I was a Shinzo Abe skeptic. That’s putting it mildly. After all, I was still living in Japan when Abe’s disastrous first term in office put a halt to the reform process begun by Junichiro Koizumi, and ushered in a return to the bad old days of prime minister musical chairs that paralyzed Japan in the 1990s.
When Abe swept back into power in 2012, I thought he was just going to try to talk down the yen and give a little boost to stocks, increasing his public support just long enough to ram through a revision of Japan’s pacifist constitution. I thought he was going to ignore Japan’s moribund economy and long-festering social problems in order to throw red meat to his right-wing backers.
Boy, was I wrong. I was wrong, wrong, wrong.
Let me be blunt: Shinzo Abe is the most effective national leader in the world right now. I never thought I’d say this, but he’s an example that the rest of the world should be following...
Read the whole thing here!
Is this an implementation of market monetarism or traditional monetarism or something else entirely. Maybe even a hybrid solution. Can you classify it under any particular economic school of thought.
ReplyDeleteThere's only that tiny problem of ignoring and downplaying Japanese war crimes and agitating in an extremely tense situation (with China and other SE Asian nations locked in territorial disputes). It's like going around in Germany in the 30s telling people not to mind the crazies in the national socialist party because their economic ideas are really rad. And just as Hitler's economic policy was ultimately unsustainable and dependent upon a war to hold together (check out their foreign reserve depletion, which was saved by annexing Austria, the Sudetenland, etc), Abe's may face insurmountable difficulties and fail to last long.
ReplyDeleteBesides that:
"Abe is moving to cut Japan’s corporate tax rate, which along with the U.S.'s is the world’s highest."
Is it really? Everyone knows the US corporate tax rate is actually far lower in "real terms" than it is in "nominal terms" when you adjust for loopholes. Is this true of Japan as well?
"Abe has launched a large number of deregulation efforts, and has pushed -- so far unsuccessfully -- for Japan to join the Trans-Pacific Partnership, which would lower trade barriers."
Would the TPP do much for trade barriers? I know it will do a lot for holders of IP (especially medical IP) and those wishing to crush environmental and labour law, as those are the people currently negotiating. From the leaked documents, though, it seems to have little to do with trade, mostly just "investor's rights". Didn't you have a piece a while ago based on how the Seattle protesters were mostly dead on about the trade agreements of their day? It seems like the TPP is just a repeat of that, except possibly even worse.
"To me, Abe looks very much like Japan’s answer to Ronald Reagan -- an unapologetic nationalist who wants to slash government and make a principled stand against a bullying rival."
You've got the unapologetic nationalist part right (how many Latin American countries were attacked under Reagan? How many right-wing terrorist groups were funded?), but Reagan didn't exactly slash government unless you ignore the massive military-industrial complex that grew even larger on his watch. The guy was a "free marketeer" who was so afraid of Japanese advances in technology that he tariffed it out of competition. Is this the model Japan needs right now?
Noah, 20% of the time you knock it out of the park with your pieces. 60% of the time it's meh. But 20% of the time it feels like you're trying to package Gladwell-esque "controversial ideas" that are actually false "common wisdom" upon closer inspection, together with a few lines of good ideas tainted with their association with the former.
Thanks for the interesting piece. I wasn't aware that Abe was such a feminist, and I agree that the role of women in a major Japanese social problem - I recall, when I worked in Tokyo as a financial journalist, the manager of a forex dealing room showing me around his operation and telling me, with no shame, "Yes, here we have 23 staff, 17 dealers and six women" - so it's good that he's agitating for change.
ReplyDeleteYou've lived there, so you know how the politics works: although the western press tends to describe Japanese PMs as being like a Merkel or a Cameron, in reality any Japanese PM has less executive power than his western equivalents. Occasionally - Tanaka, Nakasone, Koizumi - there's the one who can dominate (or at least influence more than usual) the LDP factions and the men from the Ministries. My comment - question? - is whether in fact Abe has that degree of control that would enable him to live up to your description. Especially on the TPP, where he might be for it, but well dug in parts of the bureaucracy will be strongly opposed, and also on the 'third arrow' of Abenomics (structural reform), where the jury is still out.
I'll have to part company with the blogger you quote, who called Abe a "an idealist liberal icon". That's beyond daft. I have some sympathy for the previous comment from Matt in that regard: Abe is either in, or sympathetic to, the ugly far right of Japanese politics. And as you'll no doubt recall yourself - we used to get the right-wing thugs with megaphones trundling past our place on the back of a lorry, shades of Weimar 1932 - that's not where you'd like your icons to be
Controversial? OK. Wrong? Fine.
ReplyDeleteBut daft? At that I take offense.
Please accept the possibility that when I use the word icon, I am not entirely unaware that one of the meanings is a flat, ancient-looking, lifeless object of idolatry.
No offence intended. Happy to settle for controversial and wrong
ReplyDeleteMaybe Abe can get a beat-the-sales-tax shopping surge every quarter by raising the sales tax each quarter.
ReplyDeleteKudos for deftly sidestepping the anemic Abenomics record by cherry-picking an anomalous quarter and declaring it the start of a new trend.
Is it what it seems? Noah Smith finally ate crow and admited that monetarist like David Beckworth were right about Japan all along? Beware liberals of small faith!
ReplyDeleteI've been pretty skeptical of quantitative easing, so I was surprised to see that Japan's inflation rate had jumped pretty high the last few months. But why now, after all, shouldn't the expectations channel work fairly quickly? And, much more importantly, how much of this is just a surge in energy and food prices from a drop in the yen? If most of it, this doesn't bode well for Japan's economy, since regressive price increases well over the thusfar miniscule (and unrelated) increase in wages.
ReplyDeletehttp://www.nytimes.com/2014/06/13/opinion/kato-abe-and-the-fourth-estate.html
ReplyDeleteNoah, yr ABE piece for BLOOMBERg good but.see rebuttal here YOU ARE BLIND
TOKYO — Last December, around the time Prime Minister Shinzo Abe thrust his Special Secrets Protection Bill on Japan despite popular opposition, a bizarre advertisement for the daily Asahi Shimbun appeared in subway stations across Tokyo. The poster showed a well-known former boxer, now in his 60s, poring over a newspaper spread on his desk. The text read: “I want to be a citizen the prime minister will respect.”
ReplyDeleteThe ad caught the public’s eye, but it garnered overwhelmingly negative reactions, ranging from befuddlement to anger. As one freelance journalist argued, the newspaper’s self-portrayal was at odds with the so-called Canon of Journalism adopted by the Japan Newspaper Publishers and Editors Association in 2000. Those guidelines state, among other things, that “the public’s right to know” in a democracy “cannot be ensured without the existence of media, operating with the guarantee of freedom of speech and expression, while being totally committed to a high moral standard and fully independent.” The Asahi Shimbun has yet to respond satisfactorily to this criticism.
The implications of this peculiar ad are troubling. And they seem to be borne out by several incidents that have taken place in its wake, which raise serious doubts about just how “fully independent” Japanese papers really are.
One galling example occurred on Dec. 26, 2013, when Mr. Abe became the first sitting Japanese head of state in seven years to visit the Yasukuni Shrine in Tokyo, the controversial memorial said to house the spirits of Japan’s war dead, including those of convicted war criminals. That very evening, Mr. Abe had dinner with the political editors and writers of Japan’s most prominent newspapers, including Asahi, Yomiuri and Mainichi. The next day, only one of the prime minister’s dinner companions wrote about his visit to the shrine.
The sole exception, Mainichi’s political editor, criticized the visit for harming the national interest by predictably causing an international stir. But he also noted “the significance of the prime minister’s motivation, which was to express his veneration for the spirits of the heroes who sacrificed their lives for Japan.” The piece was noticeably gentler on Mr. Abe than the paper’s editorial of the same day, suggesting that the author’s personal interactions with Mr. Abe may have swayed his views in the prime minister’s favor.
There was a good deal of popular outrage when news of this dinner came to light, but not one of the newspapers whose editors dined with Mr. Abe that evening has yet offered an explanation for why it happened.
And this is just the tip of the iceberg. My own survey of publicly available information about the prime minister’s movements reveals that in the 17 months since he has come to power, he has broken bread with prominent
that is Norihido Kato at Waseda Univ writing above. he says Noah's oped is hogwash. Noah?
ReplyDeleteNoah, you don't know what you are talking about:
ReplyDeleteAbe a feminist - a Kabuki-feminist, yes; nothing but words.
Abe's economic policy - nothing but words, and US-fund-manager who believe these words pump money into the Japanese stock market, that's all. Despite the collapse of the exchange rate, the export volume has decreased. People's standard of living is stagnating at best, and this so-called end of deflation is caused by higher prices of imported goods such as energy.
I wish Abe the best in reforming Japanese society and economy, although he clearly needs to keep his own nationalist impulses under control. As for controlling the LDP, well, the old joke goes, which still seems to be not all that untrue, that the Liberal Democratic Party of Japan is neither liberal, nor democratic, nor a party.
ReplyDeleteBarkley Rosser
Noah, here's a reply Jason Smith wrote to your post here:
ReplyDeletehttp://informationtransfereconomics.blogspot.com/2014/06/is-this-what-noah-smith-is-referring-to.html