Comments on: Japan and United States 20 Years Apart

By: Wendy

Wendy — Thu, 20 Nov 2008 16:38:27 +0000

If we let auto companies with anachronistic ideas fail; and keep gasoline high, the market intriguingly enough might take care of the rest:

Forward looking, innovative auto companies will create those new generation high efficiency automobiles; people will make appropriate lifestyle and location changes; new goods and services will emerge appropriate to these newer lifestyles that will tempt consumers into spending again.

If all this is combined with some “stimulus spending” on transit infrastructure, that combined result will be that more people will have more disposible income to spend on something other than cars and gasoline, which should benefit the economy far more.

By: Jim H

Jim H — Thu, 20 Nov 2008 01:26:08 +0000

Buzzcut:
Great post; I can’t imagine why anybody would want to do anything and associate it with the failed New Deal. Next thing you know they’ll be talking about a Great Society 2.0 – I shudder to think

By: Buzzcut

Buzzcut — Wed, 19 Nov 2008 21:15:01 +0000

If I hear someone use the phrase “New New Deal” one more time, someone is going to get slapped!

Isn’t Sachs the guy that advised all the former Soviet Republics to rapidly privatize their industry by issuing shares to all citizens? “Shock Therapy”?

I actually have been advocating “Shock Therapy” for the US: no bailouts for banks. No bailouts for the auto industry. No bailouts for homeowners.

Let these companies fail. Let the banks forclose. Let’s get as much economic turnover and deflation as possible as soon as we can.

Yes, this will result in a couple of quarters of simply awful economic data. Growth will be non-existant. Unemployment will soar.

But it will be temporary and short lived, like the recession of 1983.

By: The Urbanophile

The Urbanophile — Wed, 19 Nov 2008 21:00:15 +0000

Japan’s Nikkei Index went to 45,000. The land under the Imperial Palace was worth more than the state of California. The levels of asset bubble were vastly more extreme than in the US. They also are suffering from demographic exhaustion (an aging, declining population with limited immigration). And they have a famously inflexible economy. None of which affect the United States.

What’s notable about people like Sachs is that no matter what the problem du jour, the prescription is always the same – more of their preferred social policies. We all like to see events as vindicating our world view. But the reality is much more complex.