OFF INTO THE WILD WET YONDER How does this...
Japanese Expat Housewives Question Abenomics
Typically in Japan, politics is a somewhat taboo subject for open discussion. Unlike in the United States, Japanese do not wear their political allegiances on a T-shirt. Asking someone, “Who are you going to vote for?” is simply not polite conversation—not at a bar, over the dinner table, or even at a cafe over a casual cup of green tea.
But rarely comes a chance, if ever, that you find yourself lucky enough (tongue firmly planted in cheek here) to be in a room full of late 30s/early 40s Japanese housewives who are not only opinionated but also surprisingly passionate about all matters related to politics, economics, and the future of Japan.
Well, I found myself in this exact situation just last week and so took full advantage. Prime Minister Shinzo Abe and the future of Japan is a hot topic amongst Japanese, even if a lot of it is whispered behind closed doors.
Anyone paying attention to world news understands that Japan is on an unprecedented debt train to nowhere. The country’s debt/GDP sits at a staggering 200% plus and growing. Although the majority of that debt burden is domestic, the world is still watching intently, waiting to see what the second largest economy does next to try to tweak growth, curb debt, and fight deflation (as if lower prices was a bad thing).
I questioned this group on a variety of topics relating to these issues, and received some pretty interesting responses.
“I don’t understand how this helps the population decline?” Yuriko asks of Abenomics. “We need more people in Japan. We need smart immigrants to come and replace all the people who need to retire… maybe we can only do this with robots?” (The rest of the ladies chuckle at the thought.)
“Saving rates are too low. How does the average Japanese save for the future?” Mari (the boisterous one of the group) asks eagerly. “My friends in Japan all play in the currency and stock markets now just to earn interest. My neighbor lost ¥5 million (approx. US$50,000) in the markets last year. This was half of her life’s savings… her husband was extremely disappointed,” she said.
The room becomes a bit more somber now…
“Why is this growth so important?” another asks. “I know outside of Tokyo some places are depressed because many young people leave those towns, but I’m from Tokyo and it seems the economy is always good. People are working. People shop. There are very few homeless like in other countries. Things always feel the same there.”
“This growth agenda is for the corporations,” Yuriko explains. “They were having many troubles before… now they can grow and expand, I guess.”
“But my husband’s company was doing just fine before and many others, too,” Mari fires back. “Those (companies) who smartly looked outside of Japan are doing very well,” she continued. “My husband’s company expanded into Myanmar, Vietnam, and now is focused on Indonesia. They are growing and already have a lot of money to spend on expansion needs.”
I asked them all what was most important to them in terms of what the government in Japan should be focused on—a strong currency, a rising stock market, a decent savings yield, lowering the debt burden, positive demographics, or low unemployment?
“All of them!” Mari replies followed by a chorus of “So, ne?” (“Yes, right?”) from the other wives. “But it seems that the debt burden on the younger generations is the most troublesome. How will they balance this without more children or immigration? This is very worrisome to me and for my family.”
“I don’t think a rising stock market will save Japan,” Mari explains. “Prime Minister Abe appears to have a good mind (touching her chest), but I’m not sure his policies are fitting. We Japanese care about the future of Japan for future generations, not about current stock market prices. Stock prices will not solve the pension, health, and social services burden that our future generations are burdened with. This is what many Japanese are worried about.” (This was to the agreement of everyone in the room.)
As I sat there and listened to them open up about the future of Japan, and the daunting tasks facing the Land of the Rising Sun, it became clear that just like in the United States, there appears to be a huge disconnect between what the government is doing and what the average citizens actually wants done.
Representation appears to be missing in many of the current “first world” economies. There doesn’t seem to be anyone (or at least not many) in these administrations that represent the view of the average person. There seems to be a lot of administrating but not a lot of representing.
Surprisingly, none of these women brought up income inequality—not that I should be that taken aback. I don’t think I’ve ever heard a Japanese salaryman complain about his salary or cry about not getting a raise. Maybe these conversations only happen at home? Definitely not in public spaces, as the Japanese are way too humble to mention money or salary.
I bring up the recent sales tax increase, which rose from 5% to 8% in April and which was planned to increase to 10% this past October until the government stalled those plans. As could be expected, no one agreed with it. “I don’t understand this,” Mari says abruptly. “They want us to spend more money but they raise the sales tax. We Japanese are savers, but we also enjoy shopping. Raising taxes will not make us shop more, only find ways to save more or to earn interest.”
Even though I think the tax increase was put into place to help address some of the social welfare issues of its aging population, she has a point.
It doesn’t make much sense to burden people with more taxes if you want them to spend more, especially when the last time this was tried (as recently as 1997!) it was also negatively received. If you want people to spend more, shouldn’t some incentives be put into place? Where are Abe’s incentives for some of the most infamous savers in the world? Was the Prime Minister naïve enough to believe he could turn the Japanese into American debtors overnight by running the printing presses, flooding the stock markets with cash, making it ridiculous to save money in a bank or a mattress, all the while raising taxes at the same time?
To me, this model was just inviting the Japanese to dig their trenches deeper and to prepare for the worst—like the country’s citizens have done for decades. Old habits are hard to break, especially in an aging and traumatized country like Japan. A country that sits in one of the most volatile areas of world in regards to natural disasters.
All of Japan’s issues are staggering if you truly think about them. One of the only bright spots seems to be its balance of trade, which is seemingly moving toward being more heavily weighted on exports—always a good thing for a recovering economy.
Other than that, it seems that Japan’s economic problems are not that easily addressed, especially by trying to print money to prosperity. It appears that all those smart people in government are not the magicians that they pretend to be… all the cures, tweaks, twists, easings, and tinkerings seem to be failing or, even worse, exacerbating the problems. Granted, Japan is not alone in these endeavors.
Not only would a damaged Japanese economy continue to weigh on the global economy, but it also seems to point out the obvious that other countries, such as the United States, are closely following their lead and we could be at the beginning of a race to the bottom.
If that’s really the case, perhaps some of these world leaders should take some clues from the Stoics and try to recover their lost perspective. Maybe take a week off from the business of politics, grab a cardboard box, throw on some clothes that they don’t mind dirtying, and spend a (full) week on the streets of their cities just trying to survive.
A little adjustment in one’s perspective is never a bad thing, especially when you find yourself surrounded by people, opinions, and ideas that don’t seem to be working too well…