Japanese style economics…lifted from comments
Lifted from comments from Spencer’s post on Productivity and the stock market
Mike Panzer at Financial Armageddon has been on the issue that the “street” is missing all that is going on around them. From his blog: http://panzner.typepad.com/
However, I wonder if a new paper, From Keeping Up with the Joneses to Keeping Above Water: The Status of the US Consumer from the BlackRock Investment Institute,
If long-term leverage sustainability is assumed to reside near 1990 levels, then the bulk of the deleveraging process remains ahead of the American consumer, regardless of the income measure used…
We think that these trends, coupled with stubbornly high unemployment, higher commodities prices, and slower growth in wages and salaries, will likely contribute to a lower level of personal consumption growth over the next few years. Moreover, since consumer spending is a key component of the GDP growth rate, this would argue for generalized economic growth levels that are, at best, modest for years to come, and may in fact appear anemic when compared to pre-crisis growth rates.
I have believed for years that the US is following the Japanese model.
But note that while the general belief is that the Japanese government policy has not stimulated the economy, the alternative might very well (be the) belief that Japanese policy may be preventing a depression.
Does keeping insolvent banks out of discharge prevent economic depression?
if there is such a thing as a “sustainable level” (and i think there is) we need to be thinking about how to transition from an economy built on “more” to an economy that is built on quality of life… for all.
i don’t think this needs to be some communist “equality,” but it does need to take into serious consideration what it takes for “the poor” to remain human and feel that their lives are worth living. if that means the rest of us have to give up cocaine-consumption, that might mean we can remain human with lives worth living, too.
i think an economy (people) needs innovation, enterprise, and change (“progress”) so i remain in favor of “free markets” and even “capitalism,” but under sane restraints.
what is insane about the libertarians and other hard right.. is that they believe in NO restraints.. at least none that affect them. and their idea of “good” is “more money.”
Yes, we should aim for quality of life for working class Americans. That would include subsidized affordable housing and health care without humiliating low income people. Time to stop whining about the 50% at the low end not paying federal income taxes. (BTW, some very wealthy people and corporations are people too, are included in that 50% figure)
We need decent jobs good enough to provide quality of life, it would solve a lot of our social problems. Life does revolve around jobs and the quality of life a job provides. We need policies supporting families, like paid maternity leave, time and adequate places to support women nursing their children. So much we could do without harming the free market economy and making our society less brutal.
“Taxes are the price we pay for a civil society.” If all men are created equal which is the CON used to get the poor to die fighting the British, then civil society is for everyone.
But, the CONservative view is: society is only for the non needy.
Those whose kids don’t go off to Afghanistan
We just came off of an unsustainable boom that resulted from an unsustainable property bubble. Sorry, no matter how many misdirected stimulus bills or fed intervention we are not going back quickly.
The discretionary budget needs to be redeployed. Transfer military spending to infrastrutcure spending that improves quility of life, and rebuuilds cities as environmental centers. It is not how much we spend, but how well we spend it.
People don;t mind paying taxes when they see results. When they pay more taxes, but the roads still suck they get pissy.
i agree but i don’t like “subsidized.” we should aim for an economy where even the least of these can make enough money from decent work to afford decent housing.
there is absolutely nor reason the person who cleans the toilets in the executive suite should have to live in a slum except that we permit ourselves to believe that only the lazy would take such a job, or if they are not smart enough to graduate from college they deserve to live like stray dogs.
If you actually bother to go look at the OECD data for Japan’s taxation and spending habits, you will find the following two statements to be true
1: Overall tax rates in Japan are among the lowest in the OECD and are similar to those of the USA. They have not varied much since their bubble burst.
2: Overall spending is somewhat higher than America’s, but below the OECD average. It has increased gradually over their two lost decades, but most of the increased spending was, predictably, on health care an pensions as their population aged.
This is hardly consistent with the “Japan’s stimulus failed” meme that conservatives love to repeat without ever having seen the data. It is, however, consistent with the idea that low taxes are not the answer!
Btw, as a resident of Japan, I’d just like to say things are not as bad here as some people think they are. A typical Japanese lives longer, eats better, is healthier, dresses better, looks better and has more financial, health, job, retirement and personal security than the average American. While there are certainly advantages in the states (higher overall income, bigger houses, better universities, and better gender equality, for example), Japanese life is at least comparible in quality to that of Americans. As an added bonus, the Japanese accomplish this while only using about half the natural resources.
At least Japan’s savings rate is higher than Americas.