11 thoughts on “Japan’s “Lost Decade””

  1. Replicate, hell. If the Japanese can do it, we can do a much more impressive version. Sigh.

  2. Well, looks like the US and Europe are gathering yet more data that Keynesian (at least as it is practiced in the real world, with pork, bad decisions, and all the usual stuff that happens to government actions) just doesn’t work that well for serious recessions.

  4. No, no, no. You just don’t understand. Keynesian economics policies have never failed because the stimulus was never big enough! One trillion dollars of graft and kickbacks isn’t enough. Ten trillion wouldn’t be enough to prove Keynesian economics is a failure. Just ask Krugman. He’s got a Nobel Prize, don’t you know.

    [/sarcasm]

  5. Everyone around here is convinced (that we are at the end game of debt and deficits, the end game of Social Security and Medicare, the end game of the Democratic Party). But it seems these things go in cycles and we have seen all of this before.

    Like in the early 1980’s, when we emerged from malaise and stagflation with an enormous amount of stimulus in the form of the defense build-up that ended the Cold War. And don’t-you-know-it, the sky was falling then. There were deficits as far as the eye can see and we were running out of oil back then. And Social Security was insolvent.

    And somehow we had 20 years of prosperity driven by falling oil and gasoline prices. Some of this was Reagan’s deregulation of energy markets, some of this was a Saudi conspiracy to drive down oil prices to destabilize the Soviet Union, and some of this was new tech in the form of horizontal drilling.

    The big fail is not the Stimulus or the Quantitative Easings I and II, and the Right Blogosphere is all focused on austerity and a zero-sum-game view of the economy that was all the rage among the neo-liberals (cough Lester Thurow, cough). Get energy cheap enough and all of these problems go away. Why? Because as the population ages, the amount of labor diminishes, and cheap energy allows subsitution for labor.

    If there is anything that will pull us out of the Great Recession it is cheap natural gas, i.e. fracking. This tech may also lead us back to cheaper oil.

  6. But it seems these things go in cycles and we have seen all of this before.

    Since when? Look at US debt per GDP. It hasn’t been as high as it currently is since the end of the Second World War. And we aren’t fighting a total war now. There’s been no point in US history with the current combination of irresponsible spending as a fraction of GDP and ideological self-destruction.

    If there is anything that will pull us out of the Great Recession it is cheap natural gas, i.e. fracking. This tech may also lead us back to cheaper oil.

    And such technology is also under assault from the same forces that help generate so much economic pessimism back in the 80s.

  7. If there is anything that will pull us out of the Great Recession it is cheap natural gas, i.e. fracking. This tech may also lead us back to cheaper oil.

    I don’t disagree with any of your statements, Paul. However, we have the unfortunate circumstance of having a president, a large bureaucratic institution (likely more than one), and a powerful environmentalist lobby that’s hell-bent on making energy more expensive, not less. Even should we get a better president in 2013, we’ll still be stuck with the environmental groups using lawsuits and leveraging the bureaucracy to hinder virtually every new energy development (oil, gas, nuclear, and even wind and solar). Politicians come and go but bureaucracy endures and expands. Until we change this, I don’t see the situation getting any better any time soon.

  8. To my mind, the smartest man on the planet right now is the senior Senator from Kentucky. That’s right, none other than Darth Vader himself, the Honorable Mitch McConnell. He was preceded on Fox News Sunday by a rising Conservative star who seemed to be caught off balance by why “Right of Return” is such a sticking point in the Middle East. Yes, Mr. McConnell is an Establishment Washington Politician and the man ahead of him is the darling of the Conservative/Libertarian Movement, but in deftly straightening the mess the previous guest made of “Right of Return” by restating what is arguably the “establishment/consensus/AIPAC” position, one saw in stark contrast the difference between an amateur and a professional (and the difference between a professional and the current occupant of the Oval Office).

    On the the Paul Ryan Plan!

    Senator McConnell announced that he was voting for the (House) Ryan Plan but that he was not calling upon his Senate Republican colleagues that they had to vote for it. “Senator McConnell is not going to “whip” (i.e. enforce party solidarity) Senate Republicans to support the Ryan Plan! We are doomed, doomed as doomed can be (y’know)!”

    Mr. McConnell announced, however, that some kind of plan involving changes to Medicare and Medicaid will be coupled to raising the Debt Ceiling, this will all come about by early August, and this is part of a Grand Plan to save our national debt rating.

    Mr. McConnell furthermore offered a better defense of the Ryan plan than the one Paul Ryan is making. The Senator’s explanation is that Medicare is going to change one way or another. The President has a plan that involves a Medicare Control Board, and that was explained to mean some form of non-price rationing. The Ryan plan involves a voucher to seniors purchasing health insurance (OK, not really insurance by a pre-paid health plan) on the open market, the difference being that seniors willing to spend more on their health could pay the difference out of their own pocket (i.e. some form of price rationing) and presumably there would be price competition to get the business of seniors not willing or able to pay much more than the voucher grant.

    Furthermore, the Senator explained that owing for the need for the President’s signature on whatever Grand Plan goes forward, the Ryan Plan was not going to be what gets sent to the President by August. The Plan that will get sent up is currently the subject of negotiations between a group of Senators and the Vice President as the representative of the Administration.

    Here we are on the Right Blogosphere, working ourselves into a frenzy “Newt just cut Paul Ryan off at the knees! We don’t know him (Mr. Gingrinch) any more. He is dead to us!” And now, “Scott Brown, you are voting against the Ryan Plan! How dare you! Never mind that Ted Kennedy’s seat (OK, the People’s Seat) is in (Northeast-style liberal) Republican hands! To think that we sent you money for your campaign (to end Health Care Reform)!”

  9. We’ve had a few generations of professional politicians running things and look where that got us. The so-called “conventional wisdom” (which isn’t very wise, IMO) is that any serious talk about entitlement reform is political suicide, so instead the professional politicians keep tinkering around the margins while lying to us all that there is no problem that can’t be fixed by simply raising taxes some more in exchanges for promises that this time (unlike all of the times in the past), they really, really mean to cut spending.

    Well, excuse me for not believing them. They’ve lied to us so many times that they aren’t worthy of trust. I’m old enough to remember how for every dollar of increased revenue they gained by cutting taxes in the Reagan era, they increased spending by more than $1.30. I remember how in exchange for Bush 41 breaking his “Read my lips, no new taxes” pledge, they’d cut spending. It never happened because they lied.

    If we’re ever going to get serious about runaway deficits, then they’re going to have to make serious, deep, and painful cuts. Those cuts are going to have to include entitlement programs, the defense budget (and I’m a defense contractor), education, all forms of subsidizies and everything else. Once they’ve made the cuts effective, then we can talk about raising taxes to address any additional revenue shortfalls. But it has to be in that order – cut spending first!

  10. But it has to be in that order – cut spending first!

    Given that this sentiment is only expressed at large by the marginal “Tea Party”, I predict Stein’s Law will “happen first.” It won’t be pretty.

  11. A dismal sign that the people running the US government are determined to replicate it.

    And not for the first time. It happened at least once before, under Roosevelt.

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