The Great Debate

I have been following with some interest the knockdown, drag out fight in the NBR Japan Forum over just how bad economic policymaking was in the Koizumi era. Here is one brief snippet of thread. The list moderator has been giving so many different names to the pieces of the argument one has to just go the main list, look for posts with the names of the main authors (Richard Katz, Alexander Kinmont, Craig Freeman, Mike Smitka and Todd Kreider) and then look for the key words "NPLs" "Takenaka" and "Koizumi" in the thread title.

Now I am more Katzian in my beliefs. Whatever Koizumi and Takenaka may have done to or with the economy, their actions were far outweighed in terms of outcomes by their inactions. Both together and separately, they managed to avoid saying or doing incredibly stupid things, unlike their predecessors.

By contrast, Alex Kinmont sees the Koizumi-Takenaka line as having been an ice skate on a lava flow that very nearly wiped out Japan's financial markets.

Now Mr. Kinmont is a former stockbroker. One thing I have never seen in Japan is a happy stockbroker (I was too young to be aware of what was going on in the Bubble Years).

Perhaps somewhere there is a government policy a stockbroker likes, other than a capital gains tax cut, of course. I cannot, however, imagine what it might be.

Later - The point being, when talking about Japan, we all have to be mindful of our sources. The major financial newspapers and business magazines are going to be quoting persons who are 1) unhappy with the present system and 2) going to advocate changes that will result in their own personal enrichment. Only in the very rarest of instances (such as the fight led by foreign retailers against the Large Stores Law) will the whiners and complainers be on the side of the angels (and their avatars here on Earth, lower middle-class consumers and non-executive workers).

Richard Katz offers an excellent illustration of this principle in his post to the NBR Forum on export-led growth .