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Japan's longest growth run in 16 years may not guarantee future prosperity

29 Comments
By Noriyuki Suzuki

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Funny how the media plays right into Abe's hands. Kind of like everyone is reading off the same sheet of music.

Prior to an election; everything is rosy, a outlook is great! Abe wins, following the election, a brief period of euphoria and more good news. The the other shoe drops, "hey folks it ain't gonna last", next consumption tax rises and EVERYONE gets pissed off! But not before a blip of "great" news based upon the economy getting a bump BEFORE the increase.

Wash and repeat.

11 ( +13 / -2 )

Of course things are not looking rosy, the only people who have benefited from Abenomics are a handle full of companies, that in turn fund the LDP. Until we see real wage growth, which we won't, there will be no true economic turn around. I've noticed that the Nikkei which hit its high last week and was being celebrated by many to show just how well the economy is doing, has made a fast retreat from those highs, and will continue to fall now that investors see they have been bilked by all the good news that was spewing before the election.

9 ( +9 / -0 )

The big corporations have taken massive trillion dollar gains and put it away with their friends. But their employees have gotten less while the corporations and government make you work more, tax you more, and raise the price of life.

8 ( +8 / -0 )

What gains? No one on the front line has seen any of that

5 ( +5 / -0 )

What gains? No one on the front line has seen any of that

As stated, it's the corporations that are raking it in, but not passing it along to their worker-bees.

Abe has "urged", "pleaded with", "begged" and damn near everything else to get them to pass the profits to the employees, but so far, outside of token increases by some, largely has been ignored.

3 ( +5 / -2 )

Abe has "urged", "pleaded with", "begged" and damn near everything else to get them to pass the profits to the employees, but so far, outside of token increases by some, largely has been ignored.

That's because it's all just a performance. Keidanren has no intention of passing on their profits to the workers and Abe knows it. Back in the Bubble the peasants got a taste of money and what happened? They started buying Chanel, drinking Johnny Walker and sending their children to school in the US. More to the point, they also threw out the LDP in 1993. There's no way the paid-slaves are getting any of that this time round. The last thing the LDP wants is people with money thinking for themselves.

9 ( +10 / -1 )

because every time Japan gets on to something good they try to capitalize on it too much and ruin the run. Record number foreigners in Japan, hey let's charge them a tax to leave! Record economic growth? Lets raise taxes!

Sometimes its good to just sit back and ride the wave

6 ( +6 / -0 )

And round and around we go ad infinitum

3 ( +3 / -0 )

Don't expect old aging people to keep running marathon. The euphoria will be short-lived.

5 ( +5 / -0 )

The Izanagi Boom was felt by everyone. The feeling of optimism was everywhere and the level of material wealth increased exponentially between the mid 60s and 70s.

There is none of that feeling nor is hardly anyone benefiting from this very different "economic boom".

6 ( +6 / -0 )

Record number foreigners in Japan, hey let's charge them a tax to leave!

Before you start a crazy rumor, it isn't limited to foreigners leaving Japan, Japanese going out of the country will be paying the "exit" tax as well.

That on top of the "immigration" tax, and "airport use" tax (I believe it is called) and those 1,000 yens start adding up!

3 ( +4 / -1 )

The only reason for the increase in consumption during the summer period was because I had to buy 2 air conditioners and a fridge.

You’re welcome

3 ( +4 / -1 )

I know it will never happen, but what if Abe just threatened to raise some of the corporate taxes as a form of pressure on companies to raise wages. That would seem to be far more effective than just wish and pleading. And, if the companies don't comply, then raise the taxes and use the money to pay for things that will help everyday citizens and not the people in far flung countries!

0 ( +1 / -1 )

Economics is psychology. People read this and become depressed and stop spending. This becomes a self-fulfilling prophecy.

-4 ( +0 / -4 )

It is a long boom but what is the total growth over this boom compared to other shorter booms?

1 ( +1 / -0 )

Japan's longest growth run in 16 years may not guarantee future prosperity

Yep, that is the one thing guaranteed here ( as long as LDP cronies get richer though thats all that ever mattered ).

In a fresh bid to inject momentum into his push for what he calls a "virtuous cycle" of strong wage growth-stimulated consumption, Prime Minister Shinzo Abe is now increasingly calling on companies to play their part.

Instead of another "call " how about finding and firing that elusive 3rd arrow that went MIA 5 years ago?

"The ideal scenario is for companies to gain confidence in growth prospects over the medium to longer-term and feel more inclined to raise pay for workers," said Kodama of Meiji Yasuda.

Pigs will fly before that happens and SHinzo knows that well.

3 ( +3 / -0 )

Tax these large companies if they are not giving up their profits

1 ( +2 / -1 )

Abe is calling for a 3 percent hike in salaries

Nice sentiment, Mr. Abe, but the labor unions should be doing that, not you. The Thatcher-Reagan revolution told us unions are dangerous and detrimental, and so many of us agreed. Well, now we're seeing the result of that folly.

Time to give more power back to unions so they once again represent those who contribute to the economy but are left on its margins -- just so super wealthy people can become super-duper wealthy.

4 ( +5 / -1 )

It will if Abe adopts "Make Japan Great, Again." There is nothing wrong about saying and acting. President Trump invited all countries to set themselves as "Priority One." However, continually giving away money such as to India in order to buy favor for a bullet train is not productive.

-1 ( +0 / -1 )

I know it will never happen, but what if Abe just threatened to raise some of the corporate taxes as a form of pressure on companies to raise wages.

Then the price of goods and services would simply rise, while wages stay the same...

1 ( +1 / -0 )

"Abenomics" has so far failed to break Japan free from deflation.

Has deflation a different meaning from what Istudied in junior High school?

Sizes or quantity of foodstuffs have reduced while prices have increased since Abe became prime minister. The price increase applies to almost everything whereas wages have remain stagnant except for a few large companies.

Why are economist always so completely out of touch with reality?

2 ( +2 / -0 )

the outlook appears not so rosy as surprisingly strong private consumption before this summer may prove to have been just a blip.

The JapanToday readership, by-and-large, knew that.

But the prevailing view is that robust wage growth continues to be the missing link that would spur consumers to become more confident about spending.

That could help, but it's not a silver bullet, and there is no shortcut way to acheive it anyway. 

Reforming the country's unsustainable social welfare spending programs, so that people were able to have far greater confidence in their future security would have larger positive effects, I believe.

Imagine if you had a personal account that contained funds that would support your retirement, pay for your health care costs, and pay for any unexpected emergency outlays. You wouldn't be dependent on the government's systems, which are based on debt and taxation of a shrinking working population.

Who wouldn't feel more confident in their personal future were such reforms enacted, and people could see and control for themselves the money that would support them in retirement, etc?

I believe people then might be happier to spend a little extra money.

Couple those welfare system reforms with an end to over-regulation of the economy, and things could really take off.

Prime Minister Shinzo Abe is now increasingly calling on companies to play their part.

Show us the 3rd arrow reforms first Abe, like you promised 5 years ago... sheez, what nerve.

-1 ( +0 / -1 )

Tax these large companies if they are not giving up their profits

No, that won't have useful results.

Large companies have made profits thanks to their global activities, not because Japan has been booming. Their operating overseas and employing foreign workers doesn't help Japanese workers.

So how about incentivizing companies to invest in Japan, instead? E.g. 3rd arrow reforms to unlock economic opportunities in Japan, chances to make profits here from Japan operations, as well.

Just think back to when Abe first announced the idea of 3rd arrow economic reforms. The stock market loved that.

So now if he actually went ahead with 3rd arrow reforms, the companies invested in new Japanese business operations as a result (boosting wages for workers and creating new goods and services for consumers), things would be great. Not only Japanese companies, but foreign companies as well. Make Japan a great place for companies of all nationality to be based again.

-1 ( +0 / -1 )

Just wondering, does/has Japan deregulated anything to help small businesses or startups?

0 ( +0 / -0 )

Just wondering, does/has Japan deregulated anything to help small businesses or startups?

Would be interesting to make up a scorecard...

Check this out for a laugh - it's Abe's "Buy my Abenomics" speech:

http://japan.kantei.go.jp/96_abe/statement/201309/25nyse_e.html

"I consider regulatory reform to be the key change that will break through obstacles in the private sector's way in every area."

Boy I loved Abe back then... but now we look back and see nothing. His "special deregulated economic zones" are famous only for the Kake Gakuen cronyism scandal.

"There may be some skeptics wondering, "Will you really be able to pull off those reforms?""

Fast-forward to 2017 and we see that the skeptics were right.

"I will assertively push through a bold tax reduction in order to stimulate investment."

What "bold" tax reduction was that? Anyone? Bueller? Anyone? Anyone?

0 ( +0 / -0 )

Let's wait until someone say when, Abenomics will be successful going to save much earlier than the protagonist (of this policy) going to grave.

0 ( +0 / -0 )

Another major problem with exports and investors is the lack of trust in Japanese companies, i.e. Kobe steel and it false accounting, various car makers, with fixed data sheets and incorrect inspection, this does nothing to help Japans image or reputation.

0 ( +1 / -1 )

BOJ type of 2% inflation was not achieved.

But strangely consumers in big cities like Tokyo & Osaka costs of living have went much higher in past few years:

Food package has got smaller & prices are higher.

Services prices like delivery, postage, insurance are higher.

Rental costs of apartments have went up much.

Property prices  have rocketed.

Education costs are higher.

Please ask Kuroda if he is a married salary man with a child what costs have not gone up in Tokyo & Osaka?

0 ( +0 / -0 )

But strangely consumers in big cities like Tokyo & Osaka costs of living have went much higher in past few years:

I guess the rest of us in the country don't count? How I do dislike it when folks assume that things only happen in Tokyo and by default Osaka.

This is happening all over Japan, thank you! But your opinion that property prices have skyrocketed are off the mark, if they had, you would be seeing the birth of another bubble!

0 ( +0 / -0 )

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