Why is Japan in free fall?
Yes, its nuclear disaster and tsunami didn’t help. But it did create the conditions for real political reform. Japan has decided to bet yet again on more Keynesian stimulus.
It will fail. Why?
Japan has been in Keynesian “stimulus” for 20 years.
What Japan really needs is new ideas.
Japan needs the ideals of Monetarism, especially those that are discerned inside classical republicanism. Japan suffers from its wanton ability, its continued idolization of an entire political class. An archaic vision that is witnessed throughout Japanese technological culture. It doesn’t innovate. It perpetuates.
So do most sectors of the western political economy. But we’ve also got sectors of our Union not committed to the ails that underwrite statist life. The Japanese don’t.
Japan isn’t going to grow based on labor or resources. It needs the impact of new ideas on social capital. Re-energized human capital will save Japan. Nothing else.
If a Japanse political class can find the fortitude to stop borrowing 45 trillion yen from the private sector (taxation) every year, which it wastes on low/no return, it might have a chance.
Twenty years of massive public borrowing and no real nominal GDP should have put Keynesian ‘stimulus’ in proper perspective. After all, the only reason why private Japanese capital is so unproductive is that far too much of it becomes public Japanese capital.
Remember, less Keynes more Hayek!