October 11th, 2008 at 4:32 am
Studying Japan’s Dark Years to See How the U.S. Might Fare
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Japan in the 1990s saw billions of dollars worth of wealth disappear. A generation of “parasite singles” grew up, living with their parents well into their 30s. The suicide rate spiked, and university graduates spent years in part-time jobs. Japanese entrepreneurs had no or limited access to capital, stymieing innovation. Yet the standard of living for the average Japanese did not dramatically change — the pain of the crisis unfolded over many years and the government refrained from dire pronouncements.
Unemployment would peak at only 5.5 percent, an enviable rate for much of the world in good times. Deflation — or price declines as gloomy consumers and skeptical businesses put off purchasing — sickened the economy. Yet leading experts now agree its impact was not as severe as originally thought.
Japan saw repeated years of low or negative growth, but the final tally was something short of a decade-long recession — with the 10 years leading up to 2000 averaging out at almost 1 percent growth. Companies like Toyota would prosper in adverse times, forced to sharpen their competitive edge. Emerging in the 2000s as the leader in hybrid cars, Toyota found itself on stronger footing than its U.S. counterparts.
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Well, our politicians are dumber than the average bear in the woods. So what is our five or ten year forecast?
On the plus side, they can’t hide the distress. Unlike the Japanese did.
On the minus side, the Japanese people are savers; we aren’t. (As a nation. Not me personally. Now that I’m in the retirement red zone, I’m trying to make up for lost time and all my relatives will have to fend for themselves. Unless one of my books goes platinum, they would be kept in the style that they’d like to become accustomed to! And Frau Reinke could make a frugal squirrel look like a spendthrift.)
On the minus side, more than half of the people work for the gooferment. That’s not a model that can sustain itself. Especially, if the gooferment raises taxes and “producers” decide to chuck it all and go on the dole.
Inflation is unavoidable. Where do they get all these billions they are printing? Certainly not from savings. “Re capital ization”, my tush. Capital only comes from savings. You know Robinson Crusoe forgoes eating a fish so he can eat while he makes a fish net. Savings. Real savings.
Unfortunately, the sheeple are going to get a real “eddykation in ecckkyynomicks”. It’s called the dismal science for a reason. It’s dismal. There are NO silver bullets in real life. You can’t have it all. And, no amount of printing press money is going to make it so.
Forecast: Runaway inflation. More gooferment spending. More pain in the country at below the Teddie Kennedy level. (Don’t you love how rich politicians — redundant repetition of terms –have the audacity to say “i feel your pain”!) Fixed income folk takes the brunt.
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