5 ms·

Nobody tell the author about Japan.

bluedevil2k 6y ago
Aren’t Americans too “spendy” to have that happen here? The main driver of the stagflation in Japan is that they’re too thrifty - their stimulus are literally expiring credit cards, forcing people to spend money.
- georgeecollins 6y ago
  It's important to think about the "spendy" / "thrifty" thing as being partly-- maybe mostly-- demographics. Young people are spendy, borrowing against future earnings, old people are thrifty, counting on assets to support them. Japan is in demographic decline. The US keeps growing demographically, but it does because of immigration. If the US has less immigration the chances improve that it will stagnate economically like Japan. I don't know if any of the things I am describing are good or bad. But a lot of our assumptions about how the US economy "always" is are based on 300 years of population growth.
  - t0mbstone 6y ago
    The US still has MASSIVE amounts of un-developed land that our population can grow into and utilize in all sorts of ways. Have you ever driven across the midwest? Soooooo much land just being wasted... Japan, on the other hand, is an island...
- Tiktaalik 6y ago
  Used to be during the 1980s bubble era of Japan that you'd wave hundred dollar bills at taxis to wave them down. Japan wasn't always thrifty. This was a cultural change induced by the bursting of the bubble. A generational cultural change could just as easily happen to the USA too.
omginternets 6y ago
Could you elaborate on your point? It sounds like you have something interesting to add to the discussion, but it's getting lost in snark. I for one would like to know what Japan can teach us about this question.
- david927 6y ago
  There's this optimistic notion that we'll just bounce back from any setback and continue economic growth. Japan had the same thing happen that we're seeing now in the 1980's -- and never recovered.
- bluedevil2k 6y ago
  They’re facing a unique economic situation where their economy isn’t growing and prices are decreasing. When prices decrease, people hold on to their money (after all, it will have more buying power in the future). When people don’t spend, the economy slows down. They tried lowering interest rates to $0 to try to motivate spending...hasn’t worked. They give stimulus a lot and have expirations on the debit cards they give to force spending...doesn’t really work. They’re running out of tools to get the economy growing again. This is the reason central banks aim for 1-2% inflation - it encourages spending which is good for the GDP.
  - redis_mlc 6y ago
    Japan: - rapidly aging population (senior citizens don't buy anything, don't participate in labor force) - women with a job have zero incentive to get married or have kids because of many cultural restrictions on married women (historically they lose their job, and husbands are home very late.) They buy their own condos now and stay single. - consumer companies missed the Internet boom (Apple stole Sony's lunch) - Japanese are legendary savers, not spenders. (It's considered shameful to not have $100k in the bank at all times.) - govt is holding trillions in corporate stock and bonds to prop up their capital markets.
  - omginternets 6y ago
    How much of this is cultural (e.g. valuing long-term planning / saving) versus mechanical? EDIT: this thread has some insight. https://news.ycombinator.com/item?id=26171294 https://news.ycombinator.com/item?id=26171294

Aren’t Americans too “spendy” to have that happen here? The main driver of the stagflation in Japan is that they’re too thrifty - their stimulus are literally expiring credit cards, forcing people to spend money.

georgeecollins 6y ago
It's important to think about the "spendy" / "thrifty" thing as being partly-- maybe mostly-- demographics. Young people are spendy, borrowing against future earnings, old people are thrifty, counting on assets to support them. Japan is in demographic decline. The US keeps growing demographically, but it does because of immigration. If the US has less immigration the chances improve that it will stagnate economically like Japan. I don't know if any of the things I am describing are good or bad. But a lot of our assumptions about how the US economy "always" is are based on 300 years of population growth.
- t0mbstone 6y ago
  The US still has MASSIVE amounts of un-developed land that our population can grow into and utilize in all sorts of ways. Have you ever driven across the midwest? Soooooo much land just being wasted... Japan, on the other hand, is an island...
Tiktaalik 6y ago
Used to be during the 1980s bubble era of Japan that you'd wave hundred dollar bills at taxis to wave them down. Japan wasn't always thrifty. This was a cultural change induced by the bursting of the bubble. A generational cultural change could just as easily happen to the USA too.

omginternets 6y ago

Could you elaborate on your point? It sounds like you have something interesting to add to the discussion, but it's getting lost in snark. I for one would like to know what Japan can teach us about this question.

david927 6y ago
There's this optimistic notion that we'll just bounce back from any setback and continue economic growth. Japan had the same thing happen that we're seeing now in the 1980's -- and never recovered.
bluedevil2k 6y ago
They’re facing a unique economic situation where their economy isn’t growing and prices are decreasing. When prices decrease, people hold on to their money (after all, it will have more buying power in the future). When people don’t spend, the economy slows down. They tried lowering interest rates to $0 to try to motivate spending...hasn’t worked. They give stimulus a lot and have expirations on the debit cards they give to force spending...doesn’t really work. They’re running out of tools to get the economy growing again. This is the reason central banks aim for 1-2% inflation - it encourages spending which is good for the GDP.
- redis_mlc 6y ago
  Japan: - rapidly aging population (senior citizens don't buy anything, don't participate in labor force) - women with a job have zero incentive to get married or have kids because of many cultural restrictions on married women (historically they lose their job, and husbands are home very late.) They buy their own condos now and stay single. - consumer companies missed the Internet boom (Apple stole Sony's lunch) - Japanese are legendary savers, not spenders. (It's considered shameful to not have $100k in the bank at all times.) - govt is holding trillions in corporate stock and bonds to prop up their capital markets.
- omginternets 6y ago
  How much of this is cultural (e.g. valuing long-term planning / saving) versus mechanical? EDIT: this thread has some insight. https://news.ycombinator.com/item?id=26171294 https://news.ycombinator.com/item?id=26171294