Preventing ‘economic deaths’
The author is the head of the fol:in team of the JoongAng Ilbo.
“A crisis is harsher for those who are not well-off. If you sell your house and car to get over the crisis, harder times await,” said former Deputy Prime Minister for Economic Affairs Lee Hun-jai. He said it in his memoir for the JoongAng Ilbo in 2012. Nicknamed a “trouble shooter,” he served as the head of the Financial Supervisory Service during the 1997 currency crisis.
A crisis clearly separates the haves from the have-nots, both for businesses and individuals. After the foreign exchange crisis, companies with large debt collapsed and poor people were driven to the edge. The 2008-09 financial crisis was not much different.
The ongoing chaos we are experiencing today will leave similar wounds. It is chaos that we haven’t experienced for a while — or have never experienced. No one knows when this will end. Schools closed, offices are empty and streets are quiet. Some small business owners already gave up. An owner who runs multiple bars has suggested some of his employees take unpaid leave, not to mention firing some.
Where can these people who lost jobs start work again? The crisis of small business owners is only the beginning. The plummeting stock market is the prelude to uneasiness. When money flows out, unhealthy companies will be first to be shaken.
Literal death is not the only serious risk. “Economic death” will begin. When I called Lee on March 17, he warned, “Death is of course serious. But more people will suffer economic injury or face [economic] death than those who get the disease. Hundreds of thousands of people will be pushed to the cliff’s edge.”
An epidemic requires prevention and treatment at the same time. An economic epidemic is not much different. Those who are irreversibly hurt cannot be resuscitated by stanch or emergency measures. A big wound will be left after a full operation. That’s why the economy requires epidemic prevention. As he wrapped up the conversation, Lee said, “A more clear and preemptive measure is needed for the economy. I hope the government wouldn’t miss the timing.”