Freedom Voice #52: Let the Bankers Solve their own Problems

The original Korean version of “Freedom Voice #52: Let the Bankers Solve their own Problems” was written by Freedom Factory's CEO, Chung-ho Kim, on September 17^th 2014. It can be found here.

Looking at the problems that plague Kookmin Bank nowadays, it becomes clear by Korea's financial industry can't grow. Korea's financial watchdog, Financial Supervisory Service (FSS) and the Financial Services Commission (FSC), which is the central government's body responsible for financial policy and financial supervision, wield so much influence that financial companies cannot even dream of growing.

The issue at hand is regarding the problem with Kookmin Bank's introduction of a new computer system. Apparently, whereas the bank wishes to replace its current system with a Unix system, holding companies are opposed to the change.

The FSC has since gotten itself involved in the foray and have formally issued reprimands against the bank's senior managers. Naturally, this has done nothing but to worsen the conflict.

I do not know the details of this conflict. To be honest, I don't even want to know. But what I want to know is why the authorities have decided to get involved in a dispute about a bank wanting to change its computing system. If there is a conflict between a bank and its holding companies, it is a conflict that ought to be resolved by the parties involved.

However, what started off as a small conflict now involves the FSS, the FSC, and the Prosecutors Service. Those who should be the ones to resolve this conflict have been relegated to the back seat.

I wish that the FSS and the FSC would not get involved in every single mundane problem that exists in the financial industry. Whether people choose to engage in litigation or reach a compromise, it is a much better idea to let those directly involved to solve their own mess.

The Keumsan Separation Law (a law that requires financial institutions to separate financial capital from industrial capital) is what causes confusion when people need to determine who is exactly running the banks. And it is for such reasons that banks lack the ability to resolve their own problems.

The only way for banks to resolve their problems is via trial and error. If the government steps in every time a problem arises, just how are banks supposed to learn to resolve their own problems? If this trend continues, private banks will be private in name only whereas in practice, they will all be nationally-run banks. Sometimes, however, it does feel like they are already nationally-run.

I am not denying the importance of the FSS. The FSS does, indeed, have a legitimate role to play in the market. After all, financial collapse is a real possibility that the FSS must guard against. If one bank fails, others can follow suit and then the entire economy could fall apart.

Therefore, the FSS needs to be involved to a certain extent in the industry that it oversees in order to ensure that the economy does not collapse due to market failure. However, monitoring the industry's every move and its near constant interventions in the financial industry is a clear overstepping of its functions.

The fact that senior bank managers are given golden parachutes is one of the worst kept secrets in the world. Shareholders have no say whatsoever. But what does any of that have to do with market stability? As we can see from this fiasco at Kookmin Bank, all it does is to create factions that are constantly at each others' throats.

The FSS also ought to stay out of the daily business practices of the financial industry. Any time that a bank or any other financial institution wants to introduce a new service, it needs to seek permission from the FSS every step of the way. The financial institutions themselves ought to make such decisions without having to need to ask for every single permission. Consumers are more than able to determine for themselves as to whether those services in question are beneficial for them or not.

Whether its the FSS or the FSC or the Blue House, they all ought to take their hands off of the industry's mundane everyday business practices. They should stop treating the industry like a child. Believe it or not, Korea's financial industry is more than 60 years old. It is more than capable of governing itself. Whether we are talking about the people who work in the industry or the customers that they serve, people already already know the rules of the game.

The authorities' overbearing involvement in the industry is forcing the financial industry to accept being nothing more than a big fish in a small pond.

If we want Korea's financial industry to be as successful and world-renowned like Samsung Electronics or Hyundai Motors, they should be set free. They should wake up from their delusions that they somehow know better than the sum total of individual consumers.

CEO of Freedom Factory

Chung-ho Kim

Sometimes Tears only breed more Misery

The original Korean version of “Rising Star #1: Sometimes Tears only breed more Misery” was written by Freedom Factory's Planning Director, Yoojin Lee, on April 22^nd 2014. It can be found here.

On April 16^th 2014, the Sewol sank off the coast of South Jeolla Province. As of this writing, out of a total of 476 passengers, 174 passengers were rescued, 215 people are still missing, and 87 people have been found dead. Out of 325 high school students who were on a field trip, only 75 were rescued. The other 250 children's parents are in shock and have been devastated. No matter how much we may think we have been desensitized by the media, this is no way one could ever get used to seeing something like this.

Accidents are called accidents because they happen accidentally. They are out of our control. “Unpredictable accidents” (불의의 사고) is quite the redundant statement. Claiming that we could have prevented such-and-such an accident if only we had taken such-and-such steps can only occur in hindsight. Notice that even in the movie “Minority Report,” where it is possible to predict imminent crimes, none could prevent accidents.

No matter how much we prepare for any possible eventuality, accidents are, unfortunately, inevitable. The only way we can truly minimize accidents is to be ever vigilant about our surroundings. There is no way to eliminate accidents altogether.

“There is no way.” Perhaps that is the most frustrating thing about this tragic incident; that we can't do anything about it.

As for the public, it is now gripped in fear over the possibility of such an accident happening again. While the public is praying that such an accident never happens again in the future (a real miracle that would be), the courts are carrying out swift trials for those deemed responsible. As new villains are discovered everyday, the public seems to be capable of unquenchable hate. There doesn't seem to be anyone who are questioning whether any of this productive. But then again, if they had the ability to think rationally, I don't suppose they would be this angry to begin with.

Last weekend, all three major broadcast network channels, as well as Internet media sites had reported on the Sewol, mixing facts and rumors, from sun up until sun down. Even personal blogs were participating in it. Everywhere you turn, there is fear, sadness, and anger.

People who dared to go to a baseball game or even showed signs of being happy in their personal lives were damned as sinners by the public. It's not just baseball games. Concerts, cultural festivals, seminars, public debates... they have all either canceled or have been postponed indefinitely so as not to be thought of as being heartless.

It seems that when my neighbors are in mourning, I have to be in mourning, too. And when they are angry, I also have to be angry. It's like as though the sinking of the Sewol has caused time itself to stop.

When we mourn for the dead, do we do it privately in our thoughts, or do we have to express it publicly? If we don't express our regrets and sorrows publicly, must we necessarily be fearful of being thought of as lacking compassion? If that is, indeed, what we must do, considering all the tragic events that occur around the world on a daily basis, each of us ought to ceaselessly wail and gnash our teeth 24/7 until the moment we die.

Some people will meet unfortunate and untimely deaths. Despite that, however, the living must continue living. Death is a part of life. Any sympathy from those people who were not directly affected by a tragedy, though thoughtful for the time being, is simply an extension of one's own self-centeredness.

As far as the victims, survivors, and their family members are concerned, no matter how sincere an expression of a stranger's sympathies may be, other people's condolences can be annoying at best, and offensive at worst. Therefore, the only humane things that the rest of us can do are to remain silent and give those people the time and the space that they need to grieve.

The authorities are saying that it might take about two months for them to pull the Sewol out of its watery grave. I wonder if the rest of us will be able to regain our composure by then, too? In two months, when the sunken ship has revealed all of her secrets, among those of us who were not directly affected by the sinking of this ferry, many of us will have already forgotten the incident and will have begun to cheer for our national soccer team in the World Cup. Like as though they had earned the right to be joyful again since they had already shown their obligatory sense of sorrow.

Let us not blindly follow this Pied Piper that calls itself the media. Let us not all force ourselves to be sorrowful just because the media is telling us to be sorrowful. Let us not actively engage in promoting grief or anger.

The only thing that the rest of us should do is to live our lives normally and give the victims of this tragedy the time and the space that they need. That is the best way that we can truly help them.

Selected Poem

If things could be resolved with but a word of condolence

There would be no tragedy in the world

As we search for answers

If I should hit a wall

I want to at least stop my quest

And rest on that spot for at least a while

Claiming that someone must know the unknown

Honoring some

While cursing others

When I am hurt by something in the world

I just want to leave my hurt be

I hear that it is not true

That a silent heart suffers less than an open book

Sometimes, tears only breed more misery.

Planning Director of Freedom Factory
Yoojin Lee

Freedom Voice #51: We Cannot Avoid Reality

The original Korean version of “Freedom Voice #51: We Cannot Avoid Reality” was written by Freedom Factory's CEO, Chung-ho Kim, on September 11^th 2014. It can be found here.

I was reading the newspaper yesterday when something caught my eye. The article said that despite the fact that the price of an apartment unit was going at a rate of ₩40 million (US$38,500) for 3.3m² (35.521ft²) worth of space, demand for apartments was still very strong. The thing that caught my eyes was not so much that the demand was still strong or even the price. It was the bit about 3.3m².

To be specific, did you know that it is illegal to state how much 3.3m² of an apartment unit or a plot of land is priced?

As far as the law is concerned, when it comes to the measurement of property, the use of the word “pyong” (a unit of measurement whereby 1m² is equivalent to 0.30 pyong) is prohibited. The law expressly states that all measurements must be made according to the metric system.

The newspaper article that I saw did not use the word “pyong.” However, the measurement – 3.3m² – is very much illegal because saying “3.3m²” is a sneaky way of saying 1 pyong. Therefore, in order for the newspaper article to have not broken any laws, it ought to have said that 1m² worth of apartment space costs ₩12,120,000 (₩40 million ÷ 3.3 = ₩1,212.121212...).

The journalist in question who wrote the newspaper article has broken the law. So, the newspaper company that employs this journalist is liable to pay a fine of up to ₩1 million. However, there is a good chance that this newspaper company will not be forced to cough up that money. That is because it is likely that no one will report the newspaper to the proper regulating authority. Whenever it comes to reporting on property prices, almost every newspaper reports on the story and does not fail to mention the magic number – 3.3m² – and I have never heard of anyone being forced to pay the fine. The law, in other words, is useless and unenforced.

Although it is a law that is never enforced, I can understand why the law was passed in the first place. If people continue to use pyong as a form of measurement, it will cause confusion when people try to use other forms of measurement, such as the metric system. Depending on the tools of objects or buildings being constructed, it could even lead to fatal accidents. If it were only possible, it would be splendid if everyone would use the metric system for all types of measurement.

But it just does not seem possible. The government has been cajoling, persuading, and threatening people to use the metric system instead of pyong for decades. Yet old habits die hard. The fact that this newspaper journalist used the number 3.3m², and the fact that this newspaper and every other newspaper that quotes this illegal number will not be punished goes to show that people have come to accept that pyong is not going anywhere. I think it is time that everyone accepts that reality.

As long as unrealistic laws are on the books, whether people accept it or not, even the most law-abiding citizen is turned into a criminal.

Seriously, is saying 1 pyong so bad that people have to resort to such foolishness as saying 3.3m²? Even when people resort to such mathematical games, it's still illegal! It only makes sense to decriminalize the use of the word pyong so that people will no longer have to worry about being thought of as criminals.

I am bringing this up because I want to point out that people seem to be doing as much as they can to ignore reality. Although ideals are important, it is also important to wake up to reality.

There are many laws that do not reflect reality. For example, as far as the law goes, people who board Express Buses must be seated. If there is a single passenger who is not seated, an express bus is not permitted to operate. However, in reality, there are many people who board Express Buses even when seats are not available. What can the bus companies do? They cannot be expected to supply more buses than they have during rush hour when there are more people who have to get to work or get home from work than there are buses. Under the circumstances, people who choose to board the buses knowing that seats are not available do so at their own risk. That is the reality of the situation and people can only act according to the hand that they are dealt.

The problem is that the law makes the action of accepting reality illegal.

The same applies to funding political campaigns. Politics requires money. Politicians have to campaign and they have to keep their supporters happy. If they don't, who would vote for them? As far as the law is concerned, that is not something that people can or ought to accept. All civic-minded people ought to scream that money should not determine politics.

Accepting campaign contributions has been illegal for decades. But what is the reality? I don't think it is a stretch to imagine that almost every politician has accepted illegal campaign contributions. Furthermore, all those people who have given money to politicians must have known that they, too, were breaking the law.

Although there is now a watch dog that oversees political campaign contributions, it is unlikely that it will make a big difference.

Reality is often ugly. It is pitiful that people still use pyong as a measurement, which, by the way, was a form of measurement that was introduced to Korea during the time when Korea was a Japanese colony. It is pitiful that Express Bus drivers still allow passengers to board their buses even though they know that there is no place to sit. It is pitiful that money is what makes politics go round.

As ugly as it may be, however, that is still our reality. We cannot avoid it. And if we cannot avoid it, we have to accept it and make the best of what we have. If people continue to deny reality and instead focus on ideals and principles, reality will only become uglier.

CEO of Freedom Factory

Chung-ho Kim

Meaningless Babbling

The original Korean version of “Rising Star #8: Meaningless Babbling” was written by Freedom Factory's Planning Director, Yoojin Lee, on August 17^th 2014.  It can be found here.


From the time that I was still a little girl until I got into middle school, whenever my teacher told us to write about our hopes and dreams, I always said that I wanted to be a loyal stay-at-home housewife/mom.  To be specific, I wanted to marry a man who owned a ramen factory.

The thing is, my parents never allowed me to eat ramen at home.  So, of course I wanted to eat it more.  And naturally, I thought that if I got married to a man who owned a ramen factory, that would be the day that I would be able to do anything that I wished.  At the time, marriage and ramen were the two biggest symbols of freedom in my life.

Looking back, I think I was really cute even if I say so myself.

But the important thing is that just because my parents forbade me from eating ramen didn't mean that my appetite for ramen was somehow gone. Nor did it mean that it would disappear from the supermarket.  So, of course I ate ramen whenever I got the chance.  While I was younger, my perenially unemployed uncle used to live with us.  He was always armed with a guitar in one hand and a song in the other.  And whenever he got hungry, he used to send me on errands to buy him a packet of ramen.  Whenever he sent me on such errands, I always bought the kind that I wanted and he always scolded me for getting the type that he thought didn't taste all that great.

As far as he was concerned Sam-yang Ramen was the best.

When ramen was first sold in Korea in 1963, it used to cost ₩10 a pack (as of this writing US$1.00 is worth ₩1033).  Later on, in the latter half of the 1970s, the price rose to ₩50 a pack.  Then in the 1980s, ₩90 a pack.  In the early 1990s, ₩220 a pack.  In the late 1990s, ₩450.  Now in the 2000s, it costs up to ₩750 a pack.

The price of ramen does go up really quickly, doesn't it?

However, it wasn't just the price of ramen that skyrocketed.  The same applied to the price of just about everything else.  I do believe that this is what it known as inflation.

The red line represents the Consumer Price Index whereas the green line represents the price of Sam-yang ramen from 1963 to the present day.

Looking back, when I was in high school, I learned about inflation and deflation.  Inflation, of course, refers to the general increase in the price of goods and the loss of a currency's value.  Deflation, on the other hand, refers to the general fall in the price of goods and the improvement of a currency's value.  Though I learned about both, I don't think I have ever experienced deflation.

One day, I was struck with a question.  Why doesn't the price of ramen ever fall?  I'm not talking about ramen being sold for lower prices during promotional sales.  I am talking about a general fall in the price of ramen via deflationary pressures.  If there is inflation, wouldn't it be just as natural as for there to be deflation as well?  As long as there was a limited amount of money, then supply and demand would cause prices to rise and fall.  Just like the way I learned about the price system in school.

Of course, the fact that prices only go up can only mean that the amount of money that circulates in the economy is not limited.  Coupled with the fact that people don't really have a choice about which money they can get to use just goes to show why a lot of banks never seem to go bankrupt.

Let's say, for example, that we plan to go out to sea on a boat.  No matter how much we pray for calm seas, there is no guarantee that it will always be smooth sailing.  Sometimes there will be choppy seas and sometimes, there will be waves that we just cannot manage to stay above.  If we ever find ourselves on a boat in the middle of the sea during a storm, wishing away the storm won't save us.  All we can do is try to survive the storm the best way we can.

When there is an increase in the amount of money, the price of goods rises.  When the price of goods rise, that means that the value of money has fallen.  For example, if a bag of cookies that used to cost ₩500 now costs ₩5,000, what that means is that in the past, whereas one could buy 20 bags of cookies for ₩10,000 in the past, now, people can buy only 2 bags of cookies for the same amount of money.  That is why there has to be a limited amount of money.  Every Central Bank in the world does works hard to make sure that there is an appropriate amount of money in their countries - no more, no less.

Source: Bank of Korea's Economic Education - Economics Lessons for Children

The Bank of Korea likes to say that an “appropriate” amount of money ought to exist in the world and it claims that it works hard to achieve this balance.  But how much is an “appropriate” amount of money?  Should there be enough for economic growth?

If so, I have a few questions about that.

• Is it possible for far-off third parties to figure out which human action is economically beneficial and which is not?
• Is it possible for the Bank of Korea to know for sure our current economic climate?
• Even if it could, can it then somehow accurately analyze that data in timely fashion?
• Then can it actually accurately predict the economic landscape of the future?
• It is possible for the Bank of Korea to actually know how much is just the right amount of money that needs to be printed?  Furthermore, is it possible for the Bank of Korea to know just how long that appropriate amount of money ought to be circulated?

It doesn't take a genius to realize that it is all a pointless exercise in futility.

Some time ago, Adidas had a rather catchy slogan – Impossible is Nothing.  And the Bank of Korea seems to have decided to pursue a monetary policy based on that slogan's call for tenacious determination.  As laudable as such a sentiment may be in sports, pursuing that kind of monetary policy is analogous to a snake oil peddler asking his potential clientele to trust him just this one time because he swears upon his life that his “medicine” is actually an elixir.

God knows what would happen if we took that “medicine.”  It is likely that we would get even sicker than we were before we took that “medicine.”

Only learned people seem to be able to mess around with interest rates; and they seem to do with it with the gentle flick of their hands.  And it is no different from praying for calm seas.

These central bankers have created a mess with their monopolization of the printing and distribution of money.  In order to fix the mess they made, they have pursued expansionist monetary policies.  And all the while they proclaim to all who are willing to listen that they are doing all they can to stem this flood.  I wonder if any of these people ever lose sleep at night.

If they are, indeed, that exhausted from all their efforts that have stemmed from their good intentions to save the people, then, perhaps, for their sake, if for no one else's, they all ought to resign en masse.

If they are religious, considering the Pope's visit to Korea, perhaps they could also consider going to church for some much needed confession.  They could just tell the priest that they did it because even they have bills to pay and need to put food on the table.  I'm sure that they'd be forgiven.  It wasn't like as though they were plotting to overthrow the State.

(To be continued in Part 2)

Planning Director of Freedom Factory
Yoojin Lee

Freedom Voice #50: Guarding Against Totalitarianism

The original Korean version of “Freedom Voice #50: Guarding Against Totalitarianism” was written by Freedom Factory's CEO, Chung-ho Kim, on September 3^rd 2014.  It can be found here.



After our “A Little Courage” campaign photos went out last week, we received a lot of support from many people.  Over 6,000 people viewed our website at www.freedomfactory.co.kr and we also received about 3,000 likes on our Facebook page.  It was possibly the most viewed among everything that I had ever written.  However, there were also many people who criticized and attacked me for the campaign.  So, I felt that I had to once again write about why I began this campaign, even though I know that I will be the victim of trolls yet again.

In a nutshell, it is because I am standing guard against totalitarianism.  I grow wary of our society that tries to make holding a dissenting opinion an objectionable offense.

The Republic of Korea is a democratic republic and ought to remain so.  It is a society where each individual is free to think whatever he or she may wish.  Also, it is a society that has thus far recognized people's right to express such thoughts.  Well, except for perhaps the right to engage in inflammatory speech meant to incite the violent overthrow of the government.

However, there has been a noticeable shift in tone since people protested against importing American beef, which was feared to have been tainted with Mad Cow Disease.  At the time, people who dared to say that the fears of Mad Cow Disease were exaggerated had to face direct and personal threats to their safety.  There was no room for any kind of dissent or differing opinion.  To me, that was an unmistakable sign of totalitarianism.

With the sinking of the Sewol, I am feeling a sense of deja vu.  I worry that the entire Korean people might have fallen into a kind of collective depression.  Many people wish to overcome this sense of depression but appear to be unable to.  I think it is because they are afraid of showing any emotion that might be different from those that are felt by the survivors and the family members of the departed.

Of course, there is no one who has been affected by this tragedy who has not been saddened.  However, depending on the individual and how much they have been affected by the tragedy, the length of time that each individual feels sad about the tragedy is different.  On one hand, there are those who will never forget this pain and grief for as long as they live.  On the other hand, there are those who have already forgotten and those who wish to forget.  I think it is wrong to claim that those who have moved on from the tragedy already to be cold-hearted.  Everyone has the right to move on.  Even if we don't want to move on, the passage of time makes us move on.  That is the only way that we can achieve new things.  It is high time that those who wish to express such a desire ought to be allowed to do so without fear of being ostracized and personally attacked by others.  It is high time that people once again be allowed to expressing disagreement with the mainstream opinion.

As I said, there are people who will never forget the pain and the grief that had been inflicted upon them by the sinking of the Sewol.  However, the reason I uploaded my essay and my photos the previous week was to express my opinion that I would like to see people stop using Kwanghamoon Square as a public grieving spot for the Sewol.  Others have the right to be at Kwanghamoon Square as well.  I want to see Kwanghamoon Square go back to what it used to be – a public space open to all, and not just to those specific people who wish to grieve for a specific event.  The proper place for debating the merits of a special investigative law about the Sewol Disaster is the National Assembly.  Not Kwanghamoon Square.

I dread what people will call me this time around.  However, I feel obligated to give voice to my opinion one more time.  That is because the thing that I dread more is this country falling victim to totalitarianism.  We have to do all that we can to defend our democratic republic.   So I would like to appeal to anyone who is willing to listen just one more time – we must stand guard against totalitarianism.

CEO of Freedom Factory
Chung-ho Kim