Time for Plan B

We might as well give up hope. We had hoped the presidential candidates would articulate a vision to revive the sagging economy and create decent jobs. But our candidates are still too preoccupied with political games to have any serious thoughts about the looming problems of rapid economic slowdown and potentially explosive unemployment.

Whoever takes the seat, the new president will be faced with the immediate test of restoring the economy and increasing jobs. The candidates all speak of honorable and ambitious plans like reforming politics by expanding democratic practices in economics and social welfare to promote a new type of society.

But he or she would be tasked with more urgent work upon inauguration in February. What could be more important than heeding the cries of the people struggling every day without income or work?

President Kim Dae-jung had to shelve all his grand reform plans to fight the liquidity crisis upon inauguration in 1998. President Roh Moo-hyun put away his campaign promises to quench the spread of credit card insolvencies. President Lee Myung-bak had to kiss goodbye his rosy promises on the economy when faced with the global financial meltdown in 2008.

The three most recent presidents spent the first year combating a crisis and had no time to deliberate on their campaign promises. But nothing is more urgent than the livelihood of the people. The incoming president will face the tricky and unprecedented test of tackling a prolonged slowdown.

The economy may not be in immediate life-or-death crisis, but nevertheless it is moving toward its own doom by slowly debilitating to the point of losing all energy for a revival.

A candidate with any sense can read the dangerous signs in the economy and warn the people. He or she should give an honest diagnosis and prescription, and then seek cooperation to jointly fight the crisis. He or she should also deliver words of hope and confidence to muster resources to put the nation on the path to sustainable growth. But there is no such leader among the candidates. All they utter are popular promises to woo voters.

The presidential candidates might be turning a blind eye to impending danger for two reasons. They could be blinded by political math. To them, it may be more urgent to seize power. The talk of waning growth potential may sound too far-fetched. Or they could be thinking there is no concrete solution to the problem. They lack a magical wand to make the economic troubles go away, to create new jobs or deliver a visionary long-term plan. Since they have no action plan, they cannot ask the people to help them to rebuild the country regardless of the painstaking sacrifices.

It is not that the candidates are entirely without policies on nurturing growth and jobs. But they fall short of details, and their ideas are mostly rhetoric and textbook theories. No one can know precisely the problems and dangers the economy faces. Since they cannot identify the troubles, they cannot provide the correct prescription. It is why their statements on the economy lack persuasiveness.

Now we cannot hope for a visionary leader who can steer the country away from danger, it is time to prepare for a Plan B. We need to come up with a secondary action plan now that we have to throw out the notion of strong leadership.

Since we cannot expect a competent leader and administration to do the emergency work, each one of us would have to seek our own survival scheme. We first of all must entirely fold any expectations from the new leader. Instead, we should study our problems and options.

If the economy slows and falls into a lengthy recession, incomes will be reduced and jobs will be at risk. We may lose our jobs without any hope of finding a new one. We need to brace for hard times and find a way to survive with less or no income for a lengthy period.

We best not rely on all the social welfare promises by the presidential candidates. If the economic downturn is prolonged, there is no way to raise new funds to finance new welfare programs. So we are left on our own to muddle along. We would have to re-examine our senior-age plans. Interest rates will fall, and yields on various investment funds will be low.

Companies have already positioned themselves for a secondary plan. Large manufacturing and financial companies have shaved investment plans amidst business slowdowns and anti-corporate sentiment. Some have already begun cost-cutting efforts.

Reduced corporate investment could further dampen consumer spending and domestic demand. The economy can shrivel and invite deflation.

Since we are in a contingency situation, we best prepare ourselves for the worst-case scenario. It might be more sensible to expect the worst instead of being vainly hopeful. We may come to the depressing realization that surviving is winning.

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

by Kim Jong-soo