10 ms·

The Story of Japan's 'Lost Decades' was a Hoax

116 points by mattm 13y ago

tsiki 13y ago
It's always hard to tell what's really happening behind the GDP growth figures when comparing countries. The population of US and UK are currently increasing around 0.7% a year, while Germany is around 0%. That's a lot of additional GDP growth for both UK and US, even when excluding the fact that immigrants are at their prime working age and usually more beneficial for the GDP than an average citizen. This has a fairly big impact on what's seen on the news. Since depression is defined as two consecutive quarters of negative growth, it's much easier for countries like US and UK to avoid "official" depression, and much easier for news outlets to talk about the "stagnating old Europe" or such; and of course, at the same time the living standard of an average German might be increasing and that of a UK/US citizen decreasing.
- ekianjo 13y ago
  GDP is anyway an extremely biased thing to look at. There are many ways you can influence it to make it look like you are growing.
  - deleted 13y ago
    [deleted]
  - tsiki 13y ago
    Absolutely, personally I dislike how it's the single most powerful figure for decisionmakers. There have been many alternative measurements developed for measuring overall progress of an economy, but unfortunately they haven't taken much foothold.
    - ldng 13y ago
      Would you care to list the one you find relevant ? I'm interested.
      - jjindev 13y ago
        If we stick to "economics" without even going to "well-being," I think median net worth is the best bet. But you know, governments find it easier to "book" corporate profits as part of GDP and call it a day.
      - tsiki 13y ago
        Not strictly economic, but personally I quite like the idea of gross national happiness: http://en.wikipedia.org/wiki/Gross_national_happiness http://en.wikipedia.org/wiki/Gross_national_happiness On the more economic side, you have something like the Misery Index and its extensions (http://www.cato.org/publications/commentary/misery-mena http://www.cato.org/publications/commentary/misery-mena). Obviously composite indexes like these have their flaws too, but overall they are more comprehensive than GDP alone.
    - yk 13y ago
      The problem is not so much GDP, as it is to measure the economy in one float. So GDP is a somewhat good measure, if you want a quick handle on production capacity, for standard of living something like purchase parity median income is better, but tells you nothing about relative strength of exports, etc...
- agilebyte 13y ago
  Don't worry, if UK quit the EU, you might see quite a few of those immigrants heading to Germany. That should fix that population growth.
  - lifeisstillgood 13y ago
    Aha - the UKIP double-whammy - I see Mr Farage firing up the policy word docs already.
  - raverbashing 13y ago
    Or they'll just do bilateral agreements to allow people from "the right countries" to be able to work there Like Switzerland
    - agilebyte 13y ago
      This page http://en.wikipedia.org/wiki/Immigration_to_Switzerland http://en.wikipedia.org/wiki/Immigration_to_Switzerland seems to indicate the Swiss policy to be largely in line with the UK/EU one. Is that no longer the case? I take it a lot of the rhetoric from Middle England has to do with dey tukk ur jerb from bad EU countries like mine so can't see the populace being happy with the same old policy.
      - raverbashing 13y ago
        Yes, it is very similar. Just remember that Switzerland is not part of the EU So, theoretically, they're not in the EU, but an EU citizen has similar rights there as in other EU countries.
        kaybe 13y ago
        Well, they did join the Schengen treaty, so cooperation between the police forces etc can be expected.
      - g8oz 13y ago
        Maybe he's referring to the mainstreaming of nationalist/racist overtones in parts of their political spectrum
agilebyte 13y ago
tl;dr Japanese stock market was way overvalued so it had to crash but industries have grown since then. Japanese officials were complicit in spreading the story that they are in a bad shape so that trade barriers on import don't have to be lifted. Per capita, they are doing just fine.
guard-of-terra 13y ago
"Japan’s seeming underperformance is an illusion that stems not from economics at all but from demographics" Guess what, people in Japan don't care about how their economic perform once it is decoupled from their well-being. And that's what he is suggesting: output grows, all that matters.
cryofan 13y ago
from the article: "In the meantime Japanese officials found that the basket-case story powerfully ameliorated angst in Washington over Japan’s closed markets. They proved quick learners and have projected an image of Japan as suffering some weird economic equivalent of dementia ever since." And when are americans going to learn that they swim in a sea of propaganda? That propaganda is what our minds eat, breath, and drink? Especially the young of america--their entire subculture is a enclosing, enveloping fabric of propaganda. This propaganda world is no conspirary, but an ecosystem. In this case, Japan was the generator of the propaganda, but the US govt, and the other major societal institutions of America also generate massive amounts of propaganda. This is no conspiracy, but an ecosystem, an ecosystem of human society where the major actors are large institutions and corporations that generate propaganda to manipulate public opinion, even mold and evolve the culture. From the article: "In Washington, however, the basket-case story worked like a charm. After all a chivalrous United States doesn’t kick a man when he’s down. The result is that even today not one of Washington’s highly publicized trade grievances of the 1980s has been resolved – not autos and auto parts, not financial services, not even rice." I have been reading the writing of the author of this piece, Eammonn Fingleton, for years. One of his major themes is that the real reason why japan and germany and other nations that depend on manufacturing have done so much better than the USA is that the type of manufacturing that moved from the USA to overseas was the good kind of manufacturing -- turn raw materials into products. This is quite a bit different from turning parts into products, e.g., car assembly plants. That is for the most part the type of only manufacturing that america has left. High end manufacturing is the best type of industry, better than software development or finance etc. Better for the citizens, that is. But you see Japan is run for the benefit of its citizens, and the USA was never designed for that. From the start, the USA was designed to be run for and by the owners of capital. It says right in the documents that were written as part of the development of the USA, when the so-called founding fathers got rid of the articles of confederation and installed the constitution. The fact is that the USA politicians allowed high end manufacturing to go overseas because the corporations paid them to do so. And the fact is that the American GPD growth is now primarily a factor of mass immigration. That is not a type of growth that helps the quality of life of its current citizens. But the propaganda put out by the institutions of america will not tell you that.
lkrubner 13y ago
It's important to realize that this article is by Eamonn Fingleton, who has been pushing a fixed idea for decades now: that Japan is secretly a terrifying power. He has written several books that touch (in whole or in part) on this theme: http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Daps&field-keywords=Eamonn%20Fingleton http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3D... I read Blindside back in 1996 and I thought his argument was interesting for that time. However, when you read him, it is important to remember that he has not changed his opinion in 20 years, and there are new facts to be accounted for. At that time he seemed certain that Japan would be the worlds #1 economy by the year 2000. His prediction was wrong, but he has not much changed his opinion: he still believes Japan is an important success story. Japan suffered a long depression in the 1990s. That is not fiction. That is a fact. However, it is also true that some of the stagnation of the period 1990-2013 should be attributed to demographic change. Paul Krugman offered a partial counter-argument to Eamonn Fingleton here: http://krugman.blogs.nytimes.com/2012/01/09/japan-reconsidered-2/ http://krugman.blogs.nytimes.com/2012/01/09/japan-reconsider... Also, it is worth noting that for the last 20 years Fingleton has constantly harped on the fact that Japan has a trade surplus, sometimes a very large trade surplus, and he thinks this represents economic strength. Numerous economists have made the point that a large trade surplus can be a sign of economic weakness: perpetual insufficient demand at home in the domestic market. Fingleton has rarely taken this view into account.
- tezza 13y ago
  Not to mention yet other signs of Japans wrecked economy: * Zombie giant banks, addicted to bailouts * Currency pushed and pulled by Yen carry trade * Complete efficiency collapse. Workers work very long hours accomplishing little * Eye watering debt ( worlds largest on many measures )
  - fnordfnordfnord 13y ago
    Kyle Bass is pretty bearish on the Japanese economy; has been for several years. If he turns out to be right, the Japanese are in for a bad time. I get the impression that a lot of it is due in part to the demographics (lots of elderly, at least they are healthy). 04/08/2013 - http://thecommonsensecapitalist.com/2013/04/08/kyle-bass-on-japan/ http://thecommonsensecapitalist.com/2013/04/08/kyle-bass-on-... 06/31/2013 - http://seekingalpha.com/article/1473301-should-we-allow-kyle-bass-to-bet-on-the-economic-implosion-of-japan http://seekingalpha.com/article/1473301-should-we-allow-kyle... 01/21/2013 - http://www.forbes.com/sites/stephenharner/2013/01/21/whither-japan-stocks-and-bonds-are-kyle-bass-and-martin-feldstein-right-is-market-collapse-ahead/ http://www.forbes.com/sites/stephenharner/2013/01/21/whither... 05/23/2013 - http://www.bloomberg.com/news/2013-05-23/boj-bond-buying-to-be-overwhelmed-by-investor-sales-bass-says.html http://www.bloomberg.com/news/2013-05-23/boj-bond-buying-to-...
smegel 13y ago
Strange he didn't mention women entering the workforce when he talked about demographics and the US increasing workforce, just about every article I have read about Nippon's economic stagnation does. Perhaps because it is too taboo to suggest the feminist revolution was unnecessary, that we could have achieved both economic success and personal wellbeing without it, as Japan had apparently demonstrated. So we continue to perpetuate the myth that Japan is on the verge of death - I even recall a UN committee calling for "urgent" gender equality to stave off economic disaster - it was the "only way" Japan could regain growth. Perhaps not.
- cryofan 13y ago
  or perhaps it is taboo to suggest that feminism is and was simply a propaganda tool used by Capital to increase the supply of labor and thereby increase revenues and profits. Same goes for multiculturalism, civil rights and mass immigration, and the accompanying propaganda efforts, which are in reality culture-shaping events.
- rayiner 13y ago
  > Perhaps because it is too taboo to suggest the feminist revolution was unnecessary, that we could have achieved both economic success and personal wellbeing without it, as Japan had apparently demonstrated. Utterly ridiculous definition of "unnecessary."
adventured 13y ago
Right up there with the myth that Japan suffered two decades of deflation.
lifeisstillgood 13y ago
I cannot see several administrations plus the upper echelons of corporate Tokyo agreeing for two decades to "pull the wool over the world's eyes". But I also can see that Japan is not a basket case, and indeed is doing well for a world in recession. So, the question I have is what is the meme - presumably there is some lie that Japan tells itself, that means when a variety of people speak they agree "our economy is in bad shape, we have lost a decade" even if on many measures its not true. As a Brit, our government would love Japan's growth rates or export levels. But we tell ourselves memes, about a special relationship with US, about European bureaucrats, about recovery being linked to house prices - well, I think we do, but its like a fish trying to describe the colour of water. Interested in hearing from some Japanese fish, as it were.
- shadowmint 13y ago
  I can only speak from the people I've met personally, but: Older people are worried that all of Japans 'gijyutsu' is going to China now (which literally means, art, or craft, but basically they mean, all making-new-stuff skills are going to china now). Especially the retired folk seem really concerned about it. Young people complain like crazy they can't get decent jobs. I think you'd be hard pushed to find someone who are generally speaking positive about the Japanese economy over there. I certainly didn't encounter anyone (Japanese) who was positive about it when I was there (a year ago now), or met anyone who has been here since. It'd be pretty interesting to see some japanese news paper / blog sentiment analysis work and see how wide spread that goes in general. You could probably use kanji as a pretty decent marker (negative words tend to make common elements, etc). hm...
dev_jim 13y ago
I don't see why he keeps trotting out this thesis that just isn't supported by data. Japan's GDP has been stagnant over the past two decades: https://www.google.com/search?q=japan+GDP https://www.google.com/search?q=japan+GDP Adjusting for working age population shows a similar trend. And if data doesn't work for you then there's a ton of other signs that the economy is not doing well: - Interest rates have been stuck against the zero lower bound - Stock market is 1/4 of what it was at it's peak - Property values have still not recovered in major cities - Debt as a percentage of GDP has ballooned to over 200% Now with that being said - if I had to choose a country to spend two lost decades in, it would be Japan. Local savers have allowed them to issue debt at very low interest rates which has been able to cover shortfalls. And there is signs that Abenomics is taking hold.
- wjnc 13y ago
  TL/DR: Worker productivity in Japan is high and has risen like all other western countries. Other factors, like lacklustre respons to zombie banks, must explain "lost decade". I look at the Penn World Table. In: * Real Income per Population, * Real Income per Employed Population, and * Real Income per Employed Work Hour Japan has lagged the USA pretty consistently. That is consistent with all other major economic countries. In the '90s Japan actually outperformed on the Income per Worked Hour. That means there are still 99 problems left for the Japanse economy, but worker productivity ain't one. Still zombie banks and government reponse to zombie banks might have created a consumption crisis (just as, for example in the Netherlands at this moment, consumers must pay for increasing bank buffers), but I would venture that corporations have retained profitability through the crisis. Japan didn't grow compared to it's neighbours. But that's catch-up growth for Korea and China. You can't blame Japan for already being first-world in 1990. Stock market isn't a good indicator for welfare of general population. Japan just might have been overvalued, or other countries overvalued. Property markets have gone beserk pretty much first worldwide, only in Japan first. Another pointer that we are just mimicing their banking crisis.
- rsync 13y ago
  Also, he mentions (low) cost of borrowing as a key point to his thesis, but my understanding is that the cost of borrowing for Japan is heavily influenced by domestic savings. IIRC, a lot of the money "borrowed" are the contents of the postal savings accounts (or whatever they are) of elderly Japanese who are extremely conservative investors. I have further seen it commented that there will be complications when that sect of the population switches to net withdrawls as they near end of life or pass on inheritance, etc.
csa 13y ago
tl;dr -- whether "lost decades" is a misnomer or not, evidence on the ground suggests something is going on, and it doesn't seem to be good. Some anecdotes from someone who has lived and worked in Japan on and off for about half of the past two decades: - The quality and quantity of jobs available to young people have dropped precipitously. Twenty years ago, university graduates from good schools seemed to have a choice of offers from high-prestige jobs (the one's they were after) like banks, megacorps, airlines, etc. These days, you see some good graduates selecting from much farther down the prestige chain (e.g., small, local corp., cram school teacher, etc.) with fewer choices (if any). - The overall quality of students seems to be lower in schools that have the same prestige. Even Todai and Kyodai students, while still impressive, don't seem to be what they used to be socially, intellectually, or academically. This isn't really directly related to the economy, but the universities are the feeders into the economy. - The corporate folks seem to complain that the quality of applicant has dropped over the past two decades, and the quality has sometimes dropped (they say) to a point below a threshold of acceptability. As such, they do not hire, hire temps, or hold their nose and hire. Some of this is certainly hubris, but none of it bodes well for the workers, the corporations, or the economy. - The number of small businesses seems to have dropped precipitously. The most obvious is bars/snacks and restaurants (e.g., once popular nightspots now seem dead even on their busiest nights), but the number of small support businesses (e.g., small light industrial shops, distributors, etc.) seem to have decreased as well. Some of this is due to legal changes that took away legally-mandated middlemen, but other parts of it seem to be due to lack of demand. - Everyone is worried about money and jobs. - The famous savers of Japan seem to be mostly the folks in their 50s and higher (maybe 40s), but the folks in their 30s and younger seem to be mooching A LOT off of these savings and not really saving as much on their own. - There is a massive generational gap between people who came of age before the bubble crashed and those who came of age after. The older folks seem to think that the younger people are lazy and just need to be more disciplined, and the younger people think the older generation just don't get the new economic reality. This tension is ripping the social fabric of Japan and seems to create a lot of inefficiencies. - The velocity of money seems a lot lower. If folks are interested, I can give some examples in a follow-up post.
- kaybe 13y ago
  I'm interested..
alexeisadeski3 13y ago
Nice to see more people catching on to this story. The Economist covered it previously as well.

116 points by mattm 13y ago

tsiki 13y ago

It's always hard to tell what's really happening behind the GDP growth figures when comparing countries. The population of US and UK are currently increasing around 0.7% a year, while Germany is around 0%. That's a lot of additional GDP growth for both UK and US, even when excluding the fact that immigrants are at their prime working age and usually more beneficial for the GDP than an average citizen. This has a fairly big impact on what's seen on the news. Since depression is defined as two consecutive quarters of negative growth, it's much easier for countries like US and UK to avoid "official" depression, and much easier for news outlets to talk about the "stagnating old Europe" or such; and of course, at the same time the living standard of an average German might be increasing and that of a UK/US citizen decreasing.

ekianjo 13y ago
GDP is anyway an extremely biased thing to look at. There are many ways you can influence it to make it look like you are growing.
- deleted 13y ago
  [deleted]
- tsiki 13y ago
  Absolutely, personally I dislike how it's the single most powerful figure for decisionmakers. There have been many alternative measurements developed for measuring overall progress of an economy, but unfortunately they haven't taken much foothold.
  - ldng 13y ago
    Would you care to list the one you find relevant ? I'm interested.
    - jjindev 13y ago
      If we stick to "economics" without even going to "well-being," I think median net worth is the best bet. But you know, governments find it easier to "book" corporate profits as part of GDP and call it a day.
    - tsiki 13y ago
      Not strictly economic, but personally I quite like the idea of gross national happiness: http://en.wikipedia.org/wiki/Gross_national_happiness http://en.wikipedia.org/wiki/Gross_national_happiness On the more economic side, you have something like the Misery Index and its extensions (http://www.cato.org/publications/commentary/misery-mena http://www.cato.org/publications/commentary/misery-mena). Obviously composite indexes like these have their flaws too, but overall they are more comprehensive than GDP alone.
  - yk 13y ago
    The problem is not so much GDP, as it is to measure the economy in one float. So GDP is a somewhat good measure, if you want a quick handle on production capacity, for standard of living something like purchase parity median income is better, but tells you nothing about relative strength of exports, etc...
agilebyte 13y ago
Don't worry, if UK quit the EU, you might see quite a few of those immigrants heading to Germany. That should fix that population growth.
- lifeisstillgood 13y ago
  Aha - the UKIP double-whammy - I see Mr Farage firing up the policy word docs already.
- raverbashing 13y ago
  Or they'll just do bilateral agreements to allow people from "the right countries" to be able to work there Like Switzerland
  - agilebyte 13y ago
    This page http://en.wikipedia.org/wiki/Immigration_to_Switzerland http://en.wikipedia.org/wiki/Immigration_to_Switzerland seems to indicate the Swiss policy to be largely in line with the UK/EU one. Is that no longer the case? I take it a lot of the rhetoric from Middle England has to do with dey tukk ur jerb from bad EU countries like mine so can't see the populace being happy with the same old policy.
    - raverbashing 13y ago
      Yes, it is very similar. Just remember that Switzerland is not part of the EU So, theoretically, they're not in the EU, but an EU citizen has similar rights there as in other EU countries.
      - kaybe 13y ago
        Well, they did join the Schengen treaty, so cooperation between the police forces etc can be expected.
    - g8oz 13y ago
      Maybe he's referring to the mainstreaming of nationalist/racist overtones in parts of their political spectrum

agilebyte 13y ago

tl;dr Japanese stock market was way overvalued so it had to crash but industries have grown since then. Japanese officials were complicit in spreading the story that they are in a bad shape so that trade barriers on import don't have to be lifted. Per capita, they are doing just fine.

guard-of-terra 13y ago

"Japan’s seeming underperformance is an illusion that stems not from economics at all but from demographics" Guess what, people in Japan don't care about how their economic perform once it is decoupled from their well-being. And that's what he is suggesting: output grows, all that matters.

cryofan 13y ago

from the article: "In the meantime Japanese officials found that the basket-case story powerfully ameliorated angst in Washington over Japan’s closed markets. They proved quick learners and have projected an image of Japan as suffering some weird economic equivalent of dementia ever since." And when are americans going to learn that they swim in a sea of propaganda? That propaganda is what our minds eat, breath, and drink? Especially the young of america--their entire subculture is a enclosing, enveloping fabric of propaganda. This propaganda world is no conspirary, but an ecosystem. In this case, Japan was the generator of the propaganda, but the US govt, and the other major societal institutions of America also generate massive amounts of propaganda. This is no conspiracy, but an ecosystem, an ecosystem of human society where the major actors are large institutions and corporations that generate propaganda to manipulate public opinion, even mold and evolve the culture. From the article: "In Washington, however, the basket-case story worked like a charm. After all a chivalrous United States doesn’t kick a man when he’s down. The result is that even today not one of Washington’s highly publicized trade grievances of the 1980s has been resolved – not autos and auto parts, not financial services, not even rice." I have been reading the writing of the author of this piece, Eammonn Fingleton, for years. One of his major themes is that the real reason why japan and germany and other nations that depend on manufacturing have done so much better than the USA is that the type of manufacturing that moved from the USA to overseas was the good kind of manufacturing -- turn raw materials into products. This is quite a bit different from turning parts into products, e.g., car assembly plants. That is for the most part the type of only manufacturing that america has left. High end manufacturing is the best type of industry, better than software development or finance etc. Better for the citizens, that is. But you see Japan is run for the benefit of its citizens, and the USA was never designed for that. From the start, the USA was designed to be run for and by the owners of capital. It says right in the documents that were written as part of the development of the USA, when the so-called founding fathers got rid of the articles of confederation and installed the constitution. The fact is that the USA politicians allowed high end manufacturing to go overseas because the corporations paid them to do so. And the fact is that the American GPD growth is now primarily a factor of mass immigration. That is not a type of growth that helps the quality of life of its current citizens. But the propaganda put out by the institutions of america will not tell you that.

lkrubner 13y ago

It's important to realize that this article is by Eamonn Fingleton, who has been pushing a fixed idea for decades now: that Japan is secretly a terrifying power. He has written several books that touch (in whole or in part) on this theme: http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3Daps&field-keywords=Eamonn%20Fingleton http://www.amazon.com/s/ref=nb_sb_noss_1?url=search-alias%3D... I read Blindside back in 1996 and I thought his argument was interesting for that time. However, when you read him, it is important to remember that he has not changed his opinion in 20 years, and there are new facts to be accounted for. At that time he seemed certain that Japan would be the worlds #1 economy by the year 2000. His prediction was wrong, but he has not much changed his opinion: he still believes Japan is an important success story. Japan suffered a long depression in the 1990s. That is not fiction. That is a fact. However, it is also true that some of the stagnation of the period 1990-2013 should be attributed to demographic change. Paul Krugman offered a partial counter-argument to Eamonn Fingleton here: http://krugman.blogs.nytimes.com/2012/01/09/japan-reconsidered-2/ http://krugman.blogs.nytimes.com/2012/01/09/japan-reconsider... Also, it is worth noting that for the last 20 years Fingleton has constantly harped on the fact that Japan has a trade surplus, sometimes a very large trade surplus, and he thinks this represents economic strength. Numerous economists have made the point that a large trade surplus can be a sign of economic weakness: perpetual insufficient demand at home in the domestic market. Fingleton has rarely taken this view into account.

tezza 13y ago
Not to mention yet other signs of Japans wrecked economy: * Zombie giant banks, addicted to bailouts * Currency pushed and pulled by Yen carry trade * Complete efficiency collapse. Workers work very long hours accomplishing little * Eye watering debt ( worlds largest on many measures )
- fnordfnordfnord 13y ago
  Kyle Bass is pretty bearish on the Japanese economy; has been for several years. If he turns out to be right, the Japanese are in for a bad time. I get the impression that a lot of it is due in part to the demographics (lots of elderly, at least they are healthy). 04/08/2013 - http://thecommonsensecapitalist.com/2013/04/08/kyle-bass-on-japan/ http://thecommonsensecapitalist.com/2013/04/08/kyle-bass-on-... 06/31/2013 - http://seekingalpha.com/article/1473301-should-we-allow-kyle-bass-to-bet-on-the-economic-implosion-of-japan http://seekingalpha.com/article/1473301-should-we-allow-kyle... 01/21/2013 - http://www.forbes.com/sites/stephenharner/2013/01/21/whither-japan-stocks-and-bonds-are-kyle-bass-and-martin-feldstein-right-is-market-collapse-ahead/ http://www.forbes.com/sites/stephenharner/2013/01/21/whither... 05/23/2013 - http://www.bloomberg.com/news/2013-05-23/boj-bond-buying-to-be-overwhelmed-by-investor-sales-bass-says.html http://www.bloomberg.com/news/2013-05-23/boj-bond-buying-to-...

smegel 13y ago

Strange he didn't mention women entering the workforce when he talked about demographics and the US increasing workforce, just about every article I have read about Nippon's economic stagnation does. Perhaps because it is too taboo to suggest the feminist revolution was unnecessary, that we could have achieved both economic success and personal wellbeing without it, as Japan had apparently demonstrated. So we continue to perpetuate the myth that Japan is on the verge of death - I even recall a UN committee calling for "urgent" gender equality to stave off economic disaster - it was the "only way" Japan could regain growth. Perhaps not.

cryofan 13y ago
or perhaps it is taboo to suggest that feminism is and was simply a propaganda tool used by Capital to increase the supply of labor and thereby increase revenues and profits. Same goes for multiculturalism, civil rights and mass immigration, and the accompanying propaganda efforts, which are in reality culture-shaping events.
rayiner 13y ago
> Perhaps because it is too taboo to suggest the feminist revolution was unnecessary, that we could have achieved both economic success and personal wellbeing without it, as Japan had apparently demonstrated. Utterly ridiculous definition of "unnecessary."

adventured 13y ago

Right up there with the myth that Japan suffered two decades of deflation.

lifeisstillgood 13y ago

I cannot see several administrations plus the upper echelons of corporate Tokyo agreeing for two decades to "pull the wool over the world's eyes". But I also can see that Japan is not a basket case, and indeed is doing well for a world in recession. So, the question I have is what is the meme - presumably there is some lie that Japan tells itself, that means when a variety of people speak they agree "our economy is in bad shape, we have lost a decade" even if on many measures its not true. As a Brit, our government would love Japan's growth rates or export levels. But we tell ourselves memes, about a special relationship with US, about European bureaucrats, about recovery being linked to house prices - well, I think we do, but its like a fish trying to describe the colour of water. Interested in hearing from some Japanese fish, as it were.

shadowmint 13y ago
I can only speak from the people I've met personally, but: Older people are worried that all of Japans 'gijyutsu' is going to China now (which literally means, art, or craft, but basically they mean, all making-new-stuff skills are going to china now). Especially the retired folk seem really concerned about it. Young people complain like crazy they can't get decent jobs. I think you'd be hard pushed to find someone who are generally speaking positive about the Japanese economy over there. I certainly didn't encounter anyone (Japanese) who was positive about it when I was there (a year ago now), or met anyone who has been here since. It'd be pretty interesting to see some japanese news paper / blog sentiment analysis work and see how wide spread that goes in general. You could probably use kanji as a pretty decent marker (negative words tend to make common elements, etc). hm...

dev_jim 13y ago

I don't see why he keeps trotting out this thesis that just isn't supported by data. Japan's GDP has been stagnant over the past two decades: https://www.google.com/search?q=japan+GDP https://www.google.com/search?q=japan+GDP Adjusting for working age population shows a similar trend. And if data doesn't work for you then there's a ton of other signs that the economy is not doing well: - Interest rates have been stuck against the zero lower bound - Stock market is 1/4 of what it was at it's peak - Property values have still not recovered in major cities - Debt as a percentage of GDP has ballooned to over 200% Now with that being said - if I had to choose a country to spend two lost decades in, it would be Japan. Local savers have allowed them to issue debt at very low interest rates which has been able to cover shortfalls. And there is signs that Abenomics is taking hold.

wjnc 13y ago
TL/DR: Worker productivity in Japan is high and has risen like all other western countries. Other factors, like lacklustre respons to zombie banks, must explain "lost decade". I look at the Penn World Table. In: * Real Income per Population, * Real Income per Employed Population, and * Real Income per Employed Work Hour Japan has lagged the USA pretty consistently. That is consistent with all other major economic countries. In the '90s Japan actually outperformed on the Income per Worked Hour. That means there are still 99 problems left for the Japanse economy, but worker productivity ain't one. Still zombie banks and government reponse to zombie banks might have created a consumption crisis (just as, for example in the Netherlands at this moment, consumers must pay for increasing bank buffers), but I would venture that corporations have retained profitability through the crisis. Japan didn't grow compared to it's neighbours. But that's catch-up growth for Korea and China. You can't blame Japan for already being first-world in 1990. Stock market isn't a good indicator for welfare of general population. Japan just might have been overvalued, or other countries overvalued. Property markets have gone beserk pretty much first worldwide, only in Japan first. Another pointer that we are just mimicing their banking crisis.
rsync 13y ago
Also, he mentions (low) cost of borrowing as a key point to his thesis, but my understanding is that the cost of borrowing for Japan is heavily influenced by domestic savings. IIRC, a lot of the money "borrowed" are the contents of the postal savings accounts (or whatever they are) of elderly Japanese who are extremely conservative investors. I have further seen it commented that there will be complications when that sect of the population switches to net withdrawls as they near end of life or pass on inheritance, etc.

csa 13y ago

tl;dr -- whether "lost decades" is a misnomer or not, evidence on the ground suggests something is going on, and it doesn't seem to be good. Some anecdotes from someone who has lived and worked in Japan on and off for about half of the past two decades: - The quality and quantity of jobs available to young people have dropped precipitously. Twenty years ago, university graduates from good schools seemed to have a choice of offers from high-prestige jobs (the one's they were after) like banks, megacorps, airlines, etc. These days, you see some good graduates selecting from much farther down the prestige chain (e.g., small, local corp., cram school teacher, etc.) with fewer choices (if any). - The overall quality of students seems to be lower in schools that have the same prestige. Even Todai and Kyodai students, while still impressive, don't seem to be what they used to be socially, intellectually, or academically. This isn't really directly related to the economy, but the universities are the feeders into the economy. - The corporate folks seem to complain that the quality of applicant has dropped over the past two decades, and the quality has sometimes dropped (they say) to a point below a threshold of acceptability. As such, they do not hire, hire temps, or hold their nose and hire. Some of this is certainly hubris, but none of it bodes well for the workers, the corporations, or the economy. - The number of small businesses seems to have dropped precipitously. The most obvious is bars/snacks and restaurants (e.g., once popular nightspots now seem dead even on their busiest nights), but the number of small support businesses (e.g., small light industrial shops, distributors, etc.) seem to have decreased as well. Some of this is due to legal changes that took away legally-mandated middlemen, but other parts of it seem to be due to lack of demand. - Everyone is worried about money and jobs. - The famous savers of Japan seem to be mostly the folks in their 50s and higher (maybe 40s), but the folks in their 30s and younger seem to be mooching A LOT off of these savings and not really saving as much on their own. - There is a massive generational gap between people who came of age before the bubble crashed and those who came of age after. The older folks seem to think that the younger people are lazy and just need to be more disciplined, and the younger people think the older generation just don't get the new economic reality. This tension is ripping the social fabric of Japan and seems to create a lot of inefficiencies. - The velocity of money seems a lot lower. If folks are interested, I can give some examples in a follow-up post.

kaybe 13y ago
I'm interested..

alexeisadeski3 13y ago

Nice to see more people catching on to this story. The Economist covered it previously as well.