Why Japan Is Doomed
oftwominds.com
oftwominds.com
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00000I think we need a signal-tweet-feed, so someone can set up an alarm system for when their signal is activated. For great justice!
Those in denial about Japan's reliance on ballooning debt to fund its status quo (and on America's exact same reliance) basically claim that "It can't happen because it hasn't happened."
Given the success that various hedge funds had with this strategy during the crash of mortgage backed CDOs a couple of years back I would have thought that there must be a lot of speculation of this kind going on.
Assuming that there are still sellers of CDSs out there...
But maybe not.
Cheers, Carson
"Markets can remain irrational longer than you can remain solvent." -Keynes
He's lately had his chips all-in on Asia, particularly stock exchanges in India and buying up yuan and sgd. Of course, because of these times of uncertainty, he's also long on gold bullion.
I would seriously make plans for when the US is forced to stop this destructive pattern. Its going to be ugly.
http://www.roadmap.republicans.budget.house.gov/
This isn't to cheerlead Republican strategies (after all, I think the heart of Ryan's proposal is decidedly anti-Republican, since Republicans and Democrats alike seem to have based their party orthodoxy on not cutting spending, be that in the form of tax cuts or increased entitlements, respectively), merely to offer an example of the kind of cutting that will, but necessity, have to happen.
Of course, there's always the "collapse of the US" scenario.
Optimists, therefore, will prepare for the painful years of budget-cutting by refusing to rely on entitlements in their later years.
Pessimists? Well, I suppose joining a survivalist encampment doesn't sound that bad...
Now, you can say that after 8 years of castigating Bush for deficits, he's all of a sudden ok with them under Obama. And you'd be right.
But it's also true that Bush took inherited a surplus and doubled the national debt in a "boom" economy, while Obama inherited an already-massive deficit while in the most severe economic crisis we've seen in decades.
For eight years he castigated Bush for not paying down the debt. Krugman's advice is: borrow your way out of the bad days, pay it back on the good ones.
There's plenty of policy there to disagree about. There's no reason or benefit to misrepresenting people's positions.
The deficit under the last Repub congress was $100B/year and the trend was downwards. That changed when the Dems took congress for Bush's last two years. The current deficit is $100B/month.
Note that Congress didn't pass a budget in 2008 - they held back until after Obama became president.
He still didn't inherit a surplus and double the national debt.
Bush also did a prescription drug plan that was a financial disaster. However, the Dems wanted something even more expensive so ....
In fact, that's generally true; Repubs overspent, but Dems wanted more. The Repubs weren't fiscally conservative in absolute terms, but they were significantly more so than Dems. Since the alternative to Repubs isn't perfection, but Dems, that's relevant.
As to the financial disaster, it's due to Dems pushing "affordable" housing. The Repub's contribution is that they didn't try very hard to oppose it. (When McCain suggested looking at Fannie and Freddie in 2005/6, he got his teeth kicked in.)
Tax revenues increased under Bush. And fewer paid income taxes. (The poor get a decent return on SS while the rest of us are hosed. The rich don't care because both "contributions" and payouts are capped.)
You opened this thread saying "yeah but if we figure the calendar this way i can put all of the 2008 stuff on Obama". You advertised that you don't give a crap about reasoned conclusions, you're just going to attempt to twist the facts. You said out loud, "I'm doing this". Deficits don't matter in 2003, they're the most important thing ever in 2010. Whatever.
It's your right, freedom of speech and all that. But I'm not going to take you seriously.
It was mostly repubs for and mostly dems against on final passage. The vote to substitute the Dem proposal, which was more expensive, it was mostly Dems for and mostly Repubs against.
Yes, the Repubs passed a monstrosity. The Dems tried to pass something worse. It's unclear how these two facts make the Dems look better than the Repubs.
> How many of those same people, institutions and editorial pages are huge deficit hawks now? What happened to "deficits don't matter"?
One might argue that there's a difference between $100B/year and $100B/month. You're claiming that it's wrong to be concerned about $100B/month yet be okay with $100B/year....
More to the point, I'm not claiming that the Repubs were/are correct. I'm saying that they're bad, but better than Dems on this.
> yeah but if we figure the calendar this way i can put all of the 2008 stuff on Obama
It's a fact that the 2008 budget wasn't passed until after Obama took office. Congressional Dems said that Obama had significant input into that budget. Do you really want to argue that they were lying?
> you're just going to attempt to twist the facts.
Some actual examples would be nice.
> You said out loud, "I'm doing this".
Oh really? Where?
Like Monopoly's "Get Out Of Jail Free" it's a card you can only play once, though.
One person mentioned some numbers however, such as 2500 Yuan per hour. I am sure that figure one day was 25 Youan, but inflate and inflate, some zeros have been added.
I guess however having prices go up also, such that say bread is 1000 Yuan you do not get real inflation if you print slowly. But, I doubt anyone want to take a chance.
I would think also that it is not so easy and it is not really a get out of jail card. Money have value as long as they have power. They can print as much as they like, as it seems to be the case with Japan, but if prices go up accordingly, they would need to print more, and prices go up and print more and Germany 1930s or Zimbabwe 2007.
Paying off debt is a good policy, whether be it a country or individual. Saving is a good policy too.
I think if the dollar became a fonny currency people would switch quickly. It would for example not make any sense for a British man to trade in dollars if he gets say one pence for every dollar. Especially if by the next day it is worth 0.5 pence.
Plus there is the small matter that we already know how to get oil from Middle Eastern countries... We buy it.
But when we blow it and are deep in debt with declining ability to borrow cheaply, we could also lose this special status. and $4 trillion will come back and make goods more expensive for everybody stuck with no far-less-desirable paper.
Is it a cultural thing? Is it just pure altruism? Do they want to support their government that much that they're willing to ignore better investments for their savings?
http://en.wikipedia.org/wiki/Equity_home_bias_puzzle
I don't know why US savers don't invest in Australian dollar accounts either. They pay about 6 times as much as US term deposits.
http://www.infochoice.com.au/banking/savings-account/term-de...
I work for a fund manager not a bank. Would an ETF for high yield, first world, countries fixed income products work?
here's a popular blog from a citizen currently living in Argentina http://ferfal.blogspot.com/
Most of the national debt is written off, public services are cut or re-financed through printing money which has the nasty side effect of inflation and then eventually hyperinflation.
Here's some examples: http://en.wikipedia.org/wiki/Hyperinflation#Examples_of_hype...
[1] http://www.telegraph.co.uk/finance/businesslatestnews/318519...
Hope it helps.
It has taken two decades for Russia once again to at least try and act like a super power in the world stage.
As for normal people, well I would suppose they got a bit richer because well they were starving in 1989 when communism collapsed so really things could only get better. But if it happened to a rich country like America then it would probably turn to a second rate country like poor India or Mexico. There would be no cleaner to clean your street to start with...
But some people had luck - I know family, that bought one family home for credit in 1986, credit was for 30 years. Then, after a few years father went abroad to work a few months for $ (on the farm), then paid the whole credit back for these $.
Of course country had to default eventually, but many people paid their credits that otherways would be paying to this day. So that's one way of profiting from hyperinflation.
All in all it wasn't so bad, people just were using $ or Deutche Marks (it was illegal to own them then, but it was legal to change your $ to polish currency, only change rate was were unjust). So many Polish businessmans started as people illegaly trading $ to zlotys. Crazy times that were, millions laying in the streets.
I lived in Tokyo last year in a cheap apartment with alot of young Japanese people, and I was very surprised by their lack of work ethic/prospect from my first time in Japan. They would bounce from temp work (typing) to temp work (waiter) to temp work (salesperson walking everywhere in tokyo door to door), quitting every 2-3 weeks. They would sometimes sleep in and not show up for interview, and wouldn't even call to reschedule. The way they would quit a job they didn't like is by....not showing up anymore. Keep in mind these are people that went to pretty decent universities in Japan, and speak ok english. And when they do get a full time job offer, they would have to wait almost half a year to a year to start working (which I would think depress their morale).
Why would you be surprised by their "lack of work ethics"? They got fucked hard, so it's understandable that they aren't going to care much for "the man" anymore: they were told their contract was to work like mad in their studies, get to a good university and end up landing a good job in a multinational where they'd work their whole life slowly climbing up the hierarchy and pretty much guaranteed they'd be there for life.
Instead, at the end of their studies they found an utterly slaughtered job market and a crappy economy in which Japan has been stuck for 20 years (especially those who got out during the Lost Decade of the 90s).
They don't have "good work ethics" because they've managed not to be stockholm syndrome victims, and because reality showed them strong work ethics didn't matter, and promises were there to be broken.
To add, young Japanese people also don't have the option of being an entrepreneur, because that notion is still widely shunned by society. So they toil in misery for many many years without escape.
I don't think any society would mind having companies that brought them wealth and employment.
You should see the blank stare I get, when they ask me about how to be successful in life (I'm a bit older and have my own company) and I tell them to start a business.
One could say it's a meta tradition; ok.
Maybe they can adopt what the Chinese have started doing by paying a foreign person to appear to be the CEO for publicity purposes, even though the company would actually be owned and run by Japanese people. If the Japanese were made to believe that the company is a foreign one, would they be less opposed to its existence in their country?
Once "tradition" has changed in Japan not to frown on entrepreneurs, they can stop pretending to be foreign-owned.
Boo hoo, so the economic sucks and you were lied to your whole life about how your employment situation was going to work. So? This does not excuse laziness and a crappy work ethic.
Perhaps their chronic unemployment stems from the fact that they meander through life rather than actively fighting for what they want. Japan isn't some third-world backwater, there are opportunities abound for people who are willing to work and fight for it - just like it still is in the US. The ones that sit and pout all day (like Scott, from the NYT article) are the ones who will never get out.
is it never justified for someone to fight hard, see they're not getting anywhere, and then drop their effort level down to match the situation they're in, permanently or temporarily?
FWIW I've seen that happen in France: the social safety net tends to be pretty strong, but the transition from that safety net to its absence is anything but smooth. I'd go as far as to say it's pretty abrupt.
A decade or so ago, my parents started employing a domestic worker to take care of laundry, sweeping, that kind of stuff. First one was a professional, second one was somebody who'd been "on the dole" for a long time and trying to get out of it (single mother, in her 40s, two children). Went swimmingly early on, but a pair of quarters in she realized she had gone above some kind of cut-off, and as a result she didn't qualify for some govt assistance as well as e.g. government-sponsored holidays for her children. That added up to at least twice what she actually earned.
She decided to tough it up and keep trying to climb out, but I'd have understand dropping out: when you start making efforts and all of a sudden your standard of living drops sharply, it's not exactly worth it.
Some states in the US recognize the transition from public assistance as an issue. My wife used to work for an organization that was consulted by several states. With cutbacks in federal funding and a population resistant to tax increases, states do little more than study the problem.
Oh so would I, definitely, just saying that the transition back into "productive member of society" often isn't setup/incentivized correctly, and can lead to people not being able to make the transition. And that it would often be a better idea to fix that rather than decide people who stay on aid are lazy fuckers.
Opportunities exist everywhere, and a poor economy is certainly no excuse for apathy. However, discounting the challenges the economy posed to the rising generation of Japanese is pretty unfair IMO. The 90's really really sucked.
What I mean is, Japan is still an industrial power, and far from a decrepit backwater - while opportunities were not what they once were, they are still there for those who seek it.
If anything, a shitty economy and hard times should create people who fight harder and take less bullshit, not the other way around as the poster had indicated.
You are encouraging people to live in denial of reality. If the economy is bad, then a wise investor will take into account the fact that the economy is bad. And, when it comes to our careers, we are all investors. In the face of a bad economy, many investors will go to cash. Cash is a rational option in the face of a bad economy. When we are speaking of individuals, the equivalent of "going to cash" is to focus less on one's career and more on the other parts of one's life.
You're looking at people who grew without arms and are asking how comes they can't tie their shoelace.
And it seems other people understood it.
I suppose we may be talking about a different age group, but I'm in a theatre circle at a Japanese university, and out of the 7 people who joined this year, 3 aim to start a business (one in Economy, one in Business, me in Engineering). Most people who ask me about it seem to have a reaction of "it sounds so awesome, but I could never do this". I think the way of thinking is slowly changing.
I agree with the rest of your post. I've been especially disappointed by the lack of innovation at research labs in what is supposed to be a top university.
Regardless, in any first world country there are plenty of people who are willing to sit on their butts and not try to do better for themselves unless they're pushed through life with social programs and social "contracts" as were mentioned. I don't like it either, but, sadly, I'm not convinced we can get everyone to be eager, enthusiastic, ethical go-getters either.
If it won't make any difference, then… why?
5 bucks says you never had to spend more than few months looking for a job after graduation.
I know for me, I tend to get tangled up telling the boss that we are going in the wrong direction, rather than working hard on the doomed project. I find working hard in the wrong direction to be very frustrating... and when I'm not hired to set direction, I imagine the boss finds it very frustrating that I'm arguing about direction rather than implementing.
Even when I am working on the thing the boss wants me to work on, I'm not the best employee. I'll never be a 'company man' - an Entrepreneur is never going to believe that the company is a family, or that the company will take care of him.
Perhaps most important of all, even if the Entrepreneur is doing his best to do right by his employer, his dayjob isn't going to be, as pg says, 'the top idea in his mind' - even if I wanted to, I don't think I could make other people's problems the thing I think about in the shower.
So yeah... personally, I think Entrepreneurs usually make pretty shitty employees.
For someone in their 20s who can't or doesn't want to depend on their parents for a place to live, then the prospect of making 2500yen/hr as a temp, instead of a paltry 200,000/month (and being overworked) as a salaried employee, is appealing.
You'd find very, very different professional norms if you either hung around my salaryman buddies or hung around young ladies of my acquaintance who are on the "pink-collar" track.