[Editorial] No More Leftist Policies

It is not an overstatement to say that the main reason for the stagnant economy and fluctuating real estate market is that policymakers are caught up in leftist ideology and are conducting a losing fight with the market. The class approach that aims to control the Seoul Gangnam area without considering the market’s supply and demand structure, punitive heavy taxation, and regulation-oriented policies have brought on a governmental failure.

The government announced yesterday at a real estate policy conference presided over by President Roh Moo-hyun a roadmap to increase the supply of housing, but it is questionable whether the market will stabilize given public distrust. Those who drew up the August 31 real-estate policies last year mentioned, “Housing has the characteristic of public property,” and launched a round of anti-market taxation and regulations. By only considering the depression in demand, they did not consider increasing supply through the relaxation of regulations for renovation and reconstruction, or building new towns around the Gangnam area.

Even while building Pangyo, the government ignored the actual demand in the market and pursued its own policy brand in increasing housing for the poor, resulting in a jump in the number of larger apartments in Gangnam. Revealing the original cost of apartments may seem reasonable, but it may result in higher prices for high-end housing.

Leftist policies regarding companies are also problematic. Gwon Oh-seung, head of the Fair Trade Commission, said, “Samsung, Hyundai Motors, and SK Group are owned by individuals, but they are companies of the people,” and announced that they would strengthen restrictions on speculative investment. Gwon said, “If conglomerates fail, the nation has to pay for the public costs.”

There is no one answer that is ideal within corporate governance. Kia Motors, which used to call itself a people’s company, became unstable due to the moral degeneration of its employees. As a result, large amounts of public funds were invested in it. As Samsung has developed into a global company, certain factions of society call for restrictions on Samsung. But it is one of the few companies with global competitiveness. Experts say that Samsung’s success was made possible because it had “One owner who could make timely investment decisions aggressively.”

If the Fair Trade Commission strengthens the regulations on investment, conglomerates will be exposed to aggressive merger and acquisition attempts by foreign companies, and new investments will be discouraged due to the guarding of management. In this case, companies for the people may fall “prey to foreign speculative capital.”

It should be acknowledged that incompetent, anti-market, anti-company leftist ambitions are the main reasons for the government’s economic failures.