David Brooks's latest column in the New York Times calls for a restoration of "economic values" in the United States, with the aim of making "the U.S. again a producer economy, not a consumer economy." Brooks sees a decline in traditional values of restraint behind the rise of consumer spending to ever greater portions of …
Continue reading Will the DPJ weather the global rebalancing?
With two days until the general election, Asahi anticipates that turnout this year might be higher than 2005's 67.5% and might even top 70% for the first time since the 1990 general election. The weather should cooperate: there is some rain in the forecast for the Kanto area Sunday, but otherwise it looks clear across …
Speaking before the Upper House Budget Committee on Monday, Prime Minister Asō Tarō reached a new low for an LDP leader attacking the opposition DPJ.Asō was addressing the debate regarding the DPJ's plans to finance new spending by cutting wasteful spending and tapping the so-called "buried treasure" of Kasumigaseki, surpluses in the government's numerous special …
The political system is gearing up for a debate over the government's 15 trillion yen stimulus package that could decide the timing and the outcome of the next general election.Kan Naoto has indicated that if the government is open to revising the plan, the DPJ will cooperate to smooth its passage. What choice does the …
Continue reading Is the government running out of options — or out of options already?
April is here, the new fiscal year has begun, and Prime Minister Aso Taro is in London for the G20 summit.For once, he leaves behind a favorable domestic situation. After months of bad news, with his approval ratings skirting single digits, the press is full of reports about how Aso and DPJ President Ozawa Ichiro …
In the past year, Japan's exports fell 45.7%. Exports to all regions were hit - down 52% to America, 45% to China, and 46.7% to Asia as a whole. Japan's mighty national champions, its automakers, have been hit the worst: Toyota's exports are off 56.2%, Honda's 46.3%, Nissan's 62.1%.That's absolutely stunning. It is catastrophic. Words …
Gerald Curtis's article in the Financial Times deserves a response from me as well. The short version of my response is that I agree with Tobias: the fact that the DPJ will not be able to avert a depression is not sufficient reason to write them off.The longer version is this: Curtis is right when …
In my earlier post, I stated that Japan's current-account surplus can vanish in one of two ways: either Japan can consume more (which it won't because of debt and demographics), or it can (over)produce less. That is true. But when the adjustment happens is not set in stone.A casual observer might think that Nakagawa Shoichi's …
"Japan is an economy that is almost certainly producing well below its productive capacity - that is, the immediate problem facing Japan is one of demand, not supply. And it gives every appearance of being in a liquidity trap - that is, conventional monetary policy appears to have been pushed to its limits, yet the …
Prime Minister Aso Taro, having had his second stimulus package pass the Diet Tuesday, appeared before the Diet on Wednesday to deliver his latest policy address.Rhetorically, the address contains few surprises. In the opening sections, in which Mr. Aso addressed the principles behind his policies. He spoke of the "once in a century economic crisis" …
Tobias S. Harris 