Dangers of disinformationWhat was the basis for President Moon Jae-in declaring 10 days ago that the economy was recovering? The February industrial data from Statistics Korea released on Friday show the opposite. Output sank 1.4 percent from a year ago and retail sales was down 2 percent. Facility investment plummeted 26.9 percent — the biggest fall since the 28.9 percent in January 2009 soon after the Wall Street meltdown in late 2008. The coincident and leading indices extended losses for the ninth month in a row, the first time since the data was first reported in 1970. The data don’t suggest a recovery.
The president was clueless. Chairing a cabinet meeting on March 19, he said he was relieved that the economy was improving as output, consumption, and investment all have rebounded. He was referring to marginal increases in output and consumption in January. But capital investment in January slumped 17 percent on year. The Korea Development Institute also highlighted that the recovery in private consumption was fragile. The data do not suggest a solid recovery.
In the cabinet meeting, Moon was also buoyant about employment data in February, when 263,000 jobs were added year on year, the biggest jump in a year. But that too was misleading. The job additions were mainly precarious part-time work for those aged 60 or older. The number of employed in 30s and 40s, the core working population, fell by 246,000 in February, while the unemployment rate for those aged from 15 to 29 hit an all-time high. The International Monetary Fund warned of short- and mid-term headwinds in the Korean economy. Moody’s Investor Service cut growth outlook for the Korean economy for this year to 2.1 percent.
The president has been mistaken about the economy for a long time. Despite the toll of minimum wage rises, he claimed the moves were 90 percent positive. He blamed the media for misrepresenting the economy and hyping a looming crisis. He sounded as if he has never seen or been briefed about the worsening data and troubling external developments. Many suspect aides have been feeding him misinformation.
We cannot expect a suitable policy if the chief of state is so out of tune. Misinformation can undermine the credibility of the president. Those who distort facts in reporting to the president must be identified. Aides who hide the truth from the president can guide the country the wrong way. The economy faced default in 1997 because aides kept the truth about the economy from President Kim Young-sam. Past mistakes must not be repeated.
JoongAng Sunday, March 30, Page 34