The following article may shed light into what the government in Japan is trying to achieve but I find it hilarious and full of contradictions. Thoughts? http://www.businessinsider.com/what-is-abenomics-2013-3 Think about it: 1) Government stimulus. Done for more than a decade, has not solved a thing other than pushed Japan towards the brink of insolvency. 2) Central Bank stimulus, money printing, same as everywhere else, does not benefit the structure of any society other than inflating paper assets. Even Gold has not followed suit, so why should a country be tricked into the claim of its success when it has not worked anywhere else in the world? 3) Structural reform? What? Look at the bullet points in your link: a) Regulatory reform? Which reform? Japan is as closed-minded about agricultural reform as it has ever been, postal reform (how has that worked for Koizumi?), pension reform? Same here, all attempted nothing changed. Bringing in skilled labor? All tried, Japanese are the most xenophobic people in the world. b) Upping the IT/High tech industry through outside skilled labor? They tried all that. "Establishment of a society that attracts highly skilled labor from the outside"? You mean while letting extremist right-wing group tour Tokyo every single day with loudspeakers that blast their hatred for anyone non-Japanese? I have lived in Japan for over 10 years and think I know what I speak of. c) Promotion of economic partnerships? With whom? Asia? By saying "dont touch our agricultural market anything else is doable". Well, unfortunately that is all Malaysia, Thailand, Vietnam, Indonesia have to sell to Japan, food, and natural resources. But hey, maybe they meant to team up with Venezuela, Iran, and co in terms of "cooperation". d) A responsible energy policy? By shutting down all nuclear reactors and suddenly realizing that "oh, no, we forgot we do not have any own natural resources, how are we gonna keep the lights on in Tokyo"? Please notice that 2 years after the earthquake still in most subway underpaths only every second light is lid for energy preservation purposes. To proud to admit mistakes they did not re-start several nuclear reactors out of their own choice and volition but said "hey, you local governments, you chose what you like to do". Funny energy policy if you ask me. e) Combating global warming to support the economy? I think the one and only reason the US is so massively against being part of the Kyoto Protocol was that the economic costs that had to be paid were not worth the upside in adhering to such stringent standards. How is this part of reviving the economy? If anything then it is a cost. That is the precise reason China is still allowing big business to manufacture in environmentally damaging ways, which is to stimulate the economy. f) Promoting the emergence of startup companies? No other environment is so hostile and has always been hostile to anything new, especially when it comes from younger generations. Venture capital is impossible in Japan because of the taxation, education in Japan, even within the top universities, is absolutely below international standards when it comes to computer science. I cannot find a single skilled programmer in Tokyo, that I would deem truly skilled. Look at most Japanese websites? While most successful companies in the tech sector have gone WPF, Silverlight, HTML5, ..., most Japanese websites are still stuck with static html pages 90s style. Its not because there is no willpower to change that, its because there is no skilled people who could make changes. And its a devil's circle, why would a top programmer come to Japan to earn 1/2-1/3 the salary he could make in Hong Kong, Singapore, the US, Canada, London? g) "Promotion of young people and women"? Are you kidding me? This is the most ridiculous statement I ever heard coming out of any LDP led government. They are brainwashed at thinking women should have the shortest distance to walk between the kitchen and bed. Promotion of women in the workforce is all but non-existent, women are sexually harassed at the workplace as soon as they reach the age of 35-40 and pretty much forced out. Childcare for kids under 3 DOES NOT EVEN EXIST in Japan, not even in Tokyo for heaven's sake. How are women supposed to work in such environment. h) Promotion of "cool" Japan? This is the cheesy climax of a governmental policy gone entirely wrong. Sure, the world now knows about Sushi, Manga, and Uniqolo. Great, so what? It does not balance out Sony losing market share against the Samsungs of the world every single day. You may point out that I stated the status quo in most bullet points and that this is exactly what Abe and Co are planning to change. But please keep in mind that the EXACT same points have been brought up 15 years ago, and have been repeated with every new incoming prime minister, (lets not forget the half-life of a Japanese prime minister is about 4-5 months). Nothing whas tackled, nothing changed. Japanese people are suffering from a lot of disadvantages, and corporate/government brainwash, but this is how this society is structured, it is a group culture and when big business tells you something is good for you then that is what people believe. Keep in mind the employment situation in Japan has DRAMATICALLY WORSENED over the past couple years. Now HALF OF ALL EMPLOYABLE Japanese people are working as temp or contract workers, only half left as full-time employees. Please tell me how a family is supposed to build confidence in buying a house, having kids, when they may end up on the street tomorrow without any protection. There is NO MINIMUM WAGE in Japan, and there is NO LAW CAPPING THE PERCENTAGE OF TEMP STAFF A COMPANY CAN EMPLOY. Big Business rules Japan and unless there is a powerful youth and middle class and mid-sized companies groomed to re-take power nothing is gonna change in the land of the rising sun. I do not mean to be derogatory towards the Japanese people. I am living in Japan, I speak fluent Japanese as non Japanese, I am married to my Japanese wife and I love and appreciate many things in Japanese culture and society. But one thing I can tell you for sure: Japanese do not suffer enough to really cause a turn-around in current affairs, no matter how bad it already is. Plus there is no willpower by the real decision makers (bureaucrats rule Japan not the government) to cause a change.
I agree with all of the above especially this. I spent a few months in Osaka in 2011 trading/holidaying and it sure didn't look like a country in bad financial shape. The average Japanese can live very comfortably I imagine. The salaries are low, but the cost of living is also low and standard of living high. That was my perspective as an Aussie.
Aside housing living costs are not high as many believe. And regarding housing, many "arrange" their lives to live in small places to make housing affordable. Outside the major cities housing is as cheap/expensive as anywhere else in the US. And yes living standards are pretty decent. Of course it always depends on how you define living standards. The average Japanese does not value cars nearly as much as the average American, so most are content with no car or small cars. On the contrary, food is the most important item in Japan, it is only worshipped like a religion. Japanese do not spare the expense to have extremely healthy and good quality food which is one reason why so many Japanese are opposing cheap rice imports or Chinese mushroom, farmed fish and seafood. One only has to look at the average life expectancy between Japan and China (the rest of the world for that matter) to see who lives a much healthier life style despite a huge majority of men smoking which kind of speaks against the almost crusade against smokers in the US.
the last lines on smoking were an obvious joke. But actually I find this craze against smoking in the U.S. white bizarre to the level of being absurd. You are nowadays more welcome at clubs being a hooker, pimp, druggy, but smoker, hell no. Comical.
As a bit of an expert on Japan what do you think their strategy might be with regard to the island dispute with China/Philippines ? Strange how the US's new fighter jets are currently " grounded " with technical problems ?
"We estimate that a 10 percent rise in share prices boosts consumer spending by 0.12 percentage points three months later." ----------------- Anyone care to comment if this plays out here in the US. Nice rise in the Dow.