On Japan’s dual economy

Japan’s own econ-pundit, Noriko Hama, pontificates metaphorically on the state of its economy. Not so sure on her idea of exchanging shiitake mushrooms with China, but the following is an interesting scenario that is perhaps also taking place elsewhere around the world.

The struggles of workers over the past decade tamped down Japanese consumption to the point that “as we came into the crisis, it was exports and exports only that were propping up the economy.” But Tokyo, with its buzzing department stores and booster-ish business types, seemed to be doing quite well, no? “You’ll know next to nothing about what’s happening in the economy if you keep talking to people at the U.S. Chamber of Commerce in Tokyo.” Out in the rural areas and distant regions, she notes, there’s a phenomenon called “shutter street”—all the shutters of the stores and companies closed. “It has become a very serious dual economy, in which Tokyo goes from strength to strength but everybody else sinks further down the tubes.”

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  • Skydaemon

    10 years of depression down the road this could be quite important. If you typecast the Great Depression onto modern countries you get something like:

    Then – Now
    Great Britain = USA
    USA = China
    Germany = Japan

    Japan is certainly ripe for a nationalistic populist to take over leadership, and will be more so as the crisis stretches onward. With companies in Japan reneging on the implied social contracts of lifetime employment, it might finally break their tolerance if that goes on a while. They've sacrificed everything for security and it turns out that they don't even have that any more.

  • Skydaemon

    10 years of depression down the road this could be quite important. If you typecast the Great Depression onto modern countries you get something like:

    Then – Now
    Great Britain = USA
    USA = China
    Germany = Japan

    Japan is certainly ripe for a nationalistic populist to take over leadership, and will be more so as the crisis stretches onward. With companies in Japan reneging on the implied social contracts of lifetime employment, it might finally break their tolerance if that goes on a while. They've sacrificed everything for security and it turns out that they don't even have that any more.