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I'm not at all convinced that reasonable housing prices are a magic bullet for the economy. Housing in Japan is treated as a depreciating asset rather than an i

I'm not at all convinced that reasonable housing prices are a magic bullet for the economy. Housing in Japan is treated as a depreciating asset rather than an investment and is dirt cheap (outside of the most desirable parts of Tokyo, of course, but even then it's a pittance compared like-for-like with, say, desirable parts of NYC), and Japan's economic stagnation for decades is nonetheless well-known; it could be the dictionary illustration for "economic malaise". Of course, reasonable housing policy should still be pursued... just with basic human living standards being the justification rather than "it'll make our economy numbers go up" justification.

jmyeet 5mo ago
Japan's economic malaise is a big topic that's mostly driven now by a rapidly aging population. Why is it aging? Low fertility rates [1]. So why are fertility rates so low? It kind of started with the housing bubble in the 1980s that created a youth unemployment crisis (ie hikikomori), which has now come to the West where we now have a youth unemployment crisis (and thus NEETs). I found this [2]: > Japan made the same discovery thirty years earlier. The hikikomori phenomenon (young men, predominantly, who withdraw from social life entirely, sometimes for decades) emerged in the 1990s, after Japan’s asset bubble burst and the lifetime employment compact dissolved. The cultural commentary at the time, both Japanese and Western, framed it as a peculiarly Japanese pathology, something about shame and conformity and the pressure-cooker school system. This was wrong. It was a structural response to the closure of the productive ladder, and it has now appeared in every developed economy that has reproduced the same structural conditions. It's worth noting that the US fertility rate is alos below replacement levels (~1.54) but the only thing that props up our population is immigration. Japan eschews immigration as a de facto ethnostate. South Korea is further along in that crisis. China will need to find a solution too. But there are cultural reasons here too. Japanese work culture, pay relative to work, etc. [1]: https://www.macrotrends.net/global-metrics/countries/jpn/japan/fertility-rate https://www.macrotrends.net/global-metrics/countries/jpn/jap... [2]: https://henryfudgeofficial.substack.com/p/degeneracy-is-a-symptom https://henryfudgeofficial.substack.com/p/degeneracy-is-a-sy...
- applfanboysbgon 5mo ago
  [flagged]
  - jmyeet 5mo ago
    The unemployment rate doesn't capture the scope of the issue. That's true in the US and Europe too. It doesn't capture people who are undermployed, locked into lower-paid positions, have to juggle multiple casual/part-time jobs and end up doing "gig" work, which is often sub-minimum wage once you factor in depreciation. As for Japan, in particular, we have the Lost Decades [1], where the 1980s asset bubble collapsed and the economy stagnated for 20 years. Part of this was cultural too. For all of the faults of the US banking system at the time (eg the S&L crisis), the FDIC's approach is to take over failing banks whereas Japan let essentially bankrupt banks exist and gum up the economy. They are known as zombie banks [2]. You had zombie companies too and the entire thing largely came down to avoiding a loss of face by declaring bankruptcy, restructing or doing mass layoffs. For over a decade, you had the "employment ice age" [3], which essentially destroyed GenX at the time they'd otherwise be starting families. This continued into the 2010s with the millenial generation. Young people aren't stupid. They can look at their environment and increasingly realize they'll have no work-life balance, be lucky to find a good job, get paid enough to live on that job, won't own a house and can't afford to have a family. I call this a crisis in hopelessness. I also think this underpins how consumer spending has remained relatively strong. People are living for experiences rather than saving for a future because they have no future. [1]: https://en.wikipedia.org/wiki/Employment_Ice_Age https://en.wikipedia.org/wiki/Employment_Ice_Age [2]: https://en.wikipedia.org/wiki/Zombie_bank https://en.wikipedia.org/wiki/Zombie_bank [3]: https://en.wikipedia.org/wiki/Employment_Ice_Age https://en.wikipedia.org/wiki/Employment_Ice_Age
  - tomhow 5mo ago
    > Blaming ... is literally insane. > Your pet theories about how economies work should probably be grounded in more than 5 minutes of taking whatever bullshit you read on the internet as truth Hey, commenting like this on HN is not cool, as the guidelines make very clear. Please remind yourself of the guidelines and make an effort to observe them if you want to keep participating here. These ones in particular should be heeded: Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes. When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3." Please don't fulminate. Please don't sneer, including at the rest of the community. Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
littlexsparkee 5mo ago
High housing prices will kill a good economy but having moderate rents will not somehow jumpstart a bad economy. JP's slump isn't evidence against housing theory of everything.
- margalabargala 5mo ago
  I disagree. It will, it just takes a while. There are tons of cities with burgeoning artist scenes and other movements improving that city, due to the availability of extremely inexpensive space to do things. Rochester, St Louis, Baltimore, Detroit. Making things cheap means you can take risks or spend time on activity that's directly economically unproductive but indirectly has fringe benefits for everyone around. And as more people do it, more people try to do it, with a compounding positive effect over time.
indoordin0saur 5mo ago
Japan makes me feel very confused about what economic statistics actually mean. People have great housing, beautiful and safe neighborhoods, ample access to the world's best transit, tons of entertainment and cultural products to access, excellent education and one of the longest life expectancies. Sure, they maybe have some minor problems. But I suspect that if an alien came down to Earth, toured all the countries and then was asked to rank which ones it thought were the richest without looking up economic stats I'd expect it would rank Japan near the top.
jeffbee 5mo ago
Japan's "malaise" is fiscal, an outcome of one way to analyze the public balance sheet. Japan's standards of living remain exceptionally high.
- applfanboysbgon 5mo ago
  I do agree. I'm actually of the opinion that the economy is in generally good shape and that "number go up" should not be the end goal. It is abundantly clear that real living standards on the ground are completely divorced from the obsession with infinite growth.

jmyeet 5mo ago

Japan's economic malaise is a big topic that's mostly driven now by a rapidly aging population. Why is it aging? Low fertility rates [1]. So why are fertility rates so low? It kind of started with the housing bubble in the 1980s that created a youth unemployment crisis (ie hikikomori), which has now come to the West where we now have a youth unemployment crisis (and thus NEETs). I found this [2]: > Japan made the same discovery thirty years earlier. The hikikomori phenomenon (young men, predominantly, who withdraw from social life entirely, sometimes for decades) emerged in the 1990s, after Japan’s asset bubble burst and the lifetime employment compact dissolved. The cultural commentary at the time, both Japanese and Western, framed it as a peculiarly Japanese pathology, something about shame and conformity and the pressure-cooker school system. This was wrong. It was a structural response to the closure of the productive ladder, and it has now appeared in every developed economy that has reproduced the same structural conditions. It's worth noting that the US fertility rate is alos below replacement levels (~1.54) but the only thing that props up our population is immigration. Japan eschews immigration as a de facto ethnostate. South Korea is further along in that crisis. China will need to find a solution too. But there are cultural reasons here too. Japanese work culture, pay relative to work, etc. [1]: https://www.macrotrends.net/global-metrics/countries/jpn/japan/fertility-rate https://www.macrotrends.net/global-metrics/countries/jpn/jap... [2]: https://henryfudgeofficial.substack.com/p/degeneracy-is-a-symptom https://henryfudgeofficial.substack.com/p/degeneracy-is-a-sy...

applfanboysbgon 5mo ago
[flagged]
- jmyeet 5mo ago
  The unemployment rate doesn't capture the scope of the issue. That's true in the US and Europe too. It doesn't capture people who are undermployed, locked into lower-paid positions, have to juggle multiple casual/part-time jobs and end up doing "gig" work, which is often sub-minimum wage once you factor in depreciation. As for Japan, in particular, we have the Lost Decades [1], where the 1980s asset bubble collapsed and the economy stagnated for 20 years. Part of this was cultural too. For all of the faults of the US banking system at the time (eg the S&L crisis), the FDIC's approach is to take over failing banks whereas Japan let essentially bankrupt banks exist and gum up the economy. They are known as zombie banks [2]. You had zombie companies too and the entire thing largely came down to avoiding a loss of face by declaring bankruptcy, restructing or doing mass layoffs. For over a decade, you had the "employment ice age" [3], which essentially destroyed GenX at the time they'd otherwise be starting families. This continued into the 2010s with the millenial generation. Young people aren't stupid. They can look at their environment and increasingly realize they'll have no work-life balance, be lucky to find a good job, get paid enough to live on that job, won't own a house and can't afford to have a family. I call this a crisis in hopelessness. I also think this underpins how consumer spending has remained relatively strong. People are living for experiences rather than saving for a future because they have no future. [1]: https://en.wikipedia.org/wiki/Employment_Ice_Age https://en.wikipedia.org/wiki/Employment_Ice_Age [2]: https://en.wikipedia.org/wiki/Zombie_bank https://en.wikipedia.org/wiki/Zombie_bank [3]: https://en.wikipedia.org/wiki/Employment_Ice_Age https://en.wikipedia.org/wiki/Employment_Ice_Age
- tomhow 5mo ago
  > Blaming ... is literally insane. > Your pet theories about how economies work should probably be grounded in more than 5 minutes of taking whatever bullshit you read on the internet as truth Hey, commenting like this on HN is not cool, as the guidelines make very clear. Please remind yourself of the guidelines and make an effort to observe them if you want to keep participating here. These ones in particular should be heeded: Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes. When disagreeing, please reply to the argument instead of calling names. "That is idiotic; 1 + 1 is 2, not 3" can be shortened to "1 + 1 is 2, not 3." Please don't fulminate. Please don't sneer, including at the rest of the community. Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html

littlexsparkee 5mo ago

High housing prices will kill a good economy but having moderate rents will not somehow jumpstart a bad economy. JP's slump isn't evidence against housing theory of everything.

margalabargala 5mo ago
I disagree. It will, it just takes a while. There are tons of cities with burgeoning artist scenes and other movements improving that city, due to the availability of extremely inexpensive space to do things. Rochester, St Louis, Baltimore, Detroit. Making things cheap means you can take risks or spend time on activity that's directly economically unproductive but indirectly has fringe benefits for everyone around. And as more people do it, more people try to do it, with a compounding positive effect over time.

indoordin0saur 5mo ago

Japan makes me feel very confused about what economic statistics actually mean. People have great housing, beautiful and safe neighborhoods, ample access to the world's best transit, tons of entertainment and cultural products to access, excellent education and one of the longest life expectancies. Sure, they maybe have some minor problems. But I suspect that if an alien came down to Earth, toured all the countries and then was asked to rank which ones it thought were the richest without looking up economic stats I'd expect it would rank Japan near the top.

jeffbee 5mo ago

Japan's "malaise" is fiscal, an outcome of one way to analyze the public balance sheet. Japan's standards of living remain exceptionally high.

applfanboysbgon 5mo ago
I do agree. I'm actually of the opinion that the economy is in generally good shape and that "number go up" should not be the end goal. It is abundantly clear that real living standards on the ground are completely divorced from the obsession with infinite growth.