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06/02/2013

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Terry Bennett

Post-WWII Japan may well be world history's most successful experiment in communism - not the totalitarianism that is usually referred to as communism, but rather the natural and freely felt national disposition to put the needs of the collective ahead of the needs of the individual. The Japanese people - an island nation of strong ethnic identity, historically at odds with all their neighbors and distrustful of outsiders - were traumatized by the unimaginable (to them) outcome of the war, and they put on their big boy pants and got to work, struggling and skimping on personal indulgences.

This lasted for maybe 1.5 to 2 generations, and then their sense of wealth caught up to their grandchildren, who saw their elders' ingrained austerity as incongruous to their obvious national and individual prosperity, and said "Screw this" and started living la vida loca instead of aspiring to a life of 100-hour work weeks and a miniscule living space.

There were other factors: the aging population, the Kobe earthquake of '95, the emulation of their manufacturing model by South Korea, Vietnam, et al. Still, the most important change was internal, in the consciousness of young Japanese. They stopped doing what their parents and grandparents had done to produce copious wealth, and so they stopped producing copious wealth. Duh.

Bill Guerrant

When I read stuff like this I can only shake me head and wonder how much damage will be done before so-called economic experts realize that any system predicated upon perpetual "growth" and finite resources is doomed to collapse. Printing money and incenting debt and speculation will make a few people very wealthy and may create a temporary illusion of prosperity, but it is a false economy, at best.

A sustainable future will depend upon reducing consumption, not increasing it. And it will depend upon savings, not spending.

Our descendants, who will bear the weight of all this foolishness, will curse us for our stupidity.

All in my humble opinion, of course.

Jennifer

Although Japan has experienced deflation over the past couple decades, we should be reminded that Japan has been experiencing a growth miracle since before 1950.
Japan trying to copy the Fed’s large-scale asset purchases might not be the right decision. First, Japan is not in a financial crisis so federal spending at this scale is unnecessary. Second, other factors of Japan's economy must be examined. The differences in Japanese and American factors of production such as physical and human capital, including technological knowledge, vary greatly between the nations. Lastly, institutions of economic growth differ in Japan. GDP per capita varies enormously among nations; therefore, what got America's economy rolling again during a depression might not work for Japan's stagnation.
Progress is not guaranteed and economic growth is not automatic which seems to be the main concern of Abenomics.

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