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Japan's economy falls back into recession
- z92 11y agoPlus global trade is down. I am afraid the future is looking a bit darker than usual.
- nness 11y agoExcuse the over-simplification, but is the Japanese government's reluctance to proactively stimulate their economy built partially on a desire to secure the pension for a few more years (both as a product of cultural expectations and the appeasing mostly elderly voter-base)?
- programmernews3 11y agoIt is likely a major piece of the puzzle and will also be due to reverence of their elderly.
- nness 11y agoAh yes, that's what I meant by "cultural expectations," but "reverence" is certainly a far more succinct way to describe it.
- skylan_q 11y agoSome reading: https://en.wikipedia.org/wiki/Abenomics#Implementation https://en.wikipedia.org/wiki/Abenomics#Implementation They've been attempting to stimulate the economy already. As you mention, viability of pensions is very important in Japan. Much of their savings and investments are in Japanese bonds.
- chvid 11y agoFor a country like Japan which has a declining workforce and population. Maybe it would give a clearer picture to look at GDP pr. worker or GDP pr. populus? I am not so sure it would look so bad then. PS: The tourism section surely is booming. :-)
- adventured 11y agoIt looks really bad in fact. Their place in terms of GDP per capita is a disaster. In 1987 they matched and then surpassed the US on GDP per capita. Within ten years from today they'll be at half (or less) the GDP per capita level of the US. If Japan continues with their blatantly failed Yen destruction policies (meant to debase their debt), they'll rapidly sink below other countries they used to tower over on GDP per capita, such as Spain or New Zealand. Preliminary 2015 figures peg their GDP per capita at 24th, at $32k. The US is nearly $56k by comparison.
- WildUtah 11y agoThis is a classic example of the problems with using real GDP as a measure of anything. The US GDP counts crime and corruption as positive contributors to the economy; the error is so deeply embedded in the idea of GDP that economists have a name for it: the Broken Window Fallacy. Japan's GDP counts the world's most efficient urban infrastructure, best rail system, and world's best urban zoning, transit, and development practices against it because it makes unsubsidized city living relatively cheap. Inflation calculations in both countries are nothing but political propaganda. If you measure cost of living against typical wages, Japan outperforms the USA and far surpasses the UK and almost all of Europe. Just compute a budget including owning a home in a good school district in a safe neighborhood. Don't forget health care and owning two or three cars in the USA. Add back in the value of all the untaxed employer provided benefits in Japan.
- laotzu 11y ago>Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children. Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile. And it can tell us everything about America except why we are proud that we are Americans. -Robert Kennedy, Speech at the University of Kansas at Lawrence (18 March 1968)
- WildUtah 11y agoA -0.008 rate of GDP growth in a country with a -0.009 rate of working age labor force growth is actually positive growth, albeit slow. It is not in any realistic sense a recession. Japan continues to be the first world nation with the best long term prospects for its citizens. The present standard of living is not clearly exceeded anywhere in the world. Of course, adjustment to and recovery from severe overpopulation is going to create some difficulties over the next half century. It's nothing the country can't adjust to.
- hawkice 11y agoSo, those numbers together indicate an increase in productivity -- but there are non-working age people in the economy that still need a slice of the pie. Productivity growth is good, but I'd focus on the larger population changes.
- WildUtah 11y agoIt's an investment in the future. The Japanese will be much better off with a third or a fifth of their current population someday on their overstuffed islands; that's going to require some shrinkage. If you intend to encourage everyone to live out his full natural lifespan in comfort -- as we should -- then it's going to cost a little. Shouldn't cost too much, though.
- ekianjo 11y ago> best long term prospects for its citizens Seems like you are conveniently ignoring the 300+ % of Japan's GDP of Public debt. Yeah, a bright future.
- vox_mollis 11y agoI believe the stock HN response to mathematically certain sovereign debt disaster is either "print your way out" or "grow your way out".
- ekianjo 11y ago
- sanxiyn 11y agoJapan's trend growth is zero. This is business as usual, not bad economy. If we want recession to mean bad economy, definition of recession for Japan needs to be revised. See http://www.themoneyillusion.com/?p=31307 http://www.themoneyillusion.com/?p=31307.
- ekianjo 11y ago> This is business as usual, not bad economy Japan needs actually steady growth if it is to tackle its public debt sooner or later. Or then drastic measures will have to be taken at some point.
- WildUtah 11y agoThe public debt can be traded away with the high foreign exchange reserves or inflated away if it becomes a problem. There's no need to worry too much about it now as all the creditors seem eager to roll it over at low rates forever. Drastic measures are not on the horizon.
- ekianjo 11y agoInflation of public debt is just destroying Savings and Private investment, which is the opposite of what you want for a growing Economy.
- WildUtah 11y agoI'm not recommending hyperinflation. Countries like Japan and the USA with their current levels of debt will someday have to inflate or they will have to renounce the debt officially. That is a mathematical certainty. But that day is a long way off. Low inflation is better. If exchange rates are out of balance, such as in Japan in 2010, inflation in the prices of only imports should be sufficient and that should be moderate at worst. In any case it's nothing to worry about now.
- Roboprog 11y ago
- raverbashing 11y agoWhile the west complains about immigration and the issues arising from it, here's the other side of the problem. Japan has not grown significantly in the past 20 years and it won't grow again. http://www.tradingeconomics.com/japan/gdp http://www.tradingeconomics.com/japan/gdp
- anon4 11y agoEndless growth is impossible.
- anti-shill 11y agoand some forms of growth are akin to cancer
- vlehto 11y agoGenerally "Physical growth" and "GDP growth" are not really similar. A number can grow infinitely. Tree or human population can not. GDP approximates perceived value prodced by society. In capitalism, saying GDP cannot grow anymore is essentially saying humans don't want anything you can buy with money to be better in any perceivable way. Give average guy huge amount of money, if he burns it for shits and giggles, then GDP cannot grow anymore.
- orthecreedence 11y ago> Generally "Physical growth" and "GDP growth" are not really similar. No, two different things. But just the same, neither can grow infinitely. > A number can grow infinitely. Especially if it's a measure of a scale that's constantly adjusting itself. Your explanation of economic growth sounds like how American capitalists justify the existence of growth economies. Economic growth cannot be infinite, just like physical growth. Economic growth depends on resources just like any other kind of growth. When the resources run out, the everything stops. You can't math your way out of that. The only way to sustain our current economic burn at our current (and growing) population is to move off-planet.
- Shivetya 11y agoTaxing themselves out of growth. Effectively their tax rates are too high on individuals and business that there is no incentive to spend or grow. Similar reason why any supposed US recovery has been anemic.
- Karunamon 11y agoWe've got the fourth lowest tax rate among OECD convention countries (if we're looking at taxes vs GDP). Look at it from a perspective of rates on $100k gross income, and we're still not even in the top 50%. I don't think any US economic issues can be laid at the feet of our tax rates with that in mind. Interestingly enough, Japan is usually only 3 positions above us in Tax/GDP, and 9 positions above us in Tax/$100K, which calls the thesis of this article into question...
- blisterpeanuts 11y agoUS corporate tax rates are the highest among developed countries, however. Capital gains are also taxed higher in the U.S. than most other OECD countries. Perhaps it all balances out between lower personal and higher corporate; I don't know. But there are so many other factors involved--debt, military activity, outsourcing trends, health and fitness, weather--that one can't realistically call out taxation as a major cause of macroeconomic trends.
- anti-shill 11y agoat least the japanese people have been able to stop the corporations from artificially inducing growth via mass immigration....unlike here in the USA.
- acd 11y agoBut Japans central bank has printed more money and longer than most countries and it still does not work in making its economy grow. Western countries has copied Japans money printing expecting it to work better for us than in Japan. "Insanity: doing the same thing over and over again and expecting different results." - Albert Einstein We will need to engineer a new economic system that can deal with climate change which requires less physical goods. Valuing things more like renewable energy, repair ability, upgrade ability.
- simonh 11y agoThe policy responses in the west have been very different from in Japan. For a start Europe only started doing anything like QE this year, and only in a very limited fashion compared to the US or Britain. If you look at the US and Britain, they did carry out extensive money printing operations in the form of QE, but they also let their economy take the hit hard and early in the form of bankruptcies, job losses and housing devaluation. As a result, their economies have largely been through the pain. The US economy particularly has bounced back and it actually doing pretty well in global terms with growth of 3.7%. That's hardly 'the same results' as in Japan. So Europe followed a completely different path and is still stuck with low growth, while America and Britain did use QE but avoided falling back into recession. It's not as if everything's come up roses in the West, we still have major challenges to deal with, but how things have panned out is completely different.
- michaelpinto 11y agoSomething to keep in mind is that Japan is very impacted by the economy of China: Not just direct exports and tourism, but as the rest of Asia suffers from the slow down in China that also impacts Japanese exports as well. And on the tech side many Japanese brands from Sharp to Sony haven't been doing too well.