Friday, September 12, 2008

Shouldn't Someone Take Responsibility?

Shouldn't Someone Take Responsibility?
China Times editorial (Taipei, Taiwan, ROC)
A Translation
September 12, 2008

Despite opposition from the public and former finance ministers, the Ma administration nevertheless decided to lower stock transaction taxes this Wednesday. Although it says the reduction will be in effect for only half a year, no one from either the ruling or opposition parties believes the rates can be restored half a year from now. Therefore, the reduction in the stock transaction tax means a 50 billion NT loss in revenue per annum, in exchange for short-term rally. The stock market may fluctuate. But a few days later, once all the news is out, Taiwan's stock market will simply return to the fundamentals. It will continue to be buffeted by global economic turbulence. The public on Taiwan, meanwhile, will have to make up the 50 billion NT shortfall each year, every year, ad infinitum.

Fate is fickle. Foreign investors dumped their shares. The global outlook remains gloomy. Yesterday the Taiwan stock market fell 200 points, underscoring the stupidity of the reduction in the transaction tax. An recent editorial in this newspaper pointed out that policies intended benefit Taiwan's economy that collide with global economic factors will be in vain. Our warning couldn't have been clearer. Yet the Ministry of Finance and the Executive Yuan continued on their merry way. Ma Ying-jeou, Vincent Siew, and Liu Chao-hsuan, is the 50 billion NT annual price worth it? Is the public on Taiwan really going to swallow such a stupid policy?

The most baffling part of the decision to reduce stock transaction taxes, was how the Premier led a team of finance and economics cabinet officials to the Presidential Palace. President Ma and Vice President Siew then gave the team's proposal their seal of approval. Since then, our stay at home president has been kidnapped. He has been taken from the rear echelon to the front lines, and forced to shoulder responsibility for this controversial economic policy. According to media reports, Ma and Siew met with two Academia Sinica financial experts on July 5, at which time they urged the administration not to intervene in the stock market. According to newspaper reports, the president and vice president agreed with their assessment. But two months later, the administration openly intervened in the stock market. Ma and Siew personally intervened, incurring a cost of 50 billion NT per annum, giving the Academia Sinica experts a solid slap in the face. These experts, a former Minister of Finance, media pundits, and the general public, are apparently no match for a bunch of desperate and cloistered cabinet members bent on poormouthing others. Now that the cabinet is in hot water, shouldn't somebody take a little responsibility?

Yesterday this newspaper's editorial clearly pointed out that Taiwan's open, small scale economy will never be immune to international shocks. If international markets sneeze, Taiwan is going to catch a cold. That is why the administration needs to be extra cautious, cool, and objective. That is why it must think first and act second.

To draw an analogy, if a flu epidemic is raging, no one can escape its impact. A fever, runny nose, coughing, and headaches are all unavoidable symptoms. Since no one can avoid catching the flu, all one can do is get plenty of rest, drink plenty of water, avoid public spaces, avoid overwork, and look after oneself. Only then can one recover when the epidemic has passed. The last thing one ought to do when a minor symptom such as a runny nose occurs, is wolf down all kinds of medicines, in a frantic effort to fix one's kidneys in the morning, and one's liver in the afternoon, taking stomach medicines before bed, giving oneself injections in the middle of the night, drinking one nutritional supplement after the other. If one over-medicates one's body in this manner, one will not avoid the flu. One will merely destroy one's health. One's heart, liver, spleen, lungs, and kidneys will fail. One's systems will fail. Anyone with a lick of common sense knows that one must never haphazardly medicate oneself. The Executive Yuan has many Old Hands with decades of experience. How could they be so muddle-headed? How could they propose a policy as stupid as a reduction n stock transaction taxes?

Frankly, if the purpose of the reduction in stock transaction taxes really was to save the stock market, and the policy was merely an honest mistake, we could accept that. But we believe the purpose of the reduction in stock transaction taxes was not to save the stock market. Its purpose was to save cabinet members' jobs. Over the past two months, in its eagerness to produce results, the Liu cabinet has shown a lack of tolerance. On the surface it wants to produce results in order to rescue the Ma/Siew administration's poll numbers. But we think it really wants wants to produce results so that certain officials won't have to step down. Officials are promoting these policies merely to save their jobs. We believe this explanation is more plausible, and better explains the Ma administration and the Liu cabinet's slapdash proposals. Our readers know that political achievements depend on medium and long-term results. The media has never set a timetable for Ma and Siew to produce results. Cabinet officials are seeking remedies pills because they are afraid of losing their jobs.

Cabinet members say that investors who committed suicide because they bought the wrong stocks, must take responsibility for their own choices. True enough. Individual investors must indeed bear responsibility for their own mistakes. But when officials implement mistaken policies, losing tens of billions in tax revenue each year, forcing ordinary people to suffer the consequences, is that fair? Is that just? Investors bearing the burden of their own losses, acknowledging their own responsibility, has been the norm since time immemorial. But when incompetent officials harm Taiwan's economy, and make the wrong policy recommendations, shouldn't they assume responsibility too? The Liu cabinet can pass the buck to President Ma, who made the decision. President Ma can continue to stand behind incompetent officials. But if the problems continue to spread, who knows where they might lead to? No matter. Taiwan's economy is still healthy. It can survive a few more assaults by this bunch of buffoons. How will it all end? We're watching you. The entire nation is watching you.

中國時報  2008.09.12








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