Don’t be impulsive, Pres. Ma

Updated Tuesday, December 2, 2008 9:25 am TWN, The China Post news staff

Don’t be impulsive, Pres. Ma

President Ma Ying-jeou has undergone a metamorphosis. He promised to remain behind the scenes — not even to attempt to pull strings — inasmuch as government administration is concerned, when he was inaugurated, and he has kept that promise until the silent tsunami was about to hit Taiwan in full force. He said a couple of days ago he never imagined the financial and economic crisis would be as grievously serious as we warned in this column not just once. After he read heart-sinking statistics, he decided to come out in the front to try to lead the nation out of its economic woes. We are glad the president, who has little historical perspective — practically all economic historians have predicted the U.S. subprime disaster a year ago was paving the way for a stock market crash which, in turn, would trigger a depression just as great as the one in the early 1930s — has changed for the better, but some of the decisions he has taken on the spur of the moment were neither well conceived and nor sufficiently considered.

The Council of Economic Planning and Development was told, out of the blue, to prepare a four-year program to create 456,000 job opportunities by the end of 2012. One result was that Premier Liu Chao-shiuan’s administration had to increase infrastructure construction spending by NT$100 billion to a whopping NT$500 billion (US$15 billion). That budget run-over may not be enough, of course. An additional fund has to be raised to implement the Keynesian program to stimulate the ailing economy. Perhaps President Ma did not know the job creation project now under way hasn’t worked. Under the project, the government subsidizes employers who hire new employees or rehire those laid off. Subsidization, NT$10,000 per month per head, has not made seven out of every ten employers seek government aid over the past three months. The four-year program, patterned after the smaller-scaled project, is most likely to remain a dud. Moreover, the program is scheduled for completion after Ma finishes his current term, which expires on May 20, 2012. Has it ever occurred to him that people may, and most probably will, think he was simply dangling a pie in the sky?

In the meantime, Taiwan’s DRAM (dynamic random access memory) industry is awaiting a government bailout. No decision has been taken yet, but President Ma is said to consider getting the National Development Fund to bail out the flagging industry, which, as a matter of fact, had better be left alone to sink or swim. Press reports quoted insiders as saying the fund would have altogether NT$1 trillion (US$30 billion), most of which would come as loans from the deposits in the nation’s postal savings accounts. We wish President Ma would not consider this option.

The reason is simple. If President Ma should act rashly again now, he would have to save other industries that certainly would demand bailout after costly bailout. The housing industry needs one now. Car dealers are clamoring for another. Frail industries will follow suit. The fund will be exhausted in no time. Then he would have to augment the fund again.

Don’t be impulsive, please, Mr. President.

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