Re: Japan/recent decisions

[Eigo Murakami <murakami@xxxxxxxxxxxxxx>]

>From Japan;

	I am ashamed that I can't contribute to PKT even
about Japanese Economy. It is partly because of a lack
of my reading and writing skill and partly because of
a lack of my ability to analyze economy.
I will not be able to answer the question you are talking about,
but I hope I can provide some argument in Japan for you.

<Response to the dicisions from the business side >
	Many business leaders seem to be satisfying with the fiscal
expenditure in terms of the time and the scale. Of course, there
remains some problem. Major problem is that the proportion of
expenditure is the same as it used to be. They say more money should be
spent on the future industries like information infrastructure.
	Low interest rate also helps large corporations and financial
capital which lost heavily by the speculation in the bubble era.
	Public investiment has been risen the land price, so many land
holder may expect to stop the price down or even to begin to rise.

< Critics from "Left" >
	From the view of ordinary people, there are many critique about
the dicision. At first, only large construction company can profit
from the fiscal expenditure. A lot of deficit will remain in the future
to us.
	Low interest rate can't stimulate indivisual consumption because
of contra-assets effect as well as investment demand. Small/medium size
firms can not necessarily borrow money from large banks whch don't
intend to lend. Japan is caught in a liquidity trap.
	We hope the money will spend on the infrastructure which higher
our living standard and interest rate will rise to a common level in
order to consume in safe especially for low wage or old (retired) people.

< Employment/Unemployment >
	As Mr.Jim Divine say, it is said that wage and labor hour is
very flexible in Japan. In order to supplement his saying I will show
some data. (Of course, you can not see the reality of unpayed labor
which is usualy seen in the good times.)
	How do you read it ?

**** Employment indices--30 employee or more ****
					(1990=100)
Year	Hours	Vacancy Wage	Wage	Regular
	Worked	Rate	Nominal	Real	Employment
----+---------+-------+--------+-------+-----------
80	102.6	0.75	70.433	85.325	87.375
81	102.2	0.68	74.225	85.775	88.958
82	102.0	0.61	77.325	87.192	90.025
83	102.0	0.60	79.467	88	90.175
84	103	0.65	82.308	89.108	90.775
85	102.3	0.68	84.592	89.775	91.733
86	102.0	0.63	86.892	91.958	92.4
87	102.3	0.70	88.575	93.875	92.942
88	102.5	1.02	91.692	96.633	94.475
89	101.2	1.26	95.475	98.333	96.992
90	100	1.41	100	99.883	100
91	97.8	1.40	103.45	100.05	103.192
92	95.3	1.08	105.325	100.333	105.45
93	93.0	0.76	106.025	99.85	106.667
94	92.6	0.64	108.2	101.4	106.7
-----------------------------------------------
	Economic White Paper says that many unemployment
people went out from the labor market and it lowered the rate
of unemplyoment to a certain extent. But it dosen't say how much.
( Existance of "discouraged workers" is a common case.)

< Yen=$ rate > : Sorry, this is my view.
	Exchange rate should be stable around the level of PPP.
So ,in the long run, Yen should down to 150-200 yen = 1$.
Of course, there is a possibility for Japanese export to grow
after the Yen down. Japan should restrain ourself not only to export
more goods but also more "bad labor condition", that is long labor hour
which causes "KAROSHI" or low "REAL" wage.
	We, all of Radicals in the industrialized countries, should
protect our standard of living (not necessaly be the waste of natural
resource. Our(?) purpose is to reduce our labor hour,isn't it ?).
At the same time, share it with developping countries.
(So this isn't "global Marxism", is it !?)

< Export/Import >
 Mr. Jhon Gelles write;
>    3. Halevi suggests Japan should buy enough imports
>	to push the yen down and create jobs outside
>	Japan in the process. I think he is right.
>	The fiscal stimulus together with near-zero
>	interest should allow for that, (if tariff and
>	non-tariff barriers to import into Japan are
>	lowered). I think such trade reform is part of
>	the program.

	I don't think so.
	When you think about it, you should know how Japanese
exporters export.

	Below is data from "White Paper" of Japanese economy.
It compears Japanese price and productivity with US and German.

	Industry	Price		Productivity
			('85=100)	real GDP/N
=======================================================
JPN	Non-Manu	112%		0.8
'85	Manu		95		3.1
 ~'93	Ex		80		--
-------------------------------------------------------
US	Non-Manu	125		0.2
'85	Manu		115		2.8
 ~'93	Ex		115		--
-------------------------------------------------------
Ger	Non-Manu	115		2.0
'85	Manu		117		1.3
 ~'91	Ex		105		--
=======================================================

	White Paper emphasizes the difference of Japanese price
index between export and non-nanufacturing goods. And It insists
that the productivity growth in the non-manu sector is
important for future growth.

	Do you agree this ? I don't.
I think that we should emphasis the fact as below.
Productivity growth of Japanese "export industry" has been
very high but the wages hasn't grow. So the price of
export goods has been decreasing very fast.
As Mr. Ito Makoto mentioned, from 1975 to 1985 growth of real
wage was only 5.9% while productivity growth of Japanese manu
industry was 215%.
	If you think about "KAROSHI", you will agree with me.

****
	I am myself interested in german economy. As White
Paper said, productivity growth of german non-manu industries
is higher than that of manu-industries. How do you think
of this ? Does the low productivity growth of manu sector
cause of work sharing in the sector ? (I want to know about
the reason.)

****

	Japanese economic growth after oil crisis, when many
people applause Japanese style management or "Toyotism", but it
was also the period when many worker died of working too much.
This is the main reason for the dynamics of Japanese firms.
	You should also know about the structure of "export
industries" more.
<< Car industry >>
	This sector is known as big corporations having a great
deal of subsidiaries. The core corporation, such as TOYOTA,
monopolize process of high-value added and scale merit and enjoy
large internal reserve which is the fund for accumulations.
Wage level is much different from their subsidiaries.
<< Electrical industry >>
	This sector is the enemy of "feminist". Many "part-timers"
are working (about 40%) with very low wage (half of that of regular
workers). And many of them are middle aged women. Because a half of
their family's income is from farming, they can work with such
a low wage. But they don't work just to enjoy their lesure time
or to buy any expensive somodity but to pay educational spending
for their children. Surprisingly, they work 8 hours or more almost
same as regular workers.
	As you may know, Japanese exporters do not dump the price
of export goods any more but still do "SOCIAL DUMPING". This is the
reason why I think Japan should decrease export not increase import.


< Conclusion ? >
	After reading this, do you still see the sign of global
Keynesianism ? I am very pesimistic.

P.S. I hope you can imagine what I'm saying. Good Luck!


			     ======================================
			     >  Murakami eigo			  <
			     >  Yokohama National University	  <
			     >  Faculty of Economics		  <
			     >  E-mail:murakami@xxxxxxxxxxxxxx	  <
			     ======================================
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