The five-year term structure of power inevitably breeds impatience. While a president's term lasts five years, by the third or fourth year, the influence of power tends to wane. If the government makes missteps that alienate public opinion or faces a scandal, this decline can accelerate. All past administrations have followed this trajectory, differing only in whether they experienced a soft landing or a rapid fall.
This inherent impatience leads to an obsession with speed. The perception that there is only one to two years of effective working time at the beginning of a term drives efforts to achieve visible results in the first year, when approval ratings are relatively high. However, few administrations have successfully implemented such plans or achieved tangible outcomes. In fact, the first one to two years of past governments have generally been chaotic. The last 20 years illustrate this: the Lee Myung-bak administration struggled with the global economic crisis and the U.S. beef controversy, while the Park Geun-hye administration faced backlash over broken promises on economic democratization. The Moon Jae-in administration fared slightly better but also saw a decline in policy momentum by its second year. The Yoon Suk-yeol administration, lacking a coherent philosophy and strategy, is an exception.
In this context, the Lee Jae-myung government, now 15 months into its term, has had a promising start. With the catchphrase of being a 'pragmatic government that gets things done,' it has achieved positive results across the economy. In terms of national approval ratings during the early months, the Lee administration resembles the Moon administration. Just as the Moon government garnered public support through successful inter-Korean summits, the Lee administration quickly met its five-year goal of a 'KOSPI 5000 era.' Notably, the KOSPI index even reached '9000' shortly after Lee's first year in office. While this surge is attributed to the semiconductor supercycle, it cannot diminish the significance of policy efforts such as amendments to commercial law. The rising KOSPI index naturally led to approval ratings climbing to the 60-70% range, aided by a disorganized opposition.
However, as the second year begins, the atmosphere is shifting. National approval ratings began to decline in June. According to a Realmeter survey, the first 'dead cross' for President Lee's approval ratings appeared in the third week of June. By the first week of August, the gap had widened to nearly 10 percentage points (43.3% approval, 53.0% disapproval). This decline mirrors the sharp drop in approval ratings experienced by the Moon administration in the latter half of its second year in 2018. A significant factor contributing to this decline is the issue of real estate. Despite the introduction of the August 3 real estate tax measures and the August 13 supply measures, public sentiment shows little sign of changing, reminiscent of the Moon administration's struggles. Consequently, a palpable sense of 'crisis' is evident in the statements coming from the Blue House and the ruling party following the announcement of real estate policies. There are concerns that the current administration may become a 'Moon Jae-in government season two' regarding real estate issues.
Of course, it is too early to judge the success or failure of the Lee administration's real estate policies. It remains to be seen how the government will modify its real estate tax reform plan and the delayed effects of supply measures on the market. However, it is undeniable that public sentiment is currently unfavorable. Just as both progressives and conservatives, as well as homeowners and non-homeowners, expressed dissatisfaction with the Moon administration's real estate policies, there is growing discontent within the ruling party and among young people regarding the current administration's real estate measures. Compounding the situation, the previously soaring stock market has also begun to cool.
What results will the Lee administration's real estate policies yield? Will it follow the path of the Moon administration, which issued 28 measures, or will it take a different approach? While predictions and forecasts are challenging, there is a noteworthy reference: a book titled Real Estate and Politics by Kim Soo-hyun, who served as the policy chief in the Moon administration. Kim was a key architect of the Moon administration's real estate policies. His book serves as a memoir and a cautionary tale regarding the failures of real estate policies during that time.
In the book, Kim attributes the failures of the Moon administration's real estate policies to 'global liquidity,' but he also presents points worth considering for the current administration's policymakers. He describes these as 'lessons and reflections to be learned from the frustrations of the Moon administration.' These include the pitfalls of punitive taxation aimed at controlling real estate and the limitations of slow housing supply relative to demand. Above all, he emphasizes the painful loss of 'trust in government policy.'
It is likely that the key officials in the Lee administration, including Kim Yong-beom, the Blue House policy chief, Koo Yun-cheol, the economic deputy prime minister, and Lee Ok-won, the chairman of the Financial Services Commission, have all read Kim's book. They were instrumental bureaucrats involved in crafting the Moon administration's real estate policies alongside Kim. What they gleaned from the policy failures over a decade ago will determine the success or failure of the Lee administration's real estate policies.
* This article has been translated by AI.
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