Professor Choi Bae-geun Criticizes Lee Jae-myung Administration's 'First Button Swamp' and Policy Failures…Points to Chaebol-led Economy, Deepening Inequality

Professor Choi Bae-geun strongly criticized the Lee Jae-myung administration for falling into a 'swamp of wrongly buttoned first buttons.' Professor Choi pointed out that despite President Lee Jae-myung presenting 'a great world of suppressing the strong and supporting the weak' as the spirit of the times, over the past year, his remarks about the weak and justice remained mere words, and his actual actions were driven by the power of money. He analyzed that this policy direction led to the current problematic situation.

He argued that President Lee Jae-myung does not properly understand the demands of the times, and this is a core problem of the administration. He stated that the spirit of 'suppressing the strong and supporting the weak' is not being practiced, leading to results far removed from the public's expectations. Professor Choi predicted that this issue would ultimately be a crucial indicator for gauging the success of the administration.

Professor Choi added that the Lee Jae-myung administration appears to be neglecting essential reform tasks and pursuing only immediate gains. He warned that this would eventually lead to a loss of public trust in the long run and exacerbate the disparity between the government's stated vision and reality.

Professor Choi Bae-geun analyzed that the Lee Jae-myung administration's approach to successful governance is centered on 'chaebol-led' or 'achieving results through cooperation with chaebols.' He claimed that President Lee Jae-myung's intention to achieve economic accomplishments through chaebols is evident. The slogan 'Irreplaceable Republic of Korea,' presented as a key keyword for the second year of governance after the local elections, is also deeply connected to this chaebol-centric growth strategy, he believed.

Professor Choi expressed concern that this approach could deepen imbalances in the economic ecosystem and increase dependence on specific large corporations. He emphasized that true national success should be achieved not by relying on chaebols, but through the participation of a wide range of economic actors and fair competition.

Professor Choi added that this is a point where it could conflict with the values of 'a great world of suppressing the strong and supporting the weak' espoused by the Lee Jae-myung administration. He expressed a critical view that while cooperation with chaebols might bring short-term results, it could exacerbate social polarization and exclude the voices of the weak in the long run.

Professor Choi Bae-geun assessed that President Lee Jae-myung had virtually abandoned reforms for realizing a great world over the past year. He pointed out that President Lee Jae-myung, under the pretext of 'national unity,' exhibited a tendency to recruit symbolic figures of vested interests with completely different historical and value perspectives. Professor Choi emphasized that true unity is achieved when citizens who do not support the government feel, through its policies, that 'politics is being done well' and 'now we support it,' rather than by recruiting privileged individuals who seek to maintain their privileges.

This criticism reflects the perception that the Lee Jae-myung administration's approach to 'unity' has actually amounted to merely forming alliances with vested interests, thereby weakening its essential commitment to reform. Professor Choi believed that unity without reform is merely a superficial patching up and has limitations in solving structural problems across society.

Professor Choi Bae-geun strongly criticized the tendency to brand those with a critical view of the Lee Jae-myung administration's actions as 'anti-Lee.' Citing author Yoo Si-min's political critique as an example, he pointed out that labeling healthy criticism of government policies as 'anti-Lee' is misguided. Professor Choi mentioned that since he also holds a critical stance on some of the Lee Jae-myung administration's policies, by this logic, he too would be considered 'anti-Lee.'

Professor Choi criticized such labeling as ultimately being for self-interest. He argued that there is an underlying intention to isolate critics to secure their own positions rather than focusing on the success of the Lee Jae-myung administration. He claimed that this attitude harms a healthy discussion culture within the Democratic Party and hinders the true progress of the government.

Professor Choi Bae-geun strongly criticized the way the Democratic Party is pushing the party convention into a 'pro-Lee vs. anti-Lee' framework as an 'act of suicide.' He argued that the concept of 'anti-Lee' itself cannot exist within the Democratic Party. He asserted that those who criticize the government when its policies go in the wrong direction should rightfully be called 'loyal subjects,' and if such loyal subjects are branded 'anti-Lee,' then no expectations can be placed on that administration.

Professor Choi believed that the formation of such a framework harms the unity of the Democratic Party and obstructs genuine democratic decision-making. He warned that if the essential role of a political party—healthy checks on government policies and proposing alternatives—is merely dismissed as internal criticism, it will darken the party's future.

Professor Choi Bae-geun claimed that President Lee Jae-myung failed to accurately diagnose the administration's tasks for the era. He assessed that while a correct diagnosis of tasks is necessary to set proper policies, President Lee Jae-myung failed in this area. According to Professor Choi, the reason the era chose Lee Jae-myung as president can be summarized as 'a great world of suppressing the strong and supporting the weak,' but President Lee Jae-myung is mistaken about this.

Professor Choi raised the possibility that 'sycophants' around President Lee Jae-myung might have prevented him from properly grasping the spirit of the times. This criticism implies that President Lee Jae-myung is being swayed by external influences rather than implementing his own philosophy.

Professor Choi Bae-geun expressed a critical view regarding the background of the Lee Jae-myung administration's slogan, 'Irreplaceable Republic of Korea.' He argued that this slogan did not originate from President Lee Jae-myung himself but from a 'delusion' to connect the 'semiconductor windfall' to his own achievements. He stated that the boom in the semiconductor industry was not a direct result of government policy but a fortuitous opportunity arising from the intersection of international economic conditions and the existing industrial ecosystem.

Professor Choi expressed concern that such 'delusions' could distort the direction of government policy and divert attention from essential reform tasks. He pointed out that setting national goals based on windfalls could be detrimental to the nation's sustainable development in the long run.

Professor Choi Bae-geun expressed a critical stance on the Lee Jae-myung administration's 'Three Mega Projects.' He argued that these projects, by further strengthening memory semiconductor manufacturing, merely serve to amplify and reproduce distortions in the existing industrial ecosystem. Professor Choi expressed concern that they would maintain or deepen the current unhealthy economic ecosystem, which is biased towards specific sectors.

He pointed out that this is far from true economic revitalization and could increase dependence on a few large corporations while hindering the development of small and medium-sized enterprises and other industrial sectors. Professor Choi emphasized that the government should focus on building a more balanced industrial structure and a healthy economic ecosystem, rather than concentrating on short-term achievements.

Professor Choi Bae-geun criticized the 'Republic of Korea's Great Leap Forward Three Mega Projects National Report Meeting' held at the Blue House on June 29 as nothing more than a 'grand show event.' He argued that presenting chaebol heads like Lee Jae-yong and Chey Tae-won, bowing 90 degrees, praising them as 'heroes representing the nation,' and then announcing large-scale investment plans, was more about showmanship than substantial investment. Professor Choi pointed out that chaebols do not make boastful investments without business viability, and similar announcements of tens of trillions of won in investment plans were common in past administrations.

He believed that such events could create false expectations among the public and were unlikely to lead to actual economic revitalization. He emphasized that if the government genuinely wants to boost the economy, it needs to focus on fundamental economic structural improvement and creating a fair market environment, rather than relying on chaebols.

Professor Choi Bae-geun pointed out that since President Lee Jae-myung took office, the real monthly average wages of workers have been stagnant for 10 years. He emphasized that the fact that people have no money to spend is the most critical economic indicator of the Korean economy losing vitality. From June to December 2022, the first year of the Lee Jae-myung administration, the real monthly average wage was 3.59 million won, which is similar to the level of 2016, 10 years ago, he stated.

Professor Choi asserted that no economic problem can be solved if national income does not increase. He argued that it is impossible to create a country where the people of the Republic of Korea are true masters without addressing this issue, and urged the government to pay more attention to increasing the real income of workers.

Professor Choi Bae-geun pointed out that average monthly household consumption expenditure remains sluggish. He stated that the most recent data, for the second quarter of this year, showed household consumption expenditure at 3.68 million won, which is even lower than the 3.683 million won in the second quarter of 2018. Professor Choi emphasized that the main reason households are unable to consume properly is that their income is not increasing.

He criticized that despite exports reaching an all-time high, national income and consumption are not increasing. He stressed that sustained economic growth is difficult without vitality in the domestic economy and urged the government to implement practical measures to increase household income.

This phenomenon is an indicator of structural problems in the Korean economy, and he warned that if consumption stagnation persists, economic recovery itself could become difficult. Professor Choi added that the government should not be satisfied with export performance alone but should also make efforts to revitalize domestic demand that directly impacts the people's lives.

Professor Choi Bae-geun criticized Korea as a country where the rich live comfortably, pointing out the unfairness of the tax system. He revealed that the top 0.1% have a monthly average income of 100 million won, but the amount of tax exempted for them over a year is approximately 113 million won. Professor Choi argued that despite Korea's top income tax rate being among the highest in the OECD, in reality, they do not pay proper taxes due to various deductions and benefits.

Professor Choi expressed concern that this phenomenon could deepen income inequality and cause relative deprivation among ordinary citizens. He emphasized that to realize tax justice, unfair tax deductions and benefits should be re-examined, and substantive tax enforcement should be strengthened to prevent tax cuts for the wealthy.

Professor Choi added that the current tax system does not properly perform its wealth redistribution function, and this contradicts the Lee Jae-myung administration's goal of 'a great world of suppressing the strong and supporting the weak.' He conveyed the message that a healthy society cannot be built without a fair tax system.

Professor Choi Bae-geun pointed out that ultra-luxury homes cleverly evade tax standards, citing MBC's 'Straight' broadcast. He argued that the current standard for luxury homes, which is over 900 million won and a dedicated area of 245 square meters or more (over 274 square meters for duplexes), has created a 'loophole' for tax evasion.

He revealed that there are cases of building high-priced homes over 10 billion won but designing them to be 273.96 square meters, thereby being excluded from the luxury home standard and evading taxes. Professor Choi emphasized the need to revise the luxury home standard to match reality and strongly regulate tax evasion by high-net-worth individuals to prevent such circumvention.

Professor Choi Bae-geun strongly criticized South Korea as the country with the worst asset inequality in the world. He presented statistics showing that the net asset share of the bottom 50% is only 1.7%, lamenting this as a terrible reality. Professor Choi pointed out that due to this extreme asset inequality, the bottom 50% of citizens in South Korea are in a situation where it is difficult even to pursue human dignity.

He stated that in an era where assets are far more important than income, such asset inequality severely harms the overall health of society. Professor Choi warned that the government must take fundamental measures to solve this inequality problem, or social conflict will deepen further.

He emphasized that the value of 'a great world of suppressing the strong and supporting the weak' advocated by the Lee Jae-myung administration should begin with solving this asset inequality problem. Professor Choi's argument is that a true 'great world' is impossible without resolving asset inequality.

Professor Choi Bae-geun strongly criticized the K-capital market, which was once considered the Lee Jae-myung administration's greatest achievement, but has now lost public trust, with the line between investment and gambling blurred. He diagnosed that despite the K-capital market boom, investors ultimately threw a 'red card' at the government, losing trust. He stated that investment had effectively become no different from gambling. Professor Choi attributed this situation to the government's misunderstanding of 'windfalls.'

He believed that the K-capital market, due to the government's reckless policy promotion and misunderstanding, failed to create a healthy investment environment and instead encouraged speculative elements. He argued that this, in the long run, deepened distortions in the capital market and resulted in massive losses for ordinary investors. Professor Choi emphasized the importance of the government understanding the nature of the market and making cautious policy decisions.

Furthermore, Professor Choi expressed concern that the failure of the K-capital market is not merely an economic loss but is leading to a loss of public trust in the government. He stated that a capital market that has lost trust cannot function properly as a crucial pillar of the national economy. He urged the government to seriously recognize the current situation and devise fundamental improvement plans.

Professor Choi Bae-geun strongly criticized single-stock leveraged products as 'pouring oil on fire' during the KOSPI boom. He pointed out that the introduction of single-stock leveraged products without considering the reflective nature of the stock market was a major cause of the KOSPI's catastrophe that began in late June. Professor Choi assessed that this policy ultimately undermined the K-capital market, which the Lee Jae-myung administration considered its biggest achievement.

He stated that this policy failure excessively increased market volatility and posed unpredictable risks to investors. He believed it was the result of the government failing to properly understand market mechanisms and pursuing reckless policies by focusing only on short-term achievements.

Professor Choi Bae-geun mentioned that Jo Guk, leader of the Jo Guk Innovation Party, publicly raised the responsibility of government officials for the failure of single-stock leveraged ETFs. Leader Jo Guk specifically named four individuals—Chief of Staff Kim Yong-beom, Head of Government Policy Coordination Yoon Chang-ryeol, Financial Services Commission Chairman Lee Won-jin, and Lee Chan-jin—demanding their accountability and personnel action. This was a criticism of clear government-controlled finance failure.

Professor Choi assessed that while there were concerns from the opposition regarding this issue, Leader Jo Guk's direct naming of individuals and demanding accountability served to highlight the seriousness of the matter. This call for accountability is interpreted as a demand for thorough verification and responsibility regarding the government's financial policy-making process and its consequences.

Professor Choi Bae-geun strongly criticized Chief of Staff Kim Yong-beom's justification for introducing single-stock leveraged ETFs by citing their allowance in the US and Hong Kong, calling it a display of 'colonial thinking.' He pointed out that the simplistic logic of 'if the US and Hong Kong allow it, why can't we?' is a problem among South Korean experts. He meant that since financial market environments and regulatory systems differ across countries, indiscriminately applying overseas precedents is dangerous.

Professor Choi believed that this way of thinking stems from an attitude of blindly following advanced countries' systems without considering the specific characteristics of the domestic financial market. He warned that this could lead to the introduction of unsuitable policies for the domestic market, causing adverse effects.

Professor Choi Bae-geun refuted Assemblywoman Seo Mi-hwa's claim on YTN that the 'Leverage Act was passed by the National Assembly.' Professor Choi explained that there is no such thing as a 'Leverage Act,' and that this issue involved changing an 'enforcement decree,' not a law. He pointed out that since enforcement decrees are not subject to parliamentary legislation, Assemblywoman Seo Mi-hwa's claim is not factual.

This point highlights that the introduction of single-stock leveraged ETFs was not subject to sufficient discussion and scrutiny by the National Assembly but was carried out through an amendment to an 'enforcement decree,' an administrative order by the government. Professor Choi raised procedural issues with the promotion of an important financial product in this manner, believing that there was a lack of responsible discussion at the National Assembly level.

He pointed out that policy promotion through amendments to enforcement decrees can weaken democratic legitimacy and that important decisions are made without forming a national consensus. He also raised concerns that if side effects occur later, the responsibility for policies introduced through such a process may become unclear.

Professor Choi Bae-geun revealed that during President Lee Jae-myung's state visit abroad from April 19 to 24, the agenda for introducing single-stock leveraged ETFs was passed at the 17th Cabinet Meeting on April 21. He explained that this meeting was presided over by Prime Minister Han Duck-soo, and the introduction was pursued on the grounds that foreign-listed single-stock underlying asset leveraged ETFs were restricted from domestic listing, failing to meet investment demand.

He pointed out that this decision-making process is controversial, as the introduction of a core financial product occurred during the President's absence. Professor Choi suggested the possibility that the agenda was rushed through without sufficient deliberation, given that it was processed as the last item on the Cabinet Meeting agenda. He expressed a critical view that an important policy decision was made without public attention and discussion.

This can be linked to issues of government policy-making transparency and accountability. He raised suspicions that an important matter might have been hastily processed during the President's absence and emphasized the need for thorough verification of the introduction process for a product that could significantly impact the financial market. Professor Choi believed that this method of policy decision-making ultimately contributed to the erosion of trust in the K-capital market.

Professor Choi Bae-geun pointed out that while the government boasts a 15.6% increase in Q2 Gross National Income (GNI), marking a 38-year high, this figure is not felt by the public. He criticized that despite the high GNI growth rate, which is at a level seen only during the economic growth period of the 1980s, the actual lives of the people are not improving. He believed that this disparity shows the gap between statistical figures and the real economy.

Professor Choi emphasized that the government should not only focus on macroeconomic indicators but also on improving the practical economic situation that citizens feel. He stated that if the livelihoods of the common people are still difficult despite a high GNI growth rate, it is merely a statistical illusion.

He added that to achieve economic growth that people can feel, more effort should be put into microeconomic policies such as resolving income inequality and boosting household consumption.

Professor Choi Bae-geun pointed out that while the government announced an increase in retail sales, the actual retail sales per self-employed person are lower than pre-pandemic levels. He stated that while the retail sales per self-employed person in June of this year indeed increased from 8.14 million won to 8.30 million won compared to the same month last year, it is still 240,000-250,000 won lower than in June 2021. He argued that these figures show that the situation for the self-employed is chronically stagnant.

This suggests that the government's announcement may not accurately reflect reality or may be portraying partial improvements as an overall boom. Professor Choi emphasized that self-employed individuals are still in a difficult situation, and their hardships should not be ignored.

Professor Choi Bae-geun mentioned the reality of homeless common people suffering and criticized that despite the Lee Jae-myung administration proposing a philosophy of providing a housing environment where even the middle class can live through the construction of 'quality rental housing,' these expectations have not actually been met. He pointed out that the government has failed to properly fulfill its promises regarding solving housing problems, and he argued that this has exacerbated the housing hardships of common people.

This reflects an assessment that the Lee Jae-myung administration's housing policies show a disparity between ideals and reality and have not brought about practical changes in the lives of common people. Professor Choi emphasized that the government should recall its original promises and implement more proactive policies to stabilize housing.

Professor Choi Bae-geun strongly criticized the Lee Jae-myung administration for being blinded by a semiconductor boom it did not create, thereby neglecting its mission of the times. He warned that such an attitude could lead to a tragedy greater than the Roh Moo-hyun tragedy. This is a strong warning that if the government overlooks the fundamental reform tasks demanded by the era and manages state affairs relying only on short-term achievements or external factors, it could face severe consequences.

Professor Choi emphasized that the Lee Jae-myung administration must reclaim its inherent value of 'a great world of suppressing the strong and supporting the weak' and take practical action for the weak and justice. Otherwise, he expressed concern that it would completely lose public trust and repeat historical tragedies.