Frank Hsieh, the Democratic Progressive Party standard bearer, has finally broached his “Happy Economics,” which he describes as a panacea to get Taiwan out of its long economic doldrums during which time it has dropped from the top to the bottom of the league table of Asia’s four “little dragons.”
At the heart of Happy Economics is what Hsieh calls “green financing,” a distorted version of Reaganomics.President Ronald Reagan cut tax to broaden the base for taxation, thereby increasing the internal revenue, putting more money into the pockets of consumers to boost spending and drumming up all businesses.Reaganomics worked in the United States.
Like Reaganomics, green financing is predicated on tax cuts for consumers as well as businesses.It’s called green, for Hsieh wants to tax heavy users of energy – one derived from the burning of fossil fuels, in particular – more heavily to compensate for the losses in revenue from the tax cuts and generate a surplus for public investment.Coupled with Taiwan’s democracy and rule of law, the DPP presidential candidate reasons, his financing policy will induce massive foreign direct investment to the island and encourage Taiwan businesses abroad to channel their earnings back to investment in their homeland.All businesses in Taiwan, large and small, will greatly benefit and will so thrive as to provide everyone who wishes to work with a job.Hsieh’s goal is zero unemployment.He believes his economic strategy will work wonders to make everybody happy.Hence Happy Economics.
Hsieh’s economic white paper author has also tried to elaborate on it.An additional boost will come in the form of “opening Taiwan up to the world” to learn experiences of success from the West and Japan, albeit he didn’t mention it.He doesn’t want Taiwan to remain open to China alone, from which no experiences of success can be learnt.But he seems oblivious to the fact that Taiwan has been open to the whole world for a long time and the learning of successful stories by itself may not help the Taiwan economy grow.
So does Hsieh.For one thing, he appears incapable of reasoning.Heavier tax on heavy energy users who are none other than manufacturers will reduce their competitiveness.Taiwan may not be able to export their products, which are made more expensive by heavier taxation.Tax cuts for consumers may not stimulate spending.(Remember such cuts in Japan have just increased the savings?)Are democracy and the rule of law a sufficient reason for international investors to send their money to Taiwan?And above all, he doesn’t know no countries in the world have ever succeeded in reducing unemployment to zero unless they are at war.President Franklin D. Roosevelt got his New Deal under way in 1933 to save the United States from the Great Depression.He couldn’t achieve zero joblessness until after he declared war on Japan and its Axis toward the end of 1941.
Is Hsieh ready to get Taiwan to fight a war with China?If what he advocates isn’t voodoo economics, we don’t know what is.
（本文刊載於96.11.26 China Post第4版，本文代表作者個人意見）
