Due to a high possibility of passionate spin-out, I’m asking this in GD .
I recall some years ago being told over and over how “Japan, Inc.” would economically take over the world, especially the USA. So what happened?
Their real-estate bubble collapsed.
The simplistic answer is that there was no reason for them to take over the world economically. They accelerated rapidly relative to the US for a variety of reasons (ironically, one of them, IIRC, was that they could only spend a small percentage of GDP on defense, because of the constitution established after WWII). Nevertheless, it is virtually impossible for a country with less than half the population of another to dominate the larger country, particularly when both are relatively liberal economies.
As to the specific reasons why Japan has stagnated for about 12 years, I’m sure the other SDMBers can do better than me.
Sam hit one major reason. But if you think US often corporations operate w/o good oversight, the Japanese zaibatsu put us to shame.
Well, if the Japanese zaibatsu “put us to shame”, why does it look like this same zaibatsu isn’t saving Japan right now?
I think what ** John Mace ** ment was, that you may think US corpoations are full of bureacracy and ineffiencies, they are a lot more flexible and easier to deal with than the mess that is * zaibatsu *.
Domo aregato, Dread-san!
Yes, that is what I meant.
Very briefly:
(a) Asset bubble collapsed (Securities and real estate assets, across the board)
(b) Tightly bound corporate - financial sector interholdings have proven a barrier to unwinding the bubble, even a decade on, with Zombie corporations kept alive by zombie banks.
© Public policy response has been (i) ineffectual on (b) and (ii) has allowed a deflationary spiral to go on which has helped acacerbate (b).
So, poor corporate governance combined with poor response by government has proven a recipe for stagnation.
But wasn’t that tightly bound corporate-financial interholding practice once considered a vital part of the success of Japan, Inc.? Likewise, from what I’ve read, the Japanese government’s policies are pretty much what they were during the 1970s and 1980s. Said policies were also considered to be part and parcel of the success of Japan, Inc., were they not?
So what about all those experts who were telling the USA that the road to success was to become more like Japan?
That was the reason during that time. Those tightly-boung corporate and government practices helped Japan become a viable industry leader. With such things in place, one could be assured that you could generally trust the products coming out of Japan. The same could not be said of any other Asian nation until the late 80’s at best.
Now however, those systems are a burden. Other Asian nations have risen in the quality of their products and have demonstrated far greater flexibility and a much faster learning cruve than Japan.
In fairness, they’ve let Japan do all the trailblazing, but its only a matter of time before Japan starts to seriously fall behind.
Reality set in. Japan’s success was through things our nation could not and should not duplicate. It also was a precarious success, as we’ve seen. Now Japan is going through what the US went through in the 70’s & 80’s: an erosion of mcuh fo teh industrial base. However, the US did switch to a service based economy. Japan seems inflexible enough to do so.
I read somewhere that one reason is because of its aging population.
An aging population obviously does not work; yet as life expectancy rises the need to save becomes more and more pressing. As a result many withhold spending. The result is of course deflation.
On the other hand US still does not face this problem. The white population may be aging but immigrants and growing Hispanic and Asian populations make up for that sufficiently.
This is true in some ways; the US corporate culture altered a bit, with more emphasis on quality and so forth. But in many other ways, we’ve developed in a completely different manner than Japan. It was not until very recently, and it is still partly true, that Japanese companis have a very… rigid order. Many American ones underwent a powerful ground-up reinvention to make them less rigid and more flexible.
The “white” (really, old immigrant) population is still growing, too, just not very fast.
Anyway, Japan has not yet had to face the aging population problem, the problem of over-saving has been going on since WWII and is not related directly to aging populations, and a big savings ate isn’t the main problem associated with an aging nation.