Friday, October 29, 2010

Economic afterthought Japan.

Today's yen rate: ¥80.57/$1

Investors, having purchased enough pesos but having spare change left over bought a few yen as an afterthought.*

A few days ago, I was in a discussion with 3 fellows--2 in their 20s and myself and another guy in our 40s discussing the economy. The young fellows had a relatively poor view of the future of Japan, especially concerning the competition from China. I and the other old geezer (Japanese---him, not me) argued that their view of the Japanese economy was too negative. In fact, I mentioned---to the young whippersnapper's disbelief---that I thought at present Japan's economy was in much better shape than the US. This was off the top of my head as I hadn't exact figures, but I been led to believe this from watching and reading US news reports about the US economy. (9% plus unemployment is not encouraging, nor are the interviews with regular folk who have lost their jobs or homes, nor the prediction that I just heard that it would be at least 2011 before US unemployment dropped below 9%). We won't even mention the New Normal.

As my age group peer said, you can't let news reports on the economy guide your life, because they are almost uniformly negative.

I would not disagree with Fackler's report (previous post) as far as the feeling of malaise (ohhhh...I smell peanuts) and the negative view of the future that many have in Japan, but I almost dropped into depression after I read it for the first time. Geez. I knew that there were problems, but I didn't realize we were goners.

Then I began to hear and read things on the Internut written by folks who had been silly enough to have wasted large chunks of their lives specializing in Japan and economics. I found---being too much in a malaise to check Fackler's data myself---that much of his data was simply wrong.

For example, we know that Japan has been on a long downward spiral since the bubble burst back in 89 or so, except that it has not really been in a long downward spiral since '89 or so. Growth slowed after the bubble, but increased slowly until the US originated Lehman Shock of 2008. Japanese language students (university level) have actually increased in part due to the popularity of manga.* (By now I am sure that there are sources all over the web countering the NYT stats. But check around NBR for just a few.)

Anyone who denied that Japan has serious problems, economic and otherwise would be a fool. But to make the country look like a desolate basket case is no less foolish.

I am fortunate enough to be able to occasionally speak with a few fellows in high positions in a large Japanese corporation which is having a very difficult time due to the high yen, Chinese and European competition, high cost of raw materials, and other serious problems. They aren't "ordinary people" in the sense that they don't have to worry about their jobs unless the company goes bankrupt (which ain't very likely---I suspect Uncle Taro would step in), and they haven't given in to despair, nor are they anywhere close to giving up. Renho's "What's wrong with being number 2," pisses them off to no end.

Perhaps it's a generational thing, or perhaps it American optimism transferred to Japan. Perhaps it's hardheaded foolishness, but I don't think Japan is dead, dying, or willing to roll over and die, in spite of what seems to be poor political leadership. (I suppose I could say the same thing about the US.) I think what the anonymous poster on my previous post implied was right: The article was as much more about the US or where we fear it may be heading than it was about Japan.

6:37 pm: A late thought: I am not sure, but I believe it was John Dower in War Without Mercy, who said something like: The US swings between thinking that the Japanese are invincible supermen, or quaint, incompetent, Orientals who can do nothing right. Apparently, we are in the latter stage now.

*I realize that things ain't that simple, but people with money to protect, gain, or lose tend not to be total fools with it. But then again, we did have the subprime crisis....

**One of my high school classmates has a son in university studying Japanese. Why? Manga. MangaMan Aso was not a complete aho after all. My old Japanese tutor is now in the US getting requests from manga fans to study Japanese. I thought this stuff was a bit goofy, but in fact, it is no goofier than those of us who studied Japan in the late 80s early 90s thinking that it was the economic way of the future.

I admit that I have a bad taste left over for the NYT and MF after the vending machine costume article of a few years ago. Fact checkers my ass.

1730: As always, edited after posting.

1 comment:

  1. Jeffrey12:30 AM

    "Anyone who denied that Japan has serious problems, economic and otherwise would be a fool. But to make the country look like a desolate basket case is no less foolish."

    I lived in Japan back in the good old days (1987-1990) and fondly remember the "roaring '80s." I visited a couple times post-Bubble before again working in Japan from 1993-1998. All through the "down years" I swear from 1992 to when I left in 1998 that it seemed like more building, commercial and useful infrastructure (subway and train lines), went on in Tokyo-to alone than the entirety of the U.S. (only a slight exaggeration).

    No country, either coming out of poverty and commercial/industrial backwardness (China) or, of course, in a bubble can sustain high growth forever. Like the U.S., Japan is now a "well- appointed" nation with a mature economy. Only with a "paradigm shift" (age of sail giving way to the age of steam and so on) can we expect to see higher growth rates in mature economies as a transition accelerates.

    I think, hope this may be coming with an end of the predominance of late 19th century (coal) and 20th century (oil) fuels (or we could be heading into a new Dark Ages). Here again, China seems to be better positioned to leap frog the West in alternative energy use. However, there is no reason that technologically proficient Japan shouldn't be able to reap a good deal of the benefits of this.