Walk-off HBP sent me this link to a NYT article that argues that maybe Japan has been over statinng its dismal financial situation for two decades and that perhaps things are not as bad as claimed.
It is true that Japanese housing prices have never returned to the ludicrous highs they briefly touched in the wild final stage of the boom. Neither has the Tokyo stock market.
But the strength of Japan’s economy and its people is evident in many ways. There are a number of facts and figures that don’t quite square with Japan’s image as the laughingstock of the business pages:
• Japan’s average life expectancy at birth grew by 4.2 years — to 83 years from 78.8 years — between 1989 and 2009. This means the Japanese now typically live 4.8 years longer than Americans. The progress, moreover, was achieved in spite of, rather than because of, diet. The Japanese people are eating more Western food than ever. The key driver has been better health care.
• Japan has made remarkable strides in Internet infrastructure. Although as late as the mid-1990s it was ridiculed as lagging, it has now turned the tables. In a recent survey by Akamai Technologies, of the 50 cities in the world with the fastest Internet service, 38 were in Japan, compared to only 3 in the United States.
• Measured from the end of 1989, the yen has risen 87 percent against the U.S. dollar and 94 percent against the British pound. It has even risen against that traditional icon of monetary rectitude, the Swiss franc.
• The unemployment rate is 4.2 percent, about half of that in the United States.
• According to skyscraperpage.com, a Web site that tracks major buildings around the world, 81 high-rise buildings taller than 500 feet have been constructed in Tokyo since the “lost decades” began. That compares with 64 in New York, 48 in Chicago, and 7 in Los Angeles.
• Japan’s current account surplus — the widest measure of its trade — totaled $196 billion in 2010, up more than threefold since 1989. By comparison, America’s current account deficit ballooned to $471 billion from $99 billion in that time. Although in the 1990s the conventional wisdom was that as a result of China’s rise Japan would be a major loser and the United States a major winner, it has not turned out that way. Japan has increased its exports to China more than 14-fold since 1989 and Chinese-Japanese bilateral trade remains in broad balance.
As longtime Japan watchers like Ivan P. Hall and Clyde V. Prestowitz Jr. point out, the fallacy of the “lost decades” story is apparent to American visitors the moment they set foot in the country. Typically starting their journeys at such potent symbols of American infrastructural decay as Kennedy or Dulles airports, they land at Japanese airports that have been extensively expanded and modernized in recent years.
Now that is interesting. The most interesting point might actually be just how much the yen has appreciated. If you read any newspaper or magazine in Japan, the rising yen has always spelled doom, but there has never been a country that's gone broke on the back of an appreciating currency. Consider that for a moment. If Japan really were going out the back, unable to compete, you'd think foreign investors would pull their money from the yen, but repeatedly since 1985 when the Plaza Accord was struck, investors have chosen to put their money in the yen. Are they right? Who knows? It's not gold, but every time there is a shock to world markets, the yen creeps up.
Even in 2006 when I was in Japan for a shoot and visited the headquarters of Mitsubishi where they build just about everything in heavy industry, there simply was no sense of panic about the state of the yen or the world - and it struck me as being at odds with all this talk that Japan was being beaten at everything in the world. So, here's a little paragraph from the NYT that needs attention:
Part of what is going on here is Western psychology. Anyone who has followed the story long-term cannot help but notice that many Westerners actively seek to belittle Japan. Thus every policy success is automatically discounted. It is a mind-set that is much in evidence even among Tokyo-based Western diplomats and scholars.
Consider that paragraph as an admission by the NYT that maybe even the westerners on the streets in Japan covering events there don't really have a inside scoop on Japan. It is possible, it is likely, it is entirely conceivable. After all, there's a huge gap between what is said by politicians and bureaucrats in public and what they say in private. Whatever the case may be, the article flies in the face of accepted common paradigms about what is going on in Japan.
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