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Japan Falls into Recession

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Re: Japan Falls into Recession

#21

Post by techdragon »

tormeh wrote: post #15
mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

I agree, but QE is not a dumb idea per se, it's just the way that it's done is severely lacking. What you want is inflation, which means you want to increase the amount of money in circulation. A simple way to do that is for the central bank to make money up and give, say, 20000 yen to each citizen every year until deflation went away. This is called a helicopter drop in finance-speak, and seen as very radical. Defla…

Australia did one and it worked wonderfully. We rode out most of the brunt of the impact of the 2008 'GFC' with little disaster. The worst of it for most of us was that getting a home loan got a bit tougher, but really this was more a case of returning to earlier norms than really getting "harder"

Re: Japan Falls into Recession

#22

Post by mc32 »

techdragon wrote: post #18
mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

Immigration is painfully unlikely due to cultural issues. It's oft suggested by non Japanese people looking at the problem but at least from what I can see, the majority of the Japanese voting public don't want immigration. There's reasons if you want a fun read. Particularly interesting is the history of people of Korean decent who are native Japanese residents for a generation or two.

It's true Japanese aren't very accepting of immigration, historically --and having to be blood to be a true national is a bit of an odd theory for citizenship; however, unless they (or anyone else) devise an alternative to neo-liberal capitalism which provides a decent living for its population while that population is in decline, the Japanese may have to reconsider their position on immigration.

Re: Japan Falls into Recession

#23

Post by ohyes »

efjhewjfnkew wrote: post #3

Here's the thing: you actually need a strong middle class to buy your products. No amount of artificially inflating the value of the stock market through quantitative easing will give you a healthy economy. QE is like putting a fresh coat of paint on a house with a rotten interior: it makes things look pretty, but the structural integrity of the building is almost non-existent. Employees working themselves to death f…

You ever notice how people telling you "how it is" with economics stuff give you vague analogies rather than statistics, because there isn't any evidence to any of it and everything is just theory mixed with opinion?

That's kind of like trying to improve performance in a piece of software without taking any profiling data. Sure, you can find some coincidences that might prove your theory about what's wrong, you might even improve things if you are really lucky. But for the most part, you're just engaging in an essentially masturbatory activity.

Re: Japan Falls into Recession

#24

Post by deciplex »

techdragon wrote: post #18
mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

Immigration is painfully unlikely due to cultural issues. It's oft suggested by non Japanese people looking at the problem but at least from what I can see, the majority of the Japanese voting public don't want immigration. There's reasons if you want a fun read. Particularly interesting is the history of people of Korean decent who are native Japanese residents for a generation or two.

It's often suggested that Koreans in Japan are somehow deprived of Japanese citizenship. This is not true. Rather they are not allowed to naturalize in Japan while retaining their Korean citizenship (yes, I realize that is not the whole story and there is a lot of history there - nevertheless, there is nothing stopping a Korean who has lived in Japan long enough, or was born there, from acquiring Japanese citizenship if they choose). Many countries have this sort of policy yet somehow it's controversial when Japan does it.

That said, mass immigration is unlikely, as you say.

Re: Japan Falls into Recession

#26

Post by Animats »

pastProlog wrote: post #6
lkrubner wrote: post #5

Earlier quoted context omitted.

But quantitative easing lowers interests, so that people can more easily take out a housing loan, so they can fix the "rotten interior" -- they can replace the rotting wood, they can replace the moldy roof, and by doing so, they stimulate the economy. "Putting a fresh coat of paint on a house" also stimulates the economy. You have chosen some strange metaphors for criticizing an economic program. If your point is tha…

> people can more easily take out a housing loan So now you have underpaid people creating a housing bubble in Tokyo and going into debt. This does succeed in kicking the can down the road for a few years. But when the music stops in this game of musical chairs, the crisis is actually worse.

So now you have underpaid people creating a housing bubble in Tokyo and going into debt.

Which happened in 1989. Japan never came back fully from that. See "https://en.wikipedia.org/wiki/Japanese_asset_price_bubble"

Re: Japan Falls into Recession

#27

Post by bpodgursky »

mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

Large scale immigration is just passing the buck down onto a currently-poorer country. But poor countries aren't going to stay human-meat factories forever, and sooner rather than later someone is going to have to figure out a way to maintain an industrialized society with a stable population.

Re: Japan Falls into Recession

#28

Post by techtivist »

Here's the biggest underlying problem. Contrary to what one would expect, Japanese firms are actually flush with money, but due to Abenomics, the weakness of Yen means they are investing more and more abroad, rather than putting the resources in improving its own infrastructure. We all know about Softbank's recent investments in India and South East Asia. And it's not just limited to Tech or even the private sector, even infra firms are investing in troves abroad, especially in South East Asia. In a way the Japanese growth rate doesn't take into account the rent its entities are receiving from abroad. So the short term picture might actually be rosier than the numbers of would suggest.

The bigger problem is actually long term weaknesses that this trend will expose.

Another huge problem is consumer lending. Most Japanese banks are actually pretty stringent when it comes to lending to their own people. So even if low interest rates might encourage consumer borrowing appetite, there's very little supply out there. I think the PM and the central bank needs to address these, even if loosening lending might be contrary to what Japan has done in the past.

Re: Japan Falls into Recession

#29

Post by alex_anglin »

mc32 wrote: post #16
sliverstorm wrote: post #14

Earlier quoted context omitted.

Well, their population looks about ready to take a nosedive, so it's not like they "just aren't growing fast enough".

Be that as it may, the other option, to export their way out of this is not going to happen. They are not a cheap-labor based economy --and they don't have known viable reserves of natural resources. So, what are they to do?

Export creative products or develop intellectual property?

Re: Japan Falls into Recession

#30

Post by nandemo »

georgeecollins wrote: post #17
mc32 wrote: post #4

Quantitative easing, Yen depreciation... What they need to do is figure out a way to grow the population locally or through large-scale immigration. I'm afraid this is the fate that awaits the developed world (or countries with low population growth). Japan is like a canary in the mine of post-industrialism. It'll be interesting to see what they figure out for their society and the lessons they might have for us.

I agree that Japan (and the US) would benefit from more immigration for a lot of reasons. But if you can only grow your economy by adding people, you aren't really increasing per-capita income, at least for the working class.

> you aren't really increasing per-capita income,

Even countries that are relatively open to (legal) immigration, like Canada and Australia, tend to limit immigration to working-age adults qualified to work in technical, professional or otherwise white-collar jobs. So I think it's fair to say that you do increase per-capita income.

I wouldn't put the US in the same boat as Japan, though. Between green cards and naturalizations, the US receives well over 1 million immigrants per year (that doesn't count non-immigrant visas like H1B etc):

http://www.voanews.com/content/us-issues-million-green-cards...

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