During the second quarter of 2010, China passed Japan as the second largest economy of the world. On October 16, 2010, Martin Fackler states in his New York Times article, "Japan Goes From Dynamic to Disheartened," that since the late 1980's, Japan has been living in a period dominated by stagflation and deflation. The possible reality that Japan represents America's future is something most Americans would prefer not to happen.
It's Not Pretty In Japan
Fackler points out that Japan, since the late 80's, has been living in a period of stagflation and deflation. Jobs are very scarce.
Charles Hugh Smith, August 6, 2010, Daily Finance, "Japan Economic Stagnation Is Creating a Nation of Lost Youths," states that more then one-third of the workforce is part time. A big chunk of Japanese companies no longer offer life-time employment.
Japan is becoming a nation of haves and have- nots. The Japanese media use the phrase "Kakusa Shakai," which means gap society. The upper class elite are prospering quite well. The middle class is vanishing. The younger population is hurting financially. Two million yen, $23,000, is the apparent poverty line for millions of Japanese.
Japan's Small Hope for the Future
Many young people have embraced the contemporary attitude that it is OK not to work a 70 hour work week with undying loyalty to a corporation. This attitude is known in Japan as a freeter. Freeters are mostly young part time workers.
The freeter perspective evolved from the twenty some years of economic stagflation in Japan. Young people have seen what happened to their parents who worked 70 hour weeks with absolute loyalty to their corporation. This work ethic was achieved by promises of lifetime employment and a good retirement from the corporate world. Beginning in the late eighties these young people saw their parents loose their jobs. These freeters believe their parents were foolish and that they wasted their lives.
David McNeill in the Independent World, February 6, 2008, "Luxury gap: how Japan turned Into a nation of haves and the have-nots," points out that Japan is becoming a two tiered society. "We are being divided into rich people and poor people," the social democrat leader, Mizuho Fukushima told the Japanese media in 2008. "And the gap is widening."
Mc Neill states that the fear in Japan is when the generation of baby boomers dies out, and the economy continues to slide, the income disparities will pull the country to pieces.
Where is the Hope in America?
The issue today in America is jobs. America's unemployment rate in September was 9.6%. The real estate market in the United States is a disaster. Not only are homes throughout the country going into foreclosure, but there is a big chunk of homeowners who are underwater. In another words, homeowners owe more money then their homes are worth.
Although the unemployment rate as of August 2010 was 5.6% in Japan, the job market there is very discouraging. Almost one-third of the employed in Japan have only part-time jobs. Japan's real estate market is dead. Depreciation has taken a terrible toll on real estate values.
The big difference between the situation in Japan and America is time. Japan has been living with stagflation and deflation for twenty years. America is experiencing stagflation. Deflation is occuring primarily in real estate. However, the potential for the United States to nose dive into all out deflationary spiral does exist.. John H. Makin's article, in the July 2010, American Enterprise Institute For Public Policy Research, "The Rising Threat of Deflation," suggests that the possibility of American experiencing deflation on a massive scale is not an impossibility.
John A. Marinchek - John is a student and writer of Social-Economic issues, the Human Potential movement, and Martial Arts. His specific interests deal with ...
