Marketing Japan: Insanity Reins in Japanese Government Circles

By Mike in Tokyo Rogers

The news out today informs us that, in spite of 20 years of fiscal stimulus that has done nothing but destroy the economy and ruin the lives of countless Japanese people, the current Japanese government has learned nothing and is considering another fiscal stimulus plan. As Yahoo reports:

Faced with meager growth and a strong yen, the country's leaders are moving toward injecting more stimulus measures to fight a sharp slowdown in momentum. 

See? The guy on the left works for the government.

They've been doing the same thing over and over since 1989 and look where it has gotten Japan. Why do they think this same old plan is going to work differently this time? It is the definition of insanity to repeat a process and expect a different result every time. So they are either insane or just plain stupid. I suspect stupid and I will prove it to you later in this article...

Of course, just like the west, or the USA, it doesn't matter what political party is in power at the time, the only answers they have to any of our problems is an expansion of the government and increased spending. They consistently pay lip service to controlling the budget, but we never hear of the practical measures that you or I would take if, say, our household financial situation were out of control: That would mean cutting spending. Oh no! Whether it is the left, right or center, no political party has the will to do what's right and cut spending on the government. They will, of course, cut spending on things that the public actually wants, like libraries or schools, but to cut spending on government staff, the military or pet projects? No way. They always want to increase taxes or increase the money supply (print more money).

But it will be a tricky task for Prime Minister Naoto Kan, who is also juggling a promise to reduce the country's massive debt and a possible challenge for leadership of the Democratic Party next month.

Kan has asked his Cabinet for ideas that limit new spending, suggesting tax and regulatory reforms as potential alternatives.

These idiots always hide tax increases by calling them "tax reforms" but don't be fooled! "Tax and regulatory reforms" always mean an increase in both taxes and regulations. Because that's what governments do; they work to increase themselves. (If you want to read more about this from a USA perspective, check out Mish).

Hopefully, this idiot Kan and his party will get thrashed in the next elections. I think they most probably will and then we will have our 7th prime minister in 6 years and the government deadlock - which is the best we can hope for - will continue (at least when there is deadlock, no new laws or taxes can be passed!)

But now let me go back to my claims that these guys and Kan are just plain stupid. Read that above line again. It says:

Kan has asked his Cabinet for ideas that limit new spending, suggesting tax and regulatory reforms

See? We already know that "tax and regulatory reforms" means "tax and regulation increases." Top that off with this moron Kan actually saying in public, during the last election, that he wanted to double sales tax from 5% to 10%! Think about this, folks: Anyone who is stupid enough to run on a platform that actually tells the public, in public, that they will raise their taxes if elected deserves to get stomped. Well, they deserve worse, but I think lynching is against the law.

Guess what? Kan's party did get stomped in the last election where they did this. I wrote about that here. Now they are going to try the same thing again? Hilarious... Well, it would be hilarious if it weren't true.

If the past is any judge of the future, then this is what will happen in Japan, unfortunately:

Kan's party will be stupid enough to run on a policy that has tax increases built into the platform. They will soundly lose the election. The Liberal Democratic Party of Japan (LDP) will return to power. Once in power, the LDP will implement some sort of  "tax and regulatory reforms" (for meaning of "tax and regulatory reforms" see above).

Ultimately, the real problem in Japan boils down to this: the core of the problem is the economy. The economic problem is too much public debt; more spending will only make it worse. Every time the Japanese government passes a stimulus bill, they take one hundred yen from the Japanese people, then hand back fifty yen, then they cannot figure out why the economy continues to decline! 

Add to that the aging of the Japanese population; not enough babies are being born in Japan to support this entire mess. Now they want to put the public into even more debt and to raise our taxes.

I predict the Nikkei 225 at 7,000 - or lower - by August of 2011 - even with the stimulus!

The Japanese economy death spiral will continue.