09-15-2012, 07:08 AM
(09-14-2012, 07:36 PM)Kevin Wrote: I'd also invite some deeper discussion from people that know more and understand more than I about this mostly fluff article about Japan's economy the last 22 years. I know they haven't really grown in 22 years and I know many people who have traveled or lived in Japan during that time and it's not a country that has fallen apart like people say will happen to the US and they have made some of the same decisions we are making now.
It's different living in a no growth economy but I believe you don't have to growth beyond what is needed to handle increases in population either, though it may take an attitude shift.
Here's my quasi-Marxist conspiracy theory. I think the obsession with short-run growth rates is a capitalist phenomenon - that is to say, we focus on it not because it's super important, but because investors care so much about it.
I think a lot of people in the Econ world forget that GDP is a flow, not a stock, and that GDP growth is a rate of change in that flow. If a country has a very high GDP and a very low GDP growth rate, that still means that every year, they make loads of stuff. Their people live at a high standard, and produce everything necessary to do so. That's Japan right now. It's a nice place to live. They have the best of almost everything, they're well educated, they live long, all is well. For most people, Japan is awesome.
For whom is Japan not awesome? Investors. You get crap returns investing in Japan. Nobody buys Japanese bonds but Japanese people and the paranoid. They're so over-capitalized it's comical - and they have been since the 1980s.
And so, between these two stories, a good life for most people on one hand, and a deeply unsexy place for investors on the other, which narrative dominates the news about Japan? The bad one. Why? Capitalism. Who is economic news written by, and for? Investors.
-Jester