Aces High Bulletin Board
General Forums => The O' Club => Topic started by: threedays on May 15, 2003, 05:12:13 PM
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Can somebody skilled explain relationship, dependencies between Japan and US economy ?
How it become and what does that mean today ?
Thanks
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Toungue in cheek:
"The Japanese copy western ideas, having none original of their own, make it smaller, produce it cheaper, and sell it back to us for huge profits due to massive government underwriting of their entire industiral base."
In all seriousness, IMHO the Japanese beat the American's into submission by creating a work ethic in their country which for many years put us to shame. The most remarkable fact IMHO is how the Japanese entry into the automobile market starting in the late 60s eventually forced American companies to upgrade the quality of their production. It was not really until the Japanese starting producing high quality automobiles for very low consumer costs that American companies really cared about quality and customer service, etc.
"Made in Japan" went from an snidely used excuse for shoddy goods to a hallmark of excellence in many instances. They also have wrought havoc with western unionization philosphies. Plus there is also some paternalistic relationship evolving form WWII occupation and ongoing defense agreements.
It's very interesting but far far too complex to really get into in a BBS thread. But I am sure that many will offer their thoughts anyway!
:D
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School project?
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It is a common misconception to attribute japanese economic success and failure to some kind of special japanese character. It is mostly done by court economists when predictions of their theories do not work out.
Whiel national character doe have some effect on ecomomic activity, in case of japanese it's so miniscule that their behavior almost exactly followed the predictions of neo-classical /austrian schools of ecomnomics.
The japanese "miracle" of the 70s was due to Japain staying on the bottom part of the Laffer curve by indexing their tax brackets while the western world allowed money expansion (and resulting inflation) combined with steeply progressive tax structure to sharply increase real tax rates and drive the economy up the laffer curve and into stagflation - untill Reagan and Thatcher dumped Keynes and adopted Hayek/Mises on Jude Wannisky's advice.
Once Japanese stopped doing that and started taxing productive parts of the economy in order to support unproductive ones, rather than allow natural market rallocation of the resources, their miracle ended and stagnation began. And the $100 billion a year cost that japanese tax and spend their population in order to help their export industries = support dollar and depress yen = subcidise american consumpton does not help them either.
threedays ,
For a good explanation of japan recession check Explaining Japan's Recession (http://www.mises.org/fullarticle.asp?control=1099&month=51&title=Explaining+Japan%27s+Recession&id=56), jump to Austrian School though the views of Keynesians and Monetarists are also enlightening, if false.
miko
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Originally posted by Puke
School project?
Gotta be.
CHEATER!!!
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miko2d,
good points but the crux of the Japanese economy and its current troubles is its banking system, and the banks refusal to write off bad loans based on real estate values. Not much else to say.