Archive for the ‘Japan’ Category

Pesek: Krugman Take on $12 Trillion Question Rings True – Bloomberg   Leave a comment

A fiery debate has broken out over an issue many thought had long been settled: Japan (JGDPAGDP)’s economy is sliding toward irrelevance.

The freshest evidence, reported earlier this week, is the first annual trade deficit in 31 years. It means, at the very least, that the huge pool of domestic savings that Japan uses to finance its staggering national debt might instead start going to support a trade deficit, an ominous sign.

Not necessarily a problem, says Eamonn Fingleton, a long- time observer who recently wrote an op-ed in the New York Times headlined “The Myth of Japan’s Failure.” His argument that Japan is a model worth emulating generated a huge buzz. So much, in fact, that it prompted a rebuttal from Nobel laureate and Times columnist Paul Krugman, who’s considerably less enamored with Asia’s No. 2 economy. Fingleton then rebutted the rebuttal.

Who’s right? I’m more in Krugman’s camp than Fingleton’s. Japan’s toxic mix of too much debt, too little growth, too many old people and too few babies will end badly if Tokyo doesn’t get its act together.

It’s important, though, to highlight where Fingleton is right. Japan is pretty close to a model society. It is an incredibly safe, clean, efficient, predictable and consistently quirky place for an expatriate to reside. Japan is reasonably egalitarian, its people have one of the highest standards of living and enjoy the longest life spans, and its cities feature the best infrastructure anywhere. On a more superficial level, Japanese cuisine arguably blows away all others.

Japanization Myth

It’s worth noting that, in some ways, the U.S. only wishes it could become Japan someday. All the chatter about “Japanization” takes on apocalyptic tones: lost decades, debilitating debt levels, zero interest rates forever, financial chaos and existential despair. Although those worries are valid, Japan never unraveled the way skeptics expected.

Crime didn’t skyrocket, homelessness didn’t explode, Arab Spring-like social instability never materialized. Workers and companies merely adjusted, living off their savings. Japan brought a whole new meaning to the concept of muddling through.

Could the U.S. pull off what Japan has? I doubt it. The key to Japan’s ability to withstand 20 years of stagnation is roughly $15 trillion of household savings. Many Americans couldn’t live two months without a paycheck. Japan, by contrast, is anything but a basket case.

Yet here is where Fingleton’s argument falls apart. In 1995, he published “Blindside: Why Japan Is Still on Track to Overtake the U.S. by the Year 2000.” Today, the real blindside among Japan bulls is thinking that what worked for Japan yesterday will work tomorrow.

Since its asset bubble burst more than 20 years ago, policy makers have worked frantically to keep the postwar boom alive. For years, pundits fretted about Japan’s zombie companies. The real zombie is Japan’s economic playbook.

The only reason Japan has any growth can be traced to its growing public debt, the world’s largest relative to the size of the economy, and the free money provided by the central bank. The economic equivalent of steroids is what holds Japan Inc. together, Krugman argues, not its organic vitality. To flourish, Japan needs to ease regulations, tap its female workforce and liberalize immigration. Lawmakers are doing none of the above.

There’s still a powerful aversion to change, and herein lies the nation’s Achilles’ heel. The Olympus Corp. (7733) scandal showed how corporate cronyism safeguarded an insular old-boys club. The radiation leaking from Tokyo Electric Power Co. reactors in Fukushima was a reminder of how dangerously top-down Japan is in a bottom-up economic world.

via Pesek: Krugman Take on $12 Trillion Question Rings True – Bloomberg.

Posted January 27, 2012 by arnoneumann in Economic, Japan

Tagged with , ,

That 200% Debt Is Reason for ‘Arab Spring’ Revolution: William Pesek – Bloomberg   Leave a comment

“If you’d told me 10 years ago, when I moved to Tokyo, that today I’d be writing about an eighth leader, I never would’ve believed it. Yet here we are, analyzing and philosophizing about whether Yoshihiko Noda will last longer than the last five.

In April 2001, Junichiro Koizumi grabbed the job from the hapless Yoshiro Mori. Koizumi stuck around for an unthinkably long five years. He talked big about economic reforms, promised even bigger and managed to get a few things done. Then Koizumi turned the keys over to the forgettable Shinzo Abe, who then passed them to Yasuo Fukuda and Taro Aso.

Political lightning struck in August 2009. Voters tossed out the Liberal Democratic Party that had been in power for roughly 54 years. The Democratic Party of Japan might have fared better if it picked someone other than political lightweight Yukio Hatoyama as prime minister. Next came Naoto Kan, who last week resigned to make room for yet another leader.

Analysts and pundits are busy criticizing politicians in Tokyo for going with the safe choice — Noda — when Japan is navigating a world economy that is anything but. Yet let’s put blame where it belongs: Japan’s 127 million people.

There’s some truth in the old saw that people generally get the leaders they deserve. In Japan’s case, voters need to begin demanding more of leaders and speaking out forcefully for change. Instead, they offer nothing more than numbing silence.”

via That 200% Debt Is Reason for ‘Arab Spring’ Revolution: William Pesek – Bloomberg.

Posted August 30, 2011 by arnoneumann in Japan

Tagged with ,

Paper Cranes for Japan hits one million, triggers $1/2M donation | Architecture for Humanity   Leave a comment

An innovation way of bringing engagement to help Japan….

 

“Paper Cranes for Japan perfectly illustrates the power of the online community to create offline action,” says Betsy Fast, editor in chief of Dosomething.org. “It was crucial to give the campaign a virtual home, so that young people worldwide could share their wishes of support and uploaded photos, and, most importantly, see those of their peers. It will live on long after the last crane is mailed in.”

via Paper Cranes for Japan hits one million, triggers $1/2M donation | Architecture for Humanity.

Posted June 18, 2011 by arnoneumann in Japan, philanthropy

Tagged with ,

%d bloggers like this: