politics

Adviser hails 'Abenomics,' saying dollar can rise

24 Comments
By Yuri Kageyama

The requested article has expired, and is no longer available. Any related articles, and user comments are shown below.

© Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Sort by
  • Oldest
  • Latest
  • Popular

24 Comments
Login to comment

Abenomics is based on a false premise: Japan's population is shrinking: so it doesn't need to increase its aggregate growth, like other countries. Japan's GDP per capita regularly outpaces those in other countries.

This anti-deflation campaign, being pushed by big business, is a scam to make us consumers pay more money for our food, energy and goods so that corporations can make higher profits.

2 ( +8 / -6 )

Abenomics? He is just talking a good game and nothing has actually started. People are giddy with the THOUGHT of good things to come and it's the attitude that is making things move right now, nothing to do with Abe really.

The only problem I see with abenomics is that our grandchildren and their grandchildren are going to be the one's that have to PAY for all the crap that Abe starts this year.

The Nikkei 225 has gained almost 11% since the Jan 16 election.

This has got to be the quietest election in the history of Japan. Imagine that, an election where no one voted! lol!

1 ( +5 / -4 )

This anti-deflation campaign, being pushed by big business, is a scam to make us consumers pay more money for our food, energy and goods so that corporations can make higher profits.

Wow. That is so criminal. Higher profis=higher tax revenues. Stop this non sense immediately!!!!

-2 ( +6 / -8 )

Higher profis=higher tax revenues.

The gov't recently lowered Japan's corporate tax rate. So less revenue than you think.

Amid today's globalized economy, Japanese corporations are heavily invested in China, Vietnam, Taiwan, etc. So plenty of those profits will flow there, after the shareholders get their dividends, of course. In meantime, enjoy the hike in your cost of living to help fund these flows.

1 ( +5 / -4 )

The gov't recently lowered Japan's corporate tax rate. So less revenue than you think.

Puzzling point. The reduction was done BEFORE Abe's appointment so imagine the lower tax rate without the "higher profits"

Has it occurred to you that higher cost of living is as a result of higher wages??

-4 ( +5 / -9 )

@Nigelboy

"Has it occurred to you that higher cost of living is as a result of higher wages??"

A Bloomberg article from a few days ago indicates that while Abe would like wages to increase, Japanese businesses have said they will resist pay rises. That would seem to lend support to JeffLee's position that consumers will suffer.

5 ( +6 / -1 )

A Bloomberg article from a few days ago indicates that while Abe would like wages to increase, Japanese businesses have said they will resist pay rises. That would seem to lend support to JeffLee's position that consumers will suffer.

Wages stagnant. Consumption tax up. Business tax down. Corporate welfare up from stimulus spending. Inflationary policy. Yen down. Inflation up. Buying power down.

Everything about this policy is skewed to corporations.

2 ( +4 / -2 )

Hamada is just blowing his own trumpet. Just lie it how these experts on mega salaries celebrate the return of rising prices while the little people, mums and dads on lower incomes and pensioners watch the value of their little savings erode as everything gets more expensive. Look at the price of gas over the last few weeks, won,t be long before food and other stuff starts rising. While pampered academics and big business might welcome it your average Taro might start having doubts before long about the " benefits " of LDP,s policy for him. As always LDP goes all out for big business and vested interests at the expense of the little guy.

1 ( +3 / -2 )

Correction - " just love it how these experts....."

0 ( +0 / -0 )

albaleoJan. 20, 2013 - 10:04AM JST

@Nigelboy A Bloomberg article from a few days ago indicates that while Abe would like wages to increase, Japanese businesses have said they will resist pay rises. That would seem to lend support to JeffLee's position that consumers will suffer.

You can explain the obvious to Nigelboy and he just ignores it.

Yes albaleo and Jeff Lee, you are completely right and we have the domestic economic model of 2001-2005 to prove it. Then Japan had a weakened Yen, booming company profits through China's economic expansion and public spending, all under Koizumi and the LDP. Alas we saw no trickle down of those company profits in larger bomuses and increased wages for their workers, just the wage and price deflation on domestic products and salaries that we have had since the mid-90s.

The problem with Japan's economic pluralist model is that there has to be a balance between the pressure/interest groups that represent all sectors of the economy. Unfortunately those groups who represent the interests of the workers, the trade unions and employment legislation, are toothless tigers and therefore wage stagnation and possibly wage deflation will continue, while the Japanese workers will pay more for the basics of life in higher import costs and increased taxation.

1 ( +4 / -3 )

Koichi Hamada, professor emeritus of economics at Yale University, is the brain behind the “Abenomics” of Prime Minister Shinzo Abe,

Let's wait 18 months or so to see if all this spending really turns the Japanese economy around, or is just a another temporary shot in the arm like so many other spending packages have been over the past two decades, before we start labeling this guy "the brain" behind anything.

0 ( +1 / -1 )

What's Abenomics doing so far? Well, with the yen's excessive appreciation the past couple of weeks, the price of gasoline has been skyrocketing. As of last count, the price of a liter of regular gasoline here in Japan was 150 yen. The price has gone up for six weeks in a row ... with the price at its highest level since May 2012. Why is this? It's because the price of imported gasoline has gone up ... thanks to Abe's attempts to get 2% inflation underway. And if the present trend continues, gasoline might break its old record of 158.31 yen per liter.

And what does all of this mean for those of us who are trying to make ends meet? Look for other prices to rise, too, such as in the electrical and other energy fields. This in turn will trigger price rises in other segments of society, such as food prices and general household needs.

Thank you Abe-san. You are getting your wish. Prices are going higher. Inflation is underway.

And why do the people of Japan, especially those who voted for you, still like you?

Just hope your tactics don't trigger hyperinflation. If they do, I doubt if anyone will like you anymore ...

1 ( +3 / -2 )

I have a corporation and we're very happy that the corporate rate went down to (I think) 18%, from 35% or whatever it was. We are profitable and have actually been paying lots of taxes, but our accountant said that 60% of businesses in our city are in the red, and many of the one that are profitable are only massaging their numbers so the bank won't give up on loaning money to them. The thinking behind lowering the corporate rate is, if they don't businesses will give up on Japan and go to other countries that are more competitive. Just some FYI.

-1 ( +2 / -3 )

Abe can not make the "dollar rise", he can only make the Yen sink by devaluating it with "monetary easing" (ie money printing).

Alas, Obama is doing the same, so this is simply a race to the bottom.

Money printing is not, has never been, and can never be sound economic policy. But politicians love it, because it is painless (for them) and a simply short term fix. Which they can sell to the low-information public with phrases like we now hear from Abe.

1 ( +2 / -1 )

Has it occurred to you that higher cost of living is as a result of higher wages??

I see the higher cost of living here. I've yet to see higher wages.

1 ( +2 / -1 )

The whole argument about deflation being a problem was made up. Deflation is a good thing as it gives people more buying power. Inflation always harms an economy. It is like waking up and finding you have less money in your bank account and in your pocket. The large corporations and those with political ties are the only ones who profit in Japan and with each new regulation it is the small business man that suffers and the consumers suffer with increased prices while their wages remain the same which is actually making them work at lower wages. Abe's policies are terrible for the country and will only bring more poverty to the people.

2 ( +4 / -2 )

Yeah, I never understood this "try to cause inflation" logic either. We were taught in economics class way back in high school that inflation was a negative thing in an economy but unfortunately something bound to happen if you tried to reduce the other negative things like unemployment. From the recent articles about Japan it sounds like they're trying to make it happen... I am just hoping that it's something lost in translation.

Speaking as someone not being paid in yen though, this exchange rate lately is fantastic!

-1 ( +1 / -2 )

It is like waking up and finding you have less money in your bank account and in your pocket.

Unless, you, know, you are in debt. Or if you want to export something. Or...

-1 ( +1 / -2 )

Unless, you, know, you are in debt. Or if you want to export something. Or..

In debt? Depends on where your debt is. If your debt is in Japan it stays the same, if your debt is in another country it is worse. That argument can not hold water. Exports? It may increase exports but most of the Japanese things that are exported are made in other countries, it is the Japanese corporations that gain and they do not have raise wages so the people gain nothing but higher prices and less money, again you have faulty logic. The actual facts are that the Japanese people have become so used to paying high prices that they do not realize that the rest of the world pays less for products, even products made in Japan can be bought for less in other countries. There is nothing good about inflation. That is economics 101. Every other country tries to stop inflation unless they are run by someone trying to promote a socialistic/communistic state. Either way, the people lose at the expense of government and corporations.

3 ( +4 / -1 )

WilliB you hit the nail on the head.

0 ( +1 / -1 )

A Bloomberg article from a few days ago indicates that while Abe would like wages to increase, Japanese businesses have said they will resist pay rises. That would seem to lend support to JeffLee's position that consumers will suffer.

http://www.47news.jp/CN/201301/CN2013011801001748

It states here that Keidanren will revise the original plan and most likely increase wages as a result of Abe's plan. Nice try.

-4 ( +2 / -6 )

Nigelboy - yeah and pigs will fly...even if Keidanren members approved nominal increases I,d happily make a bet that those will come nowhere near covering the price and tax increases .....the average Taro is only going to loose.. Not even gonna mention the millions of hakken workers not employed by the big export companies...screwed big time..

1 ( +1 / -0 )

Marcelito,

If you mean "Consumption tax" increases which is scheduled to be implemented in April of next year, I don't think anybody proposed that the inflation target will achieve to offset that. The purpose of consolidation of social services(medical, pension for elders) was to match those expenses with the consumption tax revenues due to changing demographics of Japanese population. Hence, we should keep this separate.

As to whether or not CPI increases faster than the wage increase, we will see since it has declined 1.3% since 2010.

-1 ( +2 / -3 )

Adviser hails 'Abenomics,' saying dollar can rise

While Germany, G20 have already raising a hell on this, US remains very quiet. You know why....

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites