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: