11 ms·

In Japan’s Slow Economy, Rare Price Rise Prompts Surplus of Remorse

99 points by protomyth 10y ago

mcphage 10y ago
> But in Japan, businesses that face rising costs feel they have less ability to do so because wages are flat. Instead, they take a hit to their profits or cut back rather than alienate consumers. Won't that just flatten out wages even more? There's no money to give out raises if nobody's making any money.
wrong_variable 10y ago
If there is any person who finds this funny - and it is funny - know that is this is where the WORLD economy is heading. Europe is already half-way there, america is stalling it due to immigration, China is going to be there once it hits the demographic cliff.
- deleted 10y ago
  [deleted]
- deleted 10y ago
  [deleted]
- pcurve 10y ago
  Very true. These countries are all showing syptoms of first-world economy disease; low-birth rate, government budget deficit, high healthcare expenditure, bureaucracy, gutting of manufacturing jobs, and local labor market and education systems that fail to recognize that not everybody has IQ of 120+ and benefit from getting bachelors and masters degrees. America can thank its dollar as world reserve currency. Billions it spends on military bases around the world and foreign aids is part of its effort to keep its reserve currency status. But at some point, the party is going to be over. American labor force is already very uncompetitive and overpaid compared to its European and Asian counterparts. Yet we enjoy one of the highest standards of living. That gravy train won't last forever. The only thing that will get the developed countries out of their impending doldrums is 10/100x energy and technological breakthrough. Until then, we'll get our own version of 60 yen Garagari-kun. And don't think deflation hasn't been happening already in the U.S. The only difference is, unlike Japan, unscrupulous U.S. food companies have been cutting ingredient quality and content size, rather than raising price for the past 10 years. Check out Breyer's fake ice cream, Haagen Daaz, McCormick pepper content size, Mars shrinking chocolate bar sizes. https://consumerist.com/category/grocery-shrink-ray/ https://consumerist.com/category/grocery-shrink-ray/ http://www.dailymail.co.uk/femail/article-3037688/Shrinkflation-sneaky-firms-making-favourite-products-smaller-NOT-shrinking-price.html http://www.dailymail.co.uk/femail/article-3037688/Shrinkflat...
  - ktRolster 10y ago
    And don't think deflation hasn't been happening already in the U.S. The only difference is, unlike Japan, unscrupulous U.S. food companies have been cutting ingredient quality and content size, rather than raising price for the past 10 years. You seem to have gotten confused between inflation and deflation. With deflation, prices decrease, not increase.
    - pcurve 10y ago
      Your last paragraph is correct, but I was using the term in more macro environment context. 25 year of unchanged nominal price is symptom of deflationary environment. The reluctance by the Japanese company to raise price even when costs were going up speaks volume about the strong downward pricing pressure in the Japanese market. Though not to the same degree, similar environment has been brewing here in the U.S. for awhile. Companies don't want to raise prices, and only do so as a last resort. If economy was better, they would do so without fear that their competitors would not follow suit.
      - mindslight 10y ago
        > strong downward pricing pressure in the Japanese market Downward pricing is what one would expect in any stable market, given that price optimization is the primary market mechanic. Technology is getting ever-better, so it takes ever-larger efforts to erase its gains and create the artificial inflation prescribed by the central banksters.
  - jseliger 10y ago
    These countries are all showing syptoms of first-world economy disease; low-birth rate, government budget deficit, high healthcare expenditure, bureaucracy There are two other major problems in parts of the U.S. and Europe (in particular) that're underrated: 1. insane land-use control laws that make it illegal to build reasonably price housing (see Matt Yglesias's The Rent is Too Damn High for more: http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp/B0078XGJXO http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp...) and 2. transfer payments to older people that were originally conceived and executed when the number of workers to retirees was much different than it is now. The first is important because it impedes family formation and innovation. The second is important because it makes not having children easier, because other people's children will be forced to support you through their contribution to transfer payment programs. Yet neither issue gets much play in the press.
- chfjdjcjdjd 10y ago
  Some would say that arguments based on demographics are missing the point. Japan has been cannibalizing itself in order to protect its zaibatsus, squeezing every last ounce of productivity from its workers to the point at which they longer reproduce, and enacting corporate welfare policies in the form of QE and ZIRP/ NIRP. The EU and US have been following suit with quantitative easing and stagnant wages, and now we're beginning to experience the same economic decay that Japan has before us. This whole situation is completely avoidable if someone would just have the courage to stop coddling elites and big business.
  - eru 10y ago
    Outside of export oriented manufacturing, Japan doesn't have high productivity.
- fiatjaf 10y ago
  What does immigration has to do with price deflation? (I know you can come up with some relation, of course everything is related, but again, it is not straightforward, and you shouldn't just assume that saying a bunch of buzzywords and stating some facts stands out as an explanation)
  - pcurve 10y ago
    Immigration staves off demographic time bomb, which is cited as one of the causes (or symptoms depending on who you ask) for Japan's no-growth economic environment.
    - internaut 10y ago
      Although I lean libertarian I don't see how you can control monetary policy without also needing to control population size. Lots of awkward ethical questions nobody wants to talk about here.
      - eru 10y ago
        I don't get it? Just print money? (Or more formal, do QE?)
        internaut 10y ago
        What I mean is that there must exist an elemental relationship (min-max limits) between population size and the depth of the division of labour (how complex production can become). Pairing population to production optimally is a synchronization problem. Cybernetics I suppose, not usually how economists think. Economic growth and recession could be modulated if there were enough people when we needed them, and there were not, when we did not. Recessions won't go away but they wouldn't be compounded by demographic issues. Currently this is solved in a haphazard way e.g. using illegal immigration of people like fruit pickers (deporting them when inconvenient) or by green belt zoning and class siloing. That can't be efficient. It couldn't possibly make humans happier. Most actually adopted solutions appear to be quite damaging to humans. How much of this is consciously orchestrated is also hard to ascertain. I suspect it is mostly Scott Alexander's Moloch at work. Every central banker ought to read that poetry because it's quite recognizable. Since it is unethical to force children to exist (Ceausescu) and also wrong to murder people or prevent them having offspring when demographic issues arise, we need a plausible solution to allow for a world in which people have a realistic chance of having sustenance and purpose in their lives. Most people really don't like this topic! It is understandable. We prefer not to think of ourselves as elements of production and supply. Of course we are, we're just a special case of it. All of the problems are ultimately rectified by markets, or failing them, mother Nature. You know what they say about Nature being a mother. My point is that we don't necessarily need to let it get to market corrections if we think ahead. Suppose you were a Communist official in charge of the One Child policy who anticipated the female infanticide rate. You'd have solved for a good deal of human suffering decades later on with perhaps an afternoon's work. Right place, right time. Monetary policy tools work on a similar lever principal to this which is a large part of the reason I'm talking about them in the same vein. I'm not confident I know what to do, only that it is a factor. And now; tell me how I'm wrong!
- internaut 10y ago
  Stagnation is the main threat the world is waking up to. People will blame other things of course. Things like MENA immigration, climate patterns, crop failures, these are second order affects of stagnation. The peripheral fails before the center. Never forget that. I have to congratulate Peter Thiel. He has managed to see a lot of this ahead of almost anybody else I can think of and this is despite being at the heart of the cozy bubble that is Silicon Valley. One of his expressions is that you can have instances of success in an ocean of general failure or something to that effect. Even on HN a few hours ago I saw a WSJ article proclaiming that everything is smashingly good these days, that three/four decade wage stagnation is a mere blip on the radar. Though I agreed with the substance of the historical facts she stated I also think this is an utterly clueless point of view on human nature that is shared by huge swathes of the middle class. I didn't live in 1850 and I cannot be expected to appreciate the good fortune of the years since then! If you live in a downcycle then that's all you know. You see the contradictions at their most dire with the pension funds. They require either massive hikes in funding or 6-7 real percent per year. Wages will have to rise suddenly and dramatically and/or else we need massive massive technological changes. Somehow I see Larry Summers getting called back into Court. Whether monetary policy is enough, that is another question.
  - deleted 10y ago
    [deleted]
  - mrep 10y ago
    Wages have not been stagnating [1]. Median wage has stagnated but that is due largely to the polarization of the labor market of which has been talked about long before Peter Thiel [2]. [1]: http://www.tradingeconomics.com/united-states/wage-growth http://www.tradingeconomics.com/united-states/wage-growth [2]: https://www.researchgate.net/profile/Melissa_Kearney2/publication/4981174_The_Polarization_of_the_U.S._Labor_Market/links/0fcfd50bd66be2418b000000.pdf https://www.researchgate.net/profile/Melissa_Kearney2/public...
    - internaut 10y ago
      I agree with those statements. I'm not sure we agree on what they mean though. World becomes more zero sum when growth plateaus. Only now it is proposed that everybody and their dog get PhDs in god only knows what. Diminishing returns are exactly stagnation. I know blue collar workers making more money than people who took extensive study and got 'good' jobs. This is despite the fact those workers haven't actually had wage increases themselves! They're just working long hours for more pay. We're stuck in a rut. It could be the case that technological stagnation is created by technology itself. A hairy subject! If I remember rightly wage increases for the higher percentile aren't that great either. I mean they are better than zero but not as great as they used to be. Makes sense since their market of consumers is drying up as everybody becomes cash poor except for those making toys for the actual rich.
- ArkyBeagle 10y ago
  Yep. We'd rather slowly become more and more sclerotic rather than face so much as a tiny increase in price level.
- eru 10y ago
  The world doesn't have to head there. Central banks can produce any amount of inflation they want to, if they have the guts. See nominal GDP level targeting: http://www.economist.com/blogs/freeexchange/2011/10/monetary-policy-3 http://www.economist.com/blogs/freeexchange/2011/10/monetary...
- rosege 10y ago
  Exactly, they can see that the policies of the US and Europe will lead to lost decades like it has in Japan. You can see it already happening. I believe the problem is the bail outs from the financial crisis and the ongoing belief that nothing can be allowed to fail which is why interest rates have been kept so low. I think they would be much better off raising rates (Fed and ECB simultaneously) - this will lead to some short term pain as businesses that arent very profitable are forced to close. But from the ashes of these 'bad' businesses you will get better ones rising. The metaphor here is of fire which destorys but also clears the way for regrowth.
Olscore 10y ago
When I first saw this ad I really enjoyed the concept of it (work in video production.) Not something you see often. Maybe that will change. To me, it's interesting because [1] the consumer has to be familiar enough with the product so much that even its price is memorized, and [2] just seeing a company apologize for a price increase is rare in American culture.
- alva 10y ago
  A beautiful thing for the company to do. Shows a huge amount of integrity.
- a3n 10y ago
  I'm looking forward to the Volkswagon version, complete with spanking paddles. (And I shouldn't be surprised anymore, but, these are sold on Amazon.)
  - rangibaby 10y ago
    I did see Volkswagen's "sorry" ad on Japanese TV about a month ago!
fiatjaf 10y ago
So prices are sticky upwards now?
fiatjaf 10y ago
> Japanese policy makers have long identified > deflation as enemy No. 1 for the economy. It is crazy when policy makers try to make prices increase, prices DO increase, and everyone complains after the fact, including the people who wrote that article and commenters here.
- jpatokal 10y ago
  It's not much fun if you're in the same boat as the average Japanese salaryman, who is seeing prices increase while his meager pay packet stays unchanged.
  - hudibras 10y ago
    > who is seeing prices increase As the chart with the article notes, these price increases are now at -0.1% per year.
  - fiatjaf 10y ago
    Did I say it is fun? The average japanese is poor because the government policies are robbing him, not because of my comment.
- partiallypro 10y ago
  Prices increasing without increase in economic output though, stagflation becomes a danger. Deflation is very dangerous, stagflation is dangerous, runaway inflation is dangerous. Monetary policy isn't easy.
  - dredmorbius 10y ago
    Inflation, deflation, and stagflation are symptoms, not causes.
    - cjensen 10y ago
      Nope. Initially, deflation is a symptom as you suggest. The problem is that deflation is a stable state within the economic system. Once in deflation, people say "I could invest this $100, and in the long run I'll get back $98. Or I could stick it in a mattress and get back $100 in the long run." Investment ceases. If a manufacturing line needs to be refurbished, the owners will lay off workers and quit rather than pouring in money they will never get back. This is why the Fed in the US panicked so hard when during the last recession: we were approaching the stable state and they were willing to do anything to prevent that from happening.
fiatjaf 10y ago
25 years of governments pumping money into the economy to see if it "grows" again. When will they recognize the policy is failing and the solution is not "more of the same"? Give me a date.
- skylan_q 10y ago
  They kept the monetary base pretty steady for a while in the mid 2000's. It ended up hurting their ability to export and made it easier to import. They were unhappy with the slightly higher unemployment, the slight and constant price deflation, and the lack of GDP growth. Otherwise, things actually weren't that bad.
hkmurakami 10y ago
Hm. Well the bottled drinks in vending machines was 100yen back in the 90's when I was a child, and is now 120 yen, so many things have increased in price or have followed the American CPG way of maintaining sticker prices but decreasing the payload in the package.
- nihonde 10y ago
  You have to factor in an 8% consumption tax (~4 point increase over late 1990s) on that (meager) price increase.
roflchoppa 10y ago
Was not aware the Japan's economy is slowing down, i would totally be down to boost their economy by importing Nissan Skylines into the US. Damn Dept. of Transportation and their safety laws ;(
- Shivetya 10y ago
  it never really has ever recovered and probably won't until the government realizes it is the problem, you cannot use public spending to buy your way out. Their central bank hasn't been helping matters much either. Even threatening bank reserves (negative interest which when done by the central bank is in effect a tax) is there. (Some in the US want the Fed to have similar powers) which rolls neatly into all the recent talk being floated about basic income. see there is this other neat trick with BI. Governments could roll this out as a means to put money into the hands of consumers to spend. Now if you did it short term to jump start an economy it probably would work, just the idea its happening would loosen up money supplies.
- HeyLaughingBoy 10y ago
  I've seen at least two Nissan GTR Skylines here in Minnesota. Don't know if they're detuned or otherwise modified. First one I saw was at a gas station last year and I was so astounded I had to ask the owner if it was really what I thought it was. Crawled back into my 350Z still drooling :-)
  - roflchoppa 10y ago
    was it an R32? I think the law has slightly laxed on them due to being 25yr now. i see R35's here in the bay area every now and then.
    - HeyLaughingBoy 10y ago
      They were both current model year or at most a year old. Well, I use the term "Skyline" loosely. I don't think Nissan actually calls them that anymore.
norea-armozel 10y ago
I just wonder if they can ever get out of this death spiral for their country. I remember watching a bit of an documentary of men (young and old) who literally live out of net cafes in Japan. It was disturbing to since the same documentary mentioned that it's the norm now for people to be working just temp work (I use to do the same in manufacturing years ago) which can go away at a moment's notice. At some point this has to change, if there's X percent of wealth being generated in a country (and Japan has to be making some gains in that regard) but Y percent of the population that's un/under-employed then I wonder if the question shouldn't be about how we get these people to work but rather how we distribute the wealth to ensure everyone has their necessities met (housing, healthcare, food, education, etc)? I'm not proposing UBI, social democracy, or anything. I'm just posing this as a question because honestly I can't see this situation lasting for long unless there's a massive die off of the population (possibly literally).
kchg 10y ago
This article is painting the wrong picture, exaggerating this paltry 10 yen rise. At least from a normal household point of view living in Tokyo, I see rising prices all around - rent getting more expensive, the same type of fish (as an example) I've been buying in supermarket getting more expensive. Recently I was shopping for a bicycle bag. I saw some blog reviews from 2 years ago stating the price was around 5000 yen; But I see all the shops are now selling it for over 7000 yen!

99 points by protomyth 10y ago

> But in Japan, businesses that face rising costs feel they have less ability to do so because wages are flat. Instead, they take a hit to their profits or cut back rather than alienate consumers. Won't that just flatten out wages even more? There's no money to give out raises if nobody's making any money.

wrong_variable 10y ago

If there is any person who finds this funny - and it is funny - know that is this is where the WORLD economy is heading. Europe is already half-way there, america is stalling it due to immigration, China is going to be there once it hits the demographic cliff.

deleted 10y ago
[deleted]
deleted 10y ago
[deleted]
pcurve 10y ago
Very true. These countries are all showing syptoms of first-world economy disease; low-birth rate, government budget deficit, high healthcare expenditure, bureaucracy, gutting of manufacturing jobs, and local labor market and education systems that fail to recognize that not everybody has IQ of 120+ and benefit from getting bachelors and masters degrees. America can thank its dollar as world reserve currency. Billions it spends on military bases around the world and foreign aids is part of its effort to keep its reserve currency status. But at some point, the party is going to be over. American labor force is already very uncompetitive and overpaid compared to its European and Asian counterparts. Yet we enjoy one of the highest standards of living. That gravy train won't last forever. The only thing that will get the developed countries out of their impending doldrums is 10/100x energy and technological breakthrough. Until then, we'll get our own version of 60 yen Garagari-kun. And don't think deflation hasn't been happening already in the U.S. The only difference is, unlike Japan, unscrupulous U.S. food companies have been cutting ingredient quality and content size, rather than raising price for the past 10 years. Check out Breyer's fake ice cream, Haagen Daaz, McCormick pepper content size, Mars shrinking chocolate bar sizes. https://consumerist.com/category/grocery-shrink-ray/ https://consumerist.com/category/grocery-shrink-ray/ http://www.dailymail.co.uk/femail/article-3037688/Shrinkflation-sneaky-firms-making-favourite-products-smaller-NOT-shrinking-price.html http://www.dailymail.co.uk/femail/article-3037688/Shrinkflat...
- ktRolster 10y ago
  And don't think deflation hasn't been happening already in the U.S. The only difference is, unlike Japan, unscrupulous U.S. food companies have been cutting ingredient quality and content size, rather than raising price for the past 10 years. You seem to have gotten confused between inflation and deflation. With deflation, prices decrease, not increase.
  - pcurve 10y ago
    Your last paragraph is correct, but I was using the term in more macro environment context. 25 year of unchanged nominal price is symptom of deflationary environment. The reluctance by the Japanese company to raise price even when costs were going up speaks volume about the strong downward pricing pressure in the Japanese market. Though not to the same degree, similar environment has been brewing here in the U.S. for awhile. Companies don't want to raise prices, and only do so as a last resort. If economy was better, they would do so without fear that their competitors would not follow suit.
    - mindslight 10y ago
      > strong downward pricing pressure in the Japanese market Downward pricing is what one would expect in any stable market, given that price optimization is the primary market mechanic. Technology is getting ever-better, so it takes ever-larger efforts to erase its gains and create the artificial inflation prescribed by the central banksters.
- jseliger 10y ago
  These countries are all showing syptoms of first-world economy disease; low-birth rate, government budget deficit, high healthcare expenditure, bureaucracy There are two other major problems in parts of the U.S. and Europe (in particular) that're underrated: 1. insane land-use control laws that make it illegal to build reasonably price housing (see Matt Yglesias's The Rent is Too Damn High for more: http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp/B0078XGJXO http://www.amazon.com/TheRent-Too-Damn-High-Matters-ebook/dp...) and 2. transfer payments to older people that were originally conceived and executed when the number of workers to retirees was much different than it is now. The first is important because it impedes family formation and innovation. The second is important because it makes not having children easier, because other people's children will be forced to support you through their contribution to transfer payment programs. Yet neither issue gets much play in the press.
chfjdjcjdjd 10y ago
Some would say that arguments based on demographics are missing the point. Japan has been cannibalizing itself in order to protect its zaibatsus, squeezing every last ounce of productivity from its workers to the point at which they longer reproduce, and enacting corporate welfare policies in the form of QE and ZIRP/ NIRP. The EU and US have been following suit with quantitative easing and stagnant wages, and now we're beginning to experience the same economic decay that Japan has before us. This whole situation is completely avoidable if someone would just have the courage to stop coddling elites and big business.
- eru 10y ago
  Outside of export oriented manufacturing, Japan doesn't have high productivity.
fiatjaf 10y ago
What does immigration has to do with price deflation? (I know you can come up with some relation, of course everything is related, but again, it is not straightforward, and you shouldn't just assume that saying a bunch of buzzywords and stating some facts stands out as an explanation)
- pcurve 10y ago
  Immigration staves off demographic time bomb, which is cited as one of the causes (or symptoms depending on who you ask) for Japan's no-growth economic environment.
  - internaut 10y ago
    Although I lean libertarian I don't see how you can control monetary policy without also needing to control population size. Lots of awkward ethical questions nobody wants to talk about here.
    - eru 10y ago
      I don't get it? Just print money? (Or more formal, do QE?)
      - internaut 10y ago
        What I mean is that there must exist an elemental relationship (min-max limits) between population size and the depth of the division of labour (how complex production can become). Pairing population to production optimally is a synchronization problem. Cybernetics I suppose, not usually how economists think. Economic growth and recession could be modulated if there were enough people when we needed them, and there were not, when we did not. Recessions won't go away but they wouldn't be compounded by demographic issues. Currently this is solved in a haphazard way e.g. using illegal immigration of people like fruit pickers (deporting them when inconvenient) or by green belt zoning and class siloing. That can't be efficient. It couldn't possibly make humans happier. Most actually adopted solutions appear to be quite damaging to humans. How much of this is consciously orchestrated is also hard to ascertain. I suspect it is mostly Scott Alexander's Moloch at work. Every central banker ought to read that poetry because it's quite recognizable. Since it is unethical to force children to exist (Ceausescu) and also wrong to murder people or prevent them having offspring when demographic issues arise, we need a plausible solution to allow for a world in which people have a realistic chance of having sustenance and purpose in their lives. Most people really don't like this topic! It is understandable. We prefer not to think of ourselves as elements of production and supply. Of course we are, we're just a special case of it. All of the problems are ultimately rectified by markets, or failing them, mother Nature. You know what they say about Nature being a mother. My point is that we don't necessarily need to let it get to market corrections if we think ahead. Suppose you were a Communist official in charge of the One Child policy who anticipated the female infanticide rate. You'd have solved for a good deal of human suffering decades later on with perhaps an afternoon's work. Right place, right time. Monetary policy tools work on a similar lever principal to this which is a large part of the reason I'm talking about them in the same vein. I'm not confident I know what to do, only that it is a factor. And now; tell me how I'm wrong!
internaut 10y ago
Stagnation is the main threat the world is waking up to. People will blame other things of course. Things like MENA immigration, climate patterns, crop failures, these are second order affects of stagnation. The peripheral fails before the center. Never forget that. I have to congratulate Peter Thiel. He has managed to see a lot of this ahead of almost anybody else I can think of and this is despite being at the heart of the cozy bubble that is Silicon Valley. One of his expressions is that you can have instances of success in an ocean of general failure or something to that effect. Even on HN a few hours ago I saw a WSJ article proclaiming that everything is smashingly good these days, that three/four decade wage stagnation is a mere blip on the radar. Though I agreed with the substance of the historical facts she stated I also think this is an utterly clueless point of view on human nature that is shared by huge swathes of the middle class. I didn't live in 1850 and I cannot be expected to appreciate the good fortune of the years since then! If you live in a downcycle then that's all you know. You see the contradictions at their most dire with the pension funds. They require either massive hikes in funding or 6-7 real percent per year. Wages will have to rise suddenly and dramatically and/or else we need massive massive technological changes. Somehow I see Larry Summers getting called back into Court. Whether monetary policy is enough, that is another question.
- deleted 10y ago
  [deleted]
- mrep 10y ago
  Wages have not been stagnating [1]. Median wage has stagnated but that is due largely to the polarization of the labor market of which has been talked about long before Peter Thiel [2]. [1]: http://www.tradingeconomics.com/united-states/wage-growth http://www.tradingeconomics.com/united-states/wage-growth [2]: https://www.researchgate.net/profile/Melissa_Kearney2/publication/4981174_The_Polarization_of_the_U.S._Labor_Market/links/0fcfd50bd66be2418b000000.pdf https://www.researchgate.net/profile/Melissa_Kearney2/public...
  - internaut 10y ago
    I agree with those statements. I'm not sure we agree on what they mean though. World becomes more zero sum when growth plateaus. Only now it is proposed that everybody and their dog get PhDs in god only knows what. Diminishing returns are exactly stagnation. I know blue collar workers making more money than people who took extensive study and got 'good' jobs. This is despite the fact those workers haven't actually had wage increases themselves! They're just working long hours for more pay. We're stuck in a rut. It could be the case that technological stagnation is created by technology itself. A hairy subject! If I remember rightly wage increases for the higher percentile aren't that great either. I mean they are better than zero but not as great as they used to be. Makes sense since their market of consumers is drying up as everybody becomes cash poor except for those making toys for the actual rich.
ArkyBeagle 10y ago
Yep. We'd rather slowly become more and more sclerotic rather than face so much as a tiny increase in price level.
eru 10y ago
The world doesn't have to head there. Central banks can produce any amount of inflation they want to, if they have the guts. See nominal GDP level targeting: http://www.economist.com/blogs/freeexchange/2011/10/monetary-policy-3 http://www.economist.com/blogs/freeexchange/2011/10/monetary...
rosege 10y ago
Exactly, they can see that the policies of the US and Europe will lead to lost decades like it has in Japan. You can see it already happening. I believe the problem is the bail outs from the financial crisis and the ongoing belief that nothing can be allowed to fail which is why interest rates have been kept so low. I think they would be much better off raising rates (Fed and ECB simultaneously) - this will lead to some short term pain as businesses that arent very profitable are forced to close. But from the ashes of these 'bad' businesses you will get better ones rising. The metaphor here is of fire which destorys but also clears the way for regrowth.

Olscore 10y ago

When I first saw this ad I really enjoyed the concept of it (work in video production.) Not something you see often. Maybe that will change. To me, it's interesting because [1] the consumer has to be familiar enough with the product so much that even its price is memorized, and [2] just seeing a company apologize for a price increase is rare in American culture.

alva 10y ago
A beautiful thing for the company to do. Shows a huge amount of integrity.
a3n 10y ago
I'm looking forward to the Volkswagon version, complete with spanking paddles. (And I shouldn't be surprised anymore, but, these are sold on Amazon.)
- rangibaby 10y ago
  I did see Volkswagen's "sorry" ad on Japanese TV about a month ago!

fiatjaf 10y ago

So prices are sticky upwards now?

fiatjaf 10y ago

> Japanese policy makers have long identified > deflation as enemy No. 1 for the economy. It is crazy when policy makers try to make prices increase, prices DO increase, and everyone complains after the fact, including the people who wrote that article and commenters here.

jpatokal 10y ago
It's not much fun if you're in the same boat as the average Japanese salaryman, who is seeing prices increase while his meager pay packet stays unchanged.
- hudibras 10y ago
  > who is seeing prices increase As the chart with the article notes, these price increases are now at -0.1% per year.
- fiatjaf 10y ago
  Did I say it is fun? The average japanese is poor because the government policies are robbing him, not because of my comment.
partiallypro 10y ago
Prices increasing without increase in economic output though, stagflation becomes a danger. Deflation is very dangerous, stagflation is dangerous, runaway inflation is dangerous. Monetary policy isn't easy.
- dredmorbius 10y ago
  Inflation, deflation, and stagflation are symptoms, not causes.
  - cjensen 10y ago
    Nope. Initially, deflation is a symptom as you suggest. The problem is that deflation is a stable state within the economic system. Once in deflation, people say "I could invest this $100, and in the long run I'll get back $98. Or I could stick it in a mattress and get back $100 in the long run." Investment ceases. If a manufacturing line needs to be refurbished, the owners will lay off workers and quit rather than pouring in money they will never get back. This is why the Fed in the US panicked so hard when during the last recession: we were approaching the stable state and they were willing to do anything to prevent that from happening.

fiatjaf 10y ago

25 years of governments pumping money into the economy to see if it "grows" again. When will they recognize the policy is failing and the solution is not "more of the same"? Give me a date.

skylan_q 10y ago
They kept the monetary base pretty steady for a while in the mid 2000's. It ended up hurting their ability to export and made it easier to import. They were unhappy with the slightly higher unemployment, the slight and constant price deflation, and the lack of GDP growth. Otherwise, things actually weren't that bad.

hkmurakami 10y ago

Hm. Well the bottled drinks in vending machines was 100yen back in the 90's when I was a child, and is now 120 yen, so many things have increased in price or have followed the American CPG way of maintaining sticker prices but decreasing the payload in the package.

nihonde 10y ago
You have to factor in an 8% consumption tax (~4 point increase over late 1990s) on that (meager) price increase.

roflchoppa 10y ago

Was not aware the Japan's economy is slowing down, i would totally be down to boost their economy by importing Nissan Skylines into the US. Damn Dept. of Transportation and their safety laws ;(

Shivetya 10y ago
it never really has ever recovered and probably won't until the government realizes it is the problem, you cannot use public spending to buy your way out. Their central bank hasn't been helping matters much either. Even threatening bank reserves (negative interest which when done by the central bank is in effect a tax) is there. (Some in the US want the Fed to have similar powers) which rolls neatly into all the recent talk being floated about basic income. see there is this other neat trick with BI. Governments could roll this out as a means to put money into the hands of consumers to spend. Now if you did it short term to jump start an economy it probably would work, just the idea its happening would loosen up money supplies.
HeyLaughingBoy 10y ago
I've seen at least two Nissan GTR Skylines here in Minnesota. Don't know if they're detuned or otherwise modified. First one I saw was at a gas station last year and I was so astounded I had to ask the owner if it was really what I thought it was. Crawled back into my 350Z still drooling :-)
- roflchoppa 10y ago
  was it an R32? I think the law has slightly laxed on them due to being 25yr now. i see R35's here in the bay area every now and then.
  - HeyLaughingBoy 10y ago
    They were both current model year or at most a year old. Well, I use the term "Skyline" loosely. I don't think Nissan actually calls them that anymore.

norea-armozel 10y ago

I just wonder if they can ever get out of this death spiral for their country. I remember watching a bit of an documentary of men (young and old) who literally live out of net cafes in Japan. It was disturbing to since the same documentary mentioned that it's the norm now for people to be working just temp work (I use to do the same in manufacturing years ago) which can go away at a moment's notice. At some point this has to change, if there's X percent of wealth being generated in a country (and Japan has to be making some gains in that regard) but Y percent of the population that's un/under-employed then I wonder if the question shouldn't be about how we get these people to work but rather how we distribute the wealth to ensure everyone has their necessities met (housing, healthcare, food, education, etc)? I'm not proposing UBI, social democracy, or anything. I'm just posing this as a question because honestly I can't see this situation lasting for long unless there's a massive die off of the population (possibly literally).

kchg 10y ago

This article is painting the wrong picture, exaggerating this paltry 10 yen rise. At least from a normal household point of view living in Tokyo, I see rising prices all around - rent getting more expensive, the same type of fish (as an example) I've been buying in supermarket getting more expensive. Recently I was shopping for a bicycle bag. I saw some blog reviews from 2 years ago stating the price was around 5000 yen; But I see all the shops are now selling it for over 7000 yen!