“How’s the Economy?”, Japanese Style
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Someone asked today whether the Japanese economy has been hit hard like the US economy has been for the last few years. My answer is that I suppose it has, but I don't think the recent global turmoil has had as big an impact in Japan as it has in The States, in the same way that I don't think taking a hammer to a corpse causes it all that much pain.

I first came to Japan in June '89, when the Dow Jones Industrial Average was about $2,500. It's now $10,000.

The Japanese equivalent stock index was ¥33,000 when I came. Now it's about ¥10,000.

So in the intervening 20½ years, these national-barometer indices's went from 2,500 and 33,000 respectively, both to the same 10,000.

Had the US index progressed in the same way its Japan counterpart did, the Dow would now be $760 instead of $10,000.

So no, I don't think Japan's been hit as hard during the last few years as The States. There wasn't much left to hit.

All 3 comments so far, oldest first...

There are so many things to love about Japan: it’s traditions, beauty of the countryside, and it’s people. One thing that is clear to me is their steadfast mindset to stay the course. I live in Irvine, CA and see lots of Japanese presence here. While driving to my exit off the 5 freeway, I passed a Toshiba building, just as I started to exit the ramp. I then realized that every other building at this location has changed names over the last 20 years except for this one. I wondered if it was the Japanese mindset to hold on or is the business really that good that they have been able to survive at the same location after all these years. Unfortunately, the mindset has not served their economy well over the last 20 years. I think their inability to embrace change has caused the government to be ineffective. A recent example is JAL. I wonder if the US will be locked in a similar faith as we continue to spend money we no longer can afford?

— comment by Harvey Chin on February 6th, 2010 at 3:50am JST (14 years, 3 months ago) comment permalink

The crazy thing is it shows how far the US still could fall…

— comment by Bill on February 6th, 2010 at 1:01pm JST (14 years, 3 months ago) comment permalink

JAL is a good company to bring up in this discussion. A few weeks ago we all heard that JAL had gone bust. In a western country we would expect everything to come grinding to a halt, with workers left uncertain of their futures, creditors crowding round to prey off the corpse of the fallen company. Flights would be canceled, customers would lose their tickets and their money, and so on, and so on – in fact this very scenario has taken place within the last couple of months with a UK travel company.

But this is Japan. The economy here is not really an economy as we know them in the west. JAL fails, and nothing changes: the workers still go to work, and presumably still get paid; flights continue as normal, and customers are told not to worry, that even their air miles are safe; and I’m not sure what happens with creditors, but it seems likely that things just keep plodding on.

In other words, business as usual.

I suppose this is like the banks, in that JAL was viewed by the government as being too big to be allowed to fail. But it’s still amazing that things can happen this way. Japan really does have a quite bizarre economy.

I’m not sure how apt the JAL example is…. is there a US airline that hasn’t entered bankruptcy protection in the last decade? —Jeffrey

— comment by Thorf on February 6th, 2010 at 1:55pm JST (14 years, 3 months ago) comment permalink
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