Yup. There's nothing wrong with the business cycle. The social engineers and academics always think they can outsmart natural law. All they end up doing is fucking things up.
At least I've managed to pierce that protective shell of academia with reality, even if it were ever so brief.
Krugman's Japanese Legacy: Record Households On Welfare, Corporate Bankruptcies Soar, Majority Of Households Worse Off A little over two years into Abenomics, and two months after learning that one of Abe's economic advisors is none other than Paul Krugman, here is the progress report for what little is left of Japan's economy: 1. The number of households in Japan on welfare hit a record high in October, renewing the record for a 6th straight month. From NHK: Officials at the Welfare Ministry say households receiving welfare benefits climbed by nearly 3,300 from the previous month to about 1.61 million. That's the highest number since the government began compiling records in 1951. Households on welfare with people aged 65 or older rose by nearly 2,500 to about 761,000. That accounted for 47 percent of the total. Ministry officials say a surge in the number of elderly recipients is behind the growth in the number of households on welfare. They cite an increasing number of senior citizens who live alone in Japan's aging society. But the officials say the rate of increase of households receiving the assistance has slowed over the long term, as the number of working-age and single-mother recipients have been falling due to improving employment conditions. 2. 51.1% of Japanese households said they’re worse off compared with year earlier, the most since December 2011, according to Bank of Japan quarterly survey released today in Tokyo. Why? 71.1% of those who said their livelihoods have deteriorated cited rising prices as a reason. Thanks Abe, and thanks Abe for crushing the economic conditions diffusion index which dropped to -32.9, the lowest since Dec. 2012. Precisely when Abe took power. 3. Corporate bankruptcies linked to weak yen rose to a record 345 in 2014 from 130 a year earlier, according to a Teikoku Databank report. Weak yen-linked bankruptcies in Dec. totaled 44, the most on monthly basis since survey started in Jan. 2013. * * * In short, one has to go full-Krugman at this point to conclude that what a Krugman-advised Japan has achieved is anything but utter, abysmal failure, and is on its way to a complete currency devaluation, hyperinflation, economic (and demographic) collapse, and the inevitable outcome: a failed Keynesian state. The good news: what few (irradiated) Japanese are left alive, will have an all time high Nikkei to enjoy, however they will be limited to how many shares they can sell based on the inventory of available wheelbarrows to cart their stock sale proceeds from point A to point B. LINK
Indeed it is. That is something eminently sensible that you have just written. May I congratulate you for catching on!
"But the officials say the rate of increase of households receiving the assistance has slowed over the long term, as the number of working-age and single-mother recipients have been falling due to improving employment conditions." Rest assured I have no interest in making you look like a fool. I'm sure you mean well and believe you know as much as you need to know to be virtually certain that everyone who disagrees with you is a fool. I thought that too, when I was nineteen. I won't bother to save your statement at the end of your post above, but perhaps you can return to it in a decade from now and see how accurate you were. By the way, you said in some other post that I had only given you half the picture with regard to oil. In fact I gave you two-thirds of the picture. I gave you a link to where I had posted two charts, not one, as you claimed. look again. One chart shows per capita consumption with time, the other shows production with time. Put them together, and you have two thirds of the reason oil has dropped. The final third is the appreciation of the dollar, and we agree on that, I assume.
If you only stopped making yourself look the fool, you might have a shot at that. You bold a quote that the article says "officials are saying", but that proves my point even further. Officials are full of baloney. If it weren't so tragic to the people of the world, I would enjoy sitting back and watching countries like Japan, some of Europe and then later, the US explode from failed policy that you support. As such, it will only be bitter sweet. If only we could hang all the politicians and academics like yourself when it happens. But you'll all just crawl under the nearest rock or flee to some non-extradition country.
Abenomics 4 Arrows 1. Lower real wages 2. Spiking bankruptcies 3. Declining consumer confidence 4. A negative savings rate
Japanese companies doing more firing than hiring: OECD AFP-JIJI More than half of Japanese who are laid off will still be out of work a year later, according to a report released Monday that also says companies must be more flexible if the economy is to improve. The findings come as Prime Minister Shinzo Abe embarks on his third year in power after pledging to awaken the long-slumbering economy, in part by cutting red tape. Around 1.4 percent of workers lose their jobs each year, with older, less educated employees and those on temporary contracts at highest risk of remaining jobless, the OECD said in a report on Japan’s labor market. “A significant fraction of Japanese workers are laid off each year and then face long periods of joblessness before finding work, often at much lower wages,” the OECD said. On average between 2002 and 2013, only 48 percent of those who are laid off found a new job within 12 months, the report said, adding those who do find employment suffer an average cut of 20 percent to their income. The trend persists for the next three years, and “even four years after the displacement, their earnings are about 15 percent lower than they were,” said lead writer and OECD senior economist Paul Swaim, noting the same pattern is observed in other developed countries. “The costs borne by displaced workers are likely to remain high in many cases . . . if the employment opportunities available to mid-career job changers remain limited,” the report said. The slow death of the culture of lifetime employment and a greater dependence on part-time or casual employment means Japan’s workers, not the firms that employ them, bear almost all the costs of the job market’s lack of flexibility. “In Europe there is a word called ‘flexicurity,’ which means reconciling flexibility with security for the entire workforce,” Swaim said. “It means some mobility between jobs, not meaning becoming permanently poor as a worker.” Deregulating the job market is a key plank of Abe’s plan to turn around the economy, with rigid rules on hiring and firing sometimes blamed for flat-footed responses to changing global markets. Supporters say a more flexible workforce would better allow families to look after children and the growing ranks of elderly, as well as permitting firms to adapt more quickly. But critics say reforms run the risk of taking away job security.
Of course now we have Europe too, following Keynes for one reason: it works. And now that Japan is on the right track it will work in Japan also. The only problem, as always, are those that can't understand how it is that government's, with their own currency, can spend their way out of an economic hole and not end up broke when they reach the surface. These are the folks that call for putting on brakes while the throttle is being applied by the government. Untimely braking only results in a recession dragged out longer than it need be. What these "brakemen" can't get through their thick skulls is that all of the cost comes back in revenue that is otherwise lost in a long protracted, seemingly, never ending recession. The psychology of recessions is the furthest thing from their minds when it ought to be uppermost. Bernanke and Yellen understand it, Drahgi understands it, and Abe is trying his best to understand it. Merkel doesn't get it, she's a physicist, but she will! She is most definitely not stupid. Soros has long understood it, and now he is seeing the fruits of his persuasive powers. I recall having a brief discussion with Martinghoul in these forums, sometime back, in which he expressed the opinion that the ECB's use of QE in the Euro zone was unlikely. Probably that had to do with Germany's reluctance to go along. I don't recall now the details of our online conversation. I have always been of the opinion, however, that you should be cautious of going against human nature. Human nature is on the side of QE. Government spending to make up for retraction in the private sector in a recession is always going to be less painful than "austerity". Therefore, won't QE always be an easier sell for politicians than austerity, unless QE is mischaracterized as something that will put future generations into unconscionable debt? When you combine the natural tendency of we Homo sapiens to go the less painful route with the reality that Keynesian economics works to bring economies out of recession, you have a combination that is nearly inevitable. Consequently, I have for a long while been of the opinion that the Europeans would eventually find a way to apply QE, even though they had no Euro bond -- as Soros wisely said they should. I went further to predict that the Euro would trade in parity to the U.S. dollar by late Fall or Winter 2014. My timing was clearly off, but I think now that it will prove to be not all that far off. I plan a brief visit to Paris this May. I hope to enjoy a strong dollar and a weaker Euro!