Debate on economy was underwhelming

By Kim Tong-hyung

The economy is likely to be the number one issue on voters’ minds when they mark their ballots on Dec. 19. Too bad neither conservative favorite Park Geun-hye nor opposition rival Moon Jae-in has provided much reason to believe they have what it takes to revitalize the current weak economy.

The two squared off over economic issues in the second of their three pre-election debates Monday night. Also on show was snarky leftist candidate Lee Jung-hee, whose forceful presence on television defies her sub-1 percent support.

The latest debate represented a marginal improvement from last week’s opener when Park and Moon cautiously danced around North Korea and foreign policy issues to the background of Lee’s verbal circus, leaving viewers with not much other than the realization that their lives got two hours shorter. Still, those who had hoped for sophisticated exchanges on jobs, welfare and taxes were probably unsatisfied.

Other than some heated exchanges over big business and health care, Park and Moon rarely hit their opponent where it really hurts and seemed unable at times to drive home their message with authority. That’s probably because they had to work around millions of people who want to have it both ways _ showered with welfare benefits but exempt from taxes.

Both Park and Moon are guilty of selling the illusion that their governments will be capable of taxing small and spending big.

Park continued to speechify about her plans to bulk-up the country’s middle class, which she claims will eventually account for 70 percent of all households should she move to Cheong Wa Dae. In a bizarre twist, she joined her biggest troll, Lee, in claiming that the government should be responsible for burdening some of the liabilities of indebted households, a next to impossible idea in the conventional realm of conservative politics.

Moon could have asked his opponents whether they were intending to encourage delinquencies and penalize the families that had been prudent enough to repay their borrowings, but he didn’t.

He could have also asked Park how she plans to come up with the 135 trillion won (about $125 billion) for rebuilding the middle class and 18 trillion won for defusing the household debt threat when she continues to resist a tax rise as a viable policy option to this end. But Moon decided to pass that layup as well.

Perhaps Moon didn’t want to talk too much about money, especially when he has also failed to provide specific plans to finance his welfare pledges, including an ambitious plan to set a 1 million won per year cap on health insurance fees and broaden coverage for low-income earners.

Moon does admit that a tax hike is inevitable but has yet to provide a detailed scheme of how the burden will be distributed across different income brackets. He seemed reluctant to touch the tax issue with a barge pole on national television.

Another letdown was that Park and Moon spent too much time debating about ``democratizing’’ the economy, highlighted by reforming the chaebol, the country’s mighty family-owned conglomerates frequently accused of monopolistic behavior and illegal wealth transfer to their owners.

It seems that the chaebol issue is quickly becoming a boogie man for politicians and the media to play with as discussions between the candidates continue to spin out of the context of growth, jobs and entrepreneurship and more toward ethics 101.

While Park insists that any changes enforced on chaebol should be kept within the realm of fair trade regulations, Moon is more aggressive about changing the ownership structures of the companies.

His plans are highlighted by stemming the practice of ``circular’’ equity investments, which allow the firms to weave a complex system of corporate ownership that accelerates the transfer of wealth and management to their founding families.

For example, Samsung Electronics Chairman Lee Kun-hee, the owner of the Samsung Group, controls 20.76 percent of Samsung Life, while Samsung Everland, the fun park manager that doubles as the essential holding company of the group, is the second-largest shareholder with a 19.34 percent stake.

The majority shareholder of Samsung Everland is Lee’s son, Jae-yong, recently promoted to vice chairman of Samsung Electronics. The majority shareholder of Samsung Electronics is Samsung Life with a 7.47 percent share.

To summarize the dizzying numbers into a single sentence, Lee is maintaining dominant control over his corporate empire by leveraging the assets of Samsung Life’s insurance customers.

Should he become president, Moon will give Samsung a grace period of three years to sell an 18.5 percent share of Samsung Everland currently divided between Samsung SDI, Samsung Electro-Mechanics, Samsung Fire and Marine Insurance, Samsung Card and Samsung Corp. It would also need to find takers for the 7.4 percent share Samsung SDI holds in Samsung Corp.

Depending on who would be buying these shares, there is a possibility that the Lee family finds its grip over its business group loosened.

Park missed an important opportunity to argue in front of a national audience that it would be impossible to execute a move of such magnitude within three years.

As the conservative candidate, she could have also asked Moon whether combating chaebol-related problems is really a top priority when it’s unclear how banning circular equity investment would create more jobs and whether there is anything to be accomplished immediately by slicing up a chaebol into many pieces.

But she didn’t.