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Thread: Japanese government in crisis as recession deepens

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    Japanese government in crisis as recession deepens

    By John Chan
    23 February 2009

    As Japan confronts its worst recession since World War II, the government is in disarray, with the ruling Liberal Democratic Party (LDP) heading toward defeat in general elections due by September. Official statistics released this month revealed that the economy shrank by 12.7 percent on an annualised basis in the last quarter of 2008—the sharpest contraction since 1974 and steeper than any other major industrialised economy. Most analysts expect worse to come.

    Prime Minister Taro Aso's political decline has paralleled the collapsing economy. When he came to office last September, Aso's rating in the opinion polls was hovering around 50 percent. A recent poll by NTV showed that his popularity had slumped from about 20 percent in January to just 9.7 percent. Some LDP lawmakers have defected from the party; others are demanding that Aso resign.

    Aso's administration is increasingly shaky. Last month, vice minister for internal affairs Tetsushi Sakamoto had to publicly apologise after sparking anger over comments that homeless workers were unwilling to work. Last Tuesday, finance minister Shoichi Nakagawa was forced to resign after he appeared drunk at a G7 press conference in Rome.

    A senior LDP figure told the Financial Times on February 16: "Being in the LDP is like being on the deck of the Titanic but with one important difference. We know that the ship is going to sink. Now all we can do is to wait for it to happen and then see who can swim."

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    Re: Japanese government in crisis as recession deepens

    Japan exports drop 45% to new low

    Japan's exports plunged more than 45% in January compared to a year ago to hit the lowest figure ever recorded, official figures showed.

    Japan also had a trade deficit of 952.6 bn yen ($9.9bn; £6.8bn), the lowest figure since records began in 1979.

    The demand for Japanese cars in particular dropped by 69%.

    Demand for electronics and other goods has also slumped as global economies and consumer spending contract, pushing Japan deeper into recession.

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    Re: Japanese government in crisis as recession deepens

    my hope is that the product of this crisis will be a return of the US to the manufacturing exporting industry.
    And why does your tone suggest that you do not care about children?

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    Re: Japanese government in crisis as recession deepens

    my hope is that the product of this crisis will be a return of the US to the manufacturing exporting industry.
    "The manufacturing sector accounted for 38 percent of all mass lay-
    off events and 44 percent of initial claims filed in January 2009;
    a year earlier, manufacturing made up 30 percent of events and 35
    percent of initial claims. This January, the number of manufacturing
    claimants was greatest in transportation equipment (57,173) and
    machinery (14,120). (See table 3.) The administrative and waste ser-
    vices industry accounted for 12 percent of mass layoff events and
    associated initial claims during the month."
    Bureau of Labor Statistics

    I doubt that this will ever happen, considering the extent to which the manufacturing industries in the United States are getting ravaged by this crisis.

    Shall we start the bets on how much longer GM will last?

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    Re: Japanese government in crisis as recession deepens

    Economic slump deepens in Japan as exports collapse

    By Peter Symonds
    26 February 2009


    The collapse of Japanese exports last month underscores how rapidly economic recession is turning into a full-blown depression—and not just in Japan.

    The Japanese trade figures for January, released yesterday, registered a 45.7 percent fall in exports year-on-year and a 31.7 percent drop in imports—the largest declines since 1957. The plunge in exports was the fourth monthly decline in a row and followed a fall of 35 percent in December.

    Japan also recorded a trade deficit of 952.6 billion yen ($US9.9 billion)—the worst since records began in 1979. The trade statistics come on top of growth figures released last week, which showed that the Japanese economy shrank by 12.7 percent on an annualised basis in the December quarter.

    The trade figures provoked alarm in the international financial press. In a comment entitled "Depression in the east points the way for the rest of the world," Guardian economics editor Larry Elliott said that while Japan had been in and out of recession over the past two decades, "make no mistake, this drop in exports does not mean recession: it means depression".

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    Japan is falling. Fast.

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    Re: Japanese government in crisis as recession deepens

    Quote Originally Posted by new coup for you View Post
    my hope is that the product of this crisis will be a return of the US to the manufacturing exporting industry.
    Don't hold your breath. Manufacturers tend to stay away from high corporate tax rates and stringent labor laws. They also look unfavorably upon governments that collude with labor unions. We have all three in spades.

    Jobs will continue to go overseas - where taxes are low and labor laws are lax - until we start lowering taxes and deregulating, however, the labor unions would never hear of such a thing, but who am I to stop them from shooting themselves in the foot?

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    Re: Japanese government in crisis as recession deepens

    Quote Originally Posted by Ethereal View Post
    Don't hold your breath. Manufacturers tend to stay away from high corporate tax rates and stringent labor laws. They also look unfavorably upon governments that collude with labor unions. We have all three in spades.

    Jobs will continue to go overseas - where taxes are low and labor laws are lax - until we start lowering taxes and deregulating, however, the labor unions would never hear of such a thing, but who am I to stop them from shooting themselves in the foot?
    Our statuary corporate tax rate maybe high, but our effective corporate tax rate is fairly low compared to most other industrialized nations.

    The fact is, its every bit as absurd for someone to blame outsourcing of manufacturing jobs on labor unions and taxes as it is for someone to blame outsourcing on free trade.

    We started losing manufacturing jobs with the advent of containerization (container ships) in the early 70s. That made it possible to inexpensively and quickly ship huge amounts of goods around the world. Prior to containerization, goods were manufactured in the cheapest place to make them in America for American consumers. For example, the rust belt is where the rust belt is because of the concentration of rail and shipping in that area. Containerization allowed those goods to be manufactured in the cheapest and most efficient place to manufacture them in the world rather than just in the United States and capitalism's constant search for greater efficiency lead to just that - and there is nothing wrong with that. Goods and services should be provided by the companies and locations that can most efficiently provide them thus freeing up resources for what other companies and nations can more efficiently produce.

    The only way to bring those manufacturing jobs back to the United States would be for us to lower our standard of living to be on par with the wages and working conditions of places like the Guangdong Province of China (whose moto happens to be "The World's Factory"). I would rather keep the 44k a year per capita GDP that we enjoy here with our services oriented economy than the 8k per capita GDP enjoyed by residents of the Guangdong Province, but hey, thats just me.
    Last edited by SouthernDemocrat; 02-26-09 at 09:05 PM.
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    Re: Japanese government in crisis as recession deepens

    Quote Originally Posted by SouthernDemocrat View Post
    Our statuary corporate tax rate maybe high, but our effective corporate tax rate is fairly low compared to most other industrialized nations.

    The fact is, its every bit as absurd for someone to blame outsourcing of manufacturing jobs on labor unions and taxes as it is for someone to blame outsourcing on free trade.

    We started losing manufacturing jobs with the advent of containerization (container ships) in the early 70s. That made it possible to inexpensively and quickly ship huge amounts of goods around the world. Prior to containerization, goods were manufactured in the cheapest place to make them in America for American consumers. For example, the rust belt is where the rust belt is because of the concentration of rail and shipping in that area. Containerization allowed those goods to be manufactured in the cheapest and most efficient place to manufacture them in the world rather than just in the United States and capitalism's constant search for greater efficiency lead to just that - and there is nothing wrong with that. Goods and services should be provided by the companies and locations that can most efficiently provide them thus freeing up resources for what other companies and nations can more efficiently produce.

    The only way to bring those manufacturing jobs back to the United States would be for us to lower our standard of living to be on par with the wages and working conditions of places like the Guangdong Province of China (whose moto happens to be "The World's Factory"). I would rather keep the 44k a year per capita GDP that we enjoy here with our services oriented economy than the 8k per capita GDP enjoyed by residents of the Guangdong Province, but hey, thats just me.
    You really think it's the simple, huh? We can just maintain our standard of living in the face of global ascendency? A simple world problem should communicate my point:

    Per capita GDP is inversely proportional to jobs lost overseas. The number of jobs lost overseas is directly proportional to level of regulation.

    Get the picture?

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    Re: Japanese government in crisis as recession deepens

    Quote Originally Posted by Ethereal View Post
    You really think it's the simple, huh? We can just maintain our standard of living in the face of global ascendency? A simple world problem should communicate my point:

    Per capita GDP is inversely proportional to jobs lost overseas. The number of jobs lost overseas is directly proportional to level of regulation.

    Get the picture?
    No I don't at all. Nor would any mainstream economist. Our economy has transitioned from a manufacturing economy to a service economy. The only way to transition back to a manufacturing economy would be reduce our standard of living and quality of life to the level of places like the Guangdong Province of southeast China. Then we could manufacture those goods here just as cheaply as they do there.

    Having traveled to China, and that province, I feel comfortable in stating that the vast majority of Americans would not want that quality of life. Granted, they don't have those burdensome environmental regulations. Of course, the trade off is that you can't see past a block most days either.

    We do what we do best, nations like China do what they do best. They manufacture all the cheap crap you see in big box stores, we build the best software on earth. In the end, I would rather live in a country that was better at highly skilled professions than in a country that was better at assembly line labor.
    Last edited by SouthernDemocrat; 02-26-09 at 09:27 PM.
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    Re: Japanese government in crisis as recession deepens

    Quote Originally Posted by SouthernDemocrat View Post
    No I don't at all. Nor would any mainstream economist. Our economy has transitioned from a manufacturing economy to a service economy. The only way to transition back to a manufacturing economy would be reduce our standard of living and quality of life to the level of places like the Guangdong Province of southeast China. Then we could manufacture those goods here just as cheaply as they do there.

    Having traveled to China, and that province, I feel comfortable in stating that the vast majority of Americans would not want that quality of life. Granted, they don't have those burdensome environmental regulations. Of course, the trade off is that you can't see past a block most days either.

    We do what we do best, nations like China do what they do best. They manufacture all the cheap crap you see in big box stores, we build the best software on earth. In the end, I would rather live in a country that was better at highly skilled professions than in a country that was better at assembly line labor.
    You're neglecting the fact that we won't have a corner of the services market forever. Places all over the world, particularly India, are more than capable of meeting the demand of many service-based industries, if not now, then definitely in the future. America is stuck between a rock and a hard place as it concerns globalization.

    We need to regain global competitiveness sooner than later. Yes, this will necessitate a slight decline in our standard of living but it's better than waiting until India and China and Brazil have caught up to us. It's easier to keep businesses in America than enticing them back after they've left. The longer we wait, the more precipitous the decline will be.

    I think Americans need to stop obsessing over useless crap like big TVs and Grillmasters. There are more important things in life than material wealth, and unless Americans can wake up to this fact we will find ourselves in competition with economic leviathans whose populaces are perfectly capable of forgoing superfluous luxuries.

    Either downsize that plasma screen now, or make a choice between medicine and groceries later. Your choice America.
    Last edited by Ethereal; 02-26-09 at 09:47 PM.

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