the article below says:
>In that time, stocks have collapsed by 70%, land prices by 80% and
golf-club memberships (an important gauge of business activity) by
90%.<
is there time-series data for golf-club membership for the U.S. My hypothesis is that it's correlated with the rate of profit.
------------------------
Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
> -----Original Message-----
> From: Ian Murray [mailto:[EMAIL PROTECTED]]
> Sent: Monday, August 19, 2002 6:09 PM
> To: pen-l
> Subject: [PEN-L:29627] Japan
>
>
> Tokyo teaches painful lesson
>
> Japan's answer to recession could prove to be the envy of Europe and
> US
>
> Jonathan Watts in Tokyo
> Tuesday August 20, 2002
> The Guardian
>
> 'If this is a recession, I'd like to have one in my constituency".
> These words, uttered by an incredulous British minister during a
> recent trip to Tokyo, are being echoed with increasing frequency as
> the rest of the world starts to grapple with the sort of economic
> problems that Japan has lived with - in some style - for more than a
> decade.
>
> While the United States and Europe are struggling for the first time
> in 70 years with the sudden bursting of a speculative bubble,
> plunging stock prices and a growing fear of deflation, they are
> things Japan has learnt to live with.
>
> Since the spectacular collapse in Japanese share and property values
> started in 1989, the country has by turns been demonised as a threat
> to the world economy, sympathised with for the plight of its
> suicidal salarymen or discredited for the government's unfashionable
> attempt to spend its way out of a slump.
>
> But as the US and others start to show many of the same symptoms
> that it experienced at the start of the 1990s, many Japanese are
> asking how other countries will cope with the domestic and global
> repercussions.
>
> Senior Japanese business leaders are already pointing across the
> Pacific to identify the big risk to stability. Last week, Hiroshi
> Okuda, chairman of the Japanese business federation, called the fall
> of prices on Wall Street, "a serious crisis for Japan". Nobuo
> Yamaguchi, chairman of the chamber of commerce and industry, warned
> that it would have a large negative impact on Japanese banks'
> efforts to dispose of their bad loans.
>
> Although Japan can only lose from the slowdown of its leading export
> market, there is a certain feeling of schadenfreude in Tokyo that
> the accusations of crony capitalism that were levelled at Japanese
> executives and politicians during the Asian financial crisis are now
> being aimed at US congressmen and the chiefs of Enron, WorldCom and
> a host of other disgraced companies.
>
> Western financiers and central bankers now visit Tokyo with rather
> more humility than they have done at any time in the past decade.
> Where once they came to lecture Japanese officials on the need for
> deregulation and laissez-faire capitalism, now they come to learn
> from the country's monetary mistakes and its success in easing the
> social impact of a protracted recession.
>
> The new view of Japan as a portent rather than an aberration has
> been apparent since the publication of a paper issued this summer by
> the US Federal Reserve entitled "Preventing deflation: lessons from
> Japan's experience in the 1990s." It drew the remarkable conclusion
> that "deflation is more debilitating to economies - and harder to
> control - than inflation," a significant departure for central
> bankers who have long been conditioned to regard rising prices as
> their biggest enemy.
>
> Since that paper came out, analysts at major brokerage houses have
> issued reams of reports on the possibility of the United States
> sinking into a Japan-like slump, a once-in-60-years depression
> rather than a simple cyclical recession.
>
> It is a terrifying prospect. By just about any statistical
> reckoning, Japan - the world's second biggest economy - has been a
> basket case for 12 years.
>
> In that time, stocks have collapsed by 70%, land prices by 80% and
> golf-club memberships (an important gauge of business activity) by
> 90%.
>
> Altogether, asset values have shrunk by a staggering 1,400 trillion
> yen (£8trillion) - equivalent to wiping out the entire output of the
> British economy for more than 10 years. The banking system has been
> teetering on the edge of collapse for five years, a majority of
> companies are bankrupt in everything but name and with public debt
> at a record of 140% of GDP, Japan's credit rating has been
> downgraded to levels more usually associated with impoverished
> African nations.
>
> The longest and deepest slump that Japan has suffered since the
> second world war has been made worse by deflation, an economic
> phenomenon not seen in a developed country since the great
> depression of the 1930s.
>
> But the bad times, it seems, have never looked so good as thousands
> of visiting fans and journalists observed during the World Cup, when
> they were awed by stunning new football stadiums, bustling
> entertainment districts and streets thronging with stylishly-dressed
> shoppers and gleaming cars.
>
> Throughout the summer, local governments the length and breadth of
> the country are staging extravagant displays with hundreds of
> fireworks, some of which cost more than £10,000 pounds a piece.
>
> And as a forest of cranes testifies, central Tokyo is in the midst
> of a building boom. Next year the capital will see a record 2.2m
> square metres of new office space
>
> That this is possible after a 12-year economic implosion is largely
> thanks to huge public spending, which has filled the gap left by
> consumers and companies who are trying to pay down the debts left
> after the fall of house and stock prices.
>
> Monetarist economists in the West, who have spent the last decade
> urging Japan to initiate a bloodbath of painful structural reforms,
> say such spending and the infusion of government cash to prop up
> ailing banks and companies is merely delaying the day of reckoning.
>
> But as more countries suffer similar symptoms, another view is
> gaining ground: that free-market capitalism - which works
> effectively if painfully in a normal recession - is at best useless
> and at worst counter-productive in a depression. Supporters of this
> theory claim Japan has achieved a second economic miracle in keeping
> its economy afloat for so long with interventionist government
> spending.
>
> "When the bubble burst, Japan faced an identical pattern to that of
> the United States at the start of the great depression in the 1930s,
> yet we stayed around zero per-cent growth. That is miraculous," said
> Richard Koo, chief economist at the Nomura Research Institute, and
> an influential government adviser. "I think Japan's fiscal stimulus
> is one of the most successful policies in the history of mankind. It
> held in place tremendous deflationary pressures."
>
> Mr Koo says that when he recently visited Washington, the White
> House assistant for economic affairs, Larry Lindsey concurred that
> the US faces a balance-sheet crisis like Japan's.
>
> Most economists, however, say a rerun is unlikely because the
> similarities between the US and Japan are not as significant as the
> differences. They say the former has a stronger financial system and
> sharper central bankers whereas the latter's problems are compounded
> by a rapidly ageing society and a lack of political leadership.
>
> But there is another difference that is potentially more worrying
> for the global economy. Japan is the world's greatest creditor
> nation, whereas the United States is the biggest debtor.
>
> Even during the past 12 years of stagnation, Japanese savings have
> increased, which has effectively allowed the government to borrow
> from its own citizens to pay for repeated fiscal painkillers.
>
> For this reason, Japan's problems have mostly been contained within
> Japan. No other major country has the resources to do this on
> anything like the same scale. If the United States needs another
> 1930s-style New Deal, it is unlikely to have such easy access to
> funds.
>
> In that sense, the most frightening lesson that could be drawn from
> Japan's experience is that the government in Tokyo has been getting
> it right for the past 12 years. A depression eased by football
> stadiums and firework displays could yet be the envy of the world.
>
>
>
