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Comment by simonbarker87 | Hacker News Reader

Not the main focus of the article but I've been wondering lately why Japan is considered to have done poorly over the last 30 years economically when a lot of the big multi national brands that are very popular all over the world during that period are Japanese.

I'm not an economist (or Japanese) but from the outside when you can list Toyota, Nissan, Mitsubishi, Suburu, Shimano, Nintendo, Hitachi, Yamaha, Sega and Murata among your country's well known brands it seems odd that you would be considered a poorly performing economy for so long.

Can anyone share some insight?

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Because for some reason many commentators find it perfectly reasonable to use absolute GDP growth as a metric for comparing Japan to America, ignoring the fact that America's population is growing at around 3% while Japan's population growth is around 0% or negative (which means all things being equal one'd expect America's GDP growth to be around 3% higher). In terms of GDP growth per capita, which is the metric that actually matters when comparing standard of living, Japan hasn't done so badly.

http://www.forbes.com/sites/timworstall/2014/09/05/japan-is-...

Japanese government debt to GDP ratio is 229%. Japanese government has kept lights on with 15 years of constant deficit.

Fortunately most of this debt is internal and in local currency (no fear of hyperinflation). But Japanese are getting old. In a few years Japanese insurance companies and Japanese savers turn from net buyers of government debt and stocks into net sellers.

It's interesting to see what happens then.

US has a good stream of immigrants coming in. Last I heard immigrating to Japan is a lot tougher. I wonder why the Japanese govt isn't opening the gates up to keep the population growth of young people at a steady level

Really good point. Usually metrics are compared "per capita" in macroeconomics.

> Can anyone share some insight?

If you were around in the 1980s, when Japan was at it's economic peak, Japan has slowly been passed by China and continues to tread water (i.e. stay in the same place, as China has passed it.)

Japan is a poorly performing economy in that there's been little to no growth since the bubble burst in the late 80s. Other economies have gone through growth stages and we had the Asian financial crisis and then the '08 global crash, but Japan has just kept the status quo. So from the perspective of economists, who expect growth, Japan does look bad.

In Japan, life is largely as it has been since the 90s. In fact with deflation, prices are largely the same as they have been for more than 2 decades. This is not a good thing mostly- healthy economies should have some small amount of inflation each year.

Hope this helps? (I am Japanese, fwiw.)

Thanks, very interesting. I wasn't born until '87 so all I've ever known is Japan as it is now rather than growing in the way China has been.

Growth is next to zero in many first world economies. Most of Europe is basically not growing. Only Germany is. Many economies in Latin America are doing poorly, especially Brasil, Argentina- Venezuela is in free-fall. There is growth in Africa (from a much lower starting point), but it is uneven. There is a little growth in parts of South East Asia (Indonesia is doing ok, as is the Philippines, and Vietnam not bad) but growth is hard to find in most countries. The US and Germany are doing well. China is doing badly in comparison to the 10%+ growth they had in the 2000-2010 decade, but they are still growing.

> Growth is next to zero in many first world economies. Most of Europe is basically not growing. Only Germany is. Many economies in Latin America are doing poorly

Look beyond the 3-year or even 10-year perspective. All of Europe and most of Latin America is doing visibly better than 25 years ago in terms of infrastructure, life expectancy, disposable income etc. Even after three years of a massive economic crisis, Brazil is a better place to live than in 1990.

While Japan is the same - just older.

As an American living in Japan, life in Japan is a lot more enjoyable. From having lower healthcare costs to a more stable food budget.

While they may be Japanese brands they aren't Japanese companies, they are multi-nationals. Much like the US they have outsourced all of their manufacturing. A strong Honda that manufactures their motorcycles in Thailand and their cars in North America doesn't translate into robust Japanese employment. Fewer local jobs means less money going into the local economy.

On some level, Japan's story isn't one of high hopes and stagnant results, it's one of amazing growth in face of reality. Even in our tech-rich, service-driven economies, national growth is still largely a function of population, space, and resources. Over a half-century, Japan modernized to near the peak of first world nations on a crowded, resource-poor island. With that played out, they're sustaining their position largely by adding value to the workforces and production capacities of other nations. You're absolutely right that a lot of Japan's corporate strength doesn't translate to GDP growth, but even flat GDP is damned impressive in a lot of ways.

These companies became household names during a period of incredible economic growth in Japan (60s - 80's). But economic growth at that level is not sustainable (as China is finding out), and the country went into a recession in the 90's. Japan is still one of the wealthiest and most productive nations in the world, but the borrowing to fuel its growth has caught up, and it now has one of the largest debt-to-gdp ratios.

> but the borrowing to fuel its growth has caught up,

From what I've read, the Japanese public debt is mostly domestic, so it wasn't actually foreign money that was fueling the growth.

Yes, it is domestic (retirement savings) - but it is still debt and will need to be repaid. Due to Japan's demographics, pretty soon.

That's true, but at least it shows that people in Japan have enormous amounts of saved capital (if they could finance all that debt).

Capital, which the government is trying to diminish by desperately printing money and forcing zero- or negative- interest rates to inflate the debt.

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