Grim Exposition Of Fundamental Flaws in Abe's Abenomics

Loose monetary policy goes a long way toward liberating a country from economic torpor. However, monetary policy alone is insufficient for the whole journey. I have for a long while been railing that the Abe Cabinet has to get down to brass tacks and figure out ways to punish companies for hoarding their profits rather redistributing them to shareholders, converting them into higher pay for employees or deploying them in investments. (Link)

In a video that everyone should watch, Charles Dumas, the chief economist for Lombard Street Research, agrees. (Link - video)

That exports continued to underperform last month despite the effective devaluation of the yen (Link) only makes the Dumas presentation all the more damning.

Given that Abe 2.0: The Return of the Princeling was orchestrated by a select group of (often China hating) empire builders of the zaikai who crowd around Abe on the weekends, not letting others with their pesky opinions near their superannuated golden boy, the chances that the PM will be made aware of the changes necessary to save Abenomics, much less implement those changes, are very, very low.


Image: Council on Economic and Fiscal Policy meeting of 22 July 2014
Image courtesy: The Prime Minister's Residence

Are We Of His World Or Merely On It?

This is my world
and I am
World Leader Pretend.

- REM, "World Leader Pretend" (1988)

What does Kasai Yoshiyuki want?

- A leveraged buyout of the management of his homeland, installing a chief executive with significant self-worth issues? Check.

- A fantasy vanity maglev project through the heart of his country, with hostage shareholders and ultimately the taxpayers footing the bill? Check.

- The militarization of Japan's space policy? Check.

- U.S. high speed rail policy muddled by sales of advanced railway technology? Check.

- Japan-U.K. strategic relations muddled by sales of advanced railway technology? A work in progress.

- The United States, Japan and India forged into a politico-economic strategic iron triangle? A work in progress.

- A more strongly pro-government and pro-nuclear NHK? Check.

- The use of influence over the prime minister and the cash generated by the Shinkansen in a zero sum game of influence intent on countering China in every corner of the globe, no matter how remote? Check.

The above is just what's available after only a few minutes diddling around in English.

It is probably best to familiarize yourself with Kasai Yoshiyuki's world*. Because if your life is in some way linked to Japan, you already live in it.

--------------------

* Go ahead, Google him. In various combinations: "Yoshiyuki Kasai Shinzo Abe" "Yoshiyuki Kasai China" "Yoshiyuki Kasai India" "Yoshiyuki Kasai space" "Yoshiyuki Kasai Huntington Huffington Post" "Yoshiyuki Kasai Tomohiko Taniguchi" -- it's great fun.

Where It's At At The Asahi

It may be just one long "just-so" story...but what a story!

Keio University professor Oguma Eiji offers The Asahi Shimbun's English-language AJW a rollicking, wide-ranging take on what's going on (Hurry up and copy, before link rot sets in).

Yes, Oguma's old university home page was way cooler.

I Am the Voice of the Zaikai...Pay Heed To Me

"I find you unworthy."

I had though that yesterday morning's rushed Cabinet Decision (kakugi kettei) endorsing the Prime Minister's plan to have the proceeds from gasoline taxes shifted from road construction to the general fund in 2009 would supply sufficient political cover for the ruling coalition as it used its two-thirds majority in the House of Representatives to override the House of Councillors's rejection of the 10 year, 59 trillion yen road construction bill.

Evidently the editors of the Nihon Keizai Shimbun, the readers and leaders of conservative corporate opinion (and no friends of the Democratic Party of Japan, believe you me) were nevertheless unimpressed by the Cabinet's tail-covering exercise:

A spineless conversion to the general fund is impermissible
May 14, 2008

The Road Financing Special Measures bill, which retains for 10 years the special tax revenues for road construction, has been passed by the House of Representatives through use of the two-thirds majority. It has now become law. The law clearly contradicts the stated policy of Prime Minister Fukuda Yasuo who promises to switch the full amount to general fund in fiscal year 2009. Having forcibly passed a bill as is without correcting it is deplorable...

The Prime Minister and the Cabinet were all smiles after the override vote...but with every victory, this impatient and innumerate ruling coalition loses more and more support.

What drives them to win the battles but lose the war?