free school lunches in rich neighborhoods and halving university tuition for all really help ordinary people? The array of proposals packaged under the “for-the-people” banner, in fact, is a derailment from the principle of “fair distribution” and does little to help the majority of ordinary people.

The boost in “affordable housing supply” ended up disrupting the housing market and sent rent prices through the roof.

The late former President Roh Moo-hyun - who long prided himself as “the president of the people” - had the best “for-the-people” policy. He had said that creating jobs for ordinary people was the best welfare and policy for the public.

President Lee Myung-bak and Sohn Hak-kyu, the leader of the main opposition Democratic Party, agreed with this panacea. If the president and politicians from the ruling and opposition camps know the way, there should be no problem. But in reality, knowing and acting are different things. The debate on creating jobs turns into welfare issues, and plans to deregulate to spur jobs are pushed aside due to opposition from various interest groups. They instead disguised expedient welfare proposals as “for-the-people” policies.

Jobs sprout from a healthy economy. A languid economy cannot generate jobs. An economy grows when companies invest, consumers spend and exports increase. A versatile and expanding economy increases jobs. Strangely, the government is pushing policy in an opposite direction. It plans to place a higher priority on containing consumer prices than it does on boosting economic growth. It may believe that stable prices will do more to help the lives of ordinary people than would economic growth.

The government is worried that inflation is hovering above the annual threshold of 3 percent. But such a level is not dangerous enough to warrant forsaking policies that would spur economic growth. The government is deluded if it thinks the economy is strong enough to generate growth on its own. The growth rates during recent years are mostly illusory rebounds from poorer performances from the year-before period.

It is not time to worry about inflation due to overheating. Inflation had remained at a safe level when our economy grew at rapid pace in the past. What the government should refocus on is its role in spurring growth to generate jobs - if it really cares for ordinary people as it says it does.

*The writer is an editorial writer of the JoongAng Ilbo.


By Kim Jong-soo
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