From Godzilla to Impotent Herbivores: Keynesian Japan

 

I know you’re already on my side on this one, but you can wave this article wildly in front of friends who still need persuading. The New York Times just ran quite an important piece about the ominous example of Japan, which is about as close as you can get to a knock-down argument against performing any more Keynesian experiments on our economy:

Few nations in recent history have seen such a striking reversal of economic fortune as Japan. The original Asian success story, Japan rode one of the great speculative stock and property bubbles of all time in the 1980s to become the first Asian country to challenge the long dominance of the West.

But the bubbles popped in the late 1980s and early 1990s, and Japan fell into a slow but relentless decline that neither enormous budget deficits nor a flood of easy money has reversed. For nearly a generation now, the nation has been trapped in low growth and a corrosive downward spiral of prices, known as deflation, in the process shriveling from an economic Godzilla to little more than an afterthought in the global economy.

Now, as the United States and other Western nations struggle to recover from a debt and property bubble of their own, a growing number of economists are pointing to Japan as a dark vision of the future. Even as the Federal Reserve chairman, Ben S. Bernanke, prepares a fresh round of unconventional measures to stimulate the economy, there are growing fears that the United States and many European economies could face a prolonged period of slow growth or even, in the worst case, deflation, something not seen on a sustained basis outside Japan since the Great Depression.

The Times has of course been pretty cheerful about the application of precisely these policies to our own economy, but this was definitely written by an internal dissenter:

The decline has been painful for the Japanese, with companies and individuals like Masato having lost the equivalent of trillions of dollars in the stock market, which is now just a quarter of its value in 1989, and in real estate, where the average price of a home is the same as it was in 1983. And the future looks even bleaker, as Japan faces the world’s largest government debt — around 200 percent of gross domestic product — a shrinking population and rising rates of poverty and suicide.

But perhaps the most noticeable impact here has been Japan’s crisis of confidence. Just two decades ago, this was a vibrant nation filled with energy and ambition, proud to the point of arrogance and eager to create a new economic order in Asia based on the yen. Today, those high-flying ambitions have been shelved, replaced by weariness and fear of the future, and an almost stifling air of resignation. Japan seems to have pulled into a shell, content to accept its slow fade from the global stage.

Indeed, notes the author, these policies have literally left Japan impotent:

Japan’s loss of gumption is most visible among its young men, who are widely derided as “herbivores” for lacking their elders’ willingness to toil for endless hours at the office, or even to succeed in romance, which many here blame, only half jokingly, for their country’s shrinking birthrate.

Contest now open: Condense that last part of the lesson to a memorable soundbite without violating Ricochet’s Code of Conduct. I’ve submitted my entry already, obviously.

There are 24 comments.

  1. EJHill Podcaster

    That headline alone deserves its own illustration.

    • #1
    • October 18, 2010, at 6:32 AM PDT
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  2. Ragnarok Inactive

    Everything Paul Krugman writes is wrong.

    • #2
    • October 18, 2010, at 6:36 AM PDT
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  3. Carl Gauss Inactive

    Keynsian policies have, in fact, deflated more than just Japanese prices…

    • #3
    • October 18, 2010, at 6:38 AM PDT
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  4. Midget Faded Rattlesnake Contributor
    EJHill: That headline alone deserves its own illustration. · Oct 18 at 6:32am

    Wonderful! But is there a reason you have dinosaur toys and Viagra just lying around?

    • #4
    • October 18, 2010, at 7:00 AM PDT
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  5. Matthew Gilley Inactive

    Ironically, Japan’s screwed. (I’m sure that’s toeing the line.)

    I would be much more optimistic about Japan were it not for the government’s ossified politics and its rugged determination to make the same mistakes over and over again. I had some hope during the Koizumi years but to put the issue in Claire’s terms, he may have been a mini-Thatcher: briefly arresting the decline but not turning things around. The Japan I know is a very inventive society but capital is locked up in an oligarchical structure. Suffice to say, there are very few George Savages in Japan.

    • #5
    • October 18, 2010, at 7:01 AM PDT
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  6. Eiros Member

    Young Japanase males should revive their fathers’ diet of raw oysters and whale testicles.

    • #6
    • October 18, 2010, at 7:03 AM PDT
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  7. Claire Berlinski, Ed. Editor
    Claire Berlinski, Ed. Post author
    EJHill: That headline alone deserves its own illustration. · Oct 18 at 6:32am

    We’ll keep the contest open for a few more hours before declaring you the winner, but that’s pretty much a formality after this.

    • #7
    • October 18, 2010, at 7:05 AM PDT
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  8. EJHill Podcaster
    Midget Faded Rattlesnake Wonderful! But is there a reason you have dinosaur toys and Viagra just lying around?

    The wife will tell you there’s no need for either. But some days when all four of the kids have exhibited “special” moments, I don’t particularly care for the way she looks at the paring knife and then glances at me and then back to the knife….

    • #8
    • October 18, 2010, at 7:07 AM PDT
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  9. EJHill Podcaster
    Claire Berlinski, Ed. We’ll keep the contest open for a few more hours before declaring you the winner, but that’s pretty much a formality after this. ·

    I need to put up a graphic request form and start charging. Things like this need to be taken care of…

    • #9
    • October 18, 2010, at 7:14 AM PDT
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  10. Pilgrim Thatcher

    No longer the Land of Rising Sons, Japan’s flaccid economy stalls, stock prices soft.

    • #10
    • October 18, 2010, at 7:28 AM PDT
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  11. Jaydee_007 Inactive
    With a purposeful grimace and a terrible soundHe pulls the spitting high Finances down, Kaynezilla! Helpless people on subway trainsScream BUG-EYED as their jobs disapear, Kaynezilla! He picks up a business and he throws it back downAs he wades through the banks toward the center of town, Kaynezilla Oh no, they say it has got to go Go go Kaynezilla, yeahOh no, there goes Tokyo Go go Kaynezilla, yeah
    • #11
    • October 18, 2010, at 7:29 AM PDT
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  12. Midget Faded Rattlesnake Contributor

    I can’t improve on Claire’s headline, but I can make it rhyme a little:

    From T-rex to “can’t do sex”: Keynesian Japan

    • #12
    • October 18, 2010, at 7:39 AM PDT
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  13. Claire Berlinski, Ed. Editor
    Claire Berlinski, Ed. Post author
    Jaydee_007: With a purposeful grimace and a terrible soundHe pulls the spitting high Finances down, Kaynezilla! Helpless people on subway trainsScream BUG-EYED as their jobs disapear, Kaynezilla! He picks up a business and he throws it back downAs he wades through the banks toward the center of town, Kaynezilla Oh no, they say it has got to go Go go Kaynezilla, yeah Oh no, there goes Tokyo Go go Kaynezilla, yeah · Oct 18 at 7:29am

    We need a production of this. Where’s Jonathan Gilbert?

    • #13
    • October 18, 2010, at 7:40 AM PDT
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  14. Mark Lewis Inactive

    Japanese T-Rex Fossils are Flaccid?

    • #14
    • October 18, 2010, at 8:41 AM PDT
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  15. Profile Photo Member

    That dinosaur looks like Barney Frank.

    • #15
    • October 18, 2010, at 8:43 AM PDT
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  16. Mark Lewis Inactive

    Japanese over-stimulation causes shrinkage – the cold shower of Keynesianism

    • #16
    • October 18, 2010, at 8:44 AM PDT
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  17. Jonathan Matthew Gilbert Member

    The theatrical union laws will require me to pay for two viola players and a child-wrangler, so we might as well see if we can add them to the script…Ironically, I spent time this weekend with a young man directly descended from both Keynes and Charles Darwin. We went to IKEA, which I kept thinking was sort of like watching evolution and the effects of Keynesian economics on a culture happen right in front of you, but I was the only person who was amused by this. Sadly, he’s a bit pink. On many levels.

    For the contest, I’ve got nothing that beats that image. Reading this, though, it makes sense to me now how Japan’s suicide rate is surpassing Sweden’s…

    • #17
    • October 18, 2010, at 8:47 AM PDT
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  18. Great Ghost of Gödel Inactive

    Japan: the land in which you can no longer sit and watch the bamboo grow.

    • #18
    • October 18, 2010, at 9:15 AM PDT
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  19. Adam Freedman Contributor
    Claire Berlinski, Ed.

    Japan’s loss of gumption is most visible among its young men, who are widely derided as “herbivores”

    Recalling ancient tradition, Japanese commit ritual herbicide.

    • #19
    • October 18, 2010, at 9:33 AM PDT
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  20. Kennedy Smith Inactive

    Somewhat OT, I’ve heard that the turtle called Gamera is friend to children.

    • #20
    • October 18, 2010, at 10:20 AM PDT
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  21. EJHill Podcaster
    • #21
    • October 18, 2010, at 11:51 AM PDT
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  22. EJHill Podcaster

    Makes you want to commit Harry Carey – Holy Cow!

    • #22
    • October 18, 2010, at 11:53 AM PDT
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  23. Otto Maddox Inactive

    The wonderful comments in this thread alone make my year’s subscription a bargain.

    • #23
    • October 19, 2010, at 11:26 AM PDT
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  24. outstripp Inactive

    As a long-time resident of Japan, I am qualified to speak on all things Japanese, without exception.

    1. The Viagra box in the picture is Chinese.

    2. Any country that is erecting the tallest freestanding tower in the world is obviously not impotent.

    http://www.tokyo-skytree.jp/english/design/maxheight.html

    3. Tokyo had two express trains to Narita Airport, but not being satisfied, they just opened another that cuts commuting time in half. How’s your city doing?

    4. Haneda Airport in Tokyo has just opened a new runway and all new terminal building. How’s your city doing?

    5. Japan has a national earthquake warning system that sends a message to your cell phone. How’s your country doing?

    6. The crime rate in Japan is essentially zero. How’s your country doing?

    7. Tokyo has 197 Michelin-starred restaurants. How many does your city have?

    • #24
    • October 19, 2010, at 11:36 AM PDT
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