Japan Today



Japan can do without preaching on how to fix its economy

By Henry Hilton

Japan keeps getting it in the neck. Outsiders just love to instruct its state and citizenry on how it ought to behave. Apparently the world knows far better than this supposedly beleagered nation on all the superior ways to run an economy, conduct a democracy and act cooperatively overseas.

Others, it would seem, have digested the required lessons from Japan's infamous "lost decade" of zombie banks, fiscal mismanagement and minimal growth. Wiser men in North America, Europe and Asia keep on telling us that the Japanese authorities were guilty of multiple foul-ups in the 1990s and that there is absolutely no way that the clever guys abroad are going to repeat the same old mistakes.

Under their scenario, the early summer of 2009 is already seeing those "green shoots" of recovery beloved of the official hand-outs and PR guys. As evidence, they are quick to point to the fact that global stock markets are already anticipating a return to the good years, government debt is under control and a nice bit of controlled inflation will do wonders for all that red on slack balance sheets.

The hurrah-crowd reckons that by next year, the biggest problems will be comfortably behind us and the supposedly great recession of 2007-2009 will all turn out to have been no more than a great aberration.

But hold your horses folks. The latest stories from the U.S. suggest that the housing market has yet to really hit bottom and that consumer confidence may be only slowly turning around.

Given that the very best news is little more than a reduction in the rate of the current slowdown, then it sounds as if the markets are getting ahead of themselves. It's hard to count even a few "green shoots" on this more realistic score card. The land of the bankruptcies of first Chrysler and now General Motors, plus the father of all Ponzi scams in the Bernie Madoff affair, is unlikely to be lecturing others on how to run their national economies in the foreseeable future.

Of course, Japan is still in the doldrums but take a look at the extraordinarily dismal figures now being reported out of Germany and the scale of projected unemployment in both Britain and across Euroland. Tokyo certainly wins no prizes at present but maybe jaundiced observers might do well to pin the tag of the sick man of the G-8 nations on someone else.

The same hesitancy surely ought to apply also to judging domestic politics. Japan has been rightly criticized for the fact that both leaders of its two main parties are heirs to well-established political dynasties. Prime Minister Taro Aso and Yukio Hatoyama, the newly elected leader of Japan's main opposition party, have undoubtedly been helped on their way through such close identification with earlier postwar premiers.

Yet the problem of inherited seats and the unfair advantage of possessing the right "name" is far from just a Japanese issue. It is pretty common across both democratic and absolutist states in Asia and is not unknown, of course, in Europe and North America. Think North Korea and India or the Kennedys in the U.S. and the prewar Chamberlains in Britain.

Given the magnitude of the present parliamentary scandals in Britain, it is also improbable that there is going to be much criticism of how Japan conducts its parliamentary affairs in the near future. Fresh and decidedly juicy revelations morning after morning on the expenses claimed by many MPs suggests that any who thought the Brits were in a different league for honesty and fair dealings will have to think again. The sums may be smaller than in Japanese scandals but the shadiness is the same.

Reform of the Westminster model with a less powerful executive and the need for fixed parliamentary terms is the probable outcome in Britain that could perhaps have possible implications too for the Japanese Diet. The right of both the British and Japanese leaders to call a general election when things are going their way is seen by many to be an unfair advantage that may well be on its way to the junkyard.

Clearly, neither the so-called Anglo-Saxon model of small government and neo-liberalism nor the more extensive and greater regulation of the continental "old" European schemes is looking particularly successful at the moment. Deregulation didn't work and the free-for-all approach has led to the de facto nationalization of UK and U.S. banks, but the more cosseted Eurozone economies are now entering deflationary territory and the scale of manufacturing problems in Germany is far larger than elsewhere.

The resulting global mess ought to leave at least one piece of welcome news for Japan. Since no one country is coming out of the global downturn with much to its credit, Japanese officials and the wider public should now be free from further lectures by others on how to run an economy or regulate a financial system or operate an open, democratic political system.

The "Japanese way" is performing just as inadequately as that of the Anglo-Saxons and the Europeans. Since there are mistakes everywhere, let's hope the critics of Japan will take aim instead at their own politicians and bankers. Japan deserves a decent period of silence.

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let’s hope the critics of Japan will take aim instead at their own politicians and bankers. Japan deserves a decent period of silence.

Quite possible once Japan falls behind "BRIC" there will be complete graveyard silence, till then critics have every right to question Japan's role as World's second larget economy and Asia's No.1. little more patience with critics and things will work as desired by the author.

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Yet the problem of inherited seats and the unfair advantage of possessing the right “name” is far from just a Japanese issue. It is pretty common across both democratic and absolutist states in Asia and is not unknown, of course, in Europe and North America. Think North Korea and India or the Kennedys in the U.S. and the prewar Chamberlains in Britain.

The Kennedys were directly elected. Japanese politicians are not directly elected.

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Japan does not deserve a period of silence. It is through government fraud, and deceit that the economy is in the shape it is in. Japan deserves to be harshly scolded for its financial condition. Japan hasn't recovered since the late 80's when the bubble economy burst. This has been the main contributor to the global financial crises. Only recently, have the other economies in the world, have come to the point where they can no longer float the damages caused by Japan's fiscal irresponsibility.

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This writer is clearly an apologist for Japan. "Japanese officials and the wider public should now to be free from further lectures by others on how to run an economy or regulate a financial system or operate an open, democratic political system."

You are kidding right?!?

First of all I think critical advice is good for any country. Not only Japan. I wish more people had spoken out with more force about the issues in the US that caused the collapse. The country needed better leadership, better regulation and better common sense. Too bad more of our friends didn't step up and say so. And too bad we didn't listen to those who did.

That said, Japan needs a lot of advice right now. And if we are truly people who care about the future and welfare of this nation, which I do, it is incumbent upon us to raise our concerns and offer ideas.

Democratic political system. Just what about this system do you see as democratic? Single party rule for how long now? No direct elections for leadership and representatives who represent their party and not the people. A point that many Japanese will quickly admit to.

Political reform and the elimination of corruption in government is a critical task that Japan must resolve.

Economy. Protectionism, unbalanced regulation, no significant effort to promote and support small business, an aging population and poor immigration policies are all issues that threaten to make the next 30 years of Japanese economics pretty dark. I don't see how you are seeing light on this horizon.

Japan must enable more people to start small businesses and to support those people to create micro economies that can build a future for people here independent of the megalithic corporations. Instead Japan routinely initiates laws and practices that make it nearly impossible for most new entrprenuers to get started.

Likewise Japan's aging labor population must be replaced by immigrant labor who must be given the opportunity to integrate and participate in Japanese economic and political life. If they are not, then what is the motivation for smart capable people to choose Japan. Especially when their civil and political rights and opportunities are better in just about any other first tier nation.

The economic future here has very rough waters ahead.

Finally the financial system. Anchored by labor heavy, inefficient and at risk banking institutions this is also not encouraging.

You can apologize for Japan's shortcomings. Afterall all nations have them. But sticking your head in the sand over Japan's very real problems does the country a disservice. For those of us with a long term investment in the welfare of this nation, and that means most people, we must be critical of Japan's issues, open in discussing them and free to offer observations and recommendations.

Just because other nations have issues too, does not mean that collective silence and head hiding is the right move. Speak up and press for constructive change. That is what we need going forward.

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Yo, Japan managed to escape the post-bubble depression in spite of, not because of it's government's policies. The rise of China as both a new market and a production source, and the massive global boom might have helped a little.

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you had a financial breakdown, that led to a consumer breakdown. Japan is very big in both with little natural resources. = You now have problems. =2009 will be a tough year again for many.

What would help: New innovative (made in Japan) products that force people to buy and rich people buying some new (made in Japan) products. Donate your old and buy new (made in Japan). Save your money locally --> allows banks to lend more to others (locally).

The incentives for people to buy hybrids helps. =Saves fuel, and they are made in Japan. Starting a garden. Educating yourself.

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tkoind2: Excellent post! One thing though in regards to the government helping people start small businesses. I do believe that they do something on a prefectural level. It also depends on the prefecture. I have a friend in Miyazaki who is trying to get something up and running and he is getting a lot of help and free service from the local government there. It's to the extent that I haven't seen this happen anywhere else in the world and may not either. There also seems to be other programs available but I only have a vague outline of them. Badsey: One of your points to have rich people buy (made in Japan) products. I think they already do that. Those products for the most part are cars and electronics and in consideration of the size of most Japanese households how many TV sets can you possibly have? One of the engines for growth in the past few years here has been replacing tube TV's with flat panel ones. Japan does and will continue to innovate products, but when the occasional bright spark comes along that will go against the establishment and ruffle up the feathers then that nail will have to be hammered back down in its place and everyone knows it. That's why there is always going to be preaching from elsewhere. It can't answer the question of what it will do which is frustrating.

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I don't think it's particularly useful to compare the Aso and Hatoyama dynasties with a family that last produced a prime minister in the 1930s. Whatever (admittedly very big) problems Britain might have with its politicians, we don't have nearly as many hereditary politicians in the House of Commons as there are in Japan's House of Representatives, and we haven't had a one-party state since 1955.

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Interesting article, though I disagree with most if not all of it.

I wonder who Henry Hilton is....there is no information at all.

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DJJapan. It is good to hear about the small biz program your friend is involved in. I hope there will be a lot more of these.

Some things that would help.

Space: Business rental costs from day one are too high here. There should be some incentive for property owners to make entry into business space a lot cheaper and easier for new small companies.

Breaking Monopolies: Companies can help by being willing to work with new small companies Too many industries here are dominated by large companies who control the market. Densu is a good example for design, web and other projects. Most small companies I know of work for or though them. The ones who don't have a hard time getting real projects. In a city like Seattle, a small talented company can compete with large ones because companies know to give small guys a chance may be cost effective and result in unique and original work.

Benefits for people who work for small companies. Again giving some motivation to the public to support small biz would be good. People want to work where they feel secure. Perhaps the government could offer better unemployment protection or insurance for people who elect to work for small businesses. And perhaps stronger tax breaks for owners of small companies who employ older workers or other groups who have a hard time in the usual employment market.

There is a lot that could be done to promote small biz more. I hope we see more.

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Although it has been demonstrated that many British politicians are money-grasping crooks, just like their Japanese counterparts, the big difference is that the British thieves won't be re-elected. In Japan the voters re-elect known criminals, like that guy in Hokkaido (whose name I have forgotten) who was caught taking bribes, and numerous others.

If you knowingly elect thieves, and continue to do so, don't be surprised to find your country bankrupt some years later.

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good point henry...perhaps you were asleep during the 20-year (and counting) recession

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I have no idea what article the above posters were reading. The writer's point seems to be that Japan has been slammed for years by outsiders, but it turns out now that those outsiders didn't know what they were doing either. Japan was just guilty of screwing up first, and so now maybe the critics should back off and worry about their own countries. I think there is no reason why you can't agree with that and at the same time think that Japan is really messed up - which of course it is. But criticize it for what the problems are, not for how it differs from the "ideal" Western model, which is just a different style of screw-up.

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In 'anglo-saxon' countries (why is this guy fixated with race) politicians who are shown to be corrupt rather than merely incompetent are shown the door by the electorate.

As for the Japan being overly criticised (or more accurately, offered advice it thinks it doesn't need); I have a certain empathy here. Britain regularly 'gets it in the neck' from our erstwhile friends in Europe. But the response shouldn't be "shut up foreigners, we're Japanese and we know best." Well intentioned advice is good, and should be welcomed.

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I personally loved his defence of the farcical nature of inherited positions in the Japanese Diet :

...the problem of inherited seats and the unfair advantage of possessing the right “name” is far from just a Japanese issue. It is pretty common across both democratic and absolutist states in Asia and is not unknown, of course, in Europe and North America. Think North Korea and India...

North Korea can do it, so can Japan! So there! Ummm yeah right, Henry.

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Once again the WEST trying to tell Japan what it can and cannot do, or how it should behave. I moved from Australia to Japan to get away from this BS.

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you moved TO japan to get away from BS ? thats the funniest thing i've heard in 10 years

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Stirfry spot on !

Lamborghini, did you actually move to Japan in an effort to get away from people telling you what you can and can't do ? Boy talking about getting it totally wrong LOL !

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Henry: Australia was in a diabolical financial position in 1990/91. I came to Tokyo in October 1990 and met with a number of business and financial leaders to get an understanding of the prospect of them investing in Australia at the time, they seemed to be overflowing with wealth. They gave me valid reasons why not, and I accepted them and returned to a financially collapsing Australia.

Eight months later our Government told me the economy was flat and no one in Treasury, Finance, our Central Bank, or their own advisor's new what to do. I surprised and panicked them by disclosing that was just part of the problem, that two of our four major banks where about to collapse. One of the four wouldn't because it was Federal Government owned, but the third might within a year. All our State Bank's had already fallen over and the streets of Australia's main business centre, Melbourne were like a ghost town.

Partly from the information the Japanese businessmen had given me and partly from my own experience and knowledge I was able to provide a solution. They adopted it the next day on 1 August 1991.

The outcome: All our major banks survived and now are four of only ten AA rated banks on earth. We have had 18 great years of growth and even in 2009, we are still growing, albeit modestly. None of our banks are at risk. Melbourne is booming and can easily be demonstrated to be the most advanced society on earth. Australia in 2009 is the most prosperous country on the planet. It has until recently, had no Federal Public debt and is running up a relatively small debt for financial stimulus reasons, just for caution. It will not go as high as targeted - 15% of GDP.

Japan should have invested heavily in Australia when it had the chance in the eighties and even later but failed to do so. Virtually all the resources it needs are in abundance in Australia. The Yen has been heavily over valued for 25 years. Japan should have used its overvalued currency to pick up foreign assets cheaply. But Japan didn't.

Japan's over valued Yen destroyed your industry. Japan committed the sin of "Commercialism" when the Japanese banks sneakily lent money to its big trading corporations for 25 years to export cars etcetera at huge losses, just to keep up face and volume. Your banking system survives but is hopelessly insolvent. Your manufacturers uncompetitive. Your workforce is aging, tired and introverted. You have few natural resources. Your Federal Government (public debt) is 190% of your US$4.5 trillion GDP and will soon be 220%. twice anyone else, and they are broke at that level, e.g., the US. You undermined US manufacturing, as did the Chinese, thus killing the goose that laid the golden egg. The Americans no longer have the money to buy your goods and services and the same applies to China. Like Japan the foolish US has run up massive Federal Government debt to 90% of its US$14 trillion GDP and will soon be 100%.

Australia only survived 1991 because one person understood what was wrong and had the balls to terrify the Government into sacking its then Prime-minister, and introducing a replacement, strong and intelligent enough to follow through with the changes needed. All these changes were said to be the direct opposite to the advice provided by the Australian Treasury, Central Bank and so on at the time. But they did it and it worked.

How ironic is it that Australia's economy prospered after 1991 and Japan's, the source of some of the solution, went into in decline and was followed by Europe and the US.

Just like there phenomena in electrical magnetic forces, weather and so on, so there is with money and you need to understand it. Japan needs a pied piper like Australia had in 1991, as does the US.

I am not busy!

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The basic argument presented in this article is that because others are doing bad, it's ok for Japan to do bad.

That's a crappy argument, and is the type of argument that got us into this mess in the first place. The banks in America gave sub-prime loans because all the other banks were giving sub-prime loans.

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After the burst of the bubble economy of Japan in 1990's, the U.S. government criticized this country for its lax way of bad debt disposal and window dressing. But what Anglo-Americans are doing now is more than just what Japan used to do.They made new accounting rules to let financial statements look better. They walked off the job of assessing non-performing loans any rigidly; window-dressing seems to have become their state economic policy. And yet should Japan ask again for their preaching?

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I like how Henry Hilton brought up only the Kennedy's in America. Teddy is the only one left, and he doesn't have much time left anyhow. Funny how he forgot the Bush's (two presidents and a governor of Florida). Methinks he is not only an apologist, but an annoying right-wing one at that.

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japan will never listen to opinions from outside the system. no-one outside the system has any power

no-one inside the system will ever risk losing their position by challenging the status quo, nor would they have anything to gain

ergo nothing ever changes


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Constructive criticism is a bad bad concept here.The country is ultimately too immature to even understand the concept.

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It's been twenty years since the end of the Cold War, then the Bubble burst in Japan. I have been involved w/ some behind the scenes activities - w/out going into details, it has been an extraordinary period, and Japan has made some good moves during the period. It'd been amazing.....

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Constructive criticism is a bad bad concept here.The country is ultimately too immature to even understand the concept.

japan is too insecure about itself, its indentity, its place on the world stage and its history

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The global economy is faced with "layered compression", and possibly soon to be followed by "modular infrastructural conversion", of which the most institutionalized of us, may have the most difficulty adjusting to such a change. For any of those that may intuitively know what I am talking about, I would recommend your intrinsic theological abilities, and perhaps we can rendezvous or reconvene somewhere in that area.

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Every gaijin I know and quite a few JT readers love to lecture Japan about everything from nudity at onsen to the economy. It would really be more pleasant if everybody would just shut up for a day.

As for constructive criticism, there are so many self proclaimed experts running around that one has to wonder how mankind survived all these years without them....

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I don't even know where to start on the inaccuracies, the bad comparisons and the complete lack of clarity when it comes to facing the truth of the economic situation in Japan, but in any case all those before me have pretty much hit the nails on the heads.

It is not about Japan-bashing - as someone so rightly pointed out most of us here have a vested interest in seeing a prosperous Japan and if only for financial reasons we care about what happens here - and the frustration is evident in many of the posts on JT.

The fact is - Japan NEEDS preaching on how to fix it's economy - because after nearly 19 years of bleak financial stats it is obviously not in a position to tackle the problem alone, however much it would like to think so. Yes, there are problems in all economies and all politics across the world. But I think Mr Hilton will find that people are equally vociferously going after those nations too.

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Totally agree ca1ic0cat, as long as there're people, there will be "preaching". It's a fact that ALL countries have their own arm-chair critics and forum posters. It's not new or threatening, but sometimes mildly irritating...however, like a mosquito bite, if you intentionally pick at it, while momentarily satisfying to quell the irritation, it'll only get worse until there's a permanent scar. So I encourage "preaching" (aka construcive criticism) because it's interesting to hear people's opinions, educated or not, and their reactions when you counter-argue. This article's "Preaching" about not "preaching" about Japan.

To be honest this article's chock full of out-of-context examples, and the comparison of Japan to North Korea, India, prewar Britain, etc.?? I chuckled and this article lost about 90% of its credibility from that point onward.

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This article is about making excuses for a national polity that seems to be incapable of wresting itself from the status quo. Economic history obviously isn't this guy's strong point. Perhaps he should actually try reading some of this unfair, biased, imperialist, western patronising stuff that is apparently rife throughout the world.

Might I suggest he and other like him start with Paul Krugman?

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Who is doing the "lecturing"? Who? Come on, Henry, give us some NAMES. Give us some titles, specific quotes, etc. Otherwise your "commentary" is really a chauvanistic rant.

Another note:

no one country is coming out of the global downturn with much to its credit

Wrong again. Canada has been praised by analysts for its past and current policies.

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Japan ,China ,India and USA as global top 4,they are the 4 leaders for global economy. Whatever effects Japan and the other top 3 dictates global economy. People need to do a lot of preaching,to help understand what is going on with top4 economies.

The rest of world's economic prosperity is dependant on japan and other top3,why should anyone be silent and not preach the top 4.

The rest of the world works for the top 4 which includes japan, for keeping the global economy alive and moving.

Top 4 needs to be most alive and moving,for rest of world ,future progress economically.

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things are going there way


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JeffLee I'm with you. This is apologist rubbish. It seems as though rather having something intelligent to say, we get the arguement that no one has any place to raise good points.

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Canada is doing fine, this is a badly written article. Had the PM Stephen Harper not decided to cut the national tax rate 2 points just before this crisis as a vote getter during a recent election, we'd be sitting even prettier.

but don't feel too happy for Canada. Since we're next door to the USA, the joke is when they sneeze we get a cold. So what will our largest trading partner and also the world's largets debtor nation give us? Sitting next to a blackhole doesn't really matter what we do.

Example: The GM bailout was a mistake and will only continue the business as usual thinking rather than forcing lawyers to wake up. We could have put those plants here in Canada to better use making windmills or electric cars, but alas no.

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also henry, small point here: the kennedy's were actually elected...by real voters...neither is even remotely the case in japan..but hey, don't let the facts ruin a good story eh ?

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Paul Klugman kept calling Japan all sorts of names and insisted on inflation targeting to fix its economy, criticizing the Bank of Japan's tight-money policy all these years. But recently he began to apologize to Japan, saying that wiser men in the west criticized Japan during its lost decades for being slow to take necessary measures and evading the fundamental solution, but that once placed in a similar situation, they are doing the same as Japan did. He even denies the effectiveness of inflation targeting. It seems, therefore, that for the time being Japan cannot but do without preachers.

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The lost decade speaks the loudest. No Japanese leader have solved the economy. There's no telling where Japan will end up this time round.

Paul Krugman is but one economist of hundreds who offers differing solutions. Even if he is wrong, the Japanese still hasn't figured out how to solve their economy. I never recalled anything that comes close to an apology to Japan so perhaps you can point out the article?

It's keep coming back to the fact that Japan is still broken and have no idea how to fix it. No amount of telling foreigners to 'go away' is going to help.

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Perhaps Australia is trailing Canada, is trailing Japan, is trailing the UK, is trailing the US in Real Estate, Securities, Banking, Airlines, Manufacturing, Tourism, Commodities, Resources, Environment, Consumption, Unemployment (Any others?).

What good is anything if unemployment keeps rising. It is sad and perhaps irritating to some that there are bums and people on UI, but the reality is that they used to sit beside you, perhaps you contributed to them losing their job, and ironically you could be next.

In the developing world, the average annual salary does not even compare to one month's spending of a freeter.

So to get back to the article, and its message to us foreigners, lets focus on fixing our own problems, perhaps at the individual level, because, apparently we are all in this together.

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jhk. I don't understand your first point. Australia is still in positive growth, albeit modest. It's housing market remains strong and rising. Its resources are back in demand and prices rising. It may run a modest budget deficit but has effectively no public debt - all the other countries are drowning in it. Our four major banks are strong and four of only ten in the world with a AA rating. Lets get the facts right!

Secondly, know one is knocking on Japans door pushing their economic remedies. Some good souls who understand the importance of a strong Japan and share concern with its people, extend an offer of a helping hand. Japan can accept them or ignore/reject them. In Australia, we have other things to do, like working hard and making it more prosperous than it is. At the top of the ladder. We were down but not quite out in 1991 too.

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Obama Lectures Aso:

Obama: Hello, Taro, how are you?

Aso: Fine, Obama-san, thank you for calling.

Aso: There is a city in Japan called Obama, and the people there dance...

Obama: Listen Taro, this call is important, the world economy is in trouble.

Aso: Huh...the economy is in trouble??

Obama: Hell yes it is...have you been drinking again?

Aso: Well, only at the hotel...it is safe and inexpensive, you know.

Obama: Listen, Taro...we need to talk about "imbalances" as the cause of the world-wide recession. You see, Japan had a trade surplus with the US for 27 straight years, leading to an excessive imbalance of treasury bills owned by Japan which kept US interest rates artificially low...and that started the sub-prime fiasco, leading to the fiscal mess we are in.

Aso: Ah soo desu ka. When will the American economy be fixed so Japan can export again??

Obama: Taro, let me try to explain it another way. My Grandmother once told me a story about a golden goose that laid golden eggs...

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There is not easy way to fix any country's economy. The country that fixes first will be the winner and new world champion.

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I do recall many Japanese saying this is a US only problem about a year ago, and Canadians likewise six months ago, and I hear similar from you about Australia. I think unemployment in Australia, although lower than most, has gone from about 3% to 6% over the last year. And I maintain that unemployment is the best indicator because it is real people.

Analagous to blood, the solution to the problem seems to lie first in stopping the bleeding. For example, there seem to be many homeless working hard at collecting cans and bottles if this is not working hard enough for you.

There is a saying in Japan, the nail that sticks up gets hammered down. I've never made sense of this quote until recently, but anyone who touts prosperity, working hard, and being at the top of the ladder to me, is the problem and the solution.

For example, a good percentage of readers are members of TAC, Chambers of Commerce, and other clubs. They are also very familiar with performance indicators and KPIs. Perhaps you, or anyone who prides themselves in sitting on these boards, can stick unemployment at the top of the dashboard, or the percentage of their wealth usefully spent on eradicating poverty, and not just tax deductions. This command center of business decisions, access to information, flow of money, allocation of resources, policymaking, and jobs, frankly, is the problem and the solution.

To get back to the heart of this article and its message to foreigners in Japan, particularly ones that make more than 50k per year or hold management positions, don't worry about what we should be doing, worry about what you should be doing, particluarly in terms of this income gap problem. Don't worry, we will be knocking on you door to follow up on this.

Lets nail these facts down also.

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ihk. Australia's unemployment has risen from 4.7% to circa 5.5%. No one is collecting bottles because we have unemployment benefits. Our economy is turning back up again because our Government acted correctly.

It is not hard to fix an economy. There are some basics that once you stray from them, things start going wrong. Get them right and Japan's 60 million industrious workforce will do the rest. We don';t want anyone having to scavenge to survive in the world's second biggest economy.

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Hard to say how many hereditary politicians there are in the UK's House of Commons, but not so hard to spot them in the House of Lords, or indeed Mr Brown's new cabinet, or the Mandy Fan Club as it is now known.

I agree with the gist of this article, it's about time those of us who chose to live and work in Japan started supporting our hosts. Japan isn't perfect, but it isn't bad, and in some ways may be ahead of the western economic model. The 90s in Japan weren't too bad if you were prepared to be flexible and work for a living.

It isn't so long since the foreign share holder activists where ranting about how Japanese companies should be run according to western rules. The Japanese reply was that if things got tough the foreign money would leave. The world economy went belly up, and most of the foreigners got scared and ran, as predicted.

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Brunobear, well lets see where Australias unemployment will be next month, if there are any hardworking homeless collecting bottles, and figure out this income gap thing, of which I would think is as basic as we can get.

So as you sit "at the top of the ladder", what kind of things can you do today, given your leadership position, UI benefits, and prosperous nation for the remaining countries, which are bleeding employees, other than to tout how you guys are ok, but busy worrying about yourselves, on a Japanese newsite, in an article that is saying we don't need any preaching on how to fix its economy.

Unemployment is going up in all countries, including Australia, there is a widening income gap, and those at the "top of the ladder", including foreigners and members at the Tokyo American Club, American Chamber of Commerce, Australian Chamber of Commerce, and any other organization that is "members only" and "high fees", as I will say once again, are the problem and the solution.

You "decision makers" and ones who control employees, land, assets, cashflow, make us pay rent, interest, fees, and buy your products, are the ones who are making the decisions to fire more employees, while the "bottom of the ladder", temp workers, homeless, unemployed, freeters, and the 20,000 children who die every day, are praying to a God, who is probably preparing a blowtorch for all of the things that you have done or not done, and especially, as you selfishly quote about yourself "we have other things to do, like working hard and making it more prosperous than it is".

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The odd thing about this article is that it assumes that Japan is unique in being told how to run its own business. Everyone and his brother thinks its their place to run America, decide who its president is, what its social and tax policies it should be, how it should handle military issues, and it's foreign policy. Japan is not alone in being "advised" by a long shot. At least Japan mainly gets scrutinized for economic issues because they affect other countries. Everyone wants to run America.

Personally, I think all developed countries will see depressed economic growth and their citizens will see a reduction in lifestyle as a result of globalization and there's little that can be done about it besides getting citizens to accept the future or to put protectionist policies in place. Neither is a good option or a solution, but you can't consistently send jobs out to lower paid workers abroad and undermine the ability of your country's people to consume without having a bad effect on your own economy through time. Japan did well for quite some time, but mainly because it was at one point a developing economy. Now that it's developed, it's got nowhere to go but down, and there's no easy solution.

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jhk: The official Australian unemployment figures have just come out and they are 5.7%.

My strategies have assisted Australia to the success it achieved over the past 17 years and find its way through this current world financial crisis with minimum impact on Australians and their standard of living. As I write to our Federal Treasurer today, I am conveying that it seems we are through it without going into negative growth and the countries 11.5 millions workers can concentrate on their aspirations for the future. Our budgeted use of public debt of up to $300 billion will not now occur, though we will use some of it, perhaps $100 billion at worst.

I was not bragging about Australia's situation at all. I was stating facts that we have been able to manage money better than other countries because of an intrinsic understanding of how it really works. Most countries sadly live in financial fantasyland which impacts on the the people we both are concerned about, those lower down the pecking order.

I don't get paid for the advice I give the Australian Government and never have. No one knows who I am except a few. I don't seek honors, remuneration or public acknowledgment> If you know something others don't and you can assist in the public good, you should pass it on.

As I said in my first blog, I learned several things in a vital trip to Tokyo in October 1990, that assisted Australia in 1991 develop a strategy that steered us away from an economic valley of death to be the world's most prosperous country.

I am not asking Japan to pay me, I was just putting out I would help if asked. No one even knows my name jhk just my blog name.

You obviously don't know the Australian psychology. Australians will help anyone that is down.

Those CEO's who have no downside risk, that is they don't put their wealth on the line, but take salaries and bonuses of millions of dollars to screw there workforce for short term profit gains, make me sick too. They usually ride on someone elses good work, like mine as the Australian Bank CEO's did for the past 18 years.

I am a very modest living and humble person.

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@Brunobear and I thought Australia's strength lay in its natural resources .......

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Well then we will see in a few months time how well Australia fares, of which we could attribute your efforts and intentions, and I will continue to impart into the psyche of our readers in this forum that the aspirations of prosperity amongst the already wealthy is the sole cause of unemployment, poverty, lower consumption, less economic growth, a further widening of the income gap, and the beginnings of the "economic valley of death" that they are inadvertently creating for themselves.

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blue monday: Australia's wealth lays in its multi dimesional market based and unsubsidised economy and it cerebral and industrious workforce. Over 55% of Australia's population are in the workforce which is high compared to other advanced economies. Yes we are well endowed with massive mineral and energy wealth. Where economies like ours go wrong is when the Central Bank beauracrats let credit growth run rampant and then start playing Russian roulette with interest rates finding any bizarre excuse to start pulling the levers. The price of money affects wealth creation and destruction. It encourages or destroys the incentive to invest in wealth creating assets. Their is a natural rate for interest as there is for return on diversified investments over the long term. jhk: You won't remember my JT comment next week let alone in a few months time. It is getting the monetary settings right that leads to wealth creation and improves the welfare of the people we both share concern about, and that is the vast majority. The hardest thing with wealth is hanging on to it.

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Japan can do without preaching on how to fix its economy

Stop the "gaiatsu"! The Japanese don't need any help.

I mean, Henry Hilton has a long track record of being right, doesn't he?

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The global economy is faced with "layered compression", and possibly soon to be followed by "modular infrastructural conversion", of which the most institutionalized of us, may have the most difficulty adjusting to such a change. For any of those that may intuitively know what I am talking about, I would recommend your intrinsic theological abilities, and perhaps we can rendezvous or reconvene somewhere in that area.

Nice, I see what you did there! I've taken a one year break from working and spent the whole time studying to be more capable once the intermediary shift has ended and the new zeitgeist emerges.

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