207. Land of the Rising Yen – NYTimes.com
August 7, 2009 § Leave a comment
I consider this very important. Americans have consistently been critical of Japan as a model bad economy, but what they have failed to notice is that Japan kept a positive balance of payments and in fact was growing rich in ownership, of treasuries, stocks and south asian manufacturing. The result is that with a slowing world economy and less exports, japan can turn its wealth toward internal consumption and manufactign rising to the occasion. The US, by comparison is broke, and we do not have much potential for internal demand unless – unless we restructure what we are doing even more radically than the Japanese will have to do, because we need to create jobs, go green, and distribute income more widely.
Japan has been hit hard by the global financial crisis, and this time exports are not going to save us. Instead, we must scrap some of our long-held traditions and start from scratch. Many in government will be reluctant to make this change, but they may soon find that they have no other option. Japanese policy makers cannot keep the yen weakened forever because doing so is costly to the domestic economy, and thus to voters. It’s time for us to learn from the free-spending ladies of the 17th century and enjoy a strong yen.