By Steven Hill (LA Progressive) During and before the current economic crisis, few countries have been vilified as an economic basket case so much as Japan: it’s been hard to find any reference to the country without some mention of its allegedly sclerotic economy, its zombie banks, its deflation and slow economic growth. This malaise has even been called “Japan syndrome“, sounding like a disease to warn policymakers, as in “you don’t want to end up like Japan.”
No one has been more influential in defining this narrative than Nobel Prize-winning economist Paul Krugman. Throughout the 1990s, and still today, Krugman has skewered Japan’s economy and leaders. In the late 1990s, Krugman wrote a series of gloom-and-doom articles, complete with equations and titles like “Japan’s Trap” and “Setting Sun,” bluntly stating:
“The state of Japan is a scandal, an outrage, a reproach … operating far below its productive capacity, simply because its consumers and investors do not spend enough.”
But let’s look at some of the Japanese metrics during that time. Throughout the 1990s, the Japanese unemployment rate was – ready for this? – about 3%, half the US unemployment rate at the time. During that allegedly “lost decade”, Japan also had universal healthcare, less inequality, the highest life expectancy, low infant mortality and low rates of crime and incarceration. Americans should be so lucky as to experience a Japanese-style lost decade.
Read the rest: The Economic Fallacy of ‘Zombie’ Japan | The LA Progressive.
