5 ms·

Like I said, it's a complex matter, and opinions differ. But ultimately, it boils down to demographics. The Japanese haven't been having enough babies. One way

by Pitarou 12y ago

Like I said, it's a complex matter, and opinions differ. But ultimately, it boils down to demographics. The Japanese haven't been having enough babies. One way or another, the people who think they're going to retire comfortably are in for a nasty shock, because there just aren't enough young people to produce what they expect to consume. And inflation looks like the most likely mechanism for this to happen. As for the government debt, there are two ways out of the mess: inflation or default. And there's no way they're going to opt for default when they can just keep printing more money. The only real solution (real in the economists sense of the word) is mass immigration, and that's not going to happen until Japan is absolutely desperate. The "200,000 immigrants" the article mentions isn't nearly enough. And in any case, Japan has such a poor record on immigration policy that I confidently expect them to bungle this one, too. Look at the failure of their recent "skilled migrants" program, or their disastrous program to recruit trained Philippino nursing staff, or the abuse and corruption in the "trainee worker" program, or ... I could go on.

nl 12y ago
I don't disagree with anything you are saying. But often economic management is delaying a crisis until another problem makes it go away. If Abe can get the economy growing again it makes it more likely other changes will occur - like the female participation rate increasing. The consequences of that are unpredictable. One possible scenario is that it could partially reverse the trend of a shrinking workforce. Economic growth also makes inflation unnecessary to repay debt (since tax receipts increases with growth giving the government an alternate path to repaying debt). Also worth noting is that some inflation (non-hyperinflation, but higher than comparable nations) would help devalue the Yen, which would make Japanese exports more attractive again. Anyway, I guess my whole message is that focusing too much on too long-term consequences is often unhelpful in economics. The system is too chaotic to predict that far, and usually tends towards equilibrium.
- Pitarou 12y ago
  If I wanted to be upbeat about Abenomics, I think I'd say pretty much the same things you are. I think I just have a gloomier outlook than you. So I hope you're right, but I'm still keeping my savings overseas in case you're not. Because there's one thing I've learnt from other financial catastrophes: by the time ordinary people like me learn that the shit has hit the fan, it's already too late to respond.
crdoconnor 12y ago
>But ultimately, it boils down to demographics. Deflation and wage stagnation wasn't caused by the Japanese not having babies. The wage stagnation and deflation was THE CAUSE of the Japanese not having babies. If you ask most young Japanese today working McJobs (a large and growing number) if they are hopeful about the future they will say no. THIS is the real problem with Japan today and at its heart it is the problem with the west too. It's why they aren't having babies. If the Japanese government wants the younger Japanese to start having babies again they need to actually provide decent jobs. They can do that by printing/borrowing yen and spending it on employing people, EXACTLY as the US did following the great depression. >The only real solution (real in the economists sense of the word) is mass immigration This will make things worse. It will simply ensure that the already crappy McJobs the Japanese young are increasingly doing are paid even less thanks to Fillipino competition. Want the Japanese suicide rate to skyrocket from its already high level? Start bringing in dirt cheap labor competition from the 3rd world.
- Pitarou 12y ago
  I think the main cause is the stark choice Japanese women face: keep your career and status that you've worked so hard for, or give it all up and raise children for a man you'll hardly get to see. About immigration: go look up "lump of labour fallacy".
  - crdoconnor 12y ago
    >I think the main cause is the stark choice Japanese women face: keep your career and status that you've worked so hard for, or give it all up and raise children for a man you'll hardly get to see. This is part of it too. As is the migration towards cities (because that's where all the jobs are). Huge crowds and a lack of space has the same effect on humans as it does on rats. Mix those things up with the younger generation's feelings of hopelessness and/or insecurity about their careers and it's no wonder they've stopped having children. This can be reversed with a government funded jobs program / public works program, EXACTLY like the one Milton Friedman took full advantage of. It won't be reversed with immigration. >About immigration: go look up "lump of labour fallacy". I never said that there was a fixed amount of work in Japan. If you think that bringing in 3rd world workers as competition isn't going to drag down wages, though, you're dreaming.

by Pitarou 12y ago

nl 12y ago

I don't disagree with anything you are saying. But often economic management is delaying a crisis until another problem makes it go away. If Abe can get the economy growing again it makes it more likely other changes will occur - like the female participation rate increasing. The consequences of that are unpredictable. One possible scenario is that it could partially reverse the trend of a shrinking workforce. Economic growth also makes inflation unnecessary to repay debt (since tax receipts increases with growth giving the government an alternate path to repaying debt). Also worth noting is that some inflation (non-hyperinflation, but higher than comparable nations) would help devalue the Yen, which would make Japanese exports more attractive again. Anyway, I guess my whole message is that focusing too much on too long-term consequences is often unhelpful in economics. The system is too chaotic to predict that far, and usually tends towards equilibrium.

Pitarou 12y ago
If I wanted to be upbeat about Abenomics, I think I'd say pretty much the same things you are. I think I just have a gloomier outlook than you. So I hope you're right, but I'm still keeping my savings overseas in case you're not. Because there's one thing I've learnt from other financial catastrophes: by the time ordinary people like me learn that the shit has hit the fan, it's already too late to respond.

crdoconnor 12y ago

>But ultimately, it boils down to demographics. Deflation and wage stagnation wasn't caused by the Japanese not having babies. The wage stagnation and deflation was THE CAUSE of the Japanese not having babies. If you ask most young Japanese today working McJobs (a large and growing number) if they are hopeful about the future they will say no. THIS is the real problem with Japan today and at its heart it is the problem with the west too. It's why they aren't having babies. If the Japanese government wants the younger Japanese to start having babies again they need to actually provide decent jobs. They can do that by printing/borrowing yen and spending it on employing people, EXACTLY as the US did following the great depression. >The only real solution (real in the economists sense of the word) is mass immigration This will make things worse. It will simply ensure that the already crappy McJobs the Japanese young are increasingly doing are paid even less thanks to Fillipino competition. Want the Japanese suicide rate to skyrocket from its already high level? Start bringing in dirt cheap labor competition from the 3rd world.

Pitarou 12y ago
I think the main cause is the stark choice Japanese women face: keep your career and status that you've worked so hard for, or give it all up and raise children for a man you'll hardly get to see. About immigration: go look up "lump of labour fallacy".
- crdoconnor 12y ago
  >I think the main cause is the stark choice Japanese women face: keep your career and status that you've worked so hard for, or give it all up and raise children for a man you'll hardly get to see. This is part of it too. As is the migration towards cities (because that's where all the jobs are). Huge crowds and a lack of space has the same effect on humans as it does on rats. Mix those things up with the younger generation's feelings of hopelessness and/or insecurity about their careers and it's no wonder they've stopped having children. This can be reversed with a government funded jobs program / public works program, EXACTLY like the one Milton Friedman took full advantage of. It won't be reversed with immigration. >About immigration: go look up "lump of labour fallacy". I never said that there was a fixed amount of work in Japan. If you think that bringing in 3rd world workers as competition isn't going to drag down wages, though, you're dreaming.