October 10, 2007
Elaine Meinel Supkis
A major fiction for the biggest central banks is that they can prevent recessions or make them 'soft landings' via monetarist manipulations of interest rates. So here we go again, another downturn in the West that is triggering interest rate cuts which are now boosting speculative spending and stock markets. This supposedly will fix what really ails world economic dynamics but in reality, it is making it worse for the present system is set in 'self-destruct' mode. The IMF warns about a slow down which is triggering more interest rate cuts. Also, I visit Japan to examine yet another facet of Fortress Japan and how they keep out those pesky foreigners. And inflation is ravaging Japan which is leading to wage cutting as an off-set scheme.
The global economy may face a marked slowdown next year as a result of the turmoil in financial markets, the International Monetary Fund has warned.The IMF said the global credit squeeze would test the ability of the economy to continue expanding at recent rates. While future economic stability could not be taken for granted, there was plenty of evidence that the global economy remained durable, it added.
A sharp slowdown in the US economy is expected to restrain growth next year.
The US is busy pretending there will be no recession here. The Federal Reserve really does talk about our economy as if it is a car. Alas, it is a Toyota but we never talk about this anymore. The Fed even talks about the controls they use as 'gas pedal' and 'brakes'. The gas pedal is interest rates. Over the course of my life, I have watched them put the pedal to the metal. Usually, this is during wars. A severely neglected topic when people discuss economics is the nature of inflation and wars: wars cause inflation at home.
The way governments deal with this inflation, at least here in the US, has been to soak up any excess government financing flowing into people's pockets by selling US war bonds. They put a lot of energy into selling these bonds and this is a very serious facet of war spending. If war bonds don't soak up enough money, taxes are raised. The propaganda pours out telling people, it is patriotic to buy war bonds or they get taxed at a higher rate. Naturally, savings are better than taxes (please, someone must tell the GOP this simple fact!) if interest rates are high enough to quell the desire to spend the flush money from war spending!
This is how we fought WWI and WWII. During the Civil War, the older methods were used and there was inflation. So after WWI and WWII, we didn't have inflation, we had a short depression as war spending fell and then a huge boom. The 1920's boom and the 1950's boom. Houses were built, people bought cars, appliances were invented and snapped up and our economy expanded, factories were built and all was well.
The disaster at the end of the 1920's was more due to the collapse of the European empires, all of them going into bankruptcy suddenly when Germany refused to pay reparations. In America, nearly universally, people think the Great Depression was caused by the 1920's boom. It was made worse by reckless lending but just like today, this wasn't the cause, it was a symptom of problems far off in other lands. The Vietnam war was the first time our government decided to not sell war bonds to pay for a war but to boast about a big stock market/housing boom as the government, after President Kennedy was disposed of, ceased diplomacy and made the Cold War white hot again. This made the military/industrial complex extremely happy and the American people were overjoyed with this new inflation and even as coins were openly debased, people cheerfully hoarded coins and continued as if this inflation was a wealth-making machine rather than a total disaster.
For the real inflation was hidden. First, it was taken out on coins then it was driven downwards by our government urging Japan and Germany to export to the US and there was lots of propaganda about how these two former enemies were the bulwark for freedom in the Cold War. Since 1964, the US has tried to pay for war via inflation. Every time there is a war, the price of oil soars, the economy teeters on the edge of bad recessions and the Fed then stomps on the monetary gas pedal and inflation shoots up as everything roars forwards!
Here is a very good possible timeline of what happened in September when Bernanke's arm was twisted off. Lew Rockwell's news, Kevin Duffy writing:
Let's establish a time line, keeping in mind Rubin and Paulson are ex-Goldman Sachs CEOs in direct communication with the chairman of the Fed...
*snip*
It is no secret Goldman Sachs has plenty of friends in high places. It is no secret the company, as well as the rest of Wall Street, was on the ropes in August. In mid-August, politically-savvy Hank Greenberg wrote a big check and a week later he was 12% in the black. By the end of August, Goldman reported its second best trading results ever. How much of their good fortune was a result of skill we’ll leave to the reader’s imagination.
Since 1964, thanks to exactly this sort of pressure on the Fed to manipulate interest rates in an inflationary way, the US has changed its international status for world exporter to world importer. The US has changed status from creditor nation to debtor nation. The American people went from being the people with the most savings to the people with the least savings. The US went from being the main buyers of world businesses to running a fire sale of our own banks and corporations.
This week, the government is sighing with relief because Bernanke dropped interest rates which means our wild spending in Iraq doesn't have to be paid for via raising taxes and all the GOP candidates except for, of course, Ron Paul, are happily talking about tax cuts.
So here it is: the US is selling plenty of war bonds...to our rivals and potential enemies! The American people are not buying war bonds. They are taking the money these bonds represent and spending it like crazy with the encouragement and propaganda pushing of our own government. And the Federal Reserve is increasing inflation while pretending they are fighting inflation even though their actions are guaranteed to create vast seas of red ink inflation! And the profits from our wars are flowing to other nations that are exploiting our inflationary spending.
The Dow Jones industrial average and Standard & Poor's 500 index established record highs Tuesday after investors interpreted minutes from the Federal Reserve's latest meeting as a sign the central bank will continue cutting interest rates to stimulate the economy.The minutes from the Federal Open Market Committee's Sept. 18 meeting, when Fed governors voted unanimously to cut rates a half percentage point, also showed that officials were concerned that the weakness in the dollar could lead to higher inflation. But the Fed also said the economic outlook was uncertain because of the summer's credit crisis, and that there were still risks to growth that justified lower rates.
Growth due to war spending inflation is now the ideal rather than something to avoid at all costs. This is a significant change in monetary philosophy and it is why we have been steadily ravaged by inflation for much of my own life, for example. The pathetic part of all this is, wars ALWAYS cause industry, etc., to grow! This is why, even as a country is LOSING a war, their industries will still grow and the flow of money continues unabated even as a country is carpet-bombed like Japan and Germany or say, like Russia, even as it is invaded and looted, the intact parts saw fabulous industrial growth. Churning out planes, bombs and guns, of course.
This credit crisis is war related: we have no credit. We are spending wildly on wars while neither paying for this via taxes or via war bonds which are held at home. It is a cheat, selling war bonds to our enemies. They hold them outside of our domestic markets but they use them for dire purposes. In Arab countries, so they can control the use of our military itself and inflate the price of oil which they then sell us which means we need more war bonds to sell them to pay for all this oil which we consume in the Middle East as well as at home. And China and Japan buy and hold our war bonds so they can have leverage which allows them to dominate our domestic industrial systems and thus, take over our economy.
A war leader who doesn't pay attention to who is bankrolling a war ends up dead. The Crusades, for example, didn't want to raise taxes to pay for their wars with the Muslims so they went to the Venetians and asked them for loans to pay for the wars. And they got their loans but had to pay them back and what Venice wanted was two things: the right to trade with the enemy, Islam, and the right to redirect the crusade towards looting trade rivals, the Byzantines. This caused the crusaders to loot Constantinople which weakened it so badly, it fell to the Muslims and the entire crusades were utterly and totally worthless.
From Bloomberg: Iraq War Is Cheap Versus Peace With Kim Jong Il--- William Pesek
The summit was mostly useful because it offered the tantalizing possibility that a thaw in relations will lead to a reunification of the two Koreas.That's a pipe dream to many. Indeed, the U.S. may get its troops out of Iraq before the demilitarized zone is dismantled, as the Berlin Wall was in 1989. Imagine, though, just for a moment, how the process might play out -- in other words, what it might cost and who is going to pay for it.
While estimates are all over the place, they tend to range between $300 billion and $670 billion. At the higher end, rejoining the Koreas would cost more than the U.S. shelled out for the Vietnam War and more than it has paid for its invasion of Iraq. The U.S. had spent $291 billion on the war in Iraq through July of last year, a Congressional Budget Office report said.
``My central estimate is that it would take about $600 billion over 10 years to raise North Korean per-capita income to 60 percent of the South's, a target which is conventionally thought to choke off the incentives for mass migration,'' says Marcus Noland of Washington's Peterson Institute for International Economics and co-author of the 2007 book ``Famine in North Korea: Markets, Aid and Reform.''
Utter madness. The US has spent half a trillion dollars DESTROYING Iraq, not building it up at all. And the costs are rising, not falling. And things are worse and worse there, not better. And the violence continues. It rises and falls but it is constant. And the hatred of our occupation grows, not shrinks. And the desire to kill us rises, it doesn't fall. This loot has bought us exactly nothing but death and a loss of face and bankruptcy. It is causing inflation at home and is losing us friends across the planet.
Germany is rebuilding. It is growing stronger, not weaker. It now dominates all of Europe, a significant rise in power. The US has lost power because of this war just like we lost power after losing Vietnam. Not only is this money totally wasted, it is driving our own government into inflation and bankruptcy at the same time.
The opening of the mammoth new U.S. Embassy in Baghdad has been delayed indefinitely while its Kuwaiti contractor fixes a punch list of problems, the State Department said on Tuesday.The sprawling complex, whose cost is edging toward $750 million, was set to open last month but U.S. lawmakers say shoddy work by the contractor and poor oversight by the State Department have delayed it.
State Department spokesman Sean McCormack rejected claims of inadequate oversight and said there was no indication how long it would be before the new embassy opened."I can't tell you when the embassy is going to open," said McCormack. "We don't have an answer."
The world's biggest and most expensive embassy is right smack dab in the middle of this amazing defeat. The US even has a much bigger helicopter pad than in Saigon and they will need it when we are forced to flee this Fortress Amerika in the future and this is inevitable. We can't afford this embassy. Running it will bankrupt us. And we can't build it, anyway! This should require huge Congressional hearings but of course, it will lead to a slap on the fingers just like the outrageous abuse of our own soldiers at Walter Reed Hospital or the denial of education credits to National Guard troops who were deliberately brought back one day before they qualified for education credits...these are signs of impending bankruptcy.
If we had a healthy economy that could throw away half a trillion dollars because we have $1.4 trillion in our FOREX reserves, then all this is partially forgivable. But we are a hollow giant and this bleeding red ink is directly responsible for two forms of inflation ravaging our home base: the wild government spending that isn't being paid for in taxes and the hike in energy prices. Oil always shoots up in price during wars.
And all this always triggers recessions when the war ends or when the war fails. Right after winning Gulf War I, the US went into a recession and housing values fell, etc. This present war drags on so the collapse won't happen...yet. But the more we put it off, the nastier it will be. Since our government this month continues to overspend, since the Fed dropped rates despite government overspending, this means we will have a false boom like we did in 1968-1970. I remember what happened next: the stock market crash that followed this inflationary boom was very nasty and VERY long in duration. We called it 'stagflation' and many people were made homeless and lots of elderly suffered due to loss of buying power, remember the stories of grannies eating dog food?
I was young and strong and survived that period but it was quite hellish since I also started a family.
The European Union and China locked horns over exchange rates on Tuesday after authorities in Beijing deflected a European call for a rise in the level of the renminbi.Only hours after eurozone finance ministers said the renminbi’s exchange rate should more accurately reflect the country’s vast and growing current account surplus, China’s central bank set a noticeably low official reference rate for the currency against the dollar.
This little tidbit clearly shows how the Dragon operates: it already sent out pretty clear warnings last July not to monkey with China's currency controls while protecting Japan or else. This has been nearly totally ignored. I notice Japan isn't calling for China to do anything, the secret banking deal they made still stands. China is expecting Japan to shush down the Europeans and Americans at the meeting of the Seven Dwarves. But this retaliatory gesture is not a surprise to me.
Of course, the US and Europe both love to pretend there is no manipulation of currencies and thus, the New World Order's FX markets are pristine pure and not controlled by the Bank of Japan and the Bank of China and probably, Russia and the OPEC rulers! Oh, no. The entities with over $3 trillion in lose change aren't going to manipulate the value of all the world's currencies! And the Seven Dwarves have within their merry band one of these top currency holders, Japan. And they think Japan is a buddy marching along with them rather than stabbing them all in the back.
Now time to visit Fortess Japan: From the Japan Times:
It's no secret that Japan's advertising market is one of the world's largest. Indeed, the world's biggest advertising firm is a Japanese one.In 2006, the top 10 Japanese advertising agencies billed clients ¥6 trillion (37 billion euro), according to Dentsu, Japan's leading agency. Although the overall figure has been stagnant for the past few years, it still constitutes a more-than-significant sum.
What remains a secret for many, though, is exactly how their market operates.
HAHAHA. All internal Japanese markets are top, top secret! No one is allowed to figure them out! They are our friends! They are cooperating with the other six dwarves by not telling them how to penetrate the huge fortress the Japanese dwarf built while the other dwarves were marching around China chanting, 'Hi ho, hi ho, its off to blame China we go!' This story, which is not in American media, illustrates how Japan operates. Everything is kept in the dark from even other Japanese. It is more like how the Yakusa run things. Or perhaps the Byzantine Palace methodology. Outsiders can't enter. This includes upstart Japanese wishing to change the way business is done.
The Chinese operate the same way. Indeed, a reader in Asia sent me an amusing email which I will quote in full here, it is a translation:
The biggest corruption scandal in China
Recently there are many news/postings/blogs on China internet about a huge corruption case. It involves one of the most senior and high profile person in state-owned enterprises in China – Chairman of Guangzhou Automobile Industry Group Co., ZHANG Fangyou. The scale of this corruption, already a public knowledge to those in the automobile industry in China, easily beats all other corruption cases ever exposed in China.Below is a translation of what is on the web.
(Beginning of Translation)
Who is the most corrupted official in China automotive industry? Guangzhou Automobile Industry Group Chairman ZHANG Fangyou.For many years, ZHANG Fangyou and his immediate family members illegally benefited from ZHANG’s position as the Chairman of Guangzhou Automobile. ZHANAG, his wife LI Cuie, and their immediate family members took cash bribe for awarding Honda and Toyota dealerships (From Guangzhou-HONDA JV and a Guangzhou-Toyota JV), gave dealerships to immediate family members, and took shares in dealerships awarded without investing money. It is said that, out of the 600 or so Toyota and Honda dealerships in China, a very large portion is owned by the ZHANG family, either directly or indirectly via shadow shareholders.
Below are a partial list of dealerships (the full list of very long) owned by ZHANG, LI, and their immediate family members:
Guangdong(province), Foshan(city). Kunbao BMW. Owner LI Cuie (ZHANG’s wife).
Shanxi(province), Taiyuan(city). Huanghe Honda. Owner ZHANG Yanzheng (ZHANG’s nephew).
Shanxi(Province), Taiyuan(city). Huanghe Toyota. Owner ZHANG Yanzheng (ZHANG’s nephew).
Guangdong(province), Dongguan(city). Hexin Toyota. Owner Wang Ganquan (ZHANG’s step son), LI Guohong (ZHANG’s brother in law).
Guangdong(province), Dongguan(city). Henxin Honda. Owner Wang Ganquan (ZHANG’s step son), LI Cuie (ZHANG’s wife).
Hunan(province), Zhuzhou(city). Hongjun Honda. Owner LI Guohong (ZHANG’s brother in law).
Zhejiang(province), Ruian(city). Hongxu Honda. Owner ZHANG Yanzheng (ZHANG’s nephew).
Zhejiang(province), Ruian(city). Hongfeng Toyota. Owner ZHANG Yanzheng (ZHANG’s nephew).
Jiangshu(province), Changzhou(city). Guanglian Toyota. Owner JIANG Jingzhou (ZHANG’s brother in law).
Shenzhen(city). Anxun Honda. Owner LI Guohong (ZHANG’s brother in law).
Hunan(province), Changsha(city). Kunbao Toyota. Owner LI Cuie (ZHANG’s wife), LI Guohong (ZHANG’s brother in law).
Guangdong(province), Guangzhou(city). Yijun Honda. Owner ZHANG Bingxing (ZHANG’s brother).Due to the exposure on internet of his blatant corruption cases, ZHANG and his family have recently working hard in getting themselves out of potential troubles, including
1. Changing ownership structures. They have been trying to hide their shares by transferring to “shadow and friendly shareholders” – people on surface not relating to the ZHANG family.
2. Bribing officials in Guangzhou City, Guangdong Province, and Central Government in Disciplinary and Law Reinforcing agencies.3. Organizing news exposure on internet and other media channel to “praise” ZHANG as a clean and straight government official. (Ironically, ZHANG is again using government funds and resources to help him lying – trying to clean his own reputation).
4. Transferring asset to foreign destinations. ZHANG’s daughter has immigrated to Canada long time ago and ZHANG’s family visiting trips are frequently “money transferring” trips.
5. Launch investigations on suspected enemies – people may or will expose ZHANG’s corruptions. The tactic is to threaten and to shut up these enemies (again, ironically he is using government resources to help him achieve that).
All these are already public knowledge to those who work in the automobile industry in China, to those who work for Guangzhou Automobile Group, and to Guangzhou Automobile’s JV partners Honda and Toyota. The behavior of ZHANG’s and his family’s has been the laughing stock to many Chinese people. The central and provincial government should launch an investigation on ZHANG and his family as soon as possible because the long term health and reputation of China automobile industry is at stake.
(End of Translation)雅虎邮箱,终生伙伴!
I wish to thank my readers for sending me information and links. I really appreciate this. I learn so much from everyone, it is quite wonderful, the pool of knowledge online grows as we share information with each other!
This story illustrates how Japan is corrupting China and vice versa, this spreading vice is a problem and it grows when there is secrecy. If you read the entire Japan Times quoted above, one can sense how industrialists all co-operate with the mega-corporate advertising agencies who interface with the closed media system and all this is designed to be UNDER THE TABLE and to be subtle and hard to challenge. The power relationships reinforce each other and extend deep within the political system that services all of these entities and keeps them occult and hard to deal with if one is an outsider. And anyone negotiating with the Japanese hits this brick wall that is invisible but very solid.
This is why the heads of all the G 7 dwarf nations should be very terrified the Japanese dwarf who happens to hold the world's #2 bag of money, is sneaking off to secretly make deals with the Dragon. The epidemic of corruption in Japan's politics oozes into our own politics the most ugly being the open bribery of Ronald Reagan when he was negotiating with Japan over trade issues (hint: no President has ever changed the trade deficit with Japan, they only widen it in Japan's favor!).
China has an interesting way of dealing with communist officials who get too greedy: they kill them. The dynastic dreams of the ruling elites keep getting clipped by the leadership because of the system set up by the communists themselves. I keep pointing this out: even if a family becomes powerful, they rouse the Dragon who happens to be the COMMUNIST PARTY ITSELF. And it has a long and bloody history of purges that reach to the very top and the people running that system play this deadly palace game of politics that makes the Byzantines green with envy.
I have a tiny insight into these politics. My parents got involved long ago and thus, so did I. Deep within this system are a huge cadre of patriots who know their history and are determined to not let China end up like Russia, pre-Putin or like Japan and Germany, pre-WWII, or like the US today. Indeed, far from being a model to them, we are the ANTI-model. They will move heaven and earth to NOT be like us. The business of Honda and Toyota making private deals with Zhang will end with Zhang hanging and then donating his organs to charity.
Any Chinese are allowed to amass fortunes or build businesses but they must support the Communist party system or they will be decapitated. The inner battles are amusing: Hu and Wen have enough power now to take down their fellow party members who concetrated on becoming rich while Hu and Wen concentrated on collecting party power via political deals and of course, moving China along its present course to world domination. The diplomatic victories which I detailed on my Diplomacy web page, this was them building up very precious capital which they took home and used in their internal party power struggles and thus, they are gaining the upper hand with fellow party members who wanted to treat China like Yeltsin treated Russia.
Again, Japan is a close model the Chinese study in order to avoid the mistakes Japan is making. Japan's closed system is strangling Japan itself. The need to crush the consumer is killing Japan, quite literally. Their population is set to crash very soon. China can't wait.
From the above Japan Times article:
Another aspect where agencies in Japan enjoy tremendous advantages comes with the widespread acceptance that they manage competitive accounts at the same time. Hence you can see a large agency simultaneously handling the accounts of various car manufacturers without anyone thinking it's strange. The issue of conflicts of interests is not raised.As a result, certain agencies have been able to grow massively large, creating a monopolistic market where advertisers have no choice but to follow.
Some agencies have become so predominant that publishers have been known to violate contracts with advertisers rather than risk falling out of favor with their agency's partners — or perhaps, as some might say — "patrons."
Agencies in Japan are vertical players, which further strengthens their control. The auditing and monitoring firms — whether public or private — are either directly controlled or indirectly influenced by the agencies. Since media buying practices can only operate where there is an understanding of how media is consumed, it is quite fruitful for the agencies to have this option at their disposal.
Hell, all of Japan's systems are both vertical and horizontal: they are a wall that keeps out outsiders! And the idea of 'patrons' is pure Mafia/Yakuza talk. The Godfathers in Japan keep a low profile and a heavy hand. And the dangers of monopolies and interlocking cartels are obvious yet this is what the present world system is creating. Yesterday, two big beer brewing consortiums announced they are forming a new consortium that is twice as big. Oil companies have done this in the last 15 years such as the monster, Exxon/Mobile. Note that these cause inflation here in America.
In Japan, they cause deflation. Why is this? We can bet, the guys at the top get whatever they want. But they want super-low interest rates and this is the lifeline of their businesses: essentially free money. So they will crush competition in order to get to DEPRESS WAGES since the poor, pathetic workers in Japan can't go off to a better boss if all the bosses are one and the same, can they? So they have to accept bad wages, no raises and live in tiny box apartments and have such poor currency value, they can't travel abroad anymore unless they manage to eke out enough to play currency games at night and get some profit.
Prices Of Used Paper, Steel Scrap Soar On Strong China, S Korea DemandTOKYO (Nikkei)--Prices of recycled materials are rising at home and abroad as Chinese and South Korean companies actively snap up waste paper and steel scrap to meet growing demand for paper and steel products. The trend is placing upward pressure on domestic prices of such items as cardboard, household paper made from recycled materials, and steel products.
**************************************************
ON THE RADAR: Smaller Fall In Machinery Orders May Buoy StocksTOKYO (Nikkei)--The August machinery order data to be released Thursday will likely show a decline, but a smaller than expected fall could actually drive up prices of machine and financial issues.
They struggle to keep their economy going but due to obvious inflation, the only tool left for the Bank of Japan is to conspire with the industrialists and corporation presidents to depress wages even more. This is rapidly becoming a very vicious cycle and is what this 'depresssion' is all about. The so-called reforms of the very corrupt and Yakuza-like Liberal Democratic Party leaders is all bunk. Obviously, the real reforms haven't happened.
And this news just came in and is causing the inflation-addicted stock market speculators to sell.... From Bloomberg:
Federal Reserve policy makers signaled they are in no hurry to reduce interest rates again because they aren't convinced the U.S. economic expansion is coming to an end.The Federal Open Market Committee avoided foreshadowing its next move after lowering the benchmark rate on Sept. 18, minutes of the meeting, published yesterday, showed. Officials didn't want investors to conclude extra cuts were guaranteed, the records said.
Well, Goldman Sachs will get the inside dope! And like a good drug dealer, will peddle it all over the planet. Time for our War on Financial Drugs!
Culture of Life News Main Page
China is clearly doing great. Have you checked out their top ten new buildings;
http://www.trendhunter.com/trends/chinas-ten-amazing-buildings
Posted by: sin | October 10, 2007 at 12:25 PM
If this story is proven to be true, this guy is a marked man and so are his families. They are dead people walking. They will be dealt with the most severe, efficient, and "cheap" punishment.
Posted by: Dragon | October 10, 2007 at 11:26 PM
Groundhog day for EU and China - 19th Century replay...
Posted by: OC | October 11, 2007 at 03:13 AM
I like your chart Elaine it pretty much tells it all. The US is going out further on the branch and gain weight while China is sitting by the stem with a saw.
The chinese method of dealing with greed is probably a tad bit more effective than ours, the only sword that is likely to get close to our neck for serving greed during a lifetime is the queens, while knighting the criminal....
Posted by: Neuro Artist | October 11, 2007 at 04:12 AM
I'm still not convinced that Japan's wages are falling. Maybe base pay, but some of the companies also pay based on profits. For example Honda workers had a bumper year at least outside of Japan, and I'm assuming in Japan. Same with Nissan, last time I looked at Nissan compensation figures in Japan 1/3rd of the pay was in profit sharing type of agreement. Then we also have to include the benefits. For example if your whole family belongs to a health club paid for by the company. What about education benefits for the kids, and spousal benefits.. company car, possibly company housing help for some.
Then if you are in deflation even staying the same in pay is really a pay increase. For example some real estate has fallen like 70% over the past 20 years there. If wages merely stayed level the worker has significantly more buying power. Actually all of the things that are inflation in America don't neccessarily apply in Japan or other nations.
For example the big 5 inflation in America.. Housing, medical costs, education costs, lawyer fees and one more cartel type service I can't remember off the top of my head.
For a Japanese, medical care is excellent government provided. Lawyers are just not a big part of their culture, only 5% as many per capita as America. Housing we know has been falling for 20 years, and that is 40% of many Americans budgets. Education I get the understanding is mainly paid for by the corporations and government. So the Japanese don't see that either.
So whats left? Food and drinks, transportation, internet, computers, television, clothing, electronics, furniture. At best together those are staying level, and honestly looking at the quality improvement falling.
Posted by: aa2 | October 11, 2007 at 09:30 AM
Here is an example, from what I believe is Japan's strongest industry right now.
http://search.japantimes.co.jp/cgi-bin/nb20070315a1.html
"As for annual bonuses, Toyota will pay an average of 2.58 million yen, Nissan will give out about 2.13 million yen and Honda said its workers will get an average of 2.46 million yen."
Honda's 2.46 million yen average annual bonus is about $21,500 US.
Posted by: aa2 | October 11, 2007 at 09:46 AM
Hrm. Perhaps that's why Elaine keep using the term fake depression?
Posted by: Not Student | October 11, 2007 at 02:02 PM
I wonder how much of that average is getting to the base of the pyramid? Further how many auto-workers are there in Japan?
Posted by: Neuro Artist | October 11, 2007 at 02:18 PM
Not Student.. Ya I like Elaine's writing, especially highlighting the importance of Japan and east asian producers.. I just disagree on that one point that Japan's domestic worker are hurting.
Neuro - Good question... one thing I noticed in studying the auto industry, which I have for some time read about the industry from a corporate stand point... is that for all the big Japanese and American players the baseline workers represent a falling percentage of the workforce. So if 2 in 3 of the workers are not baseline, the compensation of the baseline is only one factor when thinking about the contribution of those wages to national wealth. Yet most media on the job effects of the industry focus exclusively on the factory floor worker.
Having said that Japan's pay scale is much more flat then American, so I would bet the bonus is fairly equally spread.
Which is another point I agree with the articles on this site, national wealth is really based on having a vast middle class with lots of buying power.
Posted by: aa2 | October 12, 2007 at 10:53 AM
Japan is OUTSOURCING auto production from Japan. To keep labor silent, they pass out bonuses to a SHRINKING JAPANESE BASE. And they use the most robots in Japan.
Wages of the average worker in Japan have been falling. All the statistics make this very clear. Housing: RENTS go up while housing drops in value. This is true in any nation that ceases building houses for workers to buy. No new homes=higher rents.
Health care in Japan: HAHAHA. Right. I covered just last month the horror story of the pregnant woman who couldn't find a hospital and then hours later, the ambulance she was in was in a crash and she miscarried.
And she can't hire a lawyer! Talk about bad.
Posted by: Elaine Meinel Supkis | October 12, 2007 at 11:26 AM
1. The world health organization ranks Japan's health care as 10th overall.
2. Japanese auto makers are both increasing production at home and expanding abroad. Its true they are probably at best holding factory floor workers in Japan at constant numbers. But at the same time they are expanding the number of engineers they have.
3. The median price for a home in Japan peaked in 1989 at 420,000$. And then it declined to 240,000$ in 2005. I think it is rising now. But at 2% interest rates, on a 30 year, 240,000$ mortgage, the monthly payment is 886.10$.
Posted by: aa2 | October 14, 2007 at 02:34 AM