'Foreigners must be humble, patient in Japan'

[Jack]

Kamone, Taro et al,

Yes, I forgot. Only Americans or English speaking people are smart and know what everyone else needs. Japanese people are infinitely less arrogant than Americans, much harder working than most of the American continent and western Europe. The only clueless people that I see around here are the Americans.

Some of you guys must feel so superior in Japan that may be why you live there. Eat some humble pie, it's good for your fucking health.

[Taro Toporific]

Kamone, Taro et al...Some of you guys must feel so superior in Japan that may be why you live there. Eat some humble pie, it's good for your fucking health.

At least once a day at work.

[American Oyaji]

Jack,
I'll pretend you didnt say something so stupid like that.

[Captain Japan]

Kamone, Taro et al,

Yes, I forgot. Only Americans or English speaking people are smart and know what everyone else needs. Japanese people are infinitely less arrogant than Americans, much harder working than most of the American continent and western Europe. The only clueless people that I see around here are the Americans.

Some of you guys must feel so superior in Japan that may be why you live there. Eat some humble pie, it's good for your fucking health.

I can't believe I'm responding to this but...

You've missed the point completely. That was: Japan refuses to discuss any of its problems (with regard to anything, but this topic was related to current economics), let alone admit they've got any at all. With that condition existing, how can anything improve? And given this mentality, I sort of have a tough time having any degree of concern for the way things are.

This isn't at all about one country being better than another. At least that ain't what I was saying.

Captain

[Jack]

I understood what you said completely and I don't agree with your point of view which remains patronizing as if you are the only one who knows what the problem is. The Japanese government very well knows what the problem is they just don't know how to fix it. That is why I said you have to look at the situation with a Japanese mindset.

Japanese companies can lay off workers like they do in America or Canada but how will a 45 year old man or a 32 year old female ever find work? The poor bastard might kill himself if he was thrown on the street. You cannot lay off people in Japan the way you do in the west.

The Bank of Japan and the minister of finance have repeatedly tried to re-introduce inflation, which is what Japan desparately needs, to no aveil. If anyone has a magical way of re-introducing inflation, the problems will disappear. The Bank of Japan keeps selling yen to push the currency lower but the yen keeps going up. Can't lower interest rates anymore because they are already so low. Can't cut taxes to create liquidity as the government is already hugely in a deficit.

The reason inflation has to be introduced is that Japan is now in a deflation spiral which is the core problem for Japanese banks. People do not buy things now thinking that it will be cheaper later. Banks do not lend money now because of the same reason. If people start thinking that prices could be higher later, they would buy products now and banks would start lending money again and the economy would grow. The trick is to get that inflation going again but no one has figured out how to do it without having the currency become worthless. America is in the same boat now as Japan was in 1991. Low interest rates, slow economy and low inflation. No one knows how to stimulate an economy like that.

So, going back to Japan bashing, you have to know what is behind the problem before you start accusing of people being arrogant or lazy. It is this quick desire to label another people names that I attribute to American arrogance because if you call them "lazy" you imply that you have the answer to the problem but that Japanese people don't or are unwilling to remedy the situation. It is arrogant of you guys to pretend to have the answer to the problem because you don't. No one does, which is why we have a problem. Try understanding why things are the way they are.

[GuyJean]

So, going back to Japan bashing, you have to know what is behind the problem before you start accusing of people being arrogant or lazy.

Thanks for the lesson in Economy 101. Now, who exactly were you calling arrogant?

And the companies can't fire workers, why? Because they'd kill themselves? Maybe it's not clueless.. Just hopeless.

I don't recall anyone mentioning their country being BETTER than Japan. Pointing out flaws in the country we reside in is considered arrogant?

There's a reason for this forum being named Fucked Gaijin. Maybe you should be posting on the Gaijin Fucking to Feel Important forum?

Like some wise, arrogant, insecure Canadian once said, "If you don't like it, get the fuck out."

GJ

[cstaylor]

The Bank of Japan and the minister of finance have repeatedly tried to re-introduce inflation, which is what Japan desparately needs, to no aveil.

No. Japan does NOT need inflation... things are already too expensive as they are now. Maybe you're looking at a different definition of inflation or have a more specific inflationary target than you mentioned in your post, but in general inflation is only as good as the wages. If costs inflate but wages do not, you've got Carter's stagflation.

If anyone has a magical way of re-introducing inflation, the problems will disappear. The Bank of Japan keeps selling yen to push the currency lower but the yen keeps going up.

Pushing the exchange rate of the yen down helps export companies like the automotive industry, who sell wares in foreign countries (which convert nicely to yen when the yen is cheap, giving the companies a larger price margin than their competition) but those companies have (for the most part) already been competitive in the global market. Nissan is a good example of a Japanese export company that was bleeding cash, but instead of asking for a handout from the taxpayer it did what it had to do: cut costs in order to survive. What Captain Japan, Kamome, Topo, and GJ are saying is that the domestic companies are coddled by the government, so they don't feel the pressure to improve performance.

Can't lower interest rates anymore because they are already so low.

No, but they could use taxpayer money to bail out the banks (like the U.S. does) instead of funneling funds into dubious public works projects.

Can't cut taxes to create liquidity as the government is already hugely in a deficit.

Cut the corporate tax to 10-20% instead of the outrageous 40% that it is now, and offset that by increasing the individual income tax (please hold your boos until the end). Seize assets tied to organized crime, institute RICO-like laws with teeth, and weed the police force of the weak (because you can't enforce those RICO laws with the current men in blue).

People do not buy things now thinking that it will be cheaper later.

More like "People do not buy things because they can't afford them on their meager salaries".

[Captain Japan]

The Japanese government very well knows what the problem is they just don't know how to fix it. That is why I said you have to look at the situation with a Japanese mindset.

What is this, a country club? Who afforded Japan the luxury of throwing economic principles out the window and allowing it look at everything with its own mindset?

Heck, my mindset often centers on the massage girls touting in front of Kanda Station at 1AM but do you find me indulging? Well...

The Bank of Japan and the minister of finance have repeatedly tried to re-introduce inflation, which is what Japan desparately needs, to no aveil. If anyone has a magical way of re-introducing inflation, the problems will disappear. The Bank of Japan keeps selling yen to push the currency lower but the yen keeps going up. Can't lower interest rates anymore because they are already so low. Can't cut taxes to create liquidity as the government is already hugely in a deficit.

Deflation is a symptom. So is this bad loan mess. Ask the new hires at my office who are making less money than the office ladies why they aren't buying crap. And why are their salaries so low? Because of the internal stupidity, corruption, and downright arrogance of upper management I mentioned a few posts ago.

American arrogance because if you call them "lazy" you imply that you have the answer to the problem but that Japanese people don't or are unwilling to remedy the situation. It is arrogant of you guys to pretend to have the answer to the problem because you don't. No one does, which is why we have a problem. Try understanding why things are the way they are.

I don't think anyone claims to have the answer. But it also ain't our job. What I do see is a lot of repitition of shit that just ain't working and nobody being held accountable for when it continues going bad.

You mention the US facing delation, and you know what? You're probably right. But I also think that someone might actually *do* something about it.

Captain

[GomiGirl]

Isn't this a discussion forum where people put forward opinions and then others choose to agree or disagree and debate the issues. It is not about who knows best... just a discussion.

But anybody who says that all things from one country is perfect or all people from a country are arrogant is wearing some serious blinders.

There is good folks and bad folks everywhere and no country/person has the monopoly on the correct way to run an economy. There are so many factors and the more we talk about it and see it from all points of view to stay informed to make choices for ourselves. Ignorance is not bliss.

[Jack]

You mention the US facing delation, and you know what? You're probably right. But I also think that someone might actually *do* something about it.

Captain

This is exactly what I call fucking US arrogance. Here you have it in print. Japan is not doing anything but the US will do something about it. Fuck off man. There is nothing you can do short of shredding your currency to nothing to create inflation. The tough talking gunslinging yankee boys who think they are a superior race will soon find out as well.

[GomiGirl]

Jack!!

The America bashing is really getting old.

As a non-American myself, I think I can say this without any appearance of sour grapes. You are only making yourself look small-minded and ignorant. Do yourself a favour and move on to other subjects.

[GuyJean]

Fuck off man. There is nothing you can do short of shredding your currency to nothing to create inflation. The tough talking gunslinging yankee boys who think they are a superior race will soon find out as well.

I think CS presented some solutions in 'Economic Theory 321':

Japan does NOT need inflation... things are already too expensive as they are now. Maybe you're looking at a different definition of inflation or have a more specific inflationary target than you mentioned in your post, but in general inflation is only as good as the wages. If costs inflate but wages do not, you've got Carter's stagflation.

Pushing the exchange rate of the yen down helps export companies like the automotive industry, who sell wares in foreign countries (which convert nicely to yen when the yen is cheap, giving the companies a larger price margin than their competition) but those companies have (for the most part) already been competitive in the global market. Nissan is a good example of a Japanese export company that was bleeding cash, but instead of asking for a handout from the taxpayer it did what it had to do: cut costs in order to survive. What Captain Japan, Kamome, Topo, and GJ are saying is that the domestic companies are coddled by the government, so they don't feel the pressure to improve performance.

They could use taxpayer money to bail out the banks (like the U.S. does) instead of funneling funds into dubious public works projects.

Cut the corporate tax to 10-20% instead of the outrageous 40% that it is now, and offset that by increasing the individual income tax (please hold your boos until the end). Seize assets tied to organized crime, institute RICO-like laws with teeth, and weed the police force of the weak (because you can't enforce those RICO laws with the current men in blue).

Do you work in a Japanese company, Jack? Because if you don't, you don't fucking know jack!...

Why should we listen to philandering Gaijin slut's theory of economics?

GJ

[Jack]

GuyJean,

Sorry to burst your bubble but I am an economist by profession. CS made several points which are well-known but in reality they are contradictory. For instance if you have inflation, then salaries go up in proportion. The fact is, banks have tons of assets (outstanding loans) on their books that are recorded at values that are substantially higher than the present market price of those assets. Normally they would need to write the values of those assets down to a realistic level, which they are doing. This creates a huge capital shortfall for banks that prevents them from making new loans. Another problem is that because interest rates are so low, people don't even bother making deposits with banks and deposits are a bank's biggest source of lending funds. There are trillions of yen in mattresses and kitchen cupboards that need to go to banks to increase liquidity and you can do this by increasing interest rates. Do that and you kill the economy even more.

Lowering corporate tax rates is an option but does not benefit anyone and 40% is a low tax rate anyhow compared with other G8 countries. Lowering corporate taxes to increase personal income taxes is unheard of for a democracy. A sure recipe for losing an elections (not erection). Corporations do not vote, individuals do and frankly I have never heard this happen anywhere else. The whole idea of stimulating the economy is to give more money to peole to spend, not to take money away from people.

I could go on an on and give you advanced economic lesson 442. One other thing you have to keep in mind, Japan is the second largest economy in the world. Changing things is not as easy as turning a light switch on.

Bailing the banks? Only if you knew how much money Japanese banks need to be bailed out. Japanese banks are huge in the world scheme of things. I believe the number is close to a trillion dollars not yen. Man, that country is so screwed up economically and financially I don't know what could fix it. Just keep going as is and hope for the best is what I can say. I am doing my damn part buying everything that is Japanese.

[Jack]

GuyJean,

Sorry to burst your bubble but I am an economist by profession. CS made several points which are well-known but in reality they are contradictory. For instance if you have inflation, then salaries go up in proportion. The fact is, banks have tons of assets (outstanding loans) on their books that are recorded at values that are substantially higher than the present market price of those assets. Normally they would need to write the values of those assets down to a realistic level, which they are doing. This creates a huge capital shortfall for banks that prevents them from making new loans. Another problem is that because interest rates are so low, people don't even bother making deposits with banks and deposits are a bank's biggest source of lending funds. There are trillions of yen in mattresses and kitchen cupboards that need to go to banks to increase liquidity and you can do this by increasing interest rates. Do that and you kill the economy even more.

Lowering corporate tax rates is an option but does not benefit anyone and 40% is a low tax rate anyhow compared with other G8 countries. Lowering corporate taxes to increase personal income taxes is unheard of for a democracy. A sure recipe for losing an elections (not erection). Corporations do not vote, individuals do and frankly I have never heard this happen anywhere else. The whole idea of stimulating the economy is to give more money to peole to spend, not to take money away from people.

I could go on an on and give you advanced economic lesson 442. One other thing you have to keep in mind, Japan is the second largest economy in the world. Changing things is not as easy as turning a light switch on.

Bailing the banks? Only if you knew how much money Japanese banks need to be bailed out. Japanese banks are huge in the world scheme of things. I believe the number is close to a trillion dollars not yen. Man, that country is so screwed up economically and financially I don't know what could fix it. Just keep going as is and hope for the best is what I can say. I am doing my damn part buying everything that is Japanese.

[GuyJean]

Corporations do not vote.

Ahh, but in Japan, they do. I believe that's what Captain was stating as part of the problem]Japan is the second largest economy in the world. Changing things is not as easy as turning a light switch on.[/quote]
So, it's been 12 years since the bubble burst. How long does Japan need? 20, 30, 50 years?

How was South Korea able to turn things around? What did Nissan do? Oh wait.. They hired a gaijin CEO.

Just keep going as is and hope for the best is what I can say.

This is advice from a professional economist? It's broke, don't fix it?

GJ

[GargoyleTS]

The tax break on corporations isn't a bad idea, just not a great one. Increasing income taxes will be unpopular for a time, and may generate more money than is lost from Corps. (don't have exact numbers, so I can't say it will or won't.)

A better idea (for banks to help themselves) would be yearly/bi-yearly/quarterly interest rates instituted from date of deposit and computed on a daily balance, as well as high-interest CD's (for those who may not know, I am talking about Certificates of Deposit, not Compact Discs) with tax-breaks attached to longest terms. Of course, I am not over there and have no idea the options currently available to japanese banking customers, but the idea I propose is sound as far as getting money back into banks is concerned. If these options already exist, then up the numbers across the board. Increase CD lengths and offer bigger payoffs, especially for rolling gains into new CD's.

Perhaps a scare campaign about people losing all their savings when their house was robbed or how they were able to afford a nice retirement house with the extra money from their CD's. Essentially, the banks getting money should spend some on new idea and advertising, cause they need to get people's money back in banks or nothing the Gov't can do is gonna keep them alive.

As for outstanding debts to the banks, call some of them in and sell the assets off to foreign interests or local companies that don't already owe you for immediate cash only, or offer loan buy-out to foreign banks (if legal) or offer settlement terms to recoup loan monies.

Basically, the tools are there for the banks to use. Some things are risky, but if the tiger's teeth are on your throat, punching his nose won't make things worse!

[Captain Japan]

This is exactly what I call fucking US arrogance. Here you have it in print. Japan is not doing anything but the US will do something about it. Fuck off man. There is nothing you can do short of shredding your currency to nothing to create inflation. The tough talking gunslinging yankee boys who think they are a superior race will soon find out as well.

Hey Jack, didn't get your Wheaties this morning or what?

Sorry to burst your bubble but I am an economist by profession. CS made several points which are well-known but in reality they are contradictory. For instance if you have inflation, then salaries go up in proportion. The fact is, banks have tons of assets (outstanding

I don't disagree with your assessment of the way things are now, in general. But see, my point is - and has been - that this didn't get this way by chance, luck, or the fact that God doesn't like Japan. All of these issues you have pointed out are due to a system grinding itself into the ground while everyone sits around and watches. In other words, they did it to themselves. You say that we shouldn't do anything and just hope for the best. Well, that is exactly what Japan is doing - and it ain't working.

You're very right. This ain't a matter a light switch flip. It's gonna take years and years. But, as I was trying to show in my hostess club anecdote and other examples of corporate waste still festering out of control, I don't see anyone who sees that any changes should be starting now - or ever. That to me is what makes this whole thing pretty hopeless.

Captain

P.S. Jack, if you want to have to have this out man-to-man, just say the word. I'll get the steel cage ready, and Taro has already volunteered to sell the tickets to "The Match to Death!"

[Jack]

Just keep going as is and hope for the best is what I can say.

This is advice from a professional economist? It's broke, don't fix it?

GJ

Well, you see I don't pretend to have the answers for everything nor do I complain. I am realistic and in this case, people, infinitely smarter than me, have tried to fix it and failed.

But I will tell you that I see the US heading in the same direction as Japan. I hope I am wrong on this one but I don't like the economic data coming out of the US. This could have a significant impact on the world economy. My advice is buy gold or real estate properties and dump all currencies because sooner or later we will have to face huge inflation as governments try to inject liquidity in the system by printing money. This may take a few years though, but I am pretty sure it will happen.

[cstaylor]

My advice is buy gold or real estate properties and dump all currencies

Okay, I understand the real estate purchase (especially if you don't already own a home), but a commodity like gold? Isn't that rather risky... gold on its own isn't very useful... you can't eat it, and no store will take it in exchange for goods or services. You're speculating that the value of the gold *now* will hold after the world's currencies take a dump... but that supposes that someone else will buy that gold. Are there any major economic players who still tie their currencies to a gold standard?

[Jack]

CS,

You can try and poke holes in anything you want but what you say must be true or else it becomes science fiction. Gold is accepted in many parts of the world as currency. Yes, in G8 countries it is not but it is quickly converted to currency by selling it. The reason for buying gold is that it is convertible in any currency of the world where you choose to sell it. So it is not impacted by the devaluation of a currency. Anyway, like one my statistics teacher said, "I am showing you how statistics works but I am assuming that you have knowledge of basic algebra, so that I will not show you how to solve a quadratic equation". Same here about the merits of buying gold.

[cstaylor]

Of course, if everyone else does the same thing, the selling price of gold drops dramatically... and you didn't answer my question about why someone would buy gold from you?

Wouldn't it be easier to have cash reserves in several different banks in different currencies?