Why US economists are obsessed with 'Japanification' | FT
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- Опубліковано 2 лют 2020
- Economists are terrified of how slow growth, low inflation and low interest rates could hit the economy. The FT's US economics editor Brendan Greeley explains why. Read more at on.ft.com/2uXZV9o
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Slowing economic growth is worrying economists in the US, who liken the situation to Japan's economic troubles. Read more about it: www.ft.com/content/3746c864-4362-11ea-abea-0c7a29cd66fe.
Can we call it the 'youessification', to give it a different name?
What's up with the Himalayan background music?
Great point from Freidman (4:44) that slow growth in the US and disproportionate distribution of that growth means that most Americans are really not doing well.
these economists pride themselves they can improve a country by its policies but no. Truth is the best they can do is not screw up, it is the people who drives economic growth. Japan simply reached its peak performance rapidly and corrected as fast, Japan performance is impressive but to realize GDP growth they got to accept change or better immigration
Considering 50% of current jobs will have been made obsolete within the next 25 years due to mass-automation and AI, a decline in population is prudent.
03:27 "And in one important way it's a better place to live than the United States..."
Cut to Pikachu boat filled with Pikachu mascots
It's hard to argue with such strong evidence.
I mean, it is a very valid reason why its better than the US
Healthcare for it's citizens?
@Der Porkmeister Well yeah, they charge us an arm and a leg to repair said arm and leg, so yes, that is a reason why its better, but its also better because of the Pikachus
@Der Porkmeister exactly. Thank you
I'm not a weeb, I'm the future of the world economy.
Accurate af
@@yorr5721 hey if the US wants a younger labor force and lowers their unemployment rate in the future, they should start allowing Mexican immigrants in the country.
@@muhumedmohamud2356 Mexicans be like = We're here!
@@muhumedmohamud2356 That would only allow them to lower the wages even more, causing people to be unable to exist
@@holo6883 good then
Why are there no clips of Japanese economist speaking at the forum.
They lived through the lost decade and their English is pretty good.
Ingurisu??
Japanese presence in international academia has generally collapsed in the last few decades, either as a result or correlated with the ongoing effects of the Lost (Three) Decade(s). The number of higher education Japanese students studying abroad still has not come close to recovering from its peak. Because of this, nowadays, the most prominent academics, including economists, at international institutions come from the U.S., Europe, or China. There's also not much need to have specifically Japanese economists talk about this since they may not necessarily be the foremost authorities on the issue - American economists like Paul Krugman had very good contemporary analysis of the woes ailing the Japanese economy during the 90s and accurately predicted similar issues for the U.S. economy, some of which manifested in 2008 (for example, Japan attempted a proto-form of quantitative easing to deal with its mid-late 80s recession before the U.S. did it during the Great Recession).
@@sn0wdon I still think their input as locals studying a local phenomenon would be valuable, even if they no longer participate as much internationally. They can see the human and social impact of the lost decade much more easily then someone looking at the data from another country.
The US is a bully, that’s why!
Cuz they suck at economics!
I find it strange how economists are obsessed with exponential growth, as if the world's resources are limitless.
🤣
If we become multiplanetary species
@@Enthalpy-- nah everything is in the hands of Allah his the one creating everything from nothing.
@@muhammednahhas9963 Allah was created when first scoundrel met the first fool
@@Enthalpy--i haven't understood your argument, sorry.
3:00: We can't tell you that we have no tools left or it'll cause a panic
*literally tells everyone they have no tools left*
He was only talking to the Financial Times. Now, if it had been Fox News ... no, they would never broadcast that!
Seems obvious when rates are zero and in some countries negative that the central bankers are out of tools. No surprise bitcoin and cryptos have taken off as a reaction.
“It’s easy to tell who is a San Diegan and who’s an economist”
Lol I felt that while wearing shorts.
90% of people in San Diego wearing shorts in January are from out of town or are recent transplants! ; )
d mark lol I don’t know about “recent”...
But who the hell goes hiking wearing pants?
@@AliTheHighest Uhh I’m a San Diegan who never wears shorts. Also it makes a lot of sense to wear pants while hiking because you can cover your legs from mosquito bites and protect them from sharp, low lying objects like bush branches/thorns
Japan has found itself in what is called a liquidity trap: negative interest rate and deflation so it was impossible to change the price level through the monetary supply
@Lumine Moon The BoJ opted for the Qe which is somehow the new preferred method of the Central Banks to put liquidity in the economy instead of printing money, and Shinzo Abe for an increase in consumption taxes and tax cuts for the wealty which however, leaded to a sharp contraction of the economy (the GDP fell by $1,8 trillion between 2012 and 2015)
@Lumine Moon printing more money would only lower interest rates even further
Yes but what's the cause at the first place? Should we go all the way back the 1970s, 80s to see how fast growth and mis-allocated capital and reluctant to reform cause prolonged stagnation
@Lumine Moon It will not help much, due to cultural values in japan. They do not live "in excess" and spend above their means like in the US. There is a possibility that consumers might take loans but not spend it to stimulate the economy: why buy a car today for $15000 when in 5 years the same car will cost $10000 new. This will just serve to displace the National dept held mostly by the Gov't to private (citizens and companies) entities which might cause a national crises if not sucessfull. The Gov't can always print money to sustain the economy but not the private consumers and citizens.
Ulrich Leukam i do think Japan live in excess they just throw most of it away so you just think they don’t.
Like Japan is known for their high quality products but foreigners or even the Japanese themselves don’t know how much rejects they throw away besides that if you are late with the delivery even if its just 1 day and said product has a shelf life of 3 months those guys will be thrown away too.
It’s guaranteed that if they don’t throw most of their food before reaching the market prices will be a lot lower heck they can probably feed a small country if they send all of the less than 100% perfect food to said country.
slow economic growth and low inflation sounds like sustainability to me
That's islamic finance in a nutshell..
Not when the country has what the economist on the video said is happening in America: the gap between the ability of rich to grow their money and that of the middle class is getting wider.
Antonio Renteria It’s also arguably bad for geopolitical reasons because it basically means China is going to become the greater Superpower.
Hate the US’s foreign policy or not, China is not a better tiger’s mouth to jump into.
@@innosam123 i'm pretty sure the united states has a much, much worse geopolitical track record than china or any other country that has ever existed.
Low Inflation means NEGATIVE... Slow Economy means slow decrease.. Infrastructure that will not work.
Japan has had flat economic growth and stagflation or deflation for the last 30 years but still have a great GDP per capita, long life expectancy, affordable standard of living, awesome quality of life, and some of the best public services in the world. The western world does not want to be like Japan because their economies depend on overconsumption and consumers going into debt to finance their purchases. American companies want American consumers to turnover their possessions every year and banks want to keep American consumers in debt to collect interest on those debts. The cost of living in the western world is unsustainable. When average consumers in the western world dedicate over 60% of their gross monthly income towards shelter, insurance, utilities, transportation, healthcare, and other life maintenance must haves there is nothing left to save or invest or even enjoy life at all. Wages in the western world have been in stagflation since the late 1970s where the cost of living has gone through inflation unchecked. Perhaps 30 to 40 years of deflation on the cost of living in the western world can make up for the stagflation of wages since the 1970s. My old family house in the 1990s costed $50,000 so why my new family house in the 2010s cost $500,000 is beyond my understanding. Real estate inflation at 1,000% over 20 years is quite alarming. And don’t get me started on the cost of vehicles, post-secondary education, utilities, insurance, groceries, and taxes. Japanification of the western world sounds pretty nice right now. At least the consumers in Japan don’t have to worry about their cost of living doubling every 10 to 20 years. We in North America do have to worry about that. Terrible.
If you think the economic situation for individuals/consumers is good in Japan and desirable for the West you are delusional beyond belief, I have literally never seen a more ignorant person. They have massive problems with a 'gap society,' people can't afford to raise kids, can't afford to get married, the pension system looks like it's collapsing....
@@user-vm4oh6ud8t Thank you for the correction. As my original comment is over 1 year old I have acquired more knowledge of the dire economic situations that plague the Japanese people. The Land of the Rising Sun has one of the highest debt to GDP ratios among the G20 nations which frightens me as to how the Japanese government is ever going to meet its public obligations from retiring pensioners to even the servicing of its interest payments. Cost of living is unsustainably high in Japan along with the very competitive and poor job market for high school and college graduates. Small to medium size businesses and enterprises are rare in Japan with only large multinational corporate conglomerates controlling an unfair portion of Japan’s annual economic output. And yes the socioeconomic gap in Japan is extremely polarizing making daily living so unbearable that suicide rates are high in Japan. It is hard to find any remnants of Japan during its golden decades of economic boom from the post-WW2 era to the mid 1980s. The postponed 2020 Summer Olympics in Tokyo won’t be the revenue engine that Japan needs to pay for its initial investment into the infrastructure projects for the Olympic Games and the cost of the COVID-19 pandemic response. You are very correct about Japan. I appreciate you correcting me but did you have to crucify me with being ignorant and delusional. I am not a Japanese citizen so being a foreigner with no first hand experience within Japan’s borders I am guilty of some ignorance. Please be sincere when correcting people.
@@YamiPheonix531 Yeah ok soz that was a bit unnecessary but it literally sounded like you were intentionally spreading misinformation. I appreciate you actually admitting that you maybe didn't know as much as you thought but that's not a common thing on youtube so yeah sorry about that, but please be careful talking about stuff as if you are an expert when you don't actually know so much about it because what you said sounds really convincing and appealing even though it's wrong
@@user-vm4oh6ud8t Thank you and thanks for the constructive criticism.
OP seems to miss out one factor! Japan also adopted LOWEST immigration which means low population growth accompanied with oldest and longest hour per day active workforce!! Will you see yourself in thar situation in the US? Someone must pay for Feds extra printing in least productive market due to restrictions and mandates! The crash of policies actually the reason in your story about cost of living trajectory! Immigration can dilute the currency since these immigrants dont spend it / reinvest it in local markets. Next time think about Conservative policy impact to economy instead of racism ranting . Also remember that modern home size has tripled compared to your $50k example. Dont just be a mainstream sheep.. think it over every propaganda to lure you for agreeing into bad policies. I learned so much during Trumps 4 year almost harmonized policies across the board / races. The only people who got left out were those busy in spewing nonsense radicalization.
I'd rather impress and impact people by creating value to their lives which is the only true and honest path to wealth and abundance.
@Chris DavisIt doesn't matter our background but you mindset, you will succeed if you work hard and invest on it. just go out there and do it.
@@alanfuller7176 The secret of your future is hidden in your daily routine. Successful people do daily what the unsuccessful people only do occasionally.
@@smithwillison6345 But successful people don't become that way overnight, what most people see at a glance wealth, a great career, and purpose is the result of hard work and over time.
Rich people play the money game to win. poor people play the money game not to lose. the goal truly is, the rich people always want massive wealth, the poor sees a surplus as an opportunity for consumption instead of investing it.
@@ericrobert4651 We have to change our mindset and do what the rich does. with the little we earn, which is investing it. the world is changing.
Japan has the same demographic as Germany. Their economic focus is also pretty much the same.
In my opinion the big differences between both countries are their neighborhood and their handling of monopolies.
That's so interesting John. We've actually recently published a column from chief economics commentator Martin Wolf on this very question. Perhaps you would like to take a look: www.ft.com/content/04f48e1e-f97f-11e9-98fd-4d6c20050229.
They don't really have the same Economic doctrines though. Germany is big one competition & competitiveness and has no trouble breaking monopolies. While Japan is very protectionist of its big corporations. Japan also has a bigger infacise on public infrastructure project to stimulate the economy.
@@charlesscott27 What does that have anything to do with economic policies? That's like saying Japan having a bidet makes them better then the average American.
That's true
Japan has a bigger economy than Germany but i'm pretty sure 9 out of 10 people would prefer to live in Germany than Japan.
the remaining 1 is probably a weeb, OMEGALUL~!
I thought Japanification was that thing they did in '80s science fiction movies.
so your a guy called "3.14"?
What?
Lmao
You didn't get it
Idiot
That's your name
Bye
What?
What?
Great point from Freidman (4:44) that slow growth in the US and disproportionate distribution of that growth means that most Americans are really not doing well.
@Luís Andrade Yeah, women being able to work is a great thing, but it’s just a fact that twice as many workers means more competition for jobs.
Income inequality allowes economic growth by reducing the investment risk from the higher earners (in steady economies). Forcing income equality limits the economic growth. Just look at Japan's GDP growth graph in the video...
Spending is what really drives an economy. But, who's going to be spending when most of the money is being held by a tiny group of people. His statement was not really to point out how the American people are doing but how they are going to be affected when the economy will slow down. Because, for sure, those top 1 percenters will tighten their belts to preserve their wealth. This can usually be found in the form of shutting down operations, laying off work force, or reducing work hours. All of which are the means the bottom percenters rely to get money in order for them to put food on their table.
That's just the general gist of it and it can only get scary the more you imagine what's going to happen.
@Luís Andrade The few unions the US had were completely dismantled and demolished on two occasions, once during the civil rights push and then the next time during the neoliberal revolution of the 80s. Globalization had a far greater part to play than any kind of immigration, i'd argue, and this was actively pushed for and setup by corporations. They also had a part to play in creating the very monster they are now competing with: China.
@@rafaelacosta5724 And we've come to realize that economic growth above all else is only beneficial if it benefits everyone. On paper GDP increases with a falling life expectancy and real wage stagnation provide nothing for the ordinary man.
wall street guys : uwu
OwO
Oya Oya
**notices wallet bulge** "uwu whats that"
?????????????? uwu ????????? What is that ?
@@Misuci its nothing. Just a cute word some anime characters say.
There is another issue effecting the Japanese economy that is often ignored when talking about post bubble Japan. Overwork. It is throughly unsurprising that there is low demand when most workers are chronically overworked and have no time to spend money. I work in Japan and have worked with people who have not taken a day off (this includes Weekends and all but the most significant national holidays) in several years.
From what I have seen this issue is under represented in western economic discussions about Japan. It is difficult to quantify until you spend more than a couple of weeks here. Most companies either fudge or downright lie about this kind of thing. The pressure to not take leave of any sort is overwhelming. One person I know missed the birth of their first child to stay at work.
My assessment is that this is warping the economy at large. But I am no economist. I would love to see some work done from an outsiders prospective. This kind of thing is rarely questioned here. It’s ‘shoganai’. It may allow the west to learn another useful lesson from Japan. We work to live, not live to work.
But that is the beauty of Amazon, it allows people to shop while they are at work.
@Bob Taylor you should get your facts rights, japan is a terrible place to work.
Another thing is that japan's population is declining and population growth is low. which can be tackled with immigration. USA has plenty of immigrants lining upto join the country. in the case of japan forget illegal immigration even legal immigration is hard.
USA simply needs to go harder on illegal immigrants and help legal immigrants get into country faster. usually legal immigrants
Japan on the other hand might need to make it easier for immigrants.
@Bob Taylor that is not the case at all. People in well known companies are working overtime however japan is interested in trying 4 day work week.
@Bob Taylor is this because of the nature of most work being part time or casual with very few being full time?
“Oh god, we’re gonna have to get creative!”
Yeah, yikes. "Just like all the anti-Keynesians predicted, business has invested in the wrong things for generations thanks to bailout incentives. I guess we have to keep doing the wrong things in new ways!"
@@artembolshakov3901 Austrian school where you at woooo wooo!
This reliant on interest rates as a way to manage the economy is really something we need to get rid of.
We do, but it’s like a drug. We’ll go through withdrawal and it’ll suck for a few years to get out of it, and it’d probably hurt politicians, so it’s not likely to happen. They’ll just wait until it all tumbled down and throw up their hands.
Central banking system is a policy noted in the communist manifesto and is a policy applied in 1913 and was one of many precursors to cyclical recessions
In macroeconomic college courses its thought of as the solution to these business cycles but it creates its own new problems.
it’s so interesting they were worried about the possible effects of the next recession, and this video was posted just months before the pandemic
0:59
"COVID-19 Economic Zombification"
Daniel Fernández - December 1, 2021
More and more economists and finance specialists are warning of the potential arrival of a new “Minsky moment.”
Source: UFM Market Trends
I think we should stop worrying about growth, and the economy, and focus on happiness measures, and quality of life.
pudanielson1 but that’s not “American” 😂
You can't live in a country that values money over people and expect that. Go to Scandinavia where they value people over money and you'll see exactly that.
Or better yet, center the economy around QoL and Happiness measures.
Countries need a growing population in order to have a stable or growing tax base of working age people to pay into insurance policies. This is especially important as most old people take out more than they put in.
Good luck enjoying your life when you can't afford to eat
Hey, the 80's wants it's Japanification back!
TLDR - once the boom is over, you can only ease so much before the music stops.
I love watching economists try to figure out what happens to the US as inequality increases, as if some central bank policy can prevent the millions of people struggling to feed their families from eating the rich. There is no policy, it's just game over.
I mean inequality isn't a problem that needs to be fixed. The US has more of a problem with rising cost of living with most wage growth going towards that. Fix the runaway healthcare, housing and education costs and the USA is actually doing pretty well.
@@lucasjonathanalexander It’s more than that. Auto prices, energy prices basically everything that people spend the bulk of their money on has increased so much more than the very low year to year wage increases that the majority of Americans receive which continues to widen the wealth and income inequality year to year. The overwhelming bulk of wealth and income increases have been accruing to top level executives and top level professionals for years. Stock market gains have also dramatically increased a disgusting growing divide between the top 1% mostly, but the top 10% as well.
@@GoldenRetrievers4President as a proportion of income, health, education and housing not only are outliers in inflation but also take up over 40% of most people budgets, with the bottom 50% having this number around 65%+. If those things were in check then America, with its high economic mobility and growing upper and upper middle class would have a big issue tbh. The biggest jump is from lower economic class to middle economic class. Once people get into the middle class then they can basically go anywhere. But the biggest thing that kills that jump is housing, education debt/interest and healthcare insurance and one off costs like surgery. Most other areas of the economy are tracking around inflation. And in the case of the stock market, yeah, that's likely due to an asset bubble due to excess liquidity, low interest and high fear of future hardships. So people want to store their money, but not as cash or bonds - so they turn to the equities market.
@@lucasjonathanalexander High economic mobility? Completely disagree that the biggest jump is from lower economic class to middle class. The middle class has less and less wealth, more debt to be sure, year to year. An enormous percentage of Americans live paycheck to paycheck, and most Americans don’t even have $1,000 saved up to afford an emergency situation that requires them to utilize saved money. Some can still accrue more debt to pay these bills, but a thriving and growing middle class is certainly not occurring. It is shrinking, and the wealth and income disparity is at grotesque levels while it continues to grow.
@@GoldenRetrievers4President the middle class is shrinking because its moving into upper middle class and rich. That isn't the problem. The problem is getting people into the middle class. And yes, the USA has very high economic mobility for a western nation. Rich to poor and poor to rich and the like is quite high and if you track a person over their life they have a very high change of moving up a wealth quintile or two.
Basically its not actually an issue in japan but because of how the US economy is structured theyre worried it’ll crash the US economy
because it *will* crash the US economy
The lost decade in Japan has many important lessons, but I think these economists are overlooking a number of factors that will prevent the same situation from happening elsewhere.
The random gong transitions are killing me haha. Well done FT, and a good summary of Japanification.
So all these studies in Economics and the only tool Federal banks have is rising and lowering interest rates?
They have other tools but they're much more exotic.
Problem is. The more meddling government does. The worse it gets. In Keynes time he advocated for fiscal as well as monetary policy.
Milton Friedman came to picture and introduced monetarism where primary focus was on monetary policy, since Keynesians were unable to explain stagflation from their Economic view.
Which is why central banks do lot of studies even if it's about merely just lifting or putting the interest rates up or down.
@@gabbar51ngh Translation for people who don't speak economics?
@@boltstrike2787 Hes saying the more the government tries to intervene, the more it fucks up the economy for the average citizen.
The best option for them is just to change interest rates.
@@honkhonk8009 I got that part, it's the part about fiscal and monetary policy that I don't understand. That's economic jargon the average person probably wouldn't understand.
I can't believe they cut Friedman out like that. Financial times is a Straight out savage
Maybe if the US grew a pair and introduced sustainable taxation, free education and healthcare a gentle growth situation wouldn't look so terrifying to them.
@Luís Andrade if you look at the costs objectively, a system like the NHS in the UK is cheaper and higher quality (by overall outcomes) than the the 'private' system in the states. Compare US taxes to an advanced Scandinavian type democracy and they don't look all that high to me. Food for thought..
@Luís Andrade Hi Luis, I did say 'by overall outcomes'. If you've had a bad personal experience then that's a shame but the the NHS has the UK ranked way higher for healthcare than the USA and at a lower cost per capita. This isn't hard though as the US is ranked very low for a developed country.
Even if you ignore official statistics it can help to look at it this way: For every individual, healthcare costs, on average, X amount. The only way to reduce X is by economies of scale (buying power). A toothbrush that costs 2 dollars each can be bought much cheaper (per unit) if you buy 1000 or 1,000,000 because design and tooling costs are absorbed over more units. A huge multi billion dollar health service has BIG buying power. This saving can then be made in to PROFIT for shareholders or, if profit is not the aim, SAVINGS for customers which in the UK is everybody.
The principles of buying power and non-profit are what can make a national health service more efficient. The extra tax is less than the private insurance premium. It's always going to be because nobody needs to skim profit off the top. Of course you could corrupt the system in all sorts of ways but they're the same ways you can corrupt a private system. All things being equal, a National Healthcare system will always be more efficient. Not perfect, in our case, but definitely better.
@Luís Andrade lol, us has the lowest taxes among all oced
I don't think you understand how much that would cost (and I know below you already responded, so let me deliberate)
The US has over 300 million people in it. That's more than double of the population of Denmark, Norway, Sweden, Iceland and Finland combined. Along with that, we get millions of people coming over each year, which adds to the cost. It's like the history of pensions. It seems great, but as time goes on, you realize how you put more into it than earned.
Maybe there's a possibility that high taxes on everyone will pay for free health care, but that's taxing everyone at 65% of their wages like they do in Denmark. Be honest, how many Americans do you know will work 40 hours a week and only get paid for 14.
On top of that, that also doesn't take into account of food, clothing and housing (I think it's clear after 65% example you can't get free Healthcare and housing)
Meanwhile, when it comes to cost, free education will absolutely not happen. We already have free education for k-12 and look at how those schools are. The US objectively has most of the best colleges in the world, millions come here just to go to college. We absolutely can't afford it (maybe make it cheaper, but not free)
Finally, it's nice to say the US should be like other countries, but we quite frankly can't. The world literally sees us as a leader in it, meaning they expect us to donate money for humanitarian development and yes, military assistance. I know people keep saying we should drastically shrink our military, but quite frankly, most countries don't want us to for two reasons
1. They would have to build theirs up (ex. Germany getting mad at trump for wanting to withdrawal as much military support from nato
2. Some countries actually can't defend themselves and look to us (ex. When trump withdrew from Syria and was pressured to go back after backlash for abandoning them)
We might not like it, be half of the world relies on us. The only reason why Sweden is in such a great shape is while we were protecting Europe from the nazis and the soviet union, they were working on themselves
@@andrewsutherland133 I'm sure you're sincere but I literally don't need anyone to think I understand how much it might cost because I've lived in the UK and used the NHS for 56 years and despite it being attacked and underfunded from day one (by some who don't like being told what to do), it still kicks any private system's arse by using basic economic principles. My tax has never been more than half of what you suggest and has been as low as zero - progressive taxation is generally helpful and reduces the burden on the welfare state - and could be even lower if the health service had unanimous political support. The fact that it's survived so much abuse speaks volumes.
Some people seem to think that personal choice in healthcare is more important than efficiency, quality and utility. I say fine, if you want to waste some extra money, go ahead. I'd sooner pay less, get more and spend the saving on something enjoyable and not line the pockets of some greedy execs. Customers of private systems also have to pay for the private sector lobby and various backhanders etc - it's no wonder private systems are so expensive.
I'm all for choice in principal but at the end of the day your options are A. Being told what to do by the public sector with whom you may or may not agree or B. Being told what to do by the private sector with whom you may or may not agree and who will charge you at least double. I suppose there's always the DIY option but there are limitations there also :) Although, like with publicly funded healthcare, perhaps I should stick with my principles and say don't knock it 'til you've tried it..
If Japanification is a preview movie then we have nothing to worry about really, that would be a good thing. Because every preview movie that is not Japanification end up with us destroying ourselves. That's perfect specifically in preparation for AI ruling the world.
Very weird three decades of economic slowdown japan still a super rich country i wish mexico can be like that
:) Wait a bit, and Japanese will migrate to Mexico again, not just to Peru..
A slow growth doesn't mean your country is going down the drain. Unless your country is running on debt.
If you have built your house and have 1 billion in your bank account, you won't go bankrupt if your monthly income is reduced by 50%.
The timing of this video is crazy looking at it over a year later. Sheesh
Little did they know...
@@darkmattergamesofficial wait what happebed
@@nicoleonlysometimes824 Covid started to get out of control soon after this video. Economists were worried it would destroy the world markets and start a huge depression. Luckily economies have been hanging in there (actually if you are a tech company covid benefitted you, but most lost out). They think it accelerated this trend toward recession. Who knows though, some people think consumerism might rebound and take off after restrictions are lifted, especially with how well the vaccine rollout has been.
Good report,thank you !
Spent the first 90% explaining what japanification is and last 2% rebutting it by saying, actually problem is US is more unequal. wtf.
12 den No, they said they’re worried about Japanification here because the mix of inequality and Japanification would be toxic.
@@innosam123 and 12 den....Good observation.. And yet the problem is aging... The enormous increase of of OVER 40.. and that population is unable to reproduce...
Maybe instead of being obsessed to the situation in Japan, look at other places like South Korea and Singapore as their demographic problem is far more severe and still manage to squeeze growth. Even Japan is fine as they actually are close to their peak. They peaked too much in the mid 90s till their big fall, but after that they have been recovering just fine. They still manage to expand social safety net. Even SK which inequality is a huge problem, lately is addressing their social net to solve problems like high suicide rate, low birthrate, and stuff.
Places like USA and even UK seems to try to solve the problem backwards. USA specially when they try to prop up the economy, it is only about helping Wall Street, crooked churches, and big corporations. It is never about helping the working and middle class.
The eternal growth isn't sustainable if we wanna face environmental problems that could cause a collapse. These economists are trying to balance irreconcilable concepts and just winging it.
funny watching this at the end of 2021, inflation everywhere. Guess economists were 'wrong' as usual.
It’s not just aging. The young people of today saw their parents sacrifice their lives to work. Many are avoiding that path. I see similarities with our young people who are rejecting greed in larger numbers.
A decrease in population may be economically painful but not necessarily a bad thing for the planet.
But bad for the people living in that country
I don't think many are avoiding that path intentionally. The youth just have far less opportunities than their parents did. Almost the only stable industry at this point is the healthcare industry you want a steady job taking care of all the old people. Anywhere else, and it's a gamble if you will keep the job long enough to retire.
Jav253 I have two young adult kids and I naturally am exposed to their community. There continues to exist many opportunities but in areas like engineering, medicine, plumbing, carpentry, etc. But many of the youngsters don’t seem driven like the people of my generation. It’s worrisome for me as a person who worked in the tech center because so many of the jobs I mentioned will be severely reduced by AI and tech in general.
Japan does have the problem of stagnating salaries. Heck, their gdp hasn’t grown for 20 years! Lots of Japanese are overworked for meager salaries while their entreprise leaders take the big slice. Japanification is bad; really bad.
I'm sure these economists are not worried about stagnating salaries of the working class
Well their gdp isn’t growing because their population is declining, so they have growth, just not on a surface level
yeah incomes in the west have remained stagnant in real terms since the 70s
@@billdoeson6981 They've actually grown, by about 20% since the 70s. Not much, but not stagnant. And the workforce hasn't been much more productive since the 70s either.
So they are saying Japan has less inequality?
Yes, that is what they are saying and all figures show that it is actually true.
Most OECD countries have
@@klam77 Japan has different laws. There are very high taxes for people who inherit property from their parents, unlike western countries, which leads to a huge concentration of wealth.
Bryan Shealy over all yes we do, but that’s mostly because we don’t have as many rich people here making everyone else look poorer by comparison, really as an American in Japan, the living standard here is much lower than back home, your average Japanese person doesn’t own a lot of the basic things we Americans just take for granted, even so much as having a dryer, dishwasher or car is considered a massive luxury to most people, most buildings don’t even have insulation or double paned windows, and the average apartment size is like a American walk-in closet, the only reason I moved here and started working towards citizenship is because I’m white, and I know it won’t be physically safe for people that look like me in a few years time in America, so I had to leave.
@Xadion as opposed to empty properties in New Zealand or Canada which rich Chinese buy just to increase their wealth while regular people struggle to pay rent on artificially inflated prices. Much better system eh?
I would rather America became Japanificated than Japan became Americanized.
Weeb
I would rather avoid that the unhealthy way of working made in Japan don't spread.
I rather seeing diehout.
*laughs in Meiji period*
Japan beats America on every aspect, by far. Work eficiency, life expectancy, median wealth, health system, criminality, culture, food... The only thing that is above in the US is the wealth of the few billionaires...great!
Weebs make it hard to like anything from Japan. Y’all are embarrassing
This is a good thing. It’s time to turn the machine off. We can all relax
I don't want to relax. I want to do things.
@Athena Chan 2003 a very nice place to visit indeed, I've done that. Is it a nice place to live your life though? This one I don't know, but just like most places it should comes with ups and downs.
@@Exofunny300
is ur masta feeding u well? 😍
@@alternativearchival5379
and you own a farm?
@@Exofunny300
LMFAOOOO I ACTUALLY DO
shut it bootlicker
For all the hand-wringing about Japan I haven't seen a lot of suffering related to their condition. Perhaps it's time to reassess the importance of growth. I think the economist's admission that inequality makes it a problem is telling.
3:30 in many ways Japan is a better place to live... (Roll Pikachu boat)
Immediately looks up how to move to Japan
30 years ago, "Japanification" was everyone's goal. Now, it is something to be feared.
It is very very very embarrassing that mainstream economists seldom declare possibility of a recession although it is clear in sight, where as a doctor would warn you worsening of your health, a software engineer would recommend a system upgrade, a police officer would warn you of driving hazards, etc.
but you do not factor in herd psychology. 2008 crisis happened when financial gurus got freaked, that would happen/is happening right today too.
The difference is that when a Doctor, Software Engineer, Police Officer tells you these it does not become a self fulfilling prophecy as it can with the markets.
@@brido88 In the economic field, if someone authoritative warns of problems ahead, others will immediately seek to exploit the situation: so they need things to get worse.
So this where former head of federal banks of all the countries go to.
Biplav Shrestha boog
So why is this a problem??
It depends on how who you are since this affects people differently in their respective age groups. But deflation is going to hit (make our debt heavier) via negative interest rates which benefits the boomers who gets X amount of social security that just grew in buying power, but people under 50 will get paid less and there’s no way out of this spiral at the moment.
Because if you're one of the 0.1% you rely on constant growth to drive the markets to make money. (But if your not one of the 0.1% then you'll probably be ok with it. )
it’s not a problem. It’s a good thing. Technology advancements will fix any of the problems.
@@j.obrien4990 i agree with your take on it.
Edit: In addition, I think that Bernanke is an opportunistic virus. Their methods of "preventing" a recession with massive Keynesian controls is ridiculous. Look what they're doing now with the massive "quantitative easing".
it's not that bad if you assume financial market going to be stable, but if there's a financial crisis the fed are left with only injecting cash into the market which presumably has more drastic and immediate impact to stability and equality.
Sounds like "we're worried about losing financial policy tools" is really just code for "we're worried about not pleasing the people at the top".
II live in Japan. The equality sounds good in the movie, but that is also one of the problems. Because our income does not reflect our skills or capability directly, due to the life-long employment system. This equality is caused by the low-salary easiness, which companies can keep their workforce even though they restrain the salary price. It really suffocates us……
Are younger folks changing jobs more frequently than before?
@@gaston6814 Correct. But normally, we tend to get low price salary if we change our job. This is because the most important criteria for evaluation in Japanese company, is still the loyalty to the company.
Japanese companies are said they adopt “membership” type employment, not skill-based employment. Exception of this tendency is foreign-funded company, of course, which are popular among those who have skills and want to get high-price salary.
@@tagatamenikimihanaku that sucks, mate. I considered migrating to Japan to work as an engineer after graduating, because I want to work in robotics and automatization; plus the wages are massive compared to where I'm from and I wanted to experience living in Japan. But the prospect of small salary increases after gaining useful experience deters me, because in any other first world country the salaries grow a lot by changing jobs after earning some experience.
Maybe I could try it for a couple of years in he future.
@@gaston6814 Engineering field is much much healthier even in Japan! But I highly recommend you should research carefully if you start your career here. Hope your talent is performed in the best environment!
America is too obsessed with making a few people extremely rich. Wealth inequality is a more important signifier of a failing economy than GDP growth.
The reserve bank of India guy has a very soothing voice
His name is Dr. Raghuram Rajan. A very imminent economist from India.
Japanification could been rephrased as Germanification. It did not work exact since Japan is an attempted power and security check to the fast developing continent with heavier a fastest growing population and cheap to invest for the last three decades. That has changed and we are witnessing it. The cheap to invest for profit has created limitless trouble for the west
I’d like to keep growing. One mansion is not enough. One car is not enough. 1 million is not enough. 1 billion is not enough. 1 trillion is not enough.
I always said if you want to know the financial future of the US you always look towards Japan.
"HOW can we create LOTS more debt.. when it's mathematically impossible to pay back the current amount?"
Japan's debt is no big deal.
@@skiran69 Isn't it 222% of the GDP
@@munafiqwill7837 doesn't matter. Most of it is in investments.
'“Japanification” in the economic sense refers to the stagnation that Japan's economy has faced over the past three decades, and is typically applied in reference to the concern among economists that other developed countries will follow along the same path.' Feb 2021
Source: Seeking Alpha
I think the clear way to solve the problem talked about is the following policies (not monetary policy, will explain at the end):
1) Ban exclusive zoning laws that prevent the construction of safe and well-built housing anywhere (such as building housing on top of commercial property (the mixed use utopia that exists in Holland and basically every successful city not in North America, and was previously said to be “the way you build things”)).
2) Allow housing properties to be subdivided into units however the buyers feel is necessary with the proper right of way guarantees for buyers to go into and out of their units (this allows the prevention of rentiership by having individuals purchase an apartment within a building, instead of renting it).
3) Impose a national progressive property tax (with no exemptions except for the properties owned directly by state governments and local governments) of {value of all property owned by entity}*atan(ln(value of property)/1000)/pi. This tax effectively means that there is now an incentive for landlords to directly sell units to customers, since an individual with less total property will pay less as a percentage of the value of the property (presumably the former renter will be given a mortgage such that the monthly interest equals the normal rent). This then means that as an area becomes an even better place to live, the new gains in society will be shared equitably between more people.
4) Impose a 5% tax on all incomes and profits made by any person or corporation in the United States with no exemptions where 1% of that tax goes to the IRS to enforce it and the rest goes into building new hospitals and hiring only newly graduated doctors with competitive benefits (and purchasing medical supplies from whomever provides it the cheapest, including in allowing the new department to hire the CIA to covertly purchase medications from other countries) who will then treat everyone who comes in triaging to save as many people as possible. This policy means that we can, as time goes on, invest in building up our capacity to provide for people’s needs instead of the current system which simply invests in expanding the profits of the investors in hospitals, healthcare insurance and pharmaceutical companies, which has helped no one and made the U.S. pay more for healthcare than anyone else while getting worse results.
Oh hey, a cameo by Raghuram Rajan.
The Indian weeb and finance student in me is so excited.
Absolutely agree with Mr Friedman's words.
Imagine exploiting the poor so much that you only worry about having nothing left to steal from them ...
Yes the poor are so exploited that in the USA, the poor in the world come over in vast numbers, sometimes in horrific conditions, to make sure they themselves get exploited. That makes total sense.
@@ominousparallel3854 can you move to a poor country? seems logic to me. I heard that some Norwegians get their unemployment checks and live comfortably in some South American countries for years.
@@woozyyt5573 yes because the migrants coming to the USA are all billionaires. Not at all poor people trying to make a living, because, those are clearly exploited. Of course. So obvious. Whatever.
@@ominousparallel3854 migrant billionaires renounce American citizenship in droves right now. what about answering my actual question? why are poor Americans not moving to poor countries? the only reason I can think of is family and friends. otherwise it's not a brainer to move out for a better life.
@@woozyyt5573 if you don’t understand why reality doesn’t comply to your premises, maybe your premises are wrong? Maybe you need to challenge what you think you now a bit harder?
Poor people don’t leave the USA to go to poorer country because it’s not in their interest, full stop. The idea that you would leave America to go to Madagascar, Bangladesh or Congo in the hope of getting better opportunities is completely idiotic, to say it frankly.
Really basic evidence suggests that poor people come to the us, not the other way round.
To be honest, japan is nice to visit but not so great for working. It has way longer working hours and less pay compared to the US. I prefer living in California and visiting Japan for vacation.
"When the next recession hits" - Yeah, just wait a few days...
The main difference between Japan, and most of the west, is immigration. We seem to want growth at any cost, while they're content not to do that.
Growth for who is also another question.
Interesting yet the west outsources its manufacturers to China and Asia and uses immigration to account for any labour that most would not choose to do. The question then arises is it immigration alone responsible for the west labour not being as competitive as Asia?
@@anall3l3 you nailed it amazingly Allan ... growth for who, because not for working/middle class - immigration actually reduces thier wages / position on job marketplace significantly. It only makes those rich even richer. That is why in Japan it works and it works for very long time succesfully.
@@Mario-kf3ej Here in Japan, wages have been stagnant for decades and social security is at risk. The government wants to raise the retirement age again. Whereas consumers once paid 10 percent of medical costs they now pay thirty. Without immigration, our safety net here is not sustainable, because there are not enough folks paying into the system.
Why economics are japanifying?
Me:Must have something to do with anime.
I love Japan.It is a place of dreams and I am very happy to know that there are so much old people there.
Too much
you didn't have time, I imagine, to explore how radically different immigration policies and realities affect demographics
Immigration is helping prop up the US' economic growth. Much of growth post great recession is a result of immigration.
Omar W You can’t just lie like that
@@iheartlreoy8134 of course he can, his name is Omar, why won't he lie?
@@theoutsider7331 I trust an individual with a name Omar or Abdul way more than Stein or Berg at the end...
@@Commievn It is not just funny, or true. It is partially true, of course.... Social policies do change societies, and that was the point, and yet the population are surprised because of the change, and its negatives.. As people like to hear change and expect only positive changes.. from their perspectives... Advantages they expect to come without disadvantages..
Contradiction around 2min: "when you have more demand, you have inflation".
But everybody in school is told the opposite: "the high demand generates inflation".
Now I think that inflation had nothing to do with anything but GREED from the market. Of they are selling much, they raise the prices as people is buying. If they're selling low, they also raise the prices, as they want to recovery the loses by charging extra from the lower number of buyers.
If margin of profit be not controlled, we will always get ripped off.
I know, I know, the every country who tried to control prices were bad, but they were also communists, so... How about to give a try to it in a serious, non-dictatorial country?!
Forget. The cattle is just fine with the market (and government) hands inside their assess.
When the Japonization beam hits the economy!
So true, the federal reserve will have a very limited room to manoeuvre in case of anther recession hit if the interest rate stays low in today good economy.
Nobody wants to blame Keynes general economic theory or Friedman's monetarism😅😅
spotted an enlightened person here
Or hush hush...........Capitalism !
Friedman opposed central banking and this is what it all boils down to.
@@mrniceguy7168 Friedman did not oppose the very existence federal reserve . He criticised certain measures of the federal reserve . In fact, according to his quantitative theory of money, he believed that there was a direct correlation between price stability and quantity of money which again is giving impetus and discretion to the central bank. This was the area where I feel Hayek had a much more sophisticated theory of monetary policy than Friedman. By the way , as a libertarian, i admire both of them. But Hayek's conception of money was far more advanced and sophisticated 😀😀😀
Moulieswara Prasad Friedman has called for the abolishment of the Fed and criticized them many times. Friedman simply acknowledged that they exist and that they have a responsibility to conduct monetary policy.
2:33 Yellen using an iWatch?? 😳😳😳 It kinda vibe doe
Useful video =)
Eventual labour shortage in Japan will mean rising wages. The eventual passing of the elderly also means huge transfer of wealth to the younger generations.
Sounds like net positives.
You do know that without more people business would either A. Have to increase work hours to compensate for lost manpower, B shutdown or C import workers or send work out the country. There’s only so much 1 Person could do and paying him 100 dollars a second won’t make him be able to be the janitor, cashier, restorer and more all in one time
@@supergamergrill7734 D. Automation
@@Enthalpy-- Their doing that anyway. Not all jobs can be filled by robots.
50% of current jobs will have been made obsolete within the next 25 years due to mass-automation and AI. Labor shortages in the meantime are addressed by temporary work visas...visas for which there is a long line to apply for.
Now everyone is losing their minds about HYPERinflation, not deflation in the US... times change real fast.
I like the way this Rajan guy talks.
Brilliant Central Banker, RBI governor until the uneducated PM Modi decided he wasn't loyal enough & couldn't bend him to his will with his ridiculous ideas.
If the slow growth continues and the population falls, doesn't that mean that per capita GDP is increasing. Why are we looking at absolute figures of GDP when population is falling?
Does this still apply today, a year into the pandemic?
OH NOOOO!!!! PEOPLE AREN'T MINDLESSLY OVERCONSUMING BECAUSE THEY ACTUALLY PUT VALUE AND THOUGHT INTO THEIR LIVES. THIS IS A DISASTER!!!!😱😱😱
Real Estate prices are are unreasonably high, anyone agree?
It's a direct result of post 2008 economic stimulus.
Had Bush, Obama & the Fed not prevented a much-needed collapse of the housing market modern real estate would be accessible on a level similar to the baby boomers era.
Progressives and conservatives make a great show of disagreeing, but when it comes to screwing young people out of owning homes they experience unbelievable amounts of unity.
@@unintentionallydramatic I'm also seeing a big influence from money laundering, mortgage fraud, "creative finance" which is often mortgage fruad, airbnb investors, and hedge funds buying RE to rent.
@@arodriguez2707
Absolutely.
Also foreign money, which arguably tends to tie into the money laundering.
Slow Econonic growth or sustainable economic growth? Low interest rates that don't stimulate demand is understandable but low inflation helps to keep the value of consumers' money. If this improves effective demand, how is there an issue? Why aren't they spending should be the question instead of just generalising the whole economy based off of what they see.
A few points that needs to be noted.... Japan's GDP has been slowly increasing, but population and workforce decreasing... thus greater productivity per capita.
Most challenges for those entering the workforce and those "stuck in the middle" are stagnant wages and lack of opportunities for promotion (lots of seniors still working). So shortage of labour will eventually mean higher wages and once the older population eventually make way for the younger population, more money for those workers as well. Higher wages will eventually lead back to a higher birth rate.
Lastly... while Japan has a huge debt, it's all insular. 70% of the national debt is owned by the Bank of Japan and with the majority of the remaining amount owned by Japanese banks and Japanese investors. Any increase in rate just means the money still stays within Japan.
Japan doesn’t have higher production because the people work better but they work longer hours. Europe is at a average of 32 Hours, America is at 42 hours and Japan is at 72 Hours. So them having more spending is meaningless if they can’t use it. That’s why Henry Ford increased wages and lowered work hours. To encourage his workers to buy the cars they produced. Thanks to globalization, you don’t need to do that.
Lol. They should not worry of japanification or japan. They should be worried for themselves for their actions and policies what causes recession. Even though japan have less growth it didn't have a home grown problem since 1990 that leads to a great recession unlike the US from 2008.
wouldn't the solution to widening inequality in the US be strengthening unions, worker ownership, financial regulation, etc? why would more growth be a solution if the economy has grown for decades and wages have stagnated? i think many economists have mush for brains.
The matter is never inequality. It has never been.
It's poverty that counts most. The only ones who care about this phenomenum are those who are already on a certain level of wealth.
Not those who don't know what they will have for dinner.
The one guy who pops the Bubble Benjamin M Friedman, Respect from an Aznidentity viewer
Just came from "Wall Street journal" from future and found this "past" post 😅 from @Financial Times
3:06 Anytime you hear that "there are no more tools left" remember that there will always be one ultimate tool that works all the time: taxing the 1%, and redistributing the money to reignite demand.
Read Peter Zeihan's book.
these economists pride themselves they can improve a country by its policies but no. Truth is the best they can do is not screw up, it is the people who drives economic growth. Japan simply reached its peak performance rapidly and corrected as fast, Japan performance is impressive but to realize GDP growth they got to accept change or better immigration
The ethics are different from what people think
Really
The corporate ethics is brutal
Central banking is a con. Stop putting the country in debt and have a non fiat currency and problems disappear. Financialisation leads to a non productive economy not elderly people
Finally someone else than progressives doing social studies.
Jakob Peter Raahauge I wouldn’t say it’s social studies, this just seems like a pure economic observation.
If everybody consumed and wasted as much as people in 'advanced' consumer economies we would need about 3 planets + we have less than 10 years to make annual 8% reduction in greenhouse gas emissions if we have any chance of staying below 1.5C. Infinite growth on a finite world is a path to ruin. We need to find ways to embrace a slow down of growth in the economy, ways that also help us lead longer, healthier & happier lives. Sounds like equality is key to this. Japan isn't perfect but it might have some of the answers...
Frankly go to Taiwan or Singapore people in their 60s and 70s continue to work. And really if you don't work, what are you doing?
Continuous growth is a symptom of cancer, which also kills it's host. My prediction for the economic worry about aging populations, (which has been a complaint for decades) it will be an excuse for "austerity" measures in aged care. Pensions & support services will be cut & vulnerable people will be sacrificed for economic gain.
so their concerns is that they will have to learn how mess with the economy in some other way than by using central banks
What that does to house prices ...
Japan existed for 1000s of year.
U.S existed for 250 yrs or so.
Japan will exist, but I'm not sure if U.S would, atleast in its present form.
Declining population or stagnant population = deflation
If the USA evolved to be like Japan that would be a good thing. Japan has healthcare for all. Japan has the best public infrastructure allowing its citizens to travel easily throughout the country. Japan has excellent water resources so that its citizens have abundant water supplies for drinking and other uses. Evolving to be like Japan would mean a more harmonious society.
they have very strict immigration policies too. hopefully they copy that as well.
The US and Japan are very, very different countries, Japan is a relatively small dense country that is extremely mountainous and is ethnically and linguistically homogeneous. As well as the vastly different history and culture, but there’re some aspects that could be implemented to the US and other parts of the world
@@gabbar51ngh they also have manners, discipline, respect and social policies that values working together as a unified group. Which in US would be categorised as socialism as no one is willing to pay for medicare and taxes. Australia is a multicultural society that has most things that Japan does with the exception that the Australian government sabotaged its Internet fire optic cables by caving into Rupert murdoch.
@@laraerikson1423 None of that is related to socialism. there are few welfare polices but so does usa if we go by that logic.
@@gabbar51ngh I'm referring to people who detest these principles that is found in most societies like medicare as being socialism. People love the idea of strict immigration but at the same time make the case against other successful principles that involve paying higher tax for the benefit of society.
Interesting