Causing a stir

Deputy Prime Minister for Economic Affairs Hong Nam-ki offered to resign to take responsibility for causing controversy over the revision in the tax code to increase levy on stock capital gains. President Moon Jae-in turned his resignation down. Whether it was a show or not, the fiasco underscores the poor state of the deputy prime minister in charge of economic affairs under the stubborn ruling party and shows that economic policies are mostly guided by political motives.

Hong handed in his resignation after he succumbed to pressure from the Democratic Party (DP) to maintain the current 1 billion won ($886,132) threshold for capital gains tax as demanded by the DP instead of lowering it to 300 million won. But his tendering of resignation has more to do with all the shame he endured from the presidential office and ruling party.

He mildly protested every budgetary increase, relief handouts and other policy interferences from the DP, but helplessly succumbed to the DP and Blue House every time. The Covid-19 emergency relief, which was originally designed to help low-income families, was given out to every household at the order of the DP ahead of the parliamentary elections on April 15. The finance ministry’s proposal to set guidelines on the public finance account has also been rejected by the DP which wants to continue implementing fiscal stimuli.

Former DP head Lee Hae-chan threatened to kick him out for opposing supplementary budgeting. The ruling party’s reckless populism coupled with Hong’s feebleness has caused the half-day to be a resignation fiasco. His public threat to resign looked not as a demonstration of willingness to defend the economy from political recklessness, but a childish whining for attention from his boss.

At the same time, the incident is more proof of how wrong policy direction can go if the highest economic policy chief had to publicly cause a stir.

He has earned the vote of confidence from the president, but how he can command policies with such weak leadership is questionable. But even if he is replaced, little will change. His predecessor Kim Dong-yeon also stepped down after he was repeatedly disregarded for opposing government policies. The ruling front has lost brakes after the party won a landslide victory in the parliamentary elections on top of a stubborn president. People only dread the consequences of populist policies under an impotent government and selfish ruling party.