Ham-handed and tone deaf

Koh Hyun-kohn

In 2007, Hanwha Group Chairman Kim Seung-youn was charged for beating up karaoke bar workers for hitting and insulting his son. Hanwha held an emergency meeting to deal with the crisis. The public relations team believed their boss had to admit his misbehavior and offer a sincere apology. The legal team was confident that it could handle the matter in court. Kim took his lawyers’ advice. He decided to stick his nose up in the air and went on as if nothing happened.

But a scandal of that proportion can never be kept in the dark. His arrogance backfired and cost his family its previous reputation as well as the business.

Kim might have avoided being so reviled if he simply apologized for losing his temper and blamed himself for being an overprotective father. His advisers assisted him badly. Business tycoons are in the spotlight as much as celebrities. They are both resented and envied. His story had every element required for bad publicity. He and his assistants underestimated the public and just flipped through a stack of legal papers. They would have been better off reading the newspapers.

The government often makes matters worse because of poor judgments and miscalculations. The scare over mad cow disease in American beef imports following Seoul-Washington beef talks in the spring of 2008 was a perfect example. The government downplayed a mad cow scare that had schoolchildren joining parades of street protesters. Bureaucrats laughed at the paranoia, saying Americans have no problem eating chunks of rare beef.

They were not entirely wrong. And they believed they would be easily forgiven in President Lee Myung-bak’s honeymoon period. But things only got worse. Lee had to bow his head and apologize to the people after just four months in office.

What went wrong? The administration failed to connect with the people. It thought it could tame the public’s views. The people would have understood if the government bothered to do some more explaining and persuading. The entrepreneur turned president thought he could run the country as a CEO. But presidents do more than bark out orders.

The government of President Park Geun-hye doesn’t seem to have learned from the mistakes of Lee. Last summer, the economic team under Hyun Oh-seok, the deputy prime minister, announced revisions to the tax code that would increase income taxes on a large slice of the middle class. Despite the obvious potential for public resistance to a hike in the income tax, the government didn’t even test public opinion in advance. Cho Won-dong, the senior presidential secretary for economic affairs, fanned public rage by brushing aside objections and quoting French bureaucrat Jean-Baptiste Colbert: “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing.”

Taxpayers don’t like being dismissed as hissing geese. The government had to withdraw the plan in just a few days. The economic team lost face and credibility.

Still, the economic team failed to get its act together. It never recovered its administrative sensibility. When a major breach of personal data occurred from three credit card companies, the deputy prime minister in charge of the economy said consumers should have been more careful with their private information. Consumers should be careful, of course, but in fact none had been careless in the least. The card companies were the careless ones.

The economic team continues to foul up. It suddenly announced that it will levy taxes on rental incomes in what it claimed was a way of stabilizing and rationalizing the real estate market. The announcement killed some small signs of recovery in the property market. If it only thought the policy through, it could have easily realized such a downside risk. But that wasn’t done. The team was as oblivious to basic human psychology as the executives at Hanwha Group.

Economic bureaucrats are on an elite level in our society. They graduated from the best schools and are mostly devoted to their work. They may get discouraged by missteps that lead to a flurry of criticism. They work around the clock, travelling between Seoul and the new administrative mini-capital of Sejong City, only to be pummelled for everything they do.

It’s not too late to turn their reputation around. The economic team should work on public policy from the perspective of the people. Officials should spend some time out of the office to think out of the box. What is needed is administrative sense and good judgment.

JoongAng Ilbo, April 7, Page 28

*The author is business editor of the JoongAng Ilbo.

By Koh Hyun-kohn