by liberal japonicus
The open thread is still merrily rolling along, but I thought I'd toss another log on the fire. This article, about the lack of a J-shaped recovery in Japan hits me where I live, and I wonder what folks who actually understand economics think about it.
The article mentions in passing something that really hits me where I eat and drink, which is:
Yet the recovery’s lopsidedly domestic base leaves it in a potentially precarious state, experts say, particularly given an impending increase in Japan’s national sales tax.
The rise, from 5 to 8 per cent, is likely to hurt consumption after it takes effect in April, and though most economists think Japan will avoid a recession – its fate after the tax was raised the last time, in 1997 – the lack of a cushion from exports is a concern.
Actually, the tax rise is 5 to 8 to 10, with the 10% supposed to take effect in October. Ouch! At least that's what I understand from the Japanese commentary, though the English commentary emphasizes things like Abe's statement that it is not set and 'Government to ponder 10% sales tax increase, will analyze economic activity first' (that word 'ponder' reminds me of Eudora Welty's novella Ponder Heart, which seems particularly apropos)
This afternoon, I bought some chocolate that a lot of people have been raving about and was surprised to find that it was from Brazil. I suspect that the trade deficit is being drive by the fact that Japanese are still buying imports, but they are getting things from places where they can get more for their yen, so perhaps some commentators can tell me if that is the case.
If you look at the government's economic plans, which have been termed 'Abenomics', they emphasize 'three arrows': fiscal stimulus, monetary easing and structural reforms. Some have talked about the '4th arrow', which is the spending that will accompany the 2020 Olympics. I actually think there is another arrow in the quiver, which is nationalism.
Now, some commentators suggest that Abe has toned down on his nationalism from his last time as Prime Minister to pursue economic reform, while others note a resurgence of nationalism coupled with concrete changes in Japan's military stance, along with a secrecy bill that was rammed through the Diet, and argue that Japan is still at the beck and call of the US, which shows Abe's true colors (it is often noted that he is the grandson of Nobusuke Kishi, whose post war career is checkered, to say the least).
So, the narrative is that Abe may have the right idea about economics, as long as he doesn't let his nationalist tendencies trip him up. I, on the other hand, think that Japan has looked at China and seen how they play with the open flame of nationalism, and stifle dissent and are able to manage economic expectations much better than the US, such that nationalism is actually one of the arrows of Abenomics.
What is really interesting (at least to me) is how this push to nationalism incorporates a good measure of emperor worship, while the emperor has made his liberal leanings well known, so right wing politicians like Shintaro Ishihara make a fetish of the position of the emperor, but don't even speak of the actual person. That's probably because the emperor has often mentioned that he feels close to the Korea because he feels that his ancestors are from there, which is a rather heretical notion and this anecdote,
Shogi player Kunio Yonenaga, a member of the Tokyo municipal government’s educational committee at the time, proudly told the Emperor that it was his job to make sure all public schools sing the national anthem and raise the flag. The Emperor responded — and everyone heard it clearly — that he hoped Yonenaga wasn’t forcing them to do it.
from this article seems telling. There was also his anti-nuclear speech, discussed here, which was not transmitted by NHK and his 4 visits to Okinawa as Emperor. These things may seem like very small things but over here, they take on a huge significance.
Of course, most economists argue that Japan's difficulty in accepting immigrants, which gives it negative population growth, and it's insularity, which makes change more difficult, is something to avoid rather than to embrace, so the idea of stoking up nationalism, which exacerbates those trends, seems to be opposite of what needs to be done, which is why I think you have the notion of Abe rethinking his nationalism versus Abe as a puppet of the US. However, both of those views are looking through the lens of western economists, and if you don't have bad feelings about nationalism (as Abe clearly doesn't), keeping it around as a way to deal with problematic economic expectations might seem like just the ticket.