Interesting article from ny times

http://www.nytimes.com/2012/01/08/opinio...wanted=all

Here's an excert

Quote:Time and again, Americans are told to look to Japan as a warning of what the country might become if the right path is not followed, although there is intense disagreement about what that path might be. Here, for instance, is how the CNN analyst David Gergen has described Japan: “It’s now a very demoralized country and it has really been set back.”

But that presentation of Japan is a myth. By many measures, the Japanese economy has done very well during the so-called lost decades, which started with a stock market crash in January 1990. By some of the most important measures, it has done a lot better than the United States.

What do you think about it?

I haven't read the NY Times article in full, but today I read a sort of response to it on Slate:

http://www.slate.com/blogs/moneybox/2012..._real.html

I would read the original article before making this post, but I'm just on my way out of work at the moment.

What's up with the author citing a strengthening yen as a good thing?

It's kind of a red-flag that the guy doesn't know much about how the Japanese economy works.

And the whole idea that the "myth" of the bad Japanese economy is a Western invention must be a joke.

Does this guy speak Japanese? It doesn't look like he has read the 日経, 読売, or 朝日新聞 very much over the last 25 years.

That youth unemployment graph paints the real picture of Japan. Not only that if you add in the percentage also working "temp jobs" that wish they had full time stable jobs, that unemployment figure would sky rocket.

The slate article fails to mention that much of why the Japanese economy did so well was a result of "buckle down" mentality by the companies. Instead of seeking out hand outs from the government to fix their debt problems after the bubble burst, many decided to use their own earnings and pay them off. What has really hurt Japan though has been that many of these companies even after paying off the debt, kept saving capital beyond what many people would consider a viable point. As a result of this the government turned to using the money else where to keep people stable and employed, which has resulted in Japan having a massive debt issue. However, since so much of the debt is held by entities within the country in the form of government bonds; the chance of it poisoning stuff outside Japan is much lower and is much easier to deal with a default.

Fingleton doesn't seem to understand that current account balances and currency levels do not indicate economic strength.

And using Tokyo as a standard for an apparent health in the Japanese economy is highly misleading.

vix86 Wrote:That youth unemployment graph paints the real picture of Japan. Not only that if you add in the percentage also working "temp jobs" that wish they had full time stable jobs, that unemployment figure would sky rocket.

You say that like youth unemployment in US or Europe was better, when in fact its exactly the opposite. Temp jobs don't give you much financial stability but I can assure you its better than not having a job at all.

Don't want to argue about the merits of NYT article but I think you missed the point, Japan WAS/IS a poster boy for a long term crisis painted by "Western" media & governments although oftentimes it had better economic climate & indices than them.

Media in Poland still talks about Japan being "enveloped in crisis" despite the fact that Poland has 3x times Japans unemployment rate (our government would kill for 10% youth unemployment), 80% of students are getting completely useless and low market demand degrees like sociology or political science, tons of Polish debt is foreign which costs ridiculous amounts of money just to maintain not to mention pay up and our infrastructure is worst from all the countries I've ever been in (good luck visiting us for EURO 2012).

I wasn't implying that the US was in a better situation than Japan. I think it stands to get worse and will be propelled by further austerity measures (which are bound to come) I think.

I can't say I know much about Poland, but the lack of mention of them in the news when PIGS show up seems to suggest that the Polish economy is at least keeping it self above water (for now).

vix86 Wrote:I can't say I know much about Poland, but the lack of mention of them in the news when PIGS show up seems to suggest that the Polish economy is at least keeping it self above water (for now).

Poles are well known for complaining and not seeing bright sight of things - I know, I lived there for over thirty first years of my life...

I think talking in terms like "country X is an economic failure" and "country Y is an economic success" is too simplistic. The most important thing is quality of life for the population and I don't think Japan is in a position to really complain in this respect.

Japan is still a one of the richest first world countries. Everywhere has its rises and falls.

Response by Paul Krugman (NYT):

http://krugman.blogs.nytimes.com/2012/01...sidered-2/
http://krugman.blogs.nytimes.com/2012/01...n-wonkish/

"Fingleton’s essay basically throws everything he can think of against the wall, in the hope that some of it sticks"

dizmox Wrote:I think talking in terms like "country X is an economic failure" and "country Y is an economic success" is too simplistic. The most important thing is quality of life for the population and I don't think Japan is in a position to really complain in this respect.

Japan is still a one of the richest first world countries. Everywhere has its rises and falls.

Yes, it's like in 1990 or 1991, the Tokyo correspondent for Politika (Serbian, or, at that time, Yugoslavian newspaper), wrote how, in Yugoslavia (which was then beginning to fall apart), we could only dream to have a crisis like the one they were facing in Japan.

But to me, the most interesting point of this article is the argument "that virtually everyone in Tokyo benefits from the doom and gloom story", and how, what he calls the "myth" of Japanese decline is perpetuated because it's useful to many parties.

I'll read the reaction articles today, I hope they address this point.

Eikyu Wrote:Response by Paul Krugman (NYT):

http://krugman.blogs.nytimes.com/2012/01...sidered-2/
http://krugman.blogs.nytimes.com/2012/01...n-wonkish/

"Fingleton’s essay basically throws everything he can think of against the wall, in the hope that some of it sticks"

lol krugman. While the essay is pretty dumb, I cant trust a guy (Krugman) who says that an alien attack would be good for the economy.

indeed. krugman is clueless.

That's the problem with economics. It's not like math. There is no certainty that 1+1 =2 that we can agree on, just competing models. You can't trust the 'experts', you just need to be well read and think critically about the issues yourself. In many ways academics and professionals especially those with long careers can be trusted the least because they are the most invested monetarily and politically in their own beliefs.

And what do you think about the slate article?

Zon70 Wrote:

Eikyu Wrote:Response by Paul Krugman (NYT):

http://krugman.blogs.nytimes.com/2012/01...sidered-2/
http://krugman.blogs.nytimes.com/2012/01...n-wonkish/

"Fingleton’s essay basically throws everything he can think of against the wall, in the hope that some of it sticks"

lol krugman. While the essay is pretty dumb, I cant trust a guy (Krugman) who says that an alien attack would be good for the economy.

You mean this one: http://krugman.blogs.nytimes.com/2012/01...nd-aliens/ ? He's not talking about an alien attack, but about trading with aliens.

The debate continues, Fingleton replies to Krugman:

http://www.fingleton.net/a-reply-to-paul-krugman/

Eikyu Wrote:

Zon70 Wrote:

Eikyu Wrote:Response by Paul Krugman (NYT):

http://krugman.blogs.nytimes.com/2012/01...sidered-2/
http://krugman.blogs.nytimes.com/2012/01...n-wonkish/

"Fingleton’s essay basically throws everything he can think of against the wall, in the hope that some of it sticks"

lol krugman. While the essay is pretty dumb, I cant trust a guy (Krugman) who says that an alien attack would be good for the economy.

You mean this one: http://krugman.blogs.nytimes.com/2012/01...nd-aliens/ ? He's not talking about an alien attack, but about trading with aliens.

no, from this video

Srdjan Wrote:.

But to me, the most interesting point of this article is the argument "that virtually everyone in Tokyo benefits from the doom and gloom story", and how, what he calls the "myth" of Japanese decline is perpetuated because it's useful to many parties.

I'll read the reaction articles today, I hope they address this point.

Fingleton's long held theory, first published in his 1995 book (Blindside: Why Japan Is Still on Track to Overtake the U.S. By the Year 2000), is that the Japanese government purposely derailed their economy in order to avoid an un-winnable trade war with the US and then come along and secretly overtake it with some sort of secret stealth economic power that they have...


seriously - there is a reason why this guy is not quoted in the media and Paul Krugman has a Nobel Prize in economics.

dizmox Wrote:I think talking in terms like "country X is an economic failure" and "country Y is an economic success" is too simplistic. The most important thing is quality of life for the population and I don't think Japan is in a position to really complain in this respect.

Japan is still a one of the richest first world countries. Everywhere has its rises and falls.

A lot of the factors that lead to a high quality of life in Japan are separate from the economic policies of METI or the BOJ. Public health, clean streets, education, low crime...etc.

It's important to note that economists are critiquing the economic policies of METI and BOJ. Not the failures of Japanese society in general.

And the gaps between the potential and the actual performance of the Japanese economy are absolutely huge as Krugman pointed out in his response.

Despite the article having a convenient way of looking at things, I am appalled at all the fearmongering originating from the west. Just like how the zerohedge guys being excited at the financial system going down in flames so they can profit from their gold hoards.


And oh, Japan will never overtake its best friend Uncle Sam. The latter will make sure it wont. Plaza accord. TPP.

And oh, goodluck to Japan with having a massive debt and still choosing to spend billion on defective F-35s from US. Haha.

kitakitsune Wrote:

Srdjan Wrote:.

But to me, the most interesting point of this article is the argument "that virtually everyone in Tokyo benefits from the doom and gloom story", and how, what he calls the "myth" of Japanese decline is perpetuated because it's useful to many parties.

I'll read the reaction articles today, I hope they address this point.

Fingleton's long held theory, first published in his 1995 book (Blindside: Why Japan Is Still on Track to Overtake the U.S. By the Year 2000), is that the Japanese government purposely derailed their economy in order to avoid an un-winnable trade war with the US and then come along and secretly overtake it with some sort of secret stealth economic power that they have...


seriously - there is a reason why this guy is not quoted in the media and Paul Krugman has a Nobel Prize in economics.

That book really gives him tons of credibility!

I was momentarily tempted to respond to nadiatims' "economics has only competing models" by pointing out that in that respect it's just like physics, but we'd probably veer off topic then.

I went to a presentation by Masaaki Shirakawa the other day who spoke on the same topic. And the fact is hard to deny that GDP per working-age resident in Japan has not declined, but is in fact again higher than in the US. Japan is definitely not a "failure" in economic terms.

But it's rather obvious that demographic change and low labour force participation is a problem in and of itself, and not just something that just happens to a country like a natural disaster... which seems to be how many Japanese perceive it.

Low labour force participation of women is the result of limited career chances, expectations to quit work when the first child is born, and lack of childcare facilities. The same also leads Japanese women to have fewer children, although a very important second factor is the economic uncertainty -- hard to start a family if you're temping, at least if you're fairly risk-averse (or put differently, responsible) like many Japanese.

There are some rather worrying measures: poverty has risen in Japan, also in absolute terms, youth unemployment is up, and permanent jobs for young people in Japan are fewer and fewer. But on all those points, Japan is still a better place than most Western countries.

What makes me despair is that the Japanese political system seems to be unable to produce a government that can make the necessary changes that would stem the demographic decline by moving to a model like in Sweden or the Netherlands or Quebec, i.e. generous support for women (and men!) who want to combine career and family.

Irixmark Wrote:Low labour force participation of women is the result of limited career chances, expectations to quit work when the first child is born, and lack of affordable childcare facilities. The same also leads Japanese women to have fewer children, although a very important second factor is the economic uncertainty -- hard to start a family if you're temping, at least if you're fairly risk-averse (or put differently, responsible) like many Japanese.

This sums up the social crisis in Japan right now. Though I fixed one your points for you.

Quote:What makes me despair is that the Japanese political system seems to be unable to produce a government that can make the necessary changes that would stem the demographic decline by moving to a model like in Sweden or the Netherlands or Quebec, i.e. generous support for women (and men!) who want to combine career and family.

Exactly, this has been stated many many times. If they do what Sweden did, they'll have people having kids left and right. The problem though is that they have been half assing it and aren't seeing too much of a budge on population stats. The current government of DPJ tried to enact high family allowances as a way to spur more people starting families, but after the disaster they grudgingly cut them back and reworked how they work. It use to be that people got straight cash, but now they are getting the money in the form of decreased tuitions to schools (ES, JHS, HS). Even in cash form the allowances still weren't enough to encourage people to really start families, but I think the cut backs really hurt the system even more. Japan has the problem though that they can't push too many programs because of their debt problems.

I think the problem with the government is that either no one can envision the solution or that they can envision it but no one has the balls to try and go through with it. And that is for stuff like "Getting money to people that want to start families." You still have to reshape social norms. Stuff like working long hours (off the clock) are still pretty common in Japan and it hampers the ability for people to start families.

dizmox Wrote:I think talking in terms like "country X is an economic failure" and "country Y is an economic success" is too simplistic. The most important thing is quality of life for the population and I don't think Japan is in a position to really complain in this respect.

Japan is still a one of the richest first world countries. Everywhere has its rises and falls.

This goddamn TED video:

Japan, like USA, is one of the richest countries in the world.

However, Japan ranks one of the highest, if not the highest, in quality of life, whichever measure you want to use (life expectancy, infant mortality, literacy etc...). While USA ranks very low, considering their no.1 economic status.

So the question for all other countries is "what is Japan (and Norway, Sweden, and Finland) doing that allows them to have an overall very high quality of life (via various measures) and how can we achieve the same thing?"