Wednesday, November 21, 2012
Economic problem in Japan
Japanese economy is suffering from severe depression for several years.
Many economists and even non-professional people are arguing about the reason.
Some people claim that stasis of Japan is due to structural problem. Japan has a lot of legislation restricting companies. So entrepreneurs have to take more risk to change the environment. Innovation hardly occurs. Past Prime Minister Mr. Koizumi made a point of this and he carried out broad relaxation of restriction, so called “reform of structure policy” in 1990s. His leadership made a chance to change the society. But divide between rich people and poor ones was widened.
After that some leaders of Japan rose and fell one after another. In 2009, the Democratic Party of Japan (DPJ) got the majority of the parliament, and started to administer the government instead of long past ruling Liberal Democratic Party (LDP). But Japanese fiscal problem did not improved at all.
Now the next general election is waiting in the next month. Each party is declaring about their own manifest. One of the points of conflicts is economic policy.
The chairman of LDP, Mr. Abe claims that Bank of Japan (BoJ) should make a quantitative relaxation of the money. He intends to reform the Law about administration of BoJ. Mild inflation and justification of deflation caused by appreciation of the yen will rescue financial crisis of Japan, he says.
Present Prime Minister Mr. Noda is opposing it. According to him, if the government invaded the independence of BoJ Japan money would lose trust and hyper-inflation occurs.
I do not know which is right. If I knew, I would earn more money.
Economy is difficult. We have learned many things from past experience. But the future is always clouded.