Here is an interesting article about economic stimulus efforts in Japan. Much of the spending has been for “bridges to nowhere” — projects which increase the national debt, but have relatively little economic value after the construction is complete.
My favorite (well…actually least favorite…) examples of wasteful construction in Japan are tetrapods, the eye sores that line every beach in Japan. Supposedly they prevent erosion, but I’m not sure if that’s true or not.
Japan has many chronically underfunded needs and problems. For example, their is not enough affordable day care for working mothers. This is one of serveral reasons why Japan has such a low birth rate, and as a result, women are choosing to have fewer children and having them later in life. If Japan spent more money on day care, it would provide direct economic stimulus by employing more people in the child-care industry while providing further benefits from the increased productivity of women in the workforce and helping to ease Japan’s demographic problems.
Unfortunately, Japan’s unelected, unaccountable, and very powerful bureaucrats, along with their political benefactors decided to throw money at a $250 million dollar airports that now has two flights a day and bridges that no one uses.
sneaky
The book “Dogs and Demons”, which I haven’t actually read, I confess, goes into detail about the extent to which the government and the lower ranks of the LDP are controlled by the cement industry, which is in turn heavily infested with yakuza. Obviously the cement industry has a heavy interest in seeing projects like, oh, I don’t know, large-scale avant-garde erosion guards made of cement.
Japan is a perfect example of how demographic shifts can render a system of government ineffectual. The economic growth of the post-war years was unprecedented, and the move to the cities that it precipitated changed the electorate as well. The proportional representation system was for many years completely out of wack. Geographic areas of similar size had similar representation, regardless of population. Essentially, the urban population was disenfranchised for many years, and even after the reforms of 1982, things are still highly biased towards rural districts.
Aso wants to ride the Obama-mania that’s sweeping Japan right now by pushing for a stimulus, but he’d honestly do better to imitate George Bush and cut taxes.
Dunno taxes seem relatively low here…Though when you add it all up (city, prefecture, and national taxes, plus auto tax, property tax (which I don’t pay, but I’m sure is accounted for in the price of my rent, and sales tax), maybe it’s comparable or more than America. Not sure.
That is interesting about the bias toward rural districts and the reforms you mentioned. I didn’t know about that.
I think the Japanese political system doesn’t have much accountability. How many of the bureaucrats that helped screw the pension system are still running the show? Even many people don’t like wasteful construction spending, it doesn’t seem like the elections could do much to change the gov’t action.
And the other stupid thing is how they choose a prime minister. Prime ministers resign willy-nilly and the same party gets to pick the new guy. Not much has changed from Abe –> Fukuda –> Aso because they are all LDP, each getting elected by the same group of lawmakers in the lower house. It seems like it would make a lot more since when I prime minister resigns to dissolve the parliament and have new elections. Isn’t that how it works in most place? The last election was in 2005 (another is coming this year). That year was a landslide LDP victory, and they have picked 4 prime ministers (including Koizumi).
Though I guess America was stuck with Bush for a long time well after 90% of the country lost all confidence in him. So maybe Japan being stuck with the LDP landslide is similar.
Surely, LDP is going to lose seats in the next election. But I wonder if it will be possible for another party to win? Maybe it would be if DPJ and another party join forces?
Taxes seem low to you because you don’t make much money and you don’t own a business.
Lack of accountability is nothing new in Japan. In the late 60’s there was a stock market crash and mini recession that wiped out the savings of many families. Overall savings was still so high and technology was advancing at such a high rate that productivity and GDP continued to climb until the crash in the early 90’s. The crash of the 60’s, though, was caused by a large amount of bad loans that had been taken on by the Japanese banks. When they began to fail in rapid succession, the government stepped in and rescued many of the investors, but not before the market lost something like half of it’s value. That value was actually still quite low compared to American or European securities, but it was enough to shake things up. What’s interesting is that there was no house-cleaning of the heads of the banks who had approved the bad loans. A few underlings were scape-goated, but the system that had caused the crash remained. The ministry of finance failed to learn the lessons that might have helped prevent the catastrophic downturn that knocked Japan away from the track that had it becoming the largest economy in the world sometime around 2000. Now Japan grows at a snail’s pace, if at all, and it’s demographic time bomb is likely to go off well before China’s does.
Whether you’re in Japan or America, I think the words of Doris Kearns Goodwin (as quoted by Jon Stewart) resonance when she says “It’s the end of the republic, bitches! Better learn you some motherfuckin’ Chinese!”
The above comment is me. sandoz is my AVClub handle.
Its funny, speaking about demographic time bombs, that so many people in America bitch about immigration, especially MEXICANS(!). But without them, America would be up the demographic shit creek without a paddle, just like Japan and much of Europe, and would have yet another potential drag on the economy.