Our hat is off. Our knees are bent. Our mouth hangs open.
We are amazed. Grateful. And appalled. What will the Japanese do next, we wonder?
We are amazed because we have seen the international test results. On IQ tests, the Japanese score ten points higher than the world average. And yet, there they are doing the stupidest things we can imagine.
We are grateful too, because Japan has been leading the world in economic absurdity: bubbles in stocks and real estate, bailouts, ZIRP, QE…
And there is no economic policy so ridiculous that US policymakers won’t give it a whirl. Whither thou goest Oh Nippon, we’re right behind you.
Finally, we are appalled. What kind of a moron would believe that government employees should decide what industries will be successful?
How would they know, better than people in the forestry business, that timber would pay off? And why does anyone think that encouraging young women to go out into the woods and do hard, dangerous work will be good for the economy?
It may be fun to watch, and it may be fun for girls who want fresh air and boys who want female company, but as a serious economic policy?
Abe, you’ve got to be kidding. But this is always the problem with world improvers; they are dead serious.
Japanese women armed with chainsaws head to the hills under Abe’s plan
Junko Otsuka quit her job in Tokyo and headed for the woods, swapping a computer for a bush cutter and her air-conditioned office for the side of a mountain. She was part of a new wave of women taking forestry jobs, the result of economic, social and environmental policies sprouting in Prime Minister Shinzo Abe’s Japan.
Otsuka, a 30-year-old graduate from University of Tokyo, said she’s fine with the 20 percent pay cut to be the first female logger at Tokyo Chainsaws, a lumber company. The Sugi and Hinoki trees she harvests – cedars and cypresses in Japan – are used to build local homes under the government’s program to encourage the use of domestic wood.
“When I studied forestry at university, I learned that trees on Japanese mountains, ripe for harvest decades after planting, were left untouched as nobody wanted to do the job,” Otsuka said in an interview during a break from her work on a 95 degree-Fahrenheit (35 Celsius) day on the side of Mount Mitake, about 40 miles from the center of Tokyo. “I am in the place where I should be.”
Less than 70 percent of Japanese women between 25 years and 54 years old have jobs, the lowest rate among the world’s richest countries, according to estimates by Japan’s Cabinet Office. The nation’s workforce may swell by more than seven million people and gross domestic product could jump by as much as 13 percent if participation by women equaled that of men, Goldman Sachs Group Inc. said in a report May 6.
More women sweating in the fields and forests. More of those neglected trees cut down. More paper and sawmills, their smokestacks hot with the fiery commerce.
Is that great, or what? What, you can’t see why that’s such a good thing?
Bill Bonner on markets, economics & the madness of crowds
To sign-up to Bill's free daily email just enter your email address below
Well, clearly you do not have a PhD in economics! And you are not running a major world economy.
Shinzo Abe is. With his ‘three arrow” programme, he vowed to get the numbers up. More inflation. More GDP. More this, more that.
Would the Japanese be better off? Hey, don’t bother us serious economists with impertinent questions.
You know perfectly well that we can only work with quantity, not quality. We’re digital boys now, not analogue.
If you can’t measure it – in numbers – we can’t do anything about it. So let’s not talk about it, OK?
But of all the numbers Japan has added, one stands out.
In 1980, Japan’s public debt was only half its GDP. Now, it’s nearly five times as much relative to GDP. In other words, it would take two and a half years of total output to pay back the debt the government has run up – almost all of it over the last 30 years.
And remember, this debt was incurred in order to boost GDP output. As you can see, the approach failed. For every extra dollar of output, government debt grew by $4.
And now, if you add in private debt, the total comes to 500% of GDP.
Clearly, it is time for a re-think. More debt has not solved Japan’s debt problem.
But along cometh the aforementioned Mr Shinzo Abe with a plan. His programme? More! More debt! More spending! More ZIRP! More QE! More women in the woods. More of everything which has brought Japan to the brink of desperation.
The yield on Japan’s ten-year note is a vanishing 0.51%. With so much debt, even a slight nod towards ‘normalisation’ of interest rates will be devastating. At effectively zero financing cost, the GDP barely grows at all. If the financing cost were to rise to, say 3%, Japan’s economy would collapse into depression.
And normalisation is coming. It always does. Japan’s retirees are no longer saving. And Japan’s exporters are no longer bringing in the big bucks from overseas. And investors (lenders) are bound to realise, sooner or later, that Japan can never pay its debts.
This will mean less money to lend, higher financing costs, and ultimately, the final collapse of the Japanese delusion.
• Don't miss Bill's next Daily Reckoning. To receive the next article straight into your inbox as soon as he's written it, enter your email address below.