The State as a Production Platform.

• ”If the internet was a revolution in information, AI is a revolution in production, with competition shifting beyond algorithms to a contest of productive capacity,” wrote Kim Yong-beom (former Blue House Policy Secretary) in a Facebook post.
• “The state is no longer merely a regulator of the market but a production platform that builds power grids, develops industrial sites, and organizes supply chains,” he argued, categorizing the state’s role into three types:
• First, a state that reconnects the fruits of production back into production;
• Second, a state that establishes productive infrastructure;
• Third, a state that reproduces productive capacity.
• “Production is a prerequisite for distribution, and good distribution enables even greater production. The state is the architect of this virtuous cycle. Industrial policy in the era of productive revolution is not about running the market in its place, but organizing the entire nation as a single production platform.”
• The JoongAng Ilbo analyzed in its lead headline, “Big government is back.”
• Related Link.

Creating a Future Response Fund.

• Projections suggest up to over 100 trillion won in additional tax revenue by next year.
• Kang Hoon-sik (Chief of Staff to the President) said, “We aim to make bold investments in South Korea’s future, including support for the ‘three mega-projects,’ creating future growth engines, addressing K-shaped polarization, and providing housing, startup, and job support for 2030-generation youth.”
• The remarks came from a high-level party-government consultation meeting between the Democratic Party and the Blue House. Specific fund sizes were not mentioned.
• Related Link.

What Matters Now.

To Cut or Not to Cut Lee Byung-tae?

• He was always a controversial figure. Lee Byung-tae (Vice Chairman of the Regulatory Rationalization Committee) had previously sparked multiple controversies with remarks like “The Sewol Ferry incident was an unfortunate traffic accident.” As someone who served as chief director in Hong Joon-pyo’s (former Daegu mayor) presidential campaign, his appointment was widely seen as a bold move.
• Lee Byung-tae claimed, “May 18 has become sacrosanct,” and added, “I saw a North Korean newspaper with Kim Il-sung’s photo drenched in rain and weeping, and that was their true face.”
• Kang Yu-jeong (Blue House spokesperson) warned, “As someone in a responsible position within a government-affiliated organization, this is inappropriate conduct.”
• Kim Nam-jun (Democratic Party lawmaker) said, “Since his two-year term is guaranteed, dismissal is impossible—he must resign himself,” with interpretations suggesting this reflects Lee Jae-myung’s (president) stance.
• On Facebook, Lee Byung-tae argued, “Even shouting ‘Long live Kim Il-sung’ in central Seoul should be allowed—it’s a basic right,” adding, “The majority’s truth will purify the minority’s madness.”
• In a call with Chosun Ilbo, Lee stated, “These are expressions of personal conscience; my position won’t change,” and “I’ve heard nothing from the appointing authority,” signaling he won’t step down.
• In an editorial, Kyunghyang Shinmun argued, “Expressions that harm others’ dignity and human rights cannot be defended as free speech,” and urged, “Lee Jae-myung must demand Lee Byung-tae’s resignation.”
• Hong Sung-soo (professor at Sookmyung Women’s University) noted, “When influential figures speak this way, it inevitably becomes a message endorsing such rhetoric.”
• Han Sang-hee (professor at Konkuk University) observed, “Freedom of expression is not absolute—even if legally permitted, it doesn’t mean it’s acceptable politically, socially, or ethically.”
• Related Link.
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Lee Jin-sook’s Wreath: “What Does Starbucks Have to Do with May 18?”.

• She sent a wreath to Baejae High School and posted a photo on Facebook.
• Lee Jin-sook (People Power Party lawmaker) argued, “If Starbucks symbolizes an insult to May 18 and Gwangju, then Starbucks should no longer be allowed to operate,” adding, “If the ‘democratic forces’ assume that ‘going to Starbucks’ is an insult to Gwangju’s May 18, and discipline the Baejae High School baseball team students accordingly, they are beginning to ‘handcuff people’s thoughts.’”
• Lee Hyun-sang (JoongAng Ilbo columnist) emphasized, “The role of politics is to turn off the loudspeakers and shut their mouths,” and added, “Comforting the victim’s wounds and giving the perpetrator a chance to grow again are not mutually exclusive—maintaining that balance is the responsibility of adults.”
• Related Link.
• Related Link.

“We Won’t Draft Baejae High Alumni.”.

• When Chosun Ilbo surveyed 10 professional baseball team officials, five responded, “It will be difficult to draft them.” One scouting team leader remarked, “Getting entangled in political controversy is inevitable.”
• A team director argued, “We shouldn’t brand students with a scarlet letter like a witch hunt.”
• Baejae High students decided to visit Gwangju Il High today to apologize. They will also pay respects at the May 18 Cemetery.
• Related Link.

History Education, Leading to Self-Censorship.

• In a survey by the Korean Teachers and Educational Workers’ Union, 80.2% of teachers reported witnessing hate speech within schools. 75.2% responded that they feel challenged in addressing it.
• A high school teacher interviewed by Kyunghyang Shinmun stated, “Classes covering contentious topics like politics, history, and gender often lead to accusations of political bias, forcing teachers to engage in self-censorship.”
• Related Link.

Baejae High Backlash.

• Criticism is mounting that the disciplinary measures are excessive.
• No Won-myeong (Maeil Business News commentator) noted, “They made a mistake, but it’s not as if they sold the country—treating them like traitors is overkill.”
• Koo Jeong-woo (Sungkyunkwan University professor) pointed out, “If the school pushes through a disciplinary process lacking even procedural legitimacy, it will only fuel resentment, cynicism, and further entrench a culture of hatred.”
• Related Link.
• Related Link.

Why “Go to Starbucks” Is Not an Expression of Freedom.

• Ryu Young-jae (Uijeongbu District Court judge) emphasized, “Democracy is destroyed when discrimination leads to hatred, and hatred leads to erasure.” He noted, “Mocking Gwangju citizens over a massacre is a moral crime.”
• Kang Hyung-chul (Sookmyung Women’s University professor) warned, “Punishing individuals or organizations for deviance will not resolve the issue.”
• “The mainstream ruling party, People Power Party, rejected the impeachment of the president—a key figure in the insurrection—and resisted punishment, allowing far-right ideologies to become not deviant but a legitimate voice within the democratic system. As progressive figures label outsiders with discriminatory and mocking terms like ‘watermelon’ [a slur for perceived hypocrites], ‘Moon’s hair,’ ‘ABC’ [a derogatory term for activists], and ‘juvenile law commentators,’ teenagers will reaffirm that discrimination and hatred are not wrong.”
• Related Link.
• Related Link.

Trump’s 250th Anniversary Message: “Communism Is Cancer.”.

• In his Mount Rushmore speech, he claimed, “Communism is a greater threat than Pearl Harbor or 9/11,” adding, “It’s like cancer—it must be cut out very quickly before it starts.”
• The remarks, ahead of November’s midterms, reflect awareness of the growing influence of democratic socialist factions, including Mayor Jahan Momandani of New York.
• Trump emphasized, “America’s golden age has only just begun.”
• Coincidentally, the day saw record-breaking heatwaves and intense thunderstorms, prompting evacuation orders.
• 850,000 fireworks were launched over 40 minutes.
• Related Link.

Deep Dive.

Kim Min-seok to Gwangju, Jeong Cheong-rae to Shinan.

• The race for party leadership has ignited.
• Kim Min-seok (former Prime Minister) will declare his candidacy today at the Jeonil Building in Gwangju—a structure still bearing bullet marks from helicopters of the May 1980 martial law forces.
• Jeong Cheong-rae (former Democratic Party leader) visited the birthplace of Kim Dae-jung (former president) in Shinan County, South Jeolla. Yesterday, he visited Bongha Village in Gimhae, leaving a note: “I am proud to be a Roh Moo-hyun kid.”
• They subtly clashed over the one-person-one-vote system. Kim Min-seok remarked, “If one-person-one-vote and full primaries lead to the worst-case scenario, the party could become a union chief’s party, not one with historical roots.” Jeong Cheong-rae posted a cryptic message on Facebook: “Who led the charge for one-person-one-vote in a member-sovereign party, and who opposed it? Who championed the complete abolition of supplementary investigative authority, and who resisted? That is the question.”
• Related Link.
• Related Link.

Will Samsung Electronics’ Operating Profit Surpass 86 Trillion Won?

• Q1 was 5.72 trillion won. The brokerage consensus compiled by FnGuide is 8.55 trillion won.
• Historic performance is a given, but the key is whether it will exceed market expectations.
• Headwinds and tailwinds collide. There are reports that Apple is negotiating to purchase Chinese-made memory, and that Anthropic is discussing chip development with Samsung Electronics.
• SK Hynix will list on Nasdaq on the 10th. While some forecast passive capital inflows, others argue the peak may not be far off.
• Related Link.

Memory Chips Account for 40% of a Smartphone’s Cost.

• Counterpoint Research reports that memory components account for 40% of the manufacturing cost of an $800 smartphone. DRAM and NAND flash prices have surged from $63 last year to $291 this year—a quadrupling.
• The base model of Samsung Electronics’ Galaxy Z Fold 8 is expected to launch in the U.S. at around $1,999. Some forecasts suggest Apple’s iPhone Ultra could reach up to $3,000.
• Related Link.
• Related Link.

Samsung + SK Hynix Leverage Fund Daily Trading Volume Hits 12.8 Trillion Won.

• Market cap is 13.6 trillion won, yet turnover is high. Critics argue semiconductor leverage ETFs are amplifying market volatility.
• SK Hynix stock fell 8%, yet its ETF surged 50% on some days. As buying pressure piles on, discrepancies from actual value are growing.
• Samsung Electronics and SK Hynix account for 55% of KOSPI market cap. Their share of trading value is 64%.
• In an editorial, The Hankyoreh urged, “The situation must be closely monitored, and stabilization measures prepared without delay.”
• Related Link.

Another Take.

Customers Who ‘Fled’ Have All Returned.

• Boycotts were brief, and monthly active users (MAU) hit 35.09 million. Credit card payments reached 4.8337 trillion won last month, also a record high.
• The U.S. White House unusually noted, “We are deeply concerned about the Korean government’s discriminatory targeting of American tech companies,” which is not trivial. A Foreign Ministry official interviewed by Kyunghyang Shinmun said, “The trend of strongly opposing other countries’ regulations on U.S. firms is expected to continue for the time being.”
• The Fair Trade Commission is about to announce sanctions, potentially imposing fines of up to 4% of sales.
• Woo Sung-rak (National Security Director) once stated, “It’s true that Coupang is affecting South Korea–U.S. security consultations.” In an editorial, JoongAng Ilbo commented, “Upholding the principles of law enforcement while restoring alliance trust—that is the task the government must now address.”
• Related Link.
• Related Link.

Trump Was Also a Coupang Shareholder.

• His financial disclosures show 18 transactions buying and selling Coupang shares—around the time of the Coupang hearings in South Korea. He held up to $130,000 worth of stock.
• Kevin Warsh (Federal Reserve Chair) even served as Coupang’s outside director. He sold his shares only after being nominated for the Fed chair role.
• Coupang spent $1.79 million on lobbying this March alone.

Trump’s Messy Stock Deals.

• He bought $3.6 million worth of 327 stocks and the next day posted, “Now is the time to buy stocks.”
• He purchased $250,000 worth of Intel shares before the U.S. government announced it would acquire Intel stakes.
• The White House claims, “It’s the external manager’s decision; the president is not involved in investments.” Unlike past presidents who placed stocks in blind trusts, Trump can view his portfolio. Moreover, the trust manager is his son.
• The U.S. Conflict of Interest Act prohibits public officials from performing duties related to their assets, but it does not apply to the president and vice president.
• Na Ji-hong (Chosun Ilbo columnist) noted, “Trump has tarnished the tradition of self-restraint that sustained American democracy,” adding, “He is likely to be remembered as the dirtiest president in terms of financial matters.”
• Related Link.

OECD’s Straight Talk: Korea’s Income and Consumption Taxes Are Too Low.

• Comparisons reveal the disparity more clearly.
• Korea’s income and consumption taxes account for only 5.1% and 6.1% of GDP, respectively. The OECD averages are 8.3% and 10.4%. Corporate taxes are also lower: 2.8% in Korea versus 3.6% in the OECD.
• Korea’s income tax rates are low, but exemptions and reductions are excessive. One in three citizens pays no income tax at all.
• Property taxes are higher than the OECD average, but a closer look shows holding taxes are similar while transaction taxes dominate. Korea’s transaction taxes account for 1.6% of GDP, compared to the OECD average of 0.4%. Holding taxes are comparable: 0.9% in Korea and 1.0% in the OECD. (The trend holds when viewed as a share of total tax revenue.)
• The OECD noted, “Korea’s property tax structure relies heavily on transaction taxes compared to the OECD average,” adding, “Reforming the tax system toward a revenue-neutral holding tax approach could promote residential mobility and help ease housing market tensions.”
• It’s also striking that Korean youth delay labor market entry due to civil service exam preparation, or that tuition freezes have reduced government spending—with public expenditure per student at half the OECD average. The OECD advised raising the pension eligibility age.

Is Working with Robots Safe?

• No incidents have been reported yet, but concerns arise that if a robot weighing nearly 90kg falls, nearby workers could be injured.
• Morgan Stanley forecasts that 1 billion humanoids will be sold by 2050, with the market reaching $7.5 trillion.
• While past industrial robots were “deterministic” machines operating by fixed rules, humanoids that autonomously perform tasks are “probabilistic” machines operating on chance. NVIDIA has introduced a Blackwell-based safety system, and the International Organization for Standardization (ISO) is developing standards.
• German firm Neuromatic designs robots to crouch in place when losing balance.
• Related Link.

Khamenei’s Funeral Held Amid Calls for Revenge.

• Up to 15 million people attended the funeral of Ayatollah Ali Khamenei (Iran’s late supreme leader), who died in a U.S. airstrike last February. Chants of “Death to America” and “Death to Israel” echoed through the crowds.
• Next to Khamenei’s coffin lay the coffins of his daughter, daughter-in-law, son-in-law, and granddaughter.
• Mourners demanded retaliation. Mojtaba Khamenei (Ali Khamenei’s second son, speculated to be his successor) did not appear.
• Related Link.

AI Agents Consume 137x More Electricity.

• It’s not the same as typing a single question into a chat window.
• KAIST research shows AI agents call large language models (LLMs) 9.2x more often on average, with latency increasing up to 154x.
• An AI agent using a 70-billion-parameter LLM consumes 348Wh of power per question.
• If all 13.7 billion daily Google searches shifted to AI agents, daily power demand would reach 199GW—nearly half of the U.S.’s total 477GW capacity.

Anyone Can Report Fabricated Information.

• JoongAng Ilbo and Chosun Ilbo are amplifying the narrative, calling it the “muzzle law.” The term “censorship phobia” also originated in JoongAng Ilbo.
• The revised Information and Communications Network Act takes effect on the 7th. Those who distribute fabricated information face punitive damages up to five times the actual harm. Large online platform operators with over 1 million users are mandated to prevent distribution by deleting or blocking such content.
• The Korea Daily pointed out that the definition of “fabricated information” is vague. Anyone can report content as fabricated if they dislike it, and platform operators can arbitrarily delete or block it.
• Choi Soo-jin (People Power Party Chief Floor Spokesperson) argued, “Even posts criticizing the government, raising reasonable suspicions, or expressing simple opinions could become targets of disputes.”
• Na Kyung-won (People Power Party lawmaker) claimed, “Healthy criticism of government policies or reasonable suspicions will be labeled as ‘fake news’ and cut off by AI censorship nets.” She added, “The chain reaction of ruthless ‘platform self-censorship’—this is the true goal of this law: destroying public discourse.”
• Kim Jae-seop (People Power Party lawmaker) asserted, “This is the Lee Jae-myung government’s community censorship law and Big Brother law.”
• Kim Dong-chan (Policy Committee Chair of the Citizens’ Coalition for Media Reform) noted, “If fact-checking organizations are established dependent on government funding, the government could abuse budgetary authority to exert political influence.” Oh Kyung-mi (Open Net researcher) added, “Fact-checking organizations themselves could easily become embroiled in political disputes.”
• In an editorial, The Hankyoreh stated, “There can be no disagreement that deliberate fabrication and falsehoods threaten democracy and citizens’ rights,” but warned, “The vague criteria for ‘false’ and ‘fabricated’ could easily lead to abuse.” It added, “Politicians, high-ranking officials, and conglomerates could flood the courts with lawsuits to silence critical media.”
• Related Link.
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The Fix.

Closed Coal Mines: Population Drops 21% in a Decade.

• Taebaek City, once home to 120,000 people, now leads the nation in population decline. From 47,070 in 2016, it fell to 37,088 last year. Only 97 births were recorded last year, while 494 deaths occurred.
• “There was a time when even stray dogs were said to carry 10,000-won bills, but now even keeping shops open is impossible.”
• Yu Hye-jeong (Head of the Population Research Center at the Korea Future Population Research Institute) stated, “While massive projects worth hundreds of trillions of won are needed, a dual-track policy to create alternative industrial ecosystems in near-dead regions is urgently required.”
• Related Link.

Debating Public Education Subsidies.

• 20.8% of national taxes are automatically allocated to education offices. The semiconductor boom increased corporate taxes, sparking debate.
• The Blue House and Ministry of Economy and Finance argue for adjusting the allocation ratio to reflect declining school-age populations. The Ministry of Education insists on maintaining the current system, proposing to reserve the increased subsidies in a separate fund for universities and early childhood education.

Hair Loss vs. Life.

• Kim Chang-hoon (Industry Department Head at Hankook Ilbo), who takes hair loss medication, is prescribed generics instead of original branded drugs. Five months’ worth costs 16,500 won—roughly the price of a bowl of Pyongyang-style cold noodles.
• Kim noted, “While hair loss clearly affects psychological distress and quality of life, it doesn’t threaten physical function or life itself, and the cost is manageable.”
• “Health insurance prioritizing critically ill patients whose lives are immediately at risk aligns with the purpose of public insurance. Surely fellow sufferers of hair loss can understand this.”
• Related Link.

ICYMI.

Homeplus: Liquidation if 200 Billion Won Not Secured Within Two Weeks.

• Seoul Bankruptcy Court decided to terminate Homeplus’s rehabilitation proceedings. The immediate appeal period is 14 days.
• If 200 billion won cannot be secured, the court will declare bankruptcy and distribute remaining assets to creditors.
• With 62 Homeplus stores already pledged as collateral to Meritz Financial Group, there are predictions that bankruptcy trustees will have limited options.
• The most valuable stores for acquisition have already been sold, and with the overall decline of the big-box retail industry, remaining stores are likely to be converted into mixed-use complexes or logistics centers.
• The Hankyoreh assessed that MBK Partners’ predatory management led to the collapse. After acquiring the company with 3.2 trillion won in equity and 2.7 trillion won in acquisition financing, they repaid debts through a “sale and leaseback” strategy. Rising store rental costs, delayed online transition, and underinvestment in logistics weakened the survival foundation, according to the analysis.
• Related Link.

K-Food Exports Hit Record High.

• First-half agricultural and food exports surpassed $7.05 billion (over 10 trillion won).
• Middle East imports rose 25%.
• Kimchi exports alone grew over 15% in North America.
• Ramen exports reached $930 million—up 28%.
• Sesame oil exports increased 12%, driven by popularity as salad dressing.

Worth Reading.

Is This a Team? Is This a Federation?

• The charm of football lies in its unpredictability. England’s power shot ricochets off the crossbar. Hundreds of millions in salary players miss penalty kicks. A mis-hit ball goes in, a defender clears it only for it to rebound in, a goalkeeper gets caught in a split-second error. Who could have predicted Cabo Verde—population 500,000—defeating Uruguay or Paraguay sending Germany home on penalties?
• It’s the manager’s job to control all these variables.
• This isn’t Hong Myung-bo’s (South Korea national team manager) first failure. After the 2014 Brazil World Cup collapse, he admitted, “It was my tactical failure.” Back then, the opposing manager noted, “Korean players are technically skilled but lack creativity as a team.”
• Twelve years later, the same failure repeated—but this time, he refused to acknowledge it. Hong said, “I don’t know the cause of the defeat.” If the manager doesn’t, who does?
• During last year’s 0:5 loss to Brazil, Carlo Ancelotti (Brazil manager) stood in the rain barking orders, while Hong sat in the first row of the bench. The failed three-back system hasn’t evolved at all.
• Football evolves. Paris Saint-Germain introduced “Kick-off Out,” a new tactic. Borussia Dortmund shook things up with gegenpressing. Korean football lacked the insight to read spaces. Hong claimed, “Work rates are the same, high-intensity sprints have even increased,” but the ball kept going backward.
• The football federation is equally problematic. Jung Mong-gyu (Korea Football Association president) was at a Gangwon golf course on May 17—the World Cup final roster announcement date. He explained it as an “internal decision considering the situation around the team and federation,” but it’s nonsense.
• Hong once scolded his Ulsan players in 2022: “Is this a team?” Jung Yun-soo (professor at Sungkonghoe University) asks, “Is this a federation?”
• Related Link.

Toward an Electric Nation.

• If you can read it, you can analyze it. If you can analyze it, you can predict it. If you can predict it, you can control it. If you can control it, you can automate it.
• Park Tae-woong (Chairman of the Nokseo Forum) emphasized, “An electric nation is not simply one that produces a lot of electricity, but a nation that transforms society as a whole into a platform where software and AI can operate.”
• Park Tae-woong assessed Lee Jae-myung’s government mega-project as “a declaration of intent for manufacturing powerhouse South Korea to enter the electric nation era first among Western blocs.” “It is the grandest future dream a nation with world-class semiconductors, strong manufacturing foundations, and viable software capabilities can envision in the electric nation age.”
• Related Link.

If Honam Fails, Will Yongin or Gumi Succeed?

• “Now is the time for confession. It’s time to admit the arrogance and ignorance of regionalism.”
• “When others succeed, reactions vary: some rejoice, others feel envy. Unless one’s insides twist in resentment, one doesn’t curse, ‘Die, perish.’ If ordinary folk behave thus, the current situation surrounding the Honam semiconductor cluster resembles a diagnostic chart for politicians and media rushing to emergency rooms with intestinal obstruction.”
• Kim Nam-il (Hankyoreh reporter) quoted an industrial site expert he met: “If Honam fails for such reasons, then Yongin and Yeongnam won’t succeed with semiconductors either.”
• “Ahead of local elections, those with political prowess at total burnout—unable even to integrate Daegu-Gyeongbuk—are busy kicking away the ‘first meal in decades’ Honam is about to receive, before it’s even served.”
• Related Link.