I was struck by the argument that we would be very lucky to have a “lost decade” like Japan. But the article at the Progressive didn’t seem to make a very good case (incomes are more equal there than here? Low unemployment? Universal health care? hmm). Well, the article linked above made no mention of economic growth, as if this weren’t even a consideration.
If this is what the Progressive wants, can they just admit this upfront? Will we start hearing more about the glories of the Japanese system wrought 0% rates of interest?
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But the economy of Japan is not inflationary, unlike, is DEFLATIONARY. The prices and wages fell in last decade. The savings rates are very hight in this country. Has the greatest index monetary freedom, according to ranking of economic freedom by The Heritage Foundation. Therefore, serves of example of failure of austrian economy.
And has had one of the greatest measures of liquidity extension by the Japanese central bank. Another good graph to compare would be one of Japanese deficit spending, because as it stands most New Keynesians (rallying behind Krugman) already are aware that loose money has not brought real growth to Japan (i.e. Krugman’s liquidity trap thesis).
i guess zombie banking embodies the “austrian economy”.
but: japanese money supply has not shrunk over the last two decades, nor has it grown explosively. see the chart in this article – http://www.safehaven.com/article/13964/m3s-false-signal-and-the-japan-myth
what good has been done on the monetary front has been negated by wasteful fiscal measures.
The assumption made by the original post is that if great monetary freedom has led to a low GDP growth rate, it is not true that low credit growth will help an economy. This assumption is false. Low credit growth does in fact lead to a low GDP because (even real) GDP is mainly a measure of the amount of money in the economy, not a measure of economic growth. In fact, GDP is INVERSE to economic growth. Japan has had an increase in productivity (real productivity, not monetary calculations of productivity) and standards of living over the last 20 years. This, not a calculated Keynesian number, is what is important.
If the GDP “is INVERSE to economic growth”, Why the blogger publishes the numbers on the GDP growth of Japan to mock the keynesian arguments?
Despite all, the Japan has a standard of living is very high, better that the United States e many countries of Europe. Greatest life expectancy of world, infant mortality lower than United States. The united states could adopt the politics of health of Japan.
Or maybe it could adopt the politics of having almost no military so that the government could spend the money it took from everyone else on health instead of endless wars and occupations. Not that I approve of either one.
Considering the recent debacle about people long dead being listed as alive in family registries, Japan’s average life expectancy probably isn’t as high as previously thought.
Right, because a 250 square foot micro apartment is a high standard of living.
Dream on, Japan.
Isn’t that just in downtown Tokyo?
When you move out of the bubbling housing areas, you can probably get nice deals.
Anyway, I hear Japan wants to stimulate the economy some more by additional Keynesian Cash Injections: http://www.cbc.ca/money/story/2010/08/20/japan-stimulus.html
I see you’ve never been there.
Please do. It’s very enlightening to live in another country, and then see what people say about it.
If you actually want to be employed, you’re looking at places with insane land prices or a 2 hour commute by rail.
thank you for restating exactly what the article said.
Oh, one more thing, adjusted for accidents and adjusted for the fact that Japan doesn’t classify premature children as live births (and thus not part of the mortality rate when they die), the United States has a higher life expectancy and lower infant mortality than Japan. In fact, the USA leads the entire world by a statistically large margin in both measures when everything is normalized around the same calculation methodology and deaths that are not attributable to health care (ie suicides, accidents, murders, etc) are removed. No nation even comes remotely close to matching the numbers.
Japan is an example of polítics of health of free-market. The Japan, with public spendings in health is much lower than United States, but has social indicators very better. United States could adopts this politics of health. But Obama prefers imitate the “sucessfull” healthcare of Cuba.
That…..is a scary graph.
I see the projected line straight down.
Actually, progressives here and there are coming out with arguments against growth. Of course, the arguments are theoretical, mythical, utopian, and bare very little or no understanding of human action. Here is one example out of Portland’s The Oregonian.
Great link!
This sort of thinking has been around for a long, long time. Basically, another excuse for socialism, but more importantly, very anti-human. Born mainly out of ignorance, but readily accepted by most without thinking of the implications, and very dangerous. It can only lead to stagnation and then decline.
Virtually every statement and quote in this article is simply frightening.
“Growth for the sake of growth is the ideology of the cancer cell.”
“Happy Planet Index,”
“reasonable consumption combined with fulfilling work and community life.”
“continuous economic growth on a finite planet is wishful thinking.”
“Our goal is to open up a space where politicians and others can at least talk about limits to growth.”
“Three hundred of them met this spring for the first North American “de-growth” conference ”
“We can start on this one by questioning our near-universal assumption that growth is always good. And the next time a candidate promises unending growth, it wouldn’t hurt if somebody in the audience asked, “What for?”
“But growth is also an addiction. And, like most addictions, it threatens to destroy us. Not only does it clog our freeways, but it also paves farmland, wipes out open spaces, saddles taxpayers with ruinous development costs and crushes the quality of life that attracted us to our communities in the first place. Growth sucks irreplaceable resources out of the earth. It dumps poisonous pollution into our environment. It crowds out the planet’s other species and utterly fails to deliver the human happiness it promises.”
Wow! It goes on and on and on and on……Maybe all us humans should just leave. Does the Venus project have a shuttle to Venus yet?
It reminds me of, in 1984, where in the end the government just flat out lies and says that chocolate rations have increased to 5 grams (instead of actually decreasing to 5).
I always had a deep suspicion that one day this would happen.
I mean it is all to obvious that one day, the central planners would say “we don’t know how to grow an economy, but what’s so great about growth?”
Everyone Else: “What a wise and philosophic insight, as opposed to our libertarian friends and their grubby materialism!”
http://research.stlouisfed.org/publications/iet/japan/page4.pdf
Reconcile these graphs with the scare of deflation in Japan. Looks like bouncing around zero to me.
If you think about it this is only a logical consequence of their ideas: For Keynesians, admitting the point of production is to improve people’s lives is tantamount to academic suicide. The rest of their system completely falls apart in its wake.
The politics of health in Japan … you mean you think the USA should spend billions of dollars on a demographically doomed welfare pyramid scheme without regard to the future?
Despite their old age population (because their life expectance is the greatest of world and their infant mortality is very low), the Japan spends very less in healthcare that the United States, but maintains indicators betters. How the Japan has succeeded the better indicators keeping low theirs spending in healthcare? Can be a successful case of laissez-faire in healthcare. But Obama prefers imitate the “sucessfull” cuban healthcare.
And your response to Ohhh Henry had exactly what to do with his point?
And quit using Google translate. It’s painful to read.
But Japan is, for now, a paper tiger.
Consider this little bombshell: Rumour Bank of China governor defected after losing $430B on US treasuries. Ouch. Well, at least both China and the USA will have a handy excuse for the new Cold War they’re about to launch. Can you spell “national service” ?
I am curious what the use of the 4th derivative is. We are talking about the YOY percent change of the real GDP growth rate. What does the 4th derivative tell us, because I’m not sure how that affects us in the real world. I’m sure the graph looks cool, and shows what you want it to say, but what does the rate of change of the rate of change of the rate of change tell us (no that is not a typo)?
All your healthcare costs are belong to us?
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