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Welcome to TokyoFreePress Thursday, March 23 2017 @ 07:26 PM JST
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Looking Back on Yet Another Annus Horribilis


Shiite tribal leaders and government
officials attend Christmas Day mass
at a Baghdad church

At dusk in this port city of Yokohama, day laborers from the harbor, whitecollar workers of neighborhood shipping companies and many other classes of employees and employers pour into the streets to have their traditional bonenkai (forget-the-year parties.) Some of these sararimen (salarymen) wear red-and-white hats as if to cover their empty-headedness and some others who are less intoxicated wear inane, weird smiles all the time. The worst part of this yearend festivity is that unless you are very careful, you sometimes step in a puddle of their vomit or urine, which I narrowly avoided a few days ago.

They are no different from what they were before this stormy climate set in here. Unlike Iraqi Christians (photo above) who seem to know what values they are living for, these folks brought up in a religious salad since their childhood remain caught up in the endless chain of the means, have no idea about what end to pursue and know nothing to do but to drown themselves in cheap booze. Now that a smaller number of employers are willing to sponsor these after-work activities, most parties end up in an unrestrained drinking binge or deafening as well as sickening karaoke frenzy.

However, Prime Minister Taro Aso, whose 3-month-young cabinet is already crumbling, still sounds upbeat about the purposefulness of their lives. He keeps saying like a broken record that the Japanese should pursue keiki kaifuku, or economic recovery, at any cost, with his senseless 23 trillion yen ($255 billion) stimulus package, and that his people should no longer be concerned too much about the traditional pork-barreling that has already built innumerable "bridges to nowhere" all over the nation. His delusion goes as far as to say that this nation will be the first among industrialized countries to find way out of the ongoing crisis because that's what he believes his people can do with the help of the same performance-enhancing agent they used in their postwar drive toward an economic powerhouse.
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One Big Red Herring is Gone, Thanks to Ben S. Bernanke

At times I think China's communist government is admirable because it always puts nation's interest before anything else. For one thing, it has been firmly refusing to unpeg its currency from the U.S. dollar despite the mounting pressure from the West. By contrast, it once again proved to be a piece of cake for the American government and the Federal Reserve Board to coerce their Japanese counterparts into playing along with this "swim together and sink together" game.

On December 16, the FRB headed by Ben S. Bernanke took a big step to lower its benchmark interest rates applicable to the interbank federal funds to near-zero levels. Japan's monetary authorities instantly became paralyzed and chose not to react swiftly. Actually Japan has implemented the zero-interest monetary policy since 1998. By now it has exhausted all the economic steroids it could avail itself of. So the only workable countermeasure the Bank of Japan could have taken against Bernanke's assault was to go for a negative interest strategy.

But all that Japan's central bank could actually do was to lower its key interest rate a couple of notches from 0.3% to 0.1% after 3-day-long hesitation and deliberation. The delayed action certainly indicated that the government and the BOJ had had difficulty pursuing the Japanese interest while currying favor with the American policymakers whose primary concern is the failing auto industry there. The Japanese will never ever understand that there's no such thing as a sustainable win-win situation in this world. As a result, the value of the Japanese yen, which shot up to a 13-year-high of upper 87s against the green back, still stays in the range of 89-90 yen over the weekend.

Japan's economy has been increasingly depending on exports for its recovery from the post-bubble doldrums. Now its exports account for 16% of nominal GDP, where the U.S. and China top the list of the importers of Japanese goods and services. Given BOJ's indecisiveness and weak-kneed response to the drastic move on the part of the FRB, it is little consolation for major Japanese companies that China's economy is more export-driven.
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A Heretical View of the Once-in-a-Century Stuff


Dr. Michael Hammer died in early
September as if to remind us of
his unfinished work amid the
global crisis

December 6-12 issue of The Economist observes:

"Were it not for the tax relief they receive, contributors to personal pension plans [for one] would have been better off keeping their money under their mattresses. It will be little consolation to Westerners that savers in Japan have known this empty feeling for far longer."

Although the empathy shown here is something that brings a big consolation to most Japanese, I cannot be very sure Westerners will learn bitter lessons from the "empty feeling" faster than the Japanese, if ever they are able to learn anything from it.

As a matter of fact my fellow countrymen have learned no lessons from what they experienced when the bubble economy burst. That is evident from the way they are responding to the current crisis. Once again, in the face of deja vu of the bust of 1990, they are at a loss. They are very fond of parroting Alan Greenspan's exquisite qualifier "once-in-a-century." Yet they look unable to come up with a single countermeasure which is not too conventional to be workable with this momentous set of circumstances. It's as though they wish deep inside that the former chairman of the U.S. Federal Reserve had been just exaggerating the severity of the situation.

There's nothing new in the Japanese trait shown here. Yet I still wonder how come the recent politico-economic discourse among policymakers, analysts and scholars in America has hardly come any closer to really addressing the once-in-a-century enormity of the problem. Maybe Obama's promise of creating 2.5 million jobs is unprecedented, but he should know that artificially bloated employment will only lead to a larger number of layoffs at a later point in time.

Let me go a little personal here. I started my career in 1959. After going through the high-growth era of the 1960s and 1970s, the bubble years of the 1980s and the post-bubble doldrums, I called it a career in 2005.
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DEATH WATCH FOR JAPAN No. 4 - Another Sign of Japan's Coming Collapse: A Street Interview



From time to time I do this sort of interview in the streets of Yokohama.

You may ask: "Do these interviews represent the tip of the iceberg or just exceptional phenomena confined to the city of Yokohama?" My answer will be, "Yes, you can say it's the tip of the iceberg, only on the premise that you can visualize a huge iceberg that stretches from one end of the Japanese archipelago to the other."

People are untiringly saying we are short-handed because of the declining birthrate and the resultant shrinkage in population. But the truth is that the entire nation has now been unionized, sort of, since the postwar morbid labor movement was gone, and as a result the legacy of the lifetime employment system has started taking a tragic toll on the health of both public and private sectors.

In Yokohama, as in many other cities, it's prohibited to light up in the street. The City Hall says smoking outdoors is subject to a fine of 10,000 yen. If you walk down a street with a cigarette stuck between your lips, a person or two (see above photos) comes over to warn you to stop it while offering you a special "portable ashtray".

I normally refuse to accept the warning and the ashtray, and ask them nasty questions while at the same time taking pictures with my digital camera. This always works. They run away from me as if to evade a 10,000-yen fine themselves.

My ad hoc street interview most typically goes like this:
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Big consolation to redundant workers

Prime Minister Junichiro Koizumi once said there will be no place for a sacred cow in his "reform" plans. But anybody with a certain amount of commonsense can figure out there are a lot of rich pastures that are going to be preserved, forever, for sacred cows.

More often than not, just privatizing a governmental body does not lead to a reform in this nation which has proven prone to failure to cut off those pork-barrel operators and their constituencies from their vested rights. We have learned by now a lot of bitter lessons from the 1985 privatization of the NTT. Nobody thinks we are any better off than we were before 1985 now dealing with NTT DoCoMo, NTT Communications, etc.

Take Daiei for example. We have already discussed the double-scandal that involved the ailing supermarket chain operator and its creditors, including bad debts-ridden UFJ, in "It's always taxpayers that foot the bill" (TFP, October 17). On October 18 the main banks of Daiei and the Industrial Revitalization Corporation of Japan, the quasi-governmental body for bailouts, announced a restructuring plan for the Fukuoka-based retail giant. According to the plan, 27,000 jobs out of 58,000 permanent and part-time positions will have to be slashed while keeping the number of its outlets unchanged at 260. Which means Daiei's customers have been paying an extra 47% when shopping at its outlets as far as the personnel and overhead costs are concerned.
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Niceness or mass-stupidity?

This lady who keeps bowing, as if suffering from pathological automatism, when nobody is around is a far cry from the way it was at a department store as recently as five years ago. When you stepped into a department store at 10 a.m., the time for the day's opening, on a 1999 morning, you were welcomed by a huge reception line just inside of the entrance doors. It is only of late that they started to realize they couldn't afford too much of this in part because there wasn't a huge crowd of shoppers waiting outside for the day's opening anymore. Sometimes the people forming the reception line would outnumber their customers today.

Up until recently, and even now, to a lesser degree, foreign visitors often talked about politeness, hospitality and niceness of the Japanese people. But I would call these traits a mass-stupidity. Even worse, these bows are sometimes the way they express their apology, not appreciation. Many foreigners have noticed that the Japanese always look and sound apologetic without any particular reason to do so. But of course, there is a good reason.

Japan is one of those countries that you never really understand until you live there for a certain period of time. It is only when you have settled down for months, or even years, that you start feeling the mass-stupidity disguised as hospitality or politeness does cost you a lot, money-wise and otherwise.

In Japan, saabisu (Japanese transliteration of service) means a completely different thing than in other countries, in that it is basically free of charge and something you can live without. Although we are gradually getting used to the idea of service that carries a price tag and offers something we cannot live without, Japanese customers were taken aback when foreign-capital companies such as IBM said they were charging a handsome amount of money for their service some 30 years ago. Ever since the situation has changed, to a certain degree, but still it holds true here that more often than not, saabisu is something superfluous or redundant.

My observation is that one of the things that underlie this trait is the traditional Japanese culture that somehow values uselessness, purposelessness or emptiness. But more importantly, perhaps, this high tolerance toward redundancies stems from the fact that these supposedly homogeneous people, at workplace or anywhere else, are united in perfect harmony, as if the entire nation has been "unionized", to protect themselves against the axe that the increasingly merciless management would otherwise resort to using.
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