[Comprehensive] Choo Mi-ae, Following 'Geumbubunri' with 'Baby and Salt Theory'... Political Circle Criticism Continues

Choo Mi-ae: "'Geumbubunri' is not a common term in economics but not entirely out of place"
Political circles criticize, "The Minister of Justice should focus on her core duties"

Minister of Justice Choo Mi-ae is attending an extraordinary Cabinet meeting held at the Government Seoul Office Building on the 4th / Photo by Yonhap News

[Asia Economy Reporter Kim Ga-yeon] Minister of Justice Choo Mi-ae expressed opposition to the lifting of the Seoul Greenbelt (development-restricted area) and advocated for the 'separation of finance and real estate.' In response to the criticism that arose, Minister Choo rebutted, saying, "Overnight, the 'deutbojab' (an unheard-of nobody) has become a real situation."

On the 20th, Minister Choo wrote on her Facebook, "They criticize my 'proposal for separating finance' as deutbojab," and made this statement.

She continued, "It is said that a private equity fund bought 46 apartments in Gangnam. This incident makes us realize that even if we separate finance and real estate now, it would be too late," adding, "Opposition party lawmakers! Shouldn't private equity funds under the Capital Markets Act be regulated from investing in residential apartments? I hope you are not mocking the inability to lower housing prices while standing in the ranks of those raising them."

She further stated, "What would happen if credit creation like our country's banks is linked to real estate? We've heard of the gold standard, silver standard, and dollar peg, but the real estate standard is unheard of and irrational," and questioned, "Just as the Minister of Justice cannot stand idly by while watching the economy turn into a gambling den with a gambling frenzy, wouldn't silence be a dereliction of duty?"

Earlier, on the 18th, Minister Choo proposed a 21st-century 'policy of separating finance and real estate,' likening it to the separation of finance and industry, stating on her Facebook, "Everyone knows that housing prices in Seoul cannot be controlled by a single word from authorities or lawmakers. The fundamental cause is that finance and real estate are one entity. The Moon Jae-in administration cannot suddenly change this."

She said, "Since the Park Chung-hee era of developmental dictatorship, corrupt powers and conglomerates colluded in land speculation along the Han River and Gangnam land development, bringing in financial institutions. This created a distorted economic system where finance and real estate are inseparable," adding, "As a result, the economy is shackled by real estate, making effective real estate policies impossible. In other words, the Korean economy is one where finance dominates real estate."

She added, "If more money continues to flow into land, a limited national resource, the country's vision and competitiveness will be lost," and "The Greenbelt must not be lifted to turn Seoul and the metropolitan area into a speculative arena attracting money nationwide. From now on, we must prevent finance from dominating real estate."

Minister of Justice Choo Mi-ae is responding to questions from lawmakers at the plenary meeting of the National Assembly's Legislation and Judiciary Committee on the afternoon of the 1st. Photo by Yonhap News

Minister Choo's claims sparked criticism mainly from the opposition and political circles, questioning, "Why is the Minister of Justice getting involved?"

On the 19th, Bae Jun-young, spokesperson for the United Future Party, issued a statement saying, "The Ministry of Justice is already struggling with a total crisis, yet the minister is meddling in unrelated matters, making the public more anxious. Focus on the Ministry of Justice instead of distractions," and criticized, "Minister Choo blamed the previous administration for the housing price surge and presented the obscure concept of 'separation of finance' as a solution."

On the 18th, Kwon Young-se, a member of the Future United Party, wrote on his Facebook, "It is an absurd situation never experienced before that a sitting minister blatantly intervenes in matters outside their expertise," adding, "It is disrespectful to the relevant ministry, her own ministry, the public, and the president should not remain silent."

Cho Soo-jin, a United Future Party lawmaker, shared related articles and said, "Minister Choo is the Minister of Justice," emphasizing, "She should stress law and order and victims' human rights. We repeatedly demand clear answers regarding the 'real Minister of Justice' suspicions, her son's 'emperor desertion' allegations, and various illegal controversies related to 'vacation privilege abuse.'"

Former Seoul Mayor Oh Se-hoon also targeted Minister Choo, saying, "Ban loans secured by real estate? That’s like telling the market economy not to function. It’s a truly strange and unheard-of theory," adding, "The Moon Jae-in administration's housing policy is a war against speculative demand. It is shortsighted, fragmentary, and emotional."

As the controversy spread, Minister Choo rebutted, saying, "The Minister of Justice, as a member of the State Council, can express opinions on major national policies."

On the 19th, she wrote on her Facebook, "'Separation of finance' is a term I first introduced, so naturally it is not a commonly used economic term. But it is not a random concept," adding, "Of course, I am not an economist, so I cannot present a perfect theory, but I am raising an essential issue."

She used the principle of buoyancy as an analogy: "If you put salt in a bathtub to bathe a baby, the baby’s body cannot be submerged in the dense saltwater and floats. The more salt you add, the more the baby rises. The failure to bathe the baby is not the baby's fault but the salt's," explaining, "Even if you try to lower real estate prices, if you keep pumping huge amounts of money into the real estate market without considering it, lowering prices will inevitably fail."

She added, "The failure to lower real estate prices is due to money, but political attacks blame verbal slips," and "Banks must let go of land for the residential ecosystem to function properly. If they cannot completely let go, they should find ways to ease it. The economy is the flow of money, and it is the duty of policy experts and political leaders to ensure that money flows in the right direction."

Former Dongyang University professor Jin Joong-kwon is giving a lecture on the topic "Talking about Korean Society: The Future of Ideology, Generation, and Culture" at a seminar hosted by the Economic and Social Research Institute held at Choi In-ah Bookstore in Gangnam-gu, Seoul, on the afternoon of the 2nd. Photo by Yonhap News

In response, former Dongyang University professor Jin Jung-kwon criticized, "If you want to speak as a State Council member, please do it at the Cabinet meeting. Does this administration hold Cabinet meetings on Facebook?" and said, "If the president plans to lift the Greenbelt, openly oppose it at the Cabinet meeting. Then I will applaud you."