Comments on: Could America turn out worse than Japan?

By: Erdos

Erdos — Mon, 28 Nov 2011 01:51:45 +0000

A fine article, Mr. El-Erian.
A smart mind not clouded by prejudice against Japan – that’s the only way to learn their lesson

By: MohamedAbdou

MohamedAbdou — Sat, 05 Nov 2011 04:13:41 +0000

I believe that US did the biggest mistake in US history, they overspent on military in the last 20 years, ignoring the national goals of research, education, health social development.
Mohamed Abdou,
La Verne, CA

By: Kiterunner

Kiterunner — Wed, 02 Nov 2011 04:38:20 +0000

the differences are too big…. it may be ironical, but one of the greatest strength of the US economy is the high level of unemployment rate. In some quarters, that is called high level of flexibility. That makes US corporations profitable and ready to go when the time is ripe. The initial lost decade in Japan was characterised by a steady rise in the unemployment rate to its peak of around 4.5%. In that decade, there were many opportunities for Japanese corporations to charge and go, but they were able to take full advantage of the situation because they were not lean and mean. Too late now.

Hence, it may not be obvious to many now but what has allowed the US to emerge from so many previous troughs is its willingness to sink really low first.

By: ARJTurgot2

ARJTurgot2 — Tue, 01 Nov 2011 13:37:49 +0000

I have tremendous respect for Mohamad El-Erian, but I wish he had not picked Japan. There are tremendous differences between us, and Japan is not, nor has it ever been, a very healthy culture. I would suggest he go back and read one of the very best analysts of Japanese business practices, Kenichi Ohmae. Japan was never healthy in its business practices, and when the slump came, all their errors compounded and that more than anything killed them. Follow all of that with the rise of Taiwan, SE Asia and finally China, using Japanese tactics to takeover Japanese markets. There is more to an economy than bonds and interest rates.

By: jaham

jaham — Tue, 01 Nov 2011 13:11:32 +0000

changeling…the point of OneofTheSheeps comments were in fact the exact opposite of what you suggest – the pie is not infinitely large.

It is up to one’s own faculties to not take for granted their opportunities; to work hard to grow their own pie.

Well put Sheep.

By: jathought

jathought — Tue, 01 Nov 2011 08:52:28 +0000

As a retired engineer I have a question about “growth”. Would someone enlighten me? Or could someone point me to an economics reference which explaines why growth is good rather than attempting to explain what it is?

This preoccupation with Growth is an economic mystery to me. I mean you can’t grow all the time (unless you happen to be a dinosaur, and they did
get very big indeed). If GDP were to grow in real terms all the time, after a few decades it would become huge. But this has never happened – growth gets wiped out by inflation. So why target growth? The BBC printed an
article saying countries cannot obtain tax revenues without growth. Is that right? Or did the writer mean tax revenues do not grow without growth? Why
should that matter as long as people keep paying their taxes?

By: GivaFromOz

GivaFromOz — Tue, 01 Nov 2011 05:15:29 +0000

Another fine article by Mr El-Erian! Reading it made me realise just how much harm has been done by adopting Shiskin’s definition of recession as the ultimate criterion. Restricting it to 2 successive quarters of negative GDP growth is an easy notion to understand and measure, but really does not describe economic and social conditions very well. For example, it does not take into account how the majority of the population is faring. It doesn’t even take into account population growth which, for some countries, is substantial relative to GDP growth.

But more importantly it contributes to politicians and bureaucrats taking a wrong approach to economic and social governance. It seems to me, from afar, that the US is very much in recession (albeit not in the above narrow sense) and I suspect that most citizens would agree with me. The same applies to much of the developed western world.

One wonders if such a narrow definition were not so universally accepted, would governments, world wide, have been more vigilant and would they have prevented the crisis that we all now face. The lessons of Japan would have surely been more easily learned. Mr El-Erian has pointed out that they were not learned at all. Continuing to concentrate on a wrong, or limited, concept will not help overcome our problems.

By: nieldevi

nieldevi — Tue, 01 Nov 2011 03:05:34 +0000

The U.S. has the distinction of having out-grown it’s britches. The sheer size of the country and it’s economy is buckling under it’s own weight. Because of this, they have also lost a certain amount of their mobility. In short, they have driven the ship to the ground and now find it hard to get loose of the reef and turned around. Japan is smaller and more compact, and more able to function as a whole bot socially and financially.

By: RonShook

RonShook — Tue, 01 Nov 2011 02:16:54 +0000

All this sturm and drang and a quite obvious difference between Japan and the US is totally ignored. The average CEO in Japan makes 11 times what his/her worker does. In the US that figure (I’ve seen different numbers) is 300 to 500 times with a cooresponding level of inequal income right down the line. America has more than enough egregious slop on the revenue side to jump start any economy. The Japanese didn’t have that possiblility.

By: OneOfTheSheep

OneOfTheSheep — Tue, 01 Nov 2011 01:53:10 +0000

changeling, I don’t remember pulling up the rope as I climbed the ladder to success. Keep looking…