What if everyone joined ER.org?

[Gone4Good]

Japan goes from dynamic to disheartened

Quote:

Yukari Higaki, 24, said the only economic conditions she had ever known were ones in which prices and salaries seemed to be in permanent decline. She saves as much money as she can by buying her clothes at discount stores, making her own lunches and forgoing travel abroad. She said that while her generation still lived comfortably, she and her peers were always in a defensive crouch, ready for the worst. Hisakazu Matsuda, president of Japan Consumer Marketing Research Institute, who has written several books on Japanese consumers, has a different name for Japanese in their 20s; he calls them the consumption-haters. He estimates that by the time this generation hits their 60s, their habits of frugality will have cost the Japanese economy $420 billion in lost consumption. “There is no other generation like this in the world,” Mr. Matsuda said. “These guys think it’s stupid to spend.”

[RonBoyd]

Yeah, I have always said that the "Big Spenders" have made my life "easy." A visit to any Thrift Store will give you a hint as to where I am coming from... but the price of all consumer goods -- Autos, TVs & other electronics, etc. -- is held down because of the competition created by "foolish" Spenders. I wish them many more years of overconsumption.

[haha]

Excellent article. Thanks for posting.

In some ways I think Japan may be in a better position than the US if/when peak oil becomes a reality. This world being described is not much different from how the much smaller world population lived prior to the industrial revolution, other than being immeasurably more affluent, even after their losses. But the static nature of things is familiar.

Japan is one of the world's most homogenous societies, the US one of world's most diverse societies. Diversity among other things means progress in an expanding economy. Historically extreme diversity has meant strife and civil war in a static or contracting system.


Japan and the US are both energy importers, but Japan is small country geographically that uses the fuel that it burns more efficiently than America does.

Both countries seem to be similarly broken politically. The comment below made me laugh- it is pure whistling in the dark. Since the crisis we have acted much more like Japan than like former ideas of American responses to business failure.

Many economists remain confident that the United States will avoid the stagnation of Japan, largely because of the greater responsiveness of the American political system and Americans’ greater tolerance for capitalism’s creative destruction. Japanese leaders at first denied the severity of their nation’s problems and then spent heavily on job-creating public works projects that only postponed painful but necessary structural changes, economists say.

“We’re not Japan,” said Robert E. Hall, a professor of economics at Stanford. “In America, the bet is still that we will somehow find ways to get people spending and investing again.”

We will see anyway.

Ha

[Nords]

Quote:

Originally Posted by Gone4Good Hisakazu Matsuda, president of Japan Consumer Marketing Research Institute, who has written several books on Japanese consumers, has a different name for Japanese in their 20s; he calls them the consumption-haters. He estimates that by the time this generation hits their 60s, their habits of frugality will have cost the Japanese economy $420 billion in lost consumption.

Before he starts slinging terms like "consumption haters", I think Matsuda-san needs to do some of his consumer research at Oahu's Ala Moana and Waikele shopping centers on just about any weekday afternoon. Not much frugality happenin' there.

But, hey, I guess these sorts of analyses distract from Japan's fundamental financial problems of corruption and banking inertia.

[Delawaredave5]

I think we will avoid a crisis like Japan - two major reasons:
1. We will accept more/faster "creative destruction" than Japan will.
2. They have a shrinking population, ours is growing

Although the below line looks right out of the "OBama playbook"....

"..and then spent heavily on job-creating public works projects that only postponed painful but necessary structural changes.."

Interesting that Japan unemployment is only 5% - maybe that's part of the problem.
Japan Unemployment Rate

[Bestwifeever]

Hey, I did my part for Japan with that Honda and its precessors/sister cars parked in the driveway.

[Khan]

So I'm damaging the US and world economies by choosing not to buy stuff?

My response would be edited.

[bbbamI]

What if everyone joined ER.org?

The site would run slowly...and there be more fistfights...

[Brat]

What I have heard happening in Japan is that they retire then go back to their old desk as substantially reduced pay because the govt is picking up retiree health care and paying a pension. The avoid hiring young workers because the retirees are cheaper.

[HFWR]

Quote:

Originally Posted by Delawaredave5 I think we will avoid a crisis like Japan - two major reasons: 1. We will accept more/faster "creative destruction" than Japan will. 2. They have a shrinking population, ours is growing Although the below line looks right out of the "OBama playbook".... "..and then spent heavily on job-creating public works projects that only postponed painful but necessary structural changes.." Interesting that Japan unemployment is only 5% - maybe that's part of the problem. Japan Unemployment Rate

+1

Quote:

Originally Posted by Khan So I'm damaging the US and world economies by choosing not to buy stuff? My response would be edited.

I don't think there are enough of us to matter much...

Lest we wane too negative, the USA produces about $14.5T worth of stuff per year, and 139M of us, give or take, ARE employed. I'd like to subtract one from that...

[ls99]

My fond memory of "what if" has nothing to do finance or ER. It is from Ju-Jutsu.

It was elaborated on by one my Sensei's early students, about 40years ago. He is now drawing SS and other pensions.

"What if" always hurts, a lot.

The origins are where a relatively new student un-versed in the full meaning of a move or technique would say, what if I do XYZ.

Thereupon Sensei would say, let's find out. You do your "what if".
Inevitably smart a$$ student would end up in maximum pain, just hovering on having a joint locked just beyond maximum extension or a bone on the verge of breaking and begging for mercy.

[BigNick]

Japan has had deflation for the last X years. Everything described in the quoted articles is entirely consistent with deflation: nobody buys anything if they can wait for it.

Once that spiral is broken (and it's not easy), Japanese consumers will be out there spending like the rest of us. Well, present company excepted, obviously.

[NW-Bound]

What if everyone joined ER.org, meaning practiced LBYM? No, absolutely no good...

The "Paradox of Thrift" is nothing new. To quote from this link,

The paradox states that if everyone tries to save more money during times of recession, then aggregate demand will fall and will in turn lower total savings in the population because of the decrease in consumption and economic growth. The paradox is, narrowly speaking, that total savings may fall even when individual savings attempt to rise, and, broadly speaking, that increases in savings may be harmful to an economy.

Quote:

Originally Posted by bbbamI What if everyone joined ER.org? The site would run slowly...and there be more fistfights...

Although the increased traffic may bring in more ad revenue, which in turn means that Andy would be able to afford faster servers, hence keep the response time reasonable, I agree that the latter statement would be true, and the turnover rate of moderators would be even higher, as they attain moderator heaven emeritus status at a quicker pace. We would run out of moderators fast.

However, the flip side is there might be even more love songs posted, and in more foreign languages. Speaking of the latter, I have counted French, Spanish, Italian, which are not that exotic, and one singular song in Croatian!

Shall I post a song in another new language yet, to see if I would get boo'ed out of this forum?

[bbbamI]

Quote:

Originally Posted by NW-Bound However, the flip side is there might be even more love songs posted, and in more foreign languages. Speaking of the latter, I have counted French, Spanish, Italian, which are not that exotic, and one singular song in Croatian!

There can never be too many love songs....

[RonBoyd]

Quote:

Originally Posted by NW-Bound if I would get boo'ed out of this forum?

It'll never happen... not to you anyway.

[chinaco]

Then the consumption haters' kids will inherit it and there will be massive consumption (spending growth) as they spend the windfall!