The downsizing of Japan’s ambitions can be seen on the streets of Tokyo, where concrete “microhouses” have become popular among younger Japanese who cannot afford even the famously cramped housing of their parents, or lack the job security to take out a traditional multidecade loan.
These matchbox-size homes stand on plots of land barely large enough to park a sport utility vehicle, yet have three stories of closet-size bedrooms, suitcase-size closets and a tiny kitchen that properly belongs on a submarine….
But in Japan, nearly a generation of deflation has had a much deeper effect, subconsciously coloring how the Japanese view the world. It has bred a deep pessimism about the future and a fear of taking risks that make people instinctively reluctant to spend or invest, driving down demand “” and prices “” even further.”
A new common sense appears, in which consumers see it as irrational or even foolish to buy or borrow,” said Kazuhisa Takemura, a professor at Waseda University in Tokyo who has studied the psychology of deflation.
The NY Times has a fascinating front-page story, “Japan Goes From Dynamic to Disheartened.” It explains how, for many Japanese, “living standards slowly crumbled along with Japan’s overall economy,” thanks in large part to two decades of failed economic policies.
Voters in this country who seem poised to put the people who got us in our current economic mess back in charge, at least of the US House of Representatives, may think grid-lock is good, yet I’m sure they also believe such a future is impossible for this country.
The NYT‘s explanation for why it can’t happen here isn’t reassuring:
Many economists remain confident that the United States will avoid the stagnation of Japan, largely because of the greater responsiveness of the American political system and Americans’ greater tolerance for capitalism’s creative destruction. Japanese leaders at first denied the severity of their nation’s problems and then spent heavily on job-creating public works projects that only postponed painful but necessary structural changes, economists say.
“We’re not Japan,” said Robert E. Hall, a professor of economics at Stanford. “In America, the bet is still that we will somehow find ways to get people spending and investing again.”
Huh? The “greater responsiveness of the American political system”? Are the reporters and editors at the one-time paper of record even paying attention to what’s going on in this country? The American political system — which already can barely pass an extension of jobless benefits and can’t even bring up a centrist, business friendly, Republican-designed strategy to limit carbon pollution and promote clean energy — is about to become all but ungovernable because:
- Progressives refuse to clearly articulate how we got in this mess, what the heck they’ve been doing to get us out, and what the opposition has stopped them from doing (see Krugman sets the narrative straight: “We never had the kind of fiscal expansion that might have created the millions of jobs we need” and David Stockman bombshell: How my Republican Party destroyed the American economy).
- The Tea-Party driven conservative movement has realized its nihilistic policies and messaging, while ultimately self destructive in the medium and longer term, is a short-term winner (see Why the victory of the Tea Party extremists (backed by Big Oil) over the slightly less extreme GOP establishment (also backed by Big Oil) is good for progressives, but bad for climate and clean energy).
- The media is primarily interested in reporting on the horse race, who’s up and who’s down, rather than the implications for America and the world (see Joe Klein on the GOP: “How can you sustain a democracy if one of the two major political parties has been overrun by nihilists? “¦ How can you maintain the illusion of journalistic impartiality when one of the political parties has jumped the shark?” and How the status quo media failed on climate change).
There is no genuine possibility that Congress is going to act to address our economic or energy or climate problems anytime soon — see Sen. Bennett: “The concern I have is that ideology and a demand for absolute party purity endangers our ability to govern once we get into office.” Indeed, the message that will be delivered in the November election to every Republican is that even the tiniest hint of bipartisanship is fatal to your political prospects. It’s not like Lisa Murkowski (R-AK) or Bob Bennett (R-UT) are actually moderates. They just weren’t sufficiently extreme or anti-bipartisan enough for the Tea Party crowd.
And where is the evidence Americans have “greater tolerance for capitalism’s creative destruction”? The auto bailout appears to be a tremendous success, but it is vilified along with the rest of the bailouts, which, while they may have been imperfect, appear to prevented the Bush-Cheney depression. Americans are so unhappy with the current round of capitalism’s creative destruction that they are going to hand the keys of the car back to the people who ran it into the ditch.
Of course, quite separate from the short-term question of whether we can pull the economy out of its torpor this decade is what happens in the medium term now that the Tea Party crowd has made serious action on climate and peak oil — or even a big push on clean energy — all but inconceivable. As Tom Friedman wrote over a year ago (see Is the global economy a Ponzi scheme?):
“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks “” water, hydrocarbons, forests, rivers, fish and arable land “” and not by generating renewable flows.
“You can get this burst of wealth that we have created from this rapacious behavior,” added Romm. “But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate “¦’ Real wealth is something you can pass on in a way that others can enjoy.”
And so every generation that comes after the Baby Boomers are poised to experience the dramatic changes in lifestyle that inevitably follow the collapse of any Ponzi scheme (see”Labor Day, 2029: When the global Ponzi scheme collapses, the only jobs left will be green”). Unless the Tea Party can be stopped, that is.
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Language Intelligence: Lessons on persuasion from Jesus, Shakespeare, Lincoln, and Lady Gaga
Forgive my possibly simplistic view of things, but if the tea party has it origins with people like the Koch brothers, isn’t it likely that the “tea” reference is to Texas tea, black gold, oil and not the Revolutionary War event in Boston Harbor?
Did Japan really stagnate. I get the impression that there standard of living based on other factors, longer life and health, seems to have improved.
When I look at the current political situation, I think of Jean-Jacques Rousseau’s “The Social Contract”.
“Nothing is more dangerous in public affairs than the influence of private interests, and the abuse of the law by the government is a lesser evil than that corruption of the legislator which inevitably results from the pursuit of private interests. When this happens, the state is corrupted in its very substance and no reform is possible.”
Jean-Jacques Rousseau, “The Social Contract” (1762), book 3, chapter 4
Or on the subject of ungovernability:
“However, when the social tie begins to slacken and the state to weaken, when particular interests begin to make themselves felt and sectional societies begin to exert an influence over the greater society, the common interest becomes corrupted and meets opposition; voting is no longer unanimous; the general will is no longer the will of all; contradictions and disputes arise; and even the best opinion is not allowed to prevail unchallenged.
In the end, when the state, on the brink of ruin, can maintain itself only in an empty and illusory form, when the social bond is broken in every heart, when the meanest interest impudently flaunts the sacred name of the public good, then the general will is silenced: everyone, animated by secret motives, ceases to speak as a citizen any more than as if the state had never existed; and the people enacts in the guise of laws iniquitous decrees which have private interests as their only end.”
Jean-Jacques Rousseau, “The Social Contract” (1762), Book IV
I don’t think America is there yet, but I can imagine it happening. For one thing, we are here talking about this. And Voltaire once wrote about Rousseau’s works something to the effect of “…when I read your writing, I feel like slitting my wrists.” I can see some thinking Rousseau can be a bit nihilistic in what he wrote.
“Japanese leaders at first denied the severity of their nation’s problems and then spent heavily on job-creating public works projects that only postponed painful but necessary structural changes, economists say.”
And exactly how does the NYT think this is different to the US response to the economic implosion here?
I realize that I’m preaching to the choir here, but this strikes me as exactly what US politicians are doing, while denying that it is the same.
i love the ‘economists say’ citation from that NYT article as though economists unanimously agreed that leaving millions jobless or scared for year after year was good economic medicine, like castor oil.
it’s actually pretty unusual to hear japan’s lost decade chalked down to its labor markets. most describe it as a problem of too much chairty to their banks, but i guess already-bailed-out manhattanites see our future differently.
Some thinkers- such as James Kunstler- believe that we are headed into a long period of either flat or negative economic performance, due to unsustainable debt, vanishing fuels and resources, and the fact that we no longer actually produce much wealth in the form of manufactured goods.
This would be a good thing in one sense- pressure on resources would lessen, and there would be fewer absurdities like 3500′ houses for small families made from chipboard, vinyl, and two by fours.
Whether we survive this restructuring will largely be a function of whether the wealthy continue to hog our cash and resources, as the rest of us become more impoverished. I’ve lived and worked in Japan, and, as in Europe, there is nowhere near the level of inequality that we do. That’s why they survived without chaos or violence, and why we are falling apart because of less than three years of flat and slightly negative growth.
If things continue sideways and south, the rich will continue to persuade Fox and Rush listeners that their financial desperation is caused by liberals, environmental regulation, and foreigners. Fear and ignorance may reign, two conditions that always have bad consequences.
We just have to keep fighting. Whether we control the damage, or helplessly watch the world change into a denuded and chaotic state, remains to be seen.
“In the end, when the state, on the brink of ruin, can maintain itself only in an empty and illusory form, when the social bond is broken in every heart, when the meanest interest impudently flaunts the sacred name of the public good, then the general will is silenced: everyone, animated by secret motives, ceases to speak as a citizen any more than as if the state had never existed; and the people enacts in the guise of laws iniquitous decrees which have private interests as their only end.”
Jean-Jacques Rousseau, “The Social Contract” (1762), Book IV”
Indeed. JJR just defined the Tea Party movement.
All you need to cap it all off is a quote from Milton Friedman.
Submerged in a culture of ‘the future will be better’, the impoverished middle class sees their hard work won assets trickle away. They are angry, disillusioned and looking for scapegoats.
Someone or something will have to pay for the collapse of the ‘American Dream’.
And what will it / they be?
Here’s a short list of changes that I see in their infancy now and can reasonably be foreseen:
Scientific knowledge and research -> Belief, opinion, superstition and ideology
Knowledge in general -> Ideologically based opinion
Politics, the art of the possible mixed with the art of compromise -> ideological trench warfare where prisoners are not welcome
Public good -> private good
Rich governments providing the necessities for a modern sophisticated state to flourish -> poor governments pinching pennies reducing services and letting infrastructure decay
Well educated general population -> Elite robotic minds and a dumbed down general population
Broad visions with long, mid and short term goals for society’s trajectory -> short term political wins and even shorter term economic goals
Creativity and ‘thinking outside the box’ -> creativity reduced to finding better ways to be a better supporter of one’s ideology
Art, the muses giving us sometimes unpleasant insight into our present and our future -> propaganda convincing us of the righteousness of our ideals and the promise of our future.
Ecology -> economics
This is just a short list of the gradual but increasingly speedy trends I see occurring now as a direct outcome of the new growing populist political movements in the USA and in Europe.
Oh My Gosh
What are the folks at The New York Times thinking? I haven’t read the whole article, but judging from what’s written here, wow!
For one thing, using the marketplace to wisely address our present problems (e.g., global warming) and move us with vitality into the future would have involved a robust and wise way of putting a price on carbon. And, “capitalism’s creative destruction” would have us (correspondingly) moving away from oil and coal and towards clean and renewable sources of energy. What the oil companies are doing — and what we (public) are “buying”, and what the politicians are voting — shows anything BUT a high tolerance for capitalism’s creative destruction. Indeed, it all shows an immensely damaging and stubborn tendency to hold on to the past, no matter what the cost.
This makes me wonder whether The New York Times even understands the phrases that it uses.
Sigh,
Jeff
A perfect storm, peak oil, worst recession since the depression, and climate change (with the costs associated with the damage it will inflict).
As for the middle class standard of living? I saw that go when all the manufacturing jobs left the country. In order to compete our workers would have to reduce their standard of living to that of the Indians or Chinese.
The current lack of will for “creative destruction” with redneck puppetry speaking on behalf of the oligarchy and fossil fuel state is destroying American governance.
Maybe it is good that The New York Times makes this concept part of the discussion as creative destruction is absolutely what the Tea Party is NOT about.
Have we thrown the towel in already? Last I checked it was only the 17th of October. Let’s not do what the Dems are so good at: Overly analyze rather than get out on the streets and get to work with the hope and the vision that we can turn this election around.
There are lots of good tools out there. Call undecided voters from home, volunteer with Clean Water Action, or another progressive group, knock on the doors of 10 of your neighbors. Tell them your story and make sure they too are talking about politics. Set a goal of 200 contacts in the next 2 weeks. These elections are close, and GOTV can make the difference.
Politics is about the public good. It’s not private. It’s go time! Let’s take it back!
> Americans’ greater tolerance for capitalism’s creative destruction
Yep. Americans are going to EAT the old people, not warehouse them.
The more things change the more they remain the same. History is full of such patterns. Civilizations and the paradigms they have represented are subject to the laws of entropy.
@Catchblue22
“the abuse of the law by the government is a lesser evil than that corruption of the legislator which inevitably results from the pursuit of private interests”
Nice quote.
I fear the popularity of the Tea Party movement is a reflection that body politic has lost the capacity to even perceive the distinctions among “law”, “government”, “evil”, “corruption”, “legislator” and “private interests”, let alone make comparisons of lessor or greater evil. Democracy is a harsh mistress/master/contract!
Julia #11
>Have we thrown the towel in already? Last I checked it was only the 17th of October.
I agree. Are American voters so stupid that they’ll really vote in the tea-party crazies? I know some of them are, and some probably think that they’ll “punish” Obama by voting for them, but there are still a lot of people in the middle who are looking for “Sensible” answers.
The people of America continually have voted against their own interests for decades- based on the irrational fear associated with the exploitation of their Xenophobia.
This started after world War II, in the election of 1948 with the ‘Dixiecrat’ who rebelled against Truman’s liberal policies- and again with Nixon’s ‘southern strategy of 1968- and has been the power and message from the republican party ever since.
It seems the Tea Party today- frustrated by their shrinking demographics- -out of fear in their loss of power has rallied angry white people.
The GOP has no plans or policies for the 21st century- only the stale Ronald Reagan 30 year old trickle down, tax giveaways to the wealthy and corporations All whom have become fabulously rich in the last 3 decades- at the expense of the average American.
The GOP intends to reject any reforms, ignore the growing and dangerous menace of AGW- and block the more centrist/progressive ideas of Obama- or any Democrat. The results will be a decade similar to the 1930s- Ignoring the soaring rise of CO2, and climate ‘resets’ & Feedback’s will cause increasing social anomie (Chaos) and economic uncertainty.
If anyone thinks of a more benign outcome- I would love to hear from them. The 21st century- at least thr first half is going to be a wild ride- making the 20th century look mild in comparison.
Who says different might also equate to worse in America. Japan was only stagnant and at least most could find some sort of job. Will America continue to decline over the next decade thanks to Republican polices and we’ll look back on the past few years as the ‘good times’ when unemployment was ‘only’ 10%?
Bretton Woods: amongst other things agreed was that the US$ would be the world’s trade currency and that the US$ would be backed by gold. As a consequence foreign countries and individuals hold considerable reserves of US$.
Nixon got rid of the gold backing. When the world realises that very little backs the US$ its fall could be spectacularly quick. All that hold it up is; habit, emotion and the belief that the US is too big to fail.
The huge foreign reserves of the US$ amount to a considerable free loan to the US economy. The liquidation of those reserves could have catastrophic consequences, just like a run on the banks.
The time may be soon. Look at the economic pain in the US compared to the rest of the world (yes other countries are felling pain, but not as much). Look at the huge debt, the price of gold, the political stagnation.
It is fortunate that the debt is in US$ and much of it long term.
The situation requires nuance and finesse, neither of which is in oversupply at the GOP. Vote or the loonies win and everybody(the world) looses.
Prediction: A couple of the TP candidates will get elected, but overall their effect will be seen as a setback for the right wing. I heard some political reporter on the NBC nightly news just the other night say that there are five races for the Senate where a TP candidate beat a more moderate Republican candidate, and will now likely lose to the Democrat in the general election. In other words, the TP could have cost the Republicans a shot at taking back the Senate, simply because voters wouldn’t buy into their silliness.
Here in NY State, where we have a Andrew Cuomo running against a ridiculous businessman and political newcomer, Carl Paladino, the tide is turning pretty strongly against the later. I fully expect to see the usual pattern here in western NY, though — Paladino will win some suburban and rural spots, but the cities will vote for Cuomo overwhelmingly.
In the larger sense, I’m nowhere as optimistic about where my country is headed. As harrowing as CC, peak oil, debt issues, etc. are, I still believe we can deal with them all, but not if we’re hopelessly gridlocked. And I’d bet just about anything we’re staring at a bare minimum of two years of gridlock, likely 6, no matter who is elected president in 2012.
Interesting piece in today’s Guardian on the Tea Partiers:
http://www.guardian.co.uk/commentisfree/cifamerica/2010/oct/13/phosphate-ban-dishwash-detergent
“America’s dish detergent wars – The fuss over phosphate bans provides an object lesson in the paranoid politics of the Tea Party’s anti-liberal backlash”
Cheers – John
John Mason, Thanks for cluing me in to “the fuss over phosphate.” Just when I thought the Tea Party Movement couldn’t get any sillier. We need Madge to come back and remind us, “You’re soaking in it.”
Dishwashing liquid controversy?! :P
In Tennessee, meanwhile, there’s a push to enshrine the right to hunt and fish in the state constitution.
http://www.stateline.org/live/details/story?contentId=511905
The Huffington Post series on “Midterm Madness” is a good way to add some levity to this situation.