…how come carrots and onions or most fruit are so expensive in Japan?

Here’s one possible reason. One foreigner a long time in Japan commented to a friend, who told it to me: The reason things are so expensive is not because of the things themselves, but the land and space they occupy.

Following the example of the auto-industry and banks, Hustler’s Larry Flynt wants $5 billion from the US government to bail out the American adult entertainment industry. Congress must “rejuvenate the sexual appetite of America,” Flynt said. “With all this economic misery and people losing all that money, sex is the farthest thing from their mind,” he said.

Talking agriculture subsidies, how come carrots and onions or most fruit are so expensive in Japan?

What the heck, everyone knows that’s where my sympathies lie anyway.

The basic problem is that people in every country turn into welfare queens instead of taking on the responsibility for themselves. The seniors got upset last spring when it turned out the government thought it couldn’t foot the bill for 90% of their health care anymore. They started with the nonsense about the government hoping they would hurry up and die.

When gas prices went through the roof last year, the government started paying for 90% of the price above a certain amount for fishermen. They were holding semi-strikes because the cost of gas made it tough for them to make a living.

I don’t know what happened with that deal now that prices have fallen again. (It’s hard to keep up with everything on my own!)

But what is needed is a politician who can make the public excited about going out and doing stuff on their own without government help. Not too many of those around!

http://www.demographia.com/db-gdp-metro.pdf

All in all, it’s difficult not to think Japan is in decline. Any ideas to fix the problem?

California is like another country. Really. They have regulations in all sectors of the government unlike those anywhere else in the US.

Its state income tax rate is the highest in the country, more than 10%, yet they still have a huge budget deficit. 15 billion last year. Texas, meanwhile, has no personal income tax and personal income is growing about 50% faster there.

Some would argue that laissez-faire does not really exist. There are just different degrees of government meddling. You’d probably have to go to Singapore to find laissez-faire.

There are bailouts and then there are bailouts. There was no need to take de facto government ownership stakes when there were better options.

Tax cuts to boost consumption are Keynesian.

Post-bubble prices in Japan are lower than they used to be. Rice is a different thing. Everyone protects agriculture, and then you know how Japan is about rice.

Here’s an article how rising taxes might have hurt the Japanese economy. If this be true, a premature judgment that the economy was ready to take a tax increase was wrong. So the argument goes, Japan should have continued the stimulus rather than stop it.

http://www.economist.com/research/articlesbysubject/displaystory.cfm?subjectid=348969&story_id=3294166&CFID=38354717&CFTOKEN=58250306

Some other random questions propped up onto my mind:

Aren’t tax cuts also Keynesian, if they are meant to stimulate demand? Since the problem in Japan always seems to be that people are spending too less (saving too much), something must have been done to rectify that. Government spending was one, and so were tax cuts. I guess the government favors spending because it wants to hold on to power rather than let it go.

Japan had traditionally taken the “supply-side” approach rather than the “demand-side” approach, hasn’t it? The government has always protected industries, but not consumers. That problem still lingers on today. The fact that I’m forced to pay 10,000 yen for a shirt I can buy for 30 bucks in the States always irritates me. Or I have to pay three times as much for a good bowl of rice.

Perhaps taxes are high in Japan right now because the economy was recently doing well? Taxes were slashed during the big recession- actually, corporations were not paying any taxes because they weren’t making any money (remember how Tokyo tried to tax banks anyways that led to a rather famous law suit?)

If I remember right, corporate taxes in Japan are comparable to California’s- Texan tax is cheap and its economy grew, but California was still better (correct me if I’m wrong).

Anyhow, these are just some random questions that has nothing to do with holding onto certain ideologies or economic theories.

About South Korea: it is much more export-dependent than Japan. I’m not sure if trying to stimulate domestic demand there will work there. And lowering tax will not invite foreign investment if foreigners have no ability or will to invest anymore. As for Japan, with its 120 million strong population, tax cuts might actually work. I’d also guess that South Korea is also into government spending (not just tax cuts) to wait out the big chill. But then, South Korea’s problem is not excessive saving, so I’m not sure if they can afford to issue government bonds to finance government projects.

I tend to believe that in the end, it’s consumer spending that helps, not investment. How can people invest in cattle but not eat beef? Might be a chicken-and-the-egg argument, though. I believe that Japan should have liberalized more when the economy was good (until the first half of 2008?). When it comes to Japan, I abandon my “liberal” approach except for things that have to do with freedom of choice.

All interesting. Dang, I should have taken economics rather than xxx.

Infrastructure outlays were enormous: 6.5% of GDP in 1990 to 8.3% in 1996. Didn’t work. While unemployment was falling in some countries, the rate doubled in Japan and surpassed that in the U.S.

And it’s not just personal taxes. Japan has the highest corporate tax rate among the OECD companies (and has since 06). That is a de facto tax on individuals, because companies bump up the prices to maintain their margins.

The problem with the Keynesian idea is that the money doesn’t come from thin air. They’re borrowing it against the future. It is a form of redistribution. The new budget will put aggregate debt at something like nine years’ worth of tax revenue.

Japan’s annual economic growth went from 4.1% in the 80s to 1% in the ’90s. Industrial output grew only 0.7% 1992-99, compared with close to 40% in the U.S.

Most of those years in the US there was a GOP Congress, and government spending as a % of GDP fell.

I’ve read the same thing Takenaka said but from a different source.

Tax cuts help when they lessen the penalty on productive behavior, such as investment spending, rather than just spurring consumer spending.

South Korea is cutting their tax rates now, including corporate taxes, which will provide an interesting contrast.