Kim Yong-beom, chief of policy at the presidential office, abruptly offered to resign on the 31st of last month. President Lee Jae-myung accepted the resignation the next day. With the president's approval rating having fallen below the 40% line, the replacement of the policy control tower — following that of economic ministers — is no ordinary event. Notably, the government restored the basic deduction for the comprehensive real estate holding tax to its original level immediately after Kim's departure. A tax plan that would have cut the deduction for owners of a single home they do not live in to 900 million won was reversed to 1.2 billion won after just 29 days. In the end, the resignation can only be read as a disciplinary move over policy failures, including on housing.
Kim, who served for 15 months from the start of the current administration, led or publicly raised proposals including the introduction of single-stock leveraged exchange-traded funds, an overhaul of property taxation and the return of excess profits in the semiconductor industry. The intent behind the policies — reining in home prices and the won's exchange rate while sharing the fruits of growth — is desirable. Yet criticism persisted that they overlooked market predictability, policy consistency and the complexity of housing policy. Moreover, attempts by the government to intervene directly in corporate profits and the capital market rattled the stock market and heightened policy uncertainty. On top of that, the Aug. 30 cabinet reshuffle named Lee Hyoung-il, far junior to Kim, as deputy prime minister for the economy, stirring a controversy over policy authority known as the "king policy chief" dispute.
Kim's resignation and the reversal of the property tax plan are a reminder that no government beats the market. The presidential office needs to ask whether, under the slogan of a "government that gets things done," it has leaned too far toward state-directed control. The government has repeatedly announced major policies — not only the property tax overhaul but also the threshold for classifying major shareholders under the capital gains tax on stocks, a restructuring of the financial supervisory system, single-stock leveraged ETFs and individual savings accounts — only to reverse them. When announcements come first and damage control follows, shaken policy credibility is only to be expected.
Above all, the presidential office must not treat Kim's resignation as a mere device to change the subject. Nor will it do to set important policy directions unilaterally and expect ministries and the public to fall in line without question. The more directly a policy bears on people's lives, the more it must gather the views of experts and stakeholders and proceed with care. A government that truly gets things done begins by respecting public sentiment and the market.
