Nov 27, 2007

Uncaging Korean Tiger

Uncaging Korean Tiger
Appeared in the Korea Times on Nov. 28, 2007

By Sean Hayes

The Nordic Tiger has been uncaged. Iceland has joined Hong Kong, Russia, Georgia, Macedonia, Slovakia, Ukraine, and a number of other countries, by adopting a flat tax on individuals and also drastically cutting corporate taxes, estate taxes, and capital gains taxes.

Iceland has moved from a sleepy nation in the middle of the frigid North Atlantic to one of the world's richest nations. The drastic cut in taxes has unleashed the Nordic Tiger and now places Iceland 10th in the Economic Freedom of the World's rankings up from 26th in the 1990s.

The move from a ``progressive'' personal income tax, which penalizes the most productive, to a flat personal income tax, coupled with the drastic cut of the corporate tax rate from 50 percent in the late 1980s to 18 percent today has drastically increased the incentive to invest, create, and innovate, thus, boasting economic growth.

Additionally, Iceland has assisted in proving the ``Laffer Curve'' and supply-side economics. The decrease in corporate income tax created a drastic increase in tax revenues.

In the late 1980s, the corporate tax rate was 50 percent and the corporate tax revenues were only 0.9 percent of gross domestic product (GDP). In the mid-90s the corporate tax rate was 33 percent and the corporate tax revenues were only a little over 1 percent of GDP.

Today, with an 18 percent corporate tax rate, which incrementally decreased since the 1990s, the tax revenues are now nearing 50 percent of GDP.

Korea must follow our Nordic friend. The Korean Tiger has been caged by excess taxes, a regulatory regime that is more reminiscent of former communist China, than a democratic market economy, and a bureaucracy that rivals our communist neighbors.

Korea ranks 33rd on the Economic Freedom of the World rankings, but the rankings, for Korea, are a little skewed, since Korean ranks very high in access to sound money, but dismally low in all other areas because of its restrictive trade policy, enormous size of government, high tax rates, and over regulation of credit, business and labor.

The ranking system provides an excellent tool in providing a measurement of what degree of economic freedom nations in the world enjoy.

According to the rankings, the very cornerstone of economic freedom is personal choice, voluntary exchange, freedom to compete, and the security of personal property.

The survey, thus, evaluates 42 data points under the five broad headings: size of government: expenditures, taxes and enterprises; legal structure and security of property; access to sound money; freedom to trade internationally; and regulation of credit labor and business.

A high level of economic freedom, according to numerous peer-review studies, promotes economic prosperity, the protection of civil and political rights, national health, and environmental consciousness.

For example, those that rank at the top quarter of the rankings have an average GDP of $26,000 per capita compared to the bottom quartile with a $3,300 GDP and life expectancy in the top quartile is 78 years and only 56 years in the bottom quartile.

Those at the top of the survey include: Australia, Canada, Hong Kong, Ireland, New Zealand, Switzerland, U.K., the U.S., and our Nordic Tiger friend Iceland. Germany ranks 18th and Japan ranks 22nd.

All of these countries have high GDPs per capita, high life expectancies, high levels of protection of civil and political liberties and respect for our environment. Those on the bottom include mainly the poorest of the poor nations and include many African nations and dictatorial regimes.

Those just outside the top of the rankings comprise many countries such as Korea that are struggling to uncage the Tiger, because of a bureaucracy and a political and business elite that rely on the cage to maintain their present livelihood.

The only way for the Tiger to be freed is for the people to demand that their nation respect economic freedom and for the people to realize that high taxes, over regulation, a bloated bureaucracy, regulatory protections for the vested elite and punitive tariffs are stifling the potential of the Korean people.

The Korean Tiger, to reach its full potential, must be freed or the tiger will simply be a mere tool of the bureaucratic, political and business elite at the expense of the people.

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SeanHayes@ipglegal.com

Nov 26, 2007

Dismal Legal Education

Dismal Korean Legal Education

By Sean Hayes
Korea Times 11/20/2007

Korean lawyers are not meeting the expectations of Korean and foreign clients. The problem stems from the poor quality of education in general and legal education in specific.

Businesses in Korea know there is a problem. In a survey conducted a few years back, by Lexis-Nexis and the Korea Economic Daily, 97.3 percent of Korean companies stated that Korean law firms fall behind the world standard.

Lawyers, in Korea, know there is a problem. Chun Y. Yang, a lawyer at the largest law firm in Korea, stated in a speech that: ``Generally speaking, U.S. law practice is significantly more developed and sophisticated ... U.S. lawyers are expected and trained to think three, four steps ahead and be proactive ... The chances are average local Korean practitioners or even the relatively good ones will not be able to meet the high expectations of a U.S. client.''

President Roh Moo-hyun and the National Assembly know there is a problem. The Law School Bill states, ``Under the current system to nurture legal professionals, a gap exists between legal education and legal practices. Also the current system does not sufficiently nurture legal professionals who have expertise in preventing and addressing legal disputes. Therefore, the purpose of this amendment is to provide legal services which meet citizens' various needs by introducing a U.S.-style law school system.''

However, the majority of professors either don't know or don't care about the problem, since no significant change that seems to address these problems has been acknowledged or addressed during the law school application process.

Students and legal professionals including judges, prosecutors and attorneys nearly universally believe that professors need to stop lecturing and focus on nurturing critical thinking and logical reasoning skills by engaging students. However, they believe that most professors are incapable of teaching in any other way.

The reason most professors are unable to make any substantial change to teaching methods is because a majority of Korean professors have Ph.D.s or an S.J.D. The Ph.D. is earned within the presently flawed Korean system and an S.J.D. is a degree earned in the U.S, but is essentially a self-study degree, that is sold almost entirely to non-American students.

Those with these degrees comprise the vast majority of Korean professors. Most of these simply lecture, focus on theory that has little relationship to the practice of law and put little emphasis on building students reading, writing, speaking, research, logical reasoning and critical thinking skills.

These are also the people that the nation is entrusting their law schools to. My school, Kookmin University, and the rest of the schools will simply maintain the status quo. The teaching method is not even being discussed and, thus, the major benefit of the U.S. law school system will be lost.

If this is true the impending law school system will not ``nurture legal professionals'' and a ``gap between legal education and legal practice'' will still exist. I polled students at my school and only one professor, plus myself, regularly asks students questions and regularly uses real world examples in class.

Of course this professor was a former judge and sadly will reach his retirement age and will no longer teach at my school.

We need to either abandon the law school system, since continuing on this track will only cause more expense and time for students, or require at least all first year classes to be taught in the Socratic method and a majority of classes to focus on building reading, writing, speaking, research, critical thinking and logical reasoning skills.

All first year classes should be taught by professors with J.D.s, or professors that have been judges, since all J.D. students have been ``nurtured'' in the Socratic method, and all judges, because of their experience have the tools needed to quickly adapt to this method; while professors with S.J.D.s and Ph.D.s have had little to no exposure to the Socratic method and have caused and nurtured for decades the ``gap'' between ``legal education and reality'' and are overwhelmingly incapable of anything except lecturing.

If this is not done we will be discussing further changes for decades to come.

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SeanHayes@ipglegal.com

Nov 15, 2007

Korean Law School the Shakespearean Tragedy

Korean Law School the Shakespearean Tragedy

Appeared in the Korea Times on Nov. 16, 2007


Dear Professor Hayes: As a student of law I am very supportive of the law school system, since it may provide more opportunities to be an attorney, however, I highly doubt the system will create education that nurtures quality legal professionals. Why again are we going astray? Student at Kookmin University.

Dear Student: The Law School Bill declares, “Under the current system to nurture legal professionals, a gap exists between legal education and legal practices. Also the current system does not sufficiently nurture legal professionals who have expertise in preventing and addressing legal disputes. Therefore, the purpose of this amendment is to provide legal services which meet citizens’ various needs by introducing a U.S.-style law school system.”

The system will fail to meet the objective, since the implementation is comical at best and a Shakespearian tragedy at worst, since the Ministry of Education scoring system has little relationship to the objective, since they no idea of what the “gap . . . between legal education and legal practice is”; professors are unwilling and incapable of creating a system that will “nurture legal professionals who have expertise in preventing and addressing legal disputes”; and students are afraid to express to professors the need for change.

I have asked my students, legal professionals including judges, prosecutors, and attorneys what is needed in Korean legal education. The notion of most and when I press a little, all, is that the teaching method of professors needs to change. Professors need to teach in the Question and Answer Socratic Method.

In Korea, almost all professors simply lecture. Lectures are useless in “nurturing legal professionals” and are the reason for the “gap between legal education and legal practice.” I polled students at my school and only one professor, plus myself, regularly asks students questions and regularly uses real world examples in class. Of course this professor was a former judge and sadly will reach his retirement age and will no longer teach at my school.

The only solution to this Shakespearean tragedy is to require a large portion of professors to have J.D.s, or to have been judges, since all J.D. students have been “nurtured” in the Socratic Method and have the tools needed to “prevent and address” legal problems and all judges, because of their experience have the tools needed to quickly adapt to the Socratic Method, while professors with SJDs and PhDs had little to no exposure to the Socratic Method and have caused and nurtured for decades the “gap” between “legal education and reality.”

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SeanHayes@ipglegal.com