The Democratic Party Chooses Jeong Cheong-rae.

• Jeong Cheong-rae (Democratic Party member) has been elected as the party leader. He heralded an era of a hardline ruling party.
• His vote share was 61.7%, the highest since Lee Jae-myung (President) was elected party leader twice with 85.4% and 77.8%.
• He stated, “I will not shake hands with (the People Power Party) unless they apologize for the rebellion.”
• The Chosun Ilbo criticized on its front page, “They don’t see the opposition as a partner.”
• He also mentioned Kang Seon-woo (former Minister of Gender Equality and Family nominee), saying, “I will be a strong fence.”
• Related Link.

Finishing Three Major Reforms Before Chuseok.

• A pledge was made to complete the so-called three major reforms—prosecution, media, and judicial—before Chuseok (October 6).
• Jung Cheong-rae is known as a flexible hardliner who has been through pro-Roh, pro-Moon, and pro-Myung factions. The Korea Times described him as “a politician who offers catharsis to supporters but discomfort to the opposing camp.”
• His YouTube channel has 610,000 subscribers, and he has 510,000 followers on X (Twitter).
• Cho Seung-rae (Democratic Party lawmaker) and Han Jeong-ae (Democratic Party lawmaker) were appointed as Secretary-General and Policy Committee Chair, respectively. Both are considered neutral figures.
• Jung Cheong-rae once proposed a bill allowing the dissolution of unconstitutional parties to be requested by a National Assembly plenary session resolution.
• The Korea Times editorial warned, “Further crushing the disorganized opposition will only leave the fervent supporters cheering.”
• The Hankyoreh headlined its front page with “A Stronger Democratic Party is Coming.” A multi-term lawmaker from the metropolitan area pointed out, “There is a big difference between throwing out clear reform slogans as an opposition party and designing and promoting policies that can work effectively as part of the ruling power in reality.”
• Related Link.
• Related Link.
• Related Link.

What Matters Now.

Extreme Downpour: 143mm in an Hour in Muan, Jeonnam.

• 11% of the annual rainfall fell in just one hour.
• From midnight to 9 PM, 289mm of rain fell.
• Forecasts predict up to 250mm of heavy rain in the southern region by tomorrow.

Tariffs Solved, Now Taxes Arrive.

• In two months, the KOSPI rose over 20%, but dropped 3.9% in a single day last Friday.
• There are two major issues.
• First, the threshold for major shareholders subject to capital gains tax was lowered from 5 billion won to 1 billion won. The Yoon administration had raised it from 1 billion won to 5 billion won, but it has been reverted. Concerns arise that people will find ways to circumvent this, like selling at year-end and buying again at the start of the year, causing stock prices to fluctuate. (The major shareholder standard is based on December 31, so shares are reduced only at this time.)
• Second, the top tax rate on dividend income was reduced from 49.5% to 38.5%. Originally, Lee So-young’s (Democratic Party member) bill proposed 27.5%, but it was compromised due to Jin Sung-joon’s (Democratic Party Policy Committee Chair) opposition. (Jin Sung-joon will step down with Jeong Cheong-rae’s election.)
• Lee So-young argues that with the capital gains tax top rate at 27.5%, there’s no incentive for major shareholders to distribute dividends if the dividend income tax is higher. Jin Sung-joon emphasized, “It’s not a tax cut for the rich, but a necessary fair tax reform,” yet criticism poured in that it goes against the paradigm shift.

“Who Would Be Fool Enough to Be a Director?” Tax Reform Petition Surpasses 110,000 Signatures.

• As of 5 a.m. today, it has surpassed 110,000 signatures. The petition argues, “If a plasterer and a director pay the same tax, who would be fool enough to be a director?” and claims, “If avoidance stocks flood the market every year-end, it can’t trend upwards.”
• The major shareholder threshold was reduced from 10 billion won to 5 billion won under the Lee Myung-bak administration, then to 2.5 billion won and 1.5 billion won under the Park Geun-hye administration, and further to 1 billion won under the Moon Jae-in administration, but the Yoon Seok-youl administration raised it to 5 billion won.
• Park Geum-cheol (Director of the Tax Policy Division, Ministry of Economy and Finance) stated, “We expected net sales to decrease somewhat in 2023 when the threshold was relaxed, but statistics show they actually increased,” adding, “We believe the impact on the stock market will be limited.”
• Related Link.
• Related Link.

Year-end Sell-off = New Year Buying Frenzy?

• Lee Sang-min (Research Fellow, Korea Institute of Public Finance) countered, “Even if there’s a brief increase in sales at year-end to avoid major shareholder criteria, a buying frenzy occurs 2-3 days later,” adding, “It could actually be the best buying opportunity for stock investors.”
• There are criticisms that abolishing the financial investment income tax has skewed tax equity. The financial investment income tax is levied on annual profits exceeding 50 million won from financial investments like stocks and funds.
• Countries like the US, Japan, Germany, and the UK don’t have a capital gains tax on stocks. Strengthening income tax while abolishing capital gains tax is the right direction, but we’re moving in the opposite direction by abolishing income tax and strengthening capital gains tax.
• Lee Sang-min pointed out, “Advanced capitalist countries tax everyone who profits from stocks, but in Korea, fewer than 10,000 people hold over 1 billion won in specific stocks and fall under capital gains tax.” He suggests, “If you want to relax or abolish major shareholder criteria, introduce a financial investment income tax.”
• Related Link.

Foreign Investors Sell 656 Billion Won.

• In the Korean stock market, foreign investors switched from nine months of net selling to net buying in May. Yet, they dumped shares the day after the tax reform announcement.
• In July alone, they net bought 6.281 trillion won worth, but whether this trend has changed remains to be seen.
• Foreign investors are not directly affected by the capital gains tax separation. The prevailing view is that concerns over corporate tax hikes are reflected.

“Anti-Business Legislation” Under Fire from Conservative Media.

• The Chosun Ilbo editorial criticized “taxes shaking the stock market,” stating, “It’s hard to avoid criticism that this is a hasty policy without proper internal coordination.”
• Kang Yoo-jung (Presidential Office Spokesperson) said, “It’s difficult to see the KOSPI plunge as due to tax reform,” adding, “Causal analysis must come first.”
• Kim Byung-ki (Democratic Party Floor Leader) stated, “We will review the major shareholder capital gains tax standards.”
• The People Power Party bundled the Commercial Act amendment and the Yellow Envelope Act to counterattack. Shin Dong-wook (People Power Party lawmaker) pointed out, “External forces seeking short-term profits could attack companies.”
• Shin Min-young (Professor at Hongik University) emphasized, “It’s a prime opportunity for structural reform of the Korean economy, achieving larger goals like balancing household asset structures and stabilizing the real estate market,” stressing the importance of seizing this rare opportunity without missing the policy timing.
• The Hankyoreh editorial noted, “We must reflect on whether these issues stem from the ruling party’s lack of policy consistency and absence of tax justice principles.”
• Related Link.
• Related Link.
• Related Link.

People Power Party Filibuster: Will It Happen?

• Filibustering (unlimited debate) can obstruct proceedings, but the Democratic Party can end it with over 180 votes after 24 hours anyway.
• The Democratic Party is likely to counter a one-day filibuster with a salami tactic, processing one item per day.
• The Broadcasting Act amendments, Yellow Envelope Act, cumulative voting, and expanded separate election of audit committee members are key issues in the second amendment of the Commercial Act.

Deep Dive.

Yoon Refuses Arrest, Strips Down.

• Special prosecutors arrived with an arrest warrant, but he stripped and lay down. He was in just a tank top and underwear.
• Jeong Seong-ho (Minister of Justice) told the National Assembly, “He was wearing prison clothes, but stripped when the special prosecutors attempted to execute the warrant, and put them back on after they left.”
• Yoon’s legal team criticized, saying, “Describing the attire of a detainee in a cramped space on a day nearing 40 degrees is personal humiliation.”
• SBS reported a Yoon associate saying, “He often removes his prison clothes to regulate body temperature,” but offered no explanation for why he didn’t dress upon the prosecutors’ request.
• The special prosecutors stated, “Next time, we will use force to arrest him.”
• Related Link.
• Related Link.
• Related Link.

Exerting Force Isn’t Easy.

• For a prison officer to use force, the inmate must be attempting escape, suicide, self-harm, or damaging the correctional facility, or obstructing the officer’s duties with force.
• The Kyunghyang Shinmun analyzed, “There is no way to forcibly remove someone just because they refuse to comply with an arrest warrant.”
• Related Link.

Jumbled U.S. Tariffs Delayed to the 7th.

• Many countries have yet to conclude negotiations. There’s talk of another TACO (Trump Always Chickens Out).
• The U.S. applied 10% to countries with a trade surplus and over 15% to those with a deficit. South Korea, Japan, and the EU received 15%, while the UK got 10%.
• Indonesia, Thailand, and the Philippines face 19%, Taiwan and Vietnam 20%, India and Kazakhstan 25%, Canada 35%, and Brazil 50%.
• China and Mexico have a 90-day grace period.

A Carrot Called Abolishing Breach of Trust.

• Lee Jae-myung remarked, “In Korea, engaging in corporate management can land you in jail, causing hesitation in domestic investment.”
• The bill to abolish breach of trust, proposed by Kim Tae-nyeon (Democratic Party lawmaker), seems to be gaining traction. It aims to remove the special breach of trust clause from the Commercial Act and stipulates no criminal punishment under the Criminal Act unless intent is proven.
• Until now, breach of trust was seen as “everyone has something to hide.”
• Kim Tae-nyeon pointed out in an interview with the JoongAng Ilbo, “When prosecutors can’t find anything on a company, they exploit the breach of trust clause.”
• Son Il-seon (Maeil Business Newspaper Social Affairs Editor) emphasized, “A shift to a criminal justice system that seeks regulation, not punishment, and recovery, not stigma, is urgent.” “But shouldn’t corrupt businesspeople be punished severely? Yes. However, that should be handled under other provisions like embezzlement or bribery, not breach of trust. We’ve been measuring everything with the ‘rubber ruler’ of breach of trust alone.”
• Related Link.
• Related Link.

No Second-in-Command in Lee Jae-myung’s Government.

• Jo Gwi-dong (Director of Political Strategy Consulting) analyzes that the intention is to prevent power leakage through mutual competition and checks.
• Lee Jae-myung, who grew independently in Seongnam City and Gyeonggi Province, owes little to established politics.
• Lee Jae-myung’s personnel reporting line is structured as Kim Yong-chae (Personnel Secretary)-Kim Hyun-ji (General Affairs Secretary)-Kang Hoon-sik (Chief of Staff). Jo Gwi-dong assessed, “Insiders are dividing personnel authority and acting as warlords.”
• There is also an intention not to provide positions for career management ahead of next year’s local elections. Favoring business figures might be a strategy to intensify internal competition and increase candidates from outside Yeouido.
• Related Link.

Seongnam Line’s Three Kims.

• Kim Yong-chae, Kim Hyun-ji, and Kim Nam-joon (First Secretary) are called the Seongnam Line’s Three Kims. Yoon Ki-chun (Second Secretary) is also classified as part of the Seongnam Line.
• The list of other secretaries has not been disclosed. The JoongAng Ilbo speculated that the reluctance to disclose might be due to the high number of secretaries from the Seongnam Line and Lee Jae-myung’s legal background.
• Related Link.

‘Alliance Modernization’ as a Keyword.

• The U.S. focus is on containing China. For Donald Trump (U.S. President), peace on the Korean Peninsula is a secondary issue.
• The “enhancement of strategic flexibility” the U.S. talks about means using U.S. forces in Korea to counter China.
• Oh Mi-yeon (RAND Corporation Korea Chair) warned, “Though unlikely, if a ‘Simultaneous Contingency’ arises in Taiwan and North Korea, the dispersion of U.S. military and strategic assets could be a significant burden in responding to dual crises.”
• Moon Chung-in (Yonsei University Professor) warned, “The old-style pleading response won’t work anymore.” If U.S. forces in Korea can’t be retained, a new role-sharing in the U.S.-Korea alliance should be proposed. There’s no need to be swayed by every little thing. Moon pointed out, “Instead of the single-command future combined forces command pursued by the Moon Jae-in administration, a ‘parallel’ command structure like Japan’s should be considered for the Korean and U.S. forces in Korea.”
• Related Link.
• Related Link.

Why Trump Sees the Korea-U.S. Alliance as a ‘Money Pit’.

• Kim Seung-ryeon (Editorial Director, Dong-A Ilbo) analyzed, “The essence is to reshape the Korea-U.S. alliance to fit the changed world, or more precisely, to align with America’s wishes.”
• Alliances are not formed between friends but between countries with common enemies. Trump already acknowledges North Korea as a nuclear state and does not see it as an enemy. The same goes for China. Asking Lee Jae-myung, “What will Korea do if the U.S. and China clash over Taiwan?” is not an easy question to answer.
• The U.S. delaying tariff negotiations with China for three months means Korea has gained a bit more time until then.
• Related Link.

Is There a Counterproposal Card?

• First, we could propose revising the nuclear agreement. Like Japan, we could demand permission for reprocessing spent nuclear fuel.
• Second, we might assert the introduction of nuclear-powered submarines. We have the technology, but the U.S. hasn’t allowed it.
• The Korea Times pointed out, “We must be cautious as it could inadvertently fuel the strategic flexibility of U.S. forces in Korea.”
• Related Link.

Task Force for ‘MASGA’ Launched.

• Make America Shipbuilding Great Again. It’s a project to revive American shipbuilding.
• Following tariff negotiations, HD Hyundai Heavy Industries, Hanwha Ocean, and Samsung Heavy Industries have formed a task force.
• Hanwha Ocean plans to expand its local shipyard workforce from 1,800 to 3,000 by 2030.
• Concerns about long-term uncertainty are also being raised. Focusing on U.S. investments might undermine the Korean shipbuilding ecosystem. There’s worry it could be like pouring water into a bottomless pit. Many U.S. shipyards still use welding machines from the 1970s.
• Korea ranks second in shipbuilding market share, after China. Over the past decade, Korea built 2,405 merchant ships, while the U.S. built only 37. The cost of producing an Aegis destroyer is $600 million in Korea, but $1.6 billion in the U.S. Korea produces 4.5 ships per dock, while the U.S. produces 0.8.
• A shipbuilding industry insider told Hankyoreh, “The aging of U.S. shipyards is severe, making it difficult to quickly boost productivity.” They added, “Considering the high minimum wage and training costs, there are many hurdles to overcome.”
• There’s hope that $150 billion of the ‘MASGA’ project could be accounted for in defense spending for building and repairing warships. The Korean government expects this to increase the nominal amount without raising defense spending, but it hasn’t received U.S. approval.
• Related Link.
• Related Link.
• Related Link.

Another Take.

Could Drop to 2700.

• Korea Economic Daily spoke with Kang Dae-kwon (CEO of Life Asset Management).
• Shin Jin-ho (CEO of Midas Asset Management) analyzed, “Foreign investors were already considering realizing profits from the unusually soaring Korean stocks, and the tax reform proposal has fueled selling sentiment.”
• Hana Securities lowered its KOSPI forecast from a high of 3710 to 3240. Lee Jae-man (Researcher at Hana Securities) predicted, “The best scenario is based on valuation increases, not additional profit growth,” adding, “If the highest tax rate on dividend income is not reverted to the original 25%, the KOSPI upper limit will remain at 3240.”
• Related Link.
• Related Link.

One Smart House is the Problem.

• A person with a 13 billion won apartment in Apgujeong pays less tax than someone with two 2 billion won apartments in Mapo.
• Chae Sang-wook (co-author of ‘Peak Out Korea’) emphasized, “We need to change the tax system from a unit-based to a value-based one.” The idea is not to give leniency for owning just one property.
• Chae Sang-wook insisted, “Jeonse should disappear,” even advocating for the elimination of jeonse loans. He believes the jeonse system has become a leverage tool for gap investors rather than a housing ladder. “In the past, ‘jeonse was good and monthly rent was bad,’ but now ‘jeonse is bad’ is the right answer,” he said.
• The solution? Increase rental housing significantly. Young people in Japan have no worries about housing. Loans are easy, but rental housing is abundant.
• Chae Sang-wook believes Lee Jae-myung’s promise of “not controlling house prices with taxes” should be overturned. Without a value-based tax reform, fundamental solutions are impossible.
• Lessons must be learned from Moon Jae-in’s (former president) failures. Moon failed in sales management and did not properly use financial policies. Lee Myung-bak (former president) abolished capital gains tax, and Moon increased taxes on multi-homeowners, boosting the value of one smart house. To deflate the real estate bubble, there must be confidence that stocks can guarantee higher long-term returns. Chae Sang-wook suggests creating a life where “you can leave your money in a fund and enjoy a beer while watching baseball.”
• Related Link.

Who Cares for Children When Parents Are Imprisoned?

• As of 2023, there are 36,620 convicted inmates and 19,957 awaiting trial.
• 9,253 inmates have minor children. Among them, 45% reported financial difficulties. 12% were from basic welfare recipient families.
• 42% of inmates said they do not contact their children after incarceration.
• In the U.S., children of inmates are considered ‘hidden victims’ and receive systematic support.
• Jeon Min-kyung (lawyer at Onyul) emphasized, “Supporting children of inmates is part of broader correctional efforts.” Lee Ji-sun (professor at Ewha Womans University) stated, “There must be procedures to identify the situations of inmates’ children and refer them to local governments or relevant agencies like the Ministry of Health and Welfare.”
• The four bills for children of inmates, proposed by Han Jeong-ae (Democratic Party lawmaker), are currently pending.

Has Paris Baguette Really Changed?

• After the President’s visit, SPC (Paris Baguette) eliminated overtime work.
• Woo Kyung-im (Dong-A Ilbo Editorial Writer) interpreted, “SPC quickly abolished overtime because the loss wasn’t significant.” The Korean Confederation of Trade Unions’ Chemical Fiber Food Union pointed out, “SPC hasn’t revealed any plans to address low wages.”
• Night shifts were blamed, but last August’s Shani factory accident occurred at 1 PM. The issue was the failure of the automatic stop device. With dangerous conditions unchanged, reduced overtime could mean reduced wages.
• Is the problem a lack of labor inspectors? As of last year, there were 3,100, exceeding the International Labour Organization’s recommendations.
• A construction supervisor Woo Kyung-im met warned, “The more people say ‘Take photos’ and ‘Give me documents,’ the more safety officers focus on paperwork instead of the site,” adding, “If we only produce paperwork safety, accidents won’t stop.” There’s also criticism that increasing on-site safety personnel is more urgent.
• Related Link.

The Fix.

Renewables to Surpass Fossil Fuels Next Year.

• According to the International Energy Agency (IEA). Coal-fired power is expected to drop below one-third. Wind and solar will increase from 5000 TWh this year to 6000 TWh next year. Their share is 20%. Hydropower accounts for 14%. Over the next two years, wind and solar are projected to meet 90% of the demand increase.
• Related Link.

Modern Slavery: The E-9 Visa.

• Over 300,000 migrant workers enter on non-professional E-9 visas.
• A Vietnamese migrant worker interviewed by JoongAng Ilbo applied to change workplaces due to harsh conditions, only to be told by his boss to return to Vietnam. E-9 visas make workplace changes difficult.
• After being dismissed, he wasn’t reported to the labor office, and when he showed up for work, the police were called to handcuff him. Eventually, with the labor office’s help, he was allowed to change workplaces but couldn’t recover millions in unpaid wages.
• If E-9 visa holders can’t find employment within three months, they must leave or become undocumented. As of June this year, there are about 380,000 undocumented foreigners.
• Kim Sung-hee (Professor at Korea University) noted, “The strict conditions for visa renewal, like needing an annual salary over 26 million won, are increasing undocumented cases,” and emphasized the need to expand professional (E-7) visas.
• Related Link.

Stalking Victim Protection Orders Needed.

• It’s a system allowing victims to request protection orders directly from the court without going through the police or prosecution, but the government’s amendment was blocked by the Court Administration Office. The reason? Increased court workload.
• There have been many cases where the police applied for interim measures, only for the prosecution to dismiss them, leading to greater harm. Interim measures often take more than two weeks. In 2022, Yoo Sang-beom (then a People Power Party lawmaker) pointed out, “It’s simply a matter of granting victims the right to request protection orders or having prosecutors file them.”
• A lawyer specializing in sexual crime victims stated, “The biggest issue with stalking crimes is that if not prevented early, it can lead to death,” adding, “If victim protection orders are introduced, even if the prosecution and police downplay the risk, victims can express their intentions actively, serving as an additional protective measure.”
• Related Link.

Every Day, 11 Seniors Take Their Own Lives.

• In five years, 18,044 seniors aged 65 and over have died by suicide. That’s about 3,000 each year.
• Oh Dae-jong (Professor at Kangbuk Samsung Hospital) stated, “Senior suicides are influenced by a complex mix of risk factors, not only psychiatric conditions like depression but also chronic physical illnesses, pain, financial difficulties, social isolation, and interpersonal conflicts.”
• Related Link.

From Nursing Homes to Empty Houses: Gwangju Gwangsan-gu’s ‘Lived-in House’ Project.

• This program supports nursing home patients who can live independently to move out. It’s an attempt to curb excessive costs like medical aid and enhance patients’ quality of life.
• The first resident of the ‘Lived-in House,’ Park Sang-rok, called it “a truly happy escape from the hospital.” Last year, Park received an average of 3.07 million won per month in medical aid. After leaving the hospital, his expenses, including outpatient treatment, dropped to 670,000 won.
• Gwangju Gwangsan-gu sees home medical care as a long-term method to reduce social care costs. Park Byung-kyu (Gwangju Gwangsan-gu Mayor) stated, “We aim to create a model of care innovation where people can enjoy a comfortable daily life in familiar surroundings.”
• Related Link.

ICYMI.

Wonsan Kalma Tour Package Costs $1,400.

• North Korea opened the Kalma Coastal Tourism Zone on the 1st of last month. The price includes accommodation, meals, and airfare.
• A Russian tourist posted a review saying, “The entire beach was empty.” They felt “like the most important person in the world.”
• Deposits are made in dollars, euros, or yuan, and payments are done via electronic wristbands. A bottle of beer costs 60 cents, a facial massage is $15, and Wi-Fi is $1.7 for 10 minutes.

Ford Took the Biggest Hit.

• Though reduced to 15%, U.S. auto tariffs have been at 25% since April for three months.
• Korean and Japanese companies held firm without price changes, and GM fared relatively well, but Ford posted a $36 million loss in the second quarter. Ford paid $800 million in tariffs for importing parts in Q2. There are views that tariff negotiations won’t be one-sidedly favorable to the U.S.
• Choi Jin-joo (Korea Times International Editor) noted, “The structure where the U.S. only borrows and consumes while Asian countries only sell was inherently unsustainable,” adding, “There should be more focus on expanding export markets and boosting domestic purchasing power.”
• Related Link.
• Related Link.

Apple Faces $800 Million Tariff Costs.

• Let’s not forget that iPhones are made in China.
• Sales rose 9.6% compared to last year’s second quarter as demand increased to buy before tariffs rise.
• After spending $800 million on tariff-related costs in the second quarter, $1.1 billion is expected in the third quarter. In April, the U.S. imposed a 34% reciprocal tariff on China, which is currently deferred to 24%.
• The price of the iPhone 17, launching next month, is expected to rise by $50.

Son Heung-min’s Departure from Tottenham.

• Son Heung-min (Tottenham player) is leaving after a 10-year contract to move to the U.S. BBC called it “the departure of a legend.”
• He joined in 2015 for a transfer fee of £22 million, played 454 matches, scored 173 goals, and made 101 assists. In the 2021-2022 season, he scored 23 goals, becoming the English Premier League’s top scorer.
• Speculation suggests he will join Los Angeles FC. There are also reports of a $20 million transfer fee offer.
• Related Link.

Worth Reading.

“Losing the Frame War,” Chosun Ilbo’s Reality Check.

• Chosun Ilbo is known for its skill in frame wars. Kim Kwang-il (Chosun Ilbo Editorial Writer) says, “Frame strategies are useful when there are no clear boundaries,” and “If you corner the opponent within a certain frame, it generates the political energy you need.” This reads like self-reflection.
• In today’s column, he diagnoses, “Even with just the rebellion frame, it’s daunting to think about how to handle the next local elections, and now an unexpected far-right frame has shackled the conservatives.” The old frames, used repeatedly, aren’t working.
• “During the presidential impeachment phase, they attempted a frame of regime war but couldn’t withstand the rebellion frame. They tried to create a frame of confrontation between the North-China-Russia regime and the South Korea-U.S.-Japan regime during the presidential impeachment trial but found it too challenging. So far, conservatives have been losing every battle in the frame war.”
• Related Link.

Echoes of a Century Ago.

• New powers are rising. Old alliances are breaking, and geopolitical clashes are increasing. Protectionist trade is strengthening, merging technology with security. Faith in progress and liberalism is wavering. A century ago, this led to economic depression and world wars.
• Thomas Friedman (New York Times columnist) once saw a flat world; now it’s rugged with mountains and cliffs.
• Jeong Cheol-hwan (Chosun Ilbo Paris correspondent) warns, “Korea has much to lose,” adding that the risk of entering the ‘game of the strong’ as a significant player, rather than a ‘passive weakling,’ has grown.
• Related Link.

National Appointment Ceremony? A Constitutionally Unsound Concept.

• “If national sovereignty is divided, it’s civil war; if transferred, it’s colonial slavery. Sovereignty cannot be split or transferred. What can be divided and shared are not the people’s sovereignty but the citizens’ rights.”
• Park Sang-hoon (political scientist) believes the term ‘people’ is overused. Yoon Seok-yeol often says, “I only trust the people” or “I will follow the people’s will.”
• When politicians say, “If it’s the people’s will,” it ultimately means they will do as they please under the guise of the people.
• The Lee Jae-myung administration plans to hold a ‘National Appointment Ceremony’ on Liberation Day, declaring, “I appoint you as my president.” The idea is to compensate for not having a proper inauguration, but an appointment ceremony is a concept without legal basis.
• Park Sang-hoon emphasized, “The role of the president comes after national sovereignty, citizenship, and the legislature.”
• Related Link.

Why Were the Children Left Alone?

• A fire broke out in a home without parents. The government decided to install fire detectors for free in homes with care gaps, but the conditions are strict. Song Jin-sik (Kyunghyang Shinmun National Social Affairs Editor) called it a “typical band-aid solution.”
• When the Yoon administration created after-school classes until 10 p.m., many experts criticized it as “abuse to keep children at school until that hour.”
• The government should allocate budget for parental leave and reduced working hours. The question is, “Why were the parents forced to be away from home at that time?”
• Related Link.

Why the Second Amendment to the Commercial Act is Essential.

• The bill to elect audit committee members separately and introduce cumulative voting is pending. Corporations oppose it for six main reasons.
• First, there’s a risk of external forces hostilely taking over the board.
• Second, they argue that directors recommended by activist funds won’t represent the interests of all shareholders.
• Third, there’s concern it will hinder long-term investment and reduce competitiveness.
• Fourth, there’s a claim that shareholder-recommended directors will leak confidential information.
• Fifth, it’s argued that it goes against global standards.
• Sixth, there’s a claim of unconstitutional infringement on property rights.
• All are arguments that can be countered with common sense. Cumulative voting and separate election of audit committee members are minimal safeguards against the tyranny of major shareholders. Excessive demands for shareholder returns lower stock prices. It’s a problem to be solved by the market.
• Kim Woo-chan (Professor at Korea University) pointed out, “It can only be seen as a fear that the practices of pursuing private interests, which they have enjoyed so far, will be curbed by the checks on directors recommended by shareholders.”
• Related Link.

Chasing KOSPI 5000: Neither Feasible nor Desirable.

• Expected net profit for KOSPI-listed companies this year is around 205 trillion won. If the price-to-earnings ratio (PER) is evaluated at Japan or Europe’s level, KOSPI 3500 is possible.
• For KOSPI to reach 5000, net profit must increase by nearly 43%. Can stock prices rise without profit growth? Nam-gu Jung (Senior Reporter at Hankyoreh) asserts it’s “almost impossible.”
• The average weekly working hours for Korean wage workers decreased from 41.2 hours in 2019 to 38.89 hours this year. The proportion of workers working less than 18 hours increased from 6.6% to 8.8%.
• Real wages increased by an average of 3.1% from 2015 to 2021, but fell by 0.2% in 2022 and 1.1% in 2023. Last year saw a 0.5% increase, and this year only a 0.6% increase as of April.
• Jung emphasized, “The key to reviving the economy and livelihoods is to stop the decline in good jobs and reverse the trend.”
• Related Link.

Why Are Good Jobs Always Scarce: A Conversation with Lee Sang-heon.

• Slow News subscriber invitation event.
• We are planning a chicken and beer party with Lee Sang-heon (Director of Employment Policy at the ILO), author of ‘Why Are Good Jobs Always Scarce’ and ‘Together We Make a Path’, and contributor of ‘Geneva at 8 AM’ to Slow News.
• We will first contact Slow News supporting members individually, and if there are spots left, we will accept additional registrations.
• Date and Time: August 19, 6:30 PM.
• Location: Insa Lounge.
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