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- bcomeaux, on 05/20/2009, -16/+71Japan's government spent all their savings bailing out failed banks and stimulating their economy, which didn't work. I'm guessing they wish they still had those savings now. Why does this sound familiar?
- Peaked, on 05/20/2009, -1/+35If they'd hurry up and push out Final Fantasy XIII before 2010, they'd be okay.
- craftyguy, on 05/20/2009, -4/+33One more reason why we should NOT be using the same tactics as Japan did...
- stoanhart, on 05/20/2009, -0/+28The thing about Keyneseianism is that the deficit spending in a recession was supposed to be balanced by tightening the government belt during good times. Most governments "forgot" that part, and spent when times were good and bad.
- akatsuki, on 05/20/2009, -0/+27That alone is not enough. The problems with Japan are pretty well known, but the entrenched interests have blocked most reform - even Koizumi couldn't get through enough:
1. The banking system really needs to be reformed entirely.
2. The elderly population means lack of risk taking and lack of incentive for reform or change.
3. The lack of lawyers means that corporations run wild as nobody can afford to sue or restrain their actions. In addition, the judiciary are LDP puppets and almost never upset the status quo.
4. The young are kept in permanent adolescence - living with their parents and not marrying, moving out or reproducing - both of which increase domestic consumption.
5. They have blocked any real sort of immigration, which is one of the main reasons the US population has been increasing while every other developed nation has been declining.
6. Their two party system is more of a joke than the US one - again no reform.
7. The corporations are all non-specialized, clumsy conglomerates.
8. They are completely dependent on exports, a market which Korea and now China are eating into.
9. Women don't want to marry, because marriage in Japan is pretty much the end of their independence.
Essentially, I think the intrinsic problem is lack of a young population, which leads to stagnation and the ennui they have been experiencing. The elderly fight any changes in societal or economic strictures. A young, vigorous population would also lead to more innovation as you suggest. - RonPauls, on 05/20/2009, -14/+32Keynesian spending experiment results in a severe misallocation of capital, hence you get a more severe correction as there is more malinvestment.
- cyberdork, on 05/20/2009, -2/+18My question is: how much has the industrial output fallen? And how much of the 15.2% GDP drop is simply due to banks failing or shrinking?
I would like to see how the global economy has performed over the past year MINUS the financial sector. Don't forget that finanical 'goods and services' are also included in the GDP. - nikki2300dk, on 05/20/2009, -0/+16Very informative and interesting. Thanks.
- richmomz, on 05/20/2009, -1/+16"Japan's Lost Decade Part Deux: The Search for More Money"
- morningmatters, on 05/20/2009, -2/+17Americans are different from Japanese in that they simply don't believe in saving money. Whereas the average Japanese was saving close to 100k in the late 80s when its recession began, the average American would have no problem with borrowing money and spend them quickly even if he/she does not have any savings.
To jump-start the US economy requires a different strategy from the that of Japan. Just because something didn't work in Japan doesn't mean it would fail in the US. Just because something works in the US doesn't mean it would work in Japan. - nullcodes, on 05/20/2009, -2/+17Japan stopped innovating, South Korea is doing a lot of what Japan should be doing.
Also they didn't diversify, they need to get into pharmaceuticals and all that. They do have some great scientists in the bio space, they need to turn that into something useful. Shinya Yamanaka was saying he had like very little resources/funding to do any sort of experiments. - ideaash, on 05/20/2009, -7/+20Good Grief, How many years will it to take make up for that 15 %, I think Japan was growing at 2 % or so when it was growing.
Note to administration: Hello, Bailouts don't work!!! - bcomeaux, on 05/20/2009, -1/+12That is exactly why the fed's dollar swap agreements with countries like Japan piss me off. We'd be SOL.
- covertbadger, on 05/20/2009, -4/+13The Japanese economy is struggling because of its population. Let's compare US and Japanese GDP per capita figures since the mid-80s, shall we? From http://www.demographia.com/db-ppp60+.htm:
1985: US $27435, Japan $19992
The ratio is 1.372.
2003: US $38611, Japan $28259
The ratio is 1.366.
So, throughout Japan's so-called "lost decade" and economic stagnation supposedly coming from bank bailouts, the Japanese actually slightly improved their per-capita economic value against the US. Wow, those bailouts really ***** everything up, huh? - Bloodwine, on 05/20/2009, -7/+15I blame Sony for not lowering the price of the PS3
- Raider007, on 05/20/2009, -1/+9Toss in Gran Turismo 5 and Japan will be ***** money in no time...
- derm2, on 05/20/2009, -1/+8Industry fell 22.1% Q/Q, so the Y/Y is probably much worse.
Banks are really a problem of the US and a select few like Iceland and Ireland. Most other advanced countries suffer from the shrinking demand for industrial goods.
Japan and Germany suffer the worst from the automotive industry since noone is buying cars now. Japanese export fell by 50%, mostly because of the automotive industry. - inactive, on 05/20/2009, -4/+11Exactly. And our current government has no plans to tighten the government belt.
- shujin, on 05/20/2009, -0/+7thank you for shedding light on the situation, instead of so many just saying "hey it didn't work for Japan, obviously America was dumb for using it"
- phylum, on 05/20/2009, -2/+9i believe russia is worse, just that people keep all their money under their beds, literally, thats why its not effecting them so bad, may we should do the same and forget about these banks forever.
- richmomz, on 05/20/2009, -1/+8Meanwhile in the U.S. in spite of all the terrible economic news coming out the DOW somehow rises yet again...
- Mship, on 05/20/2009, -2/+8Could it also be that, I didnt read the article yet, the Americans have stop spending and since most of the money that Americans spend are on Chinese, Indian, Japanese products that all of these countries will have a slow downing selling and production as while.
- richmomz, on 05/20/2009, -0/+6It's true - unlike in the west most people in Russia don't have all their money tied up in stocks and mortgages.
- inactive, on 05/20/2009, -2/+8No, that can't possibly be it. The explanation to all of our woes is that we don't follow the idea of the libertarian utopia. No other reason is possible.
- cheddabobb, on 05/20/2009, -0/+5"We are the knights who say... Deux" just doesn't have the same ring to it.
- ramilehti, on 05/20/2009, -0/+5DOW is not indicative of the whole economy. It contains only a handful of companies.
And neither is S & P 500 really. It's better but you also have to consider consumer confidence and all sorts of other indicators. - richmomz, on 05/20/2009, -0/+5Yeah, but Ni's not as funny (unless this was a Monty Python movie in which case it would be hilarious).
- TheXboxReview, on 05/20/2009, -1/+6The GDP being down MIGHT have something to do with the global recession, and not just Japan's bailout strategy
- Amorn, on 05/20/2009, -3/+8GOJIRAAAAA!!!!
- Xiata, on 05/20/2009, -0/+4Just digg him down next time and omit the comment. It's really obvious and you aren't helping your own image.
- Filipp0, on 05/20/2009, -0/+4The annual GDP loss will probably be much lower than 15% (more like 5-10%). It's still a lot, but it's not as bad.
In Brazil the industrial production dropped by ~20% in the first 2-3 months of 2009 and now it's back to ~0% - minoss, on 05/20/2009, -0/+4Then why is their debt 200% of their GDP?
- RonPauls, on 05/20/2009, -7/+11The thing about Keynesianism is that once you go Keynesian... there aren't any more good times
- minoss, on 05/20/2009, -3/+7The US government doesn't offer any incentives to save. Inflation destroys all value in your dollar. A dollar now is worth $0.78 in 10 years and $0.61 in 20 years (assuming 2.5% inflation). On top of that you get tax breaks on debt, not savings.
- UnWeave, on 05/20/2009, -0/+4You know they are already losing rather a lot of money on each one they sell, right? I fail to see how losing MORE money per sale would help.
- inactive, on 05/20/2009, -2/+6Nice to see an intelligent response for once.
- alais, on 05/20/2009, -0/+4Mostly just bargain hunters.
- inactive, on 05/21/2009, -0/+3Really? Wiki shows them at about 12k less GDP (per capital)PPP.
- Craig304958, on 05/20/2009, -0/+3Actually, India's economy is still rising at an annual rate of 6%. Sorry, I don't have a YouTube link for that.
- kaelyiesta, on 05/20/2009, -0/+3Japan has been in a series of short and frequent rolling recessions for over a decade now. There's a few articles on the japanese 'lost decade' that go into this in detail. They bought into the keynesian economic model of central economic planning, and it's kept them stagnant for over 10 years.
- Xiata, on 05/20/2009, -0/+3Not "FAIL!" this time?
Your comment is worthless as always since you have not reasoned why you believe his statement is false. - VassilaZaitsev, on 05/20/2009, -2/+5Hmmm...
Actually the American toilet bowls have better acoustics when I blow my pipes.
Its a symphony of sounds - TheUngod, on 05/20/2009, -1/+4Where are you reading that? I didn't see that mentioned anywhere. FTA:
"Japan's real gross domestic product, or the total value of the nation's goods and services, shrank at an annual pace of 15.2 percent in the January-March period, the government said Wednesday."
That's not saying the rate of growth dropped from what I can see, it's saying that at the current rate given by that 3 month period, it will be a 15% drop if it continues for the rest of the year. Basically within the first quarter of the year it dropped 4ish percent. - kaelyiesta, on 05/20/2009, -0/+3Even with fiscal restraint, the problem of malinvestment is unaddressed. You can't save during the good times if you are still trying to pay off the costs of the bad times.
- cheddabobb, on 05/20/2009, -0/+3The failure of the financial sector directly affects their ability to sell cars. No loans = nobody buying cars.
- Craig304958, on 05/20/2009, -1/+4Yeah, thanks for some actual facts to go on.
- mikemx7f, on 05/20/2009, -0/+3Yes. I didn't get taught until my AP economics class senior year of high school. Granted, I knew before, but its not taught in all schools.
- shujin, on 05/20/2009, -1/+3Just as a student of logic, I would like to know how you produce the causation of bailing out causing this unemployment rate. Japan is hit hard because it is a big exporter, and not a big importer, few countries are importing. America is a big importer, and has net negative exports. You are making a hasty generalization of one case while ignoring countries like the Scandinavian countries where it did work. Unless you have specific evidence tying "bailing out" and "failure" in Japan, this is a really weak argument. That said, i am not even for or against the bail out, i am not quite sure if it was good or not, i just hate seeing people utilize (and get dug up for) really bad logic.
- mohsenxp, on 05/20/2009, -1/+3It's Japan's dependency on exports that has caused such a severe drop.
I actually think Japanese business models work well. However any country relying on global markets will be hit hardest when other countries stop shopping. - herojon, on 05/21/2009, -0/+2Their citizens are also living on half the income of USA. Many of our unemployed are as well off or better off than their lower class employed.
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