The economy is all about politics
The economy is extremely political. We don’t even need to go back to the principle of economics to realize that the study of economics itself was created for politics. President Park Geun-hye’s latest moves show how politically charged the economy can become.
“It is regrettable that many citizens found the year-end tax settlement inconvenient,” she said in response to recent public outrage over changes in the tax code.
She also pressed An Chong-bum, the senior secretary in economic affairs, to add that “workers making less than 55 million won ($50,300) a year would never have an added tax burden.”
They must have had agreement in advance to use the word “never.”
That’s how it was all agreed on the spot that the National Assembly was to make a new law and retroactively apply it. It didn’t take time for her to apologize and settle the situation without leaving room for doubt. While some say the president has no other choice considering negative public opinion, I don’t think that’s how it worked.
Let’s compare it to the scandal over the behind-the-scenes power struggle at the Blue House. Park didn’t budge for two months as the media hounded Chief of Staff Kim Ki-choon and three close aides. Instead, at her New Year’s press conference, she defended Kim, saying he is a selfless man, and her secretaries, with whom no fault had been found. She didn’t apologize or try to settle the situation, which only amplified her image as a non-communicator.
Why does she have such different approaches? A president is not remembered for his or her politics, but for the economy. It’s the fate of a capitalist country.
Let’s look back and evaluate Korea’s presidents. Park Chung Hee is praised for making the country richer, and even strongman Chun Doo Hwan’s faults are glossed over by economic development. Roh Tae-woo’s northward policy also gets generous marks for economic interest. And if President Kim Dae-jung hadn’t earned a badge for overcoming the foreign currency crisis, his inter-Korean summit wouldn’t have been so celebrated.
Growing up at the center of power, President Park knows this better than anyone. She believes that success is contingent on reviving the economy. This equation must have captivated our nationalist president, making her ready to bend on financial issues.
It explains the revision in the tax law in August 2013. When attacked over the tax hikes on salaried workers, Park ordered lawmakers to reconsider the changes after four days. Those who know her tendencies found it absurd that she gave up so quickly. The first revision to the tax law is a bill that contains the administrative philosophy of the new administration. All policy promises are organized and arranged based on how taxes are collected and spent. But the president gave up on the tax law revision so easily: It means that she considered it a volatile economic issue.
So it’s understandable that she wants to talk about the economy at every turn. She also mentions unification, but this is secondary to the economy. Whenever she discusses reunification, she likes to call it a “jackpot.” An economic jackpot, it is. President Park looks at reunification as a one-shot solution to all the country’s economic issues, from the low birth rate to the aging of society to the risk of division.
But no matter how frequently the president mentions the economy, emphasizes her economic plans, advocates deregulation or pledges structural reform, the economy still has not responded. We all know the answer. Politics is putting a strain on the economy. No one in the political arena is budging; the president is raising her voice alone.
If she wants to revive the economy, she needs to change her methods. She needs to focus on politics, not the economy. She should entrust the economy to those who know it better.
Deregulation and labor market reform are such serious and significant issues that resolving either of them would make her known as a successful leader. A successful overhaul of the pension system for government workers would be the icing on the cake. And it is not just the economy that makes all this possible. It is politics. Who is the best person to handle politics? The president. She must persuade the National Assembly and sway the public to revive the economy.
By all means, the economy is extremely political.
JoongAng Ilbo, Jan. 29, Page 30
*The author is an editorial writer for the JoongAng Ilbo.
by Yi Jung-jae