To Rescue the Stock Market, First Rescue the Economy

To Rescue the Stock Market, First Rescue the Economy
United Daily News editorial (Taipei, Taiwan, ROC)
A Translation
September 10, 2008

The day before yesterday the stock market rose 351 points, Yesterday it fell 233 points. The rebound was a one night stand, a flash in the pan. The admininistration is wondering how to rescue the stock market. But absent economic momentum and confidence, the stock market has no support. After all, economic issues are not the same as stock market issues. Everyone is experiencing economic difficulties, not just investors.

The global economy is mired in the worst depression since the Great Depression of 1929. This is the international consensus. Many nations have announced programs to revive their economies. The new administration has been in office 100 days. Its financial and economic experts were too eager to claim credit. Therefore each of them promoted his own solution. The result was chaos and disunity. The first of eight half-hearted measures to revitalize the economy received its answer when the stock market fell for five straight days. The policy lost all credibility. Given this lesson, when the administration makes its next move, its must think first and act second. Its objectives must be clear. Its actions must be unified. It must not keep worrying about what people will say.

Based on actual observation, the global economy is on a downward slide. This is the main reason Taiwan's economy is limping along, and it was to be expected, Of continuing concern is the decline in Taiwan's export growth and its industrial competitiveness. Is the situation deteriorating? Currently there are no signs indicate. Inflation rates, interest rates, exchange rates, and market price fluctuations suggest that the economy is stable compared to neighbouring countries. Sluggish domestic demand has been the norm for years. It reflects the public's lack of confidence. Over the past eight years a Closed Door Policy has alienated the public. The new administration, which wants to relax these restrictions, has failed to win public trust. It has run up against sluggish external demand. Nothing can hide the facts. If the problem isn't addressed, it may spin out of control.

Pessimism has followed on the heels of optimism. A sustained downturn could spark a wildfire and spin out of control. The downturn merely reflects fluctuations in the cycle of supply and demand. But what individuals are feeling is pain. Businesses are retrenching, closing down, and even declaring bankruptcy. Personal incomes are falling. The standard of living is declining. Unemployment is spreading through families, leading people to commit suicide or to commit crimes. When fluctuations in the economy become larger, and remain longer, their impact becomes more intense and more widespread. Manufacturing industries close down one after the other. Increasing social friction and chaos threaten public safety. The economy loses its resiliency. It is no longer able to withstand the next wave of economic shocks. This is no laughing matter.

The administration needs countermeasures. But its countermeasures must not swim agains the tide. That would be a waste of ammunition. For example, artificial intervention in the stock market, will only dig the administration in deeper. Nor is the answer taking advantage of the confusion to experiment with all sorts of quick fixes, Such shortsightedness will rebound in the long run. The price would not be worthwhile. The administration is considering an expansion of the five-year tax exemption, and a reduction in document taxes. These measures remain controversial, and their effectiveness in doubt. They undermine the legitimacy and weaken the impetus for property tax reform. Administration plans must not be at the mercy of the global economic downturn. To preserve Taiwan's economic vitality, administration plans must, as far as possible, anticipate future developments. They must minimize and limit long term damage.

The administration must, at the very least, implement the dual rate system and stabilize prices. It must provide a stable business environment. It must avoid making matters worse. The relaxation of controls and reconstruction programs must not be delayed due to economic turbulence. These weapons will be necessary in the event of an economic resurgence. The highest priority must be to bolster public confidence, to reduce turbulence, and above all, prevent aftereffects. "Reduction and Prevention" requires no bag of tricks. All it requires is action. The key is to expand demand in order to alleviate the suffering of those on the economic margins.

The nation's income structure is M-shaped. The administration's countermeasures must also be M-shaped. After all, the middle and extreme right hand side of the M-shape are middle and high-income groups. They have large savings accounts. They have the ability to weather the depression. The administration's programs to increase demand must redistribute the wealth, reducing the impact on the poor. The administration has the money, but if it doesn't spend it, the benefits will not be felt.

On the extreme left hand side of he M-shape are low-income groups. The administration has put forward a work subsidy program to take care of disadvantaged groups. It should pay more attention to the plight of small and medium enterprises and to unemployment. Small and medium enterprises are most vulnerable to economic changes. Cash flow is the key to success. The administration should consolidate its existing resources, and tide them over their difficulties. July unemployment was high due to seasonal factors, and will increase in August and September. But the administration is oblivious to the problem. Unemployment is the beginning of economic deterioration. It is the source of social chaos. The administration must prevent it as soon as possible. It must assist employment agencies, expand training, prevent bankruptcy fraud, and provide unemployment benefits.

救經濟，才能救股市！
【聯合報╱社論】
2008.09.10 02:53 am

股市前天大漲三五一點，昨天大跌二三三點。一日行情，曇花一現。政府正在苦思救股市，但倘若經濟的氣勢與信心皆拉不起來，股市亦無支撐。畢竟，經濟問題不只是股市問題；陷於經濟困境的也不只是股友，而是全民。

全球景氣陷入一九二九年經濟大蕭條以來最嚴重的泥淖，幾乎已經是國際共識，各國的振興經濟方案紛紛出籠，就位剛滿百日的新政府卻因財經首長搶功心切、各自為政，政策出招凌亂分散，第一波勉強出手的八大振興景氣措施，股市竟是以連續重挫五天回應，政策威信盡失。有此前車之鑑，政府再出手，就要謀定而後動，目標清楚、行動一致，不再左顧右盼。

從實體面觀察，全球景氣進入下滑坡道，是台灣經濟走疲的主因，亦在預期之中，須持續關注的是台灣出口成長降幅及分項產業的競爭力，是否出現惡化之勢，而目前尚無跡象；再看物價漲幅、利率、匯率及房市價格的波動幅度，亦相較多數鄰近國家為低，顯示國內總體經濟情勢相對穩定；至於低迷的國內需求，實已持續多年，反映的是人民信心，過去八年因經濟鎖國而民心失離，如今主張鬆綁的新政府也未能收攏，又逢外需不振，已再無屏障遮掩，再不正視，將有失控之虞。

尤其，悲觀的氣氛就跟樂觀的信心自我實現一般，持續的不景氣也會像野火燎原而一發不可收拾；畢竟，總體面的不景氣顯現的僅是供需周期的波動，但個體感受到的是直接的痛苦，在企業是萎縮、歇業甚至破產，到了個人就是收入減少、生活品質下降、失業，進而波及到家庭，再轉換為自殺、犯罪率升高等社會問題。當景氣波動幅度愈大、持續愈久，其衝擊也愈強、愈廣，當產業體系因個體退場而瓦解、社會安全因對立升高而失序，經濟體系也將失去彈性，再無迎接下一波景氣的能力，實不能等閒視之。

因此，政府此時必須要有對策，但其對策不是逆勢而為，那是浪費子彈，例如人為干預股市，反將愈陷愈深；也不是亂開藥方，甚至乘亂夾帶，那是以短害長，代價不貲，像是討論中的五年免稅擴大適用、證交稅下降等，除了效果存疑、並有爭議，更令租稅改革失去正義，破壞賦改會的租稅改革大局；為今之計，應是處此非可完全操之在我的國際經濟逆境之中，盡量保留台灣經濟的元氣，所用之策如須預支未來，亦應以長害最小或可控為度。

在具體作法上，雙率及物價的持穩是基本要求，以提供全民安定的經營環境，避免雪上加霜；進行中的鬆綁及重建計畫，亦不能因景氣波動而放緩，這些都是迎接景氣再起的利器；現下最緊要的，則是全力穩住人民的信心，並以降低不景氣波動幅度、防止不景氣擴散後遺症為優先；「一降一防」不需花稍的招數，只要政府實在的作為，重點就在於以擴大需求，因應及緩解經濟邊緣人的痛苦。

從國民所得結構的Ｍ型化角度而言，這也是必要的Ｍ型對策；畢竟在Ｍ型中右端的中高所得族群，也是擁有高儲蓄者，具備抵禦不景氣寒冬的能量，政府的擴大需求方案確可適度挹注經濟活動，降低打擊面；但現今的問題在於政府有錢卻花不出去，效果也就顯現不出來。

對於Ｍ型中左端的中低所得者，政府已提出工作所得補貼方案、照顧弱勢族群對策等；除此之外，目前更要關注的是中小企業動態及失業情勢。中小企業對景氣最敏感，資金周轉是成敗關鍵，政府應整合現有輔導措施，助其度過難關；另七月失業率已因季節性因素走高，八、九月還將再攀升，但政府顯然還未意識到這個問題的嚴重性。失業是經濟惡化之始，也是社會失序之源，政府必須及早防範，就業媒合機構的強化、在職訓練能量的擴充、預防惡性倒閉的查察及失業給付的補救措施等，都要上緊發條了。