The Myth Of Japan's Lost Decade

[Coffee]

The Myth of Japan's 'Lost Decades'
Feb 26 2011, 3:30 PM ET
By
James Fallows
By Eamonn Fingleton

TOKYO, Japan -- In this slot a few days ago I posed some historical questions that, judging by the email I have been receiving, have perplexed a lot of readers. 

Let me now fast-forward to our own time and try some questions that will probably prove almost equally perplexing. They concern the Japanese economy, that erstwhile juggernaut of world trade of the late 1980s, which, we are told, has been mired in stagnation ever since. 

Question 1: Given that Japan's  current account surplus (the widest and most meaningful measure of its trade) totaled  $36 billion in 1990, what was it in 2010: (a) $18 billion; (b) $41 billion; or (c) $194 billion?

Question 2: How has the yen fared on balance against the dollar in the 20 years up to 2010: (a) fallen 11 percent; (b) risen 24 percent; (c) risen 65 percent?

The answer in each case is (c). Yes, all talk about "stagnation" and "malaise" to the contrary, Japan's surplus is up more than five-fold since 1990. And, yes, far from falling against the dollar, the Japanese yen has actually boasted the strongest rise of any major currency in the last two decades.

How can such facts be reconciled with the "two lost decades" story? I don't think they can. There is clearly a contradiction here, and after studying the facts on the ground in Tokyo for decades I find it hard to avoid the conclusion that the story of Japan's stagnation is a media myth.

Certainly anyone who visits Japan these days is struck by the obvious affluence even among average citizens. The cars on the roads, for instance, are generally much larger and better equipped than in the 1980s (indeed state of the art navigation devices, for instance, are more or less standard on many models).  Overseas vacation travel has more than doubled since the 1980s. The Japanese boast the world's most advanced cell phones, and the biggest and best high-definition television screens. Japan's already long life expectancy has increased by nearly two years. Its Internet connections are some of the world's fastest -- something like ten times faster on average than American speeds.

read the rest:  http://www.theatlantic.com/internationa ... des/71741/

[RuralEngineer]

A comparable rise in the value of the dollar would cost me my job and thousands of blue collar jobs as well.