Still Support Mr. Kan

Prime Minister Naoto Kan survived a no-confidence vote in Parliament on Thursday in the 480-seat lower house by a margin of 293 to 152. He could keep power from reverting to the oppositions, Liberal Democratic Party, Komei Party and Your Party, which sponsored the no-confidence vote. (06/02/2011, The New York Times)

At first, some members (faction) loyal to one of the Democratic Party’s heavyweights, Ozawa Ichiro, appeared to vote for the no-confidence measure. But before the vote Mr. Kan implied that he would step down after fulfilling his political duties, and then many of them decided to vote against it.

Yomiuri Shimbun, the leading newspaper read in Japan, summarized that his winning the vote meant a “life-prolonged treatment” for the Kan Administration. However, I guess it meant rather a “unique choice” left available to the ruling party and the oppositions, and the Japanese people.

If Mr. Kan had lost the vote and dissolved the lower house and held a general election, the Democratic Party might lose and the oppositions might win it, but do they have a stronger leadership than does Mr. Kan to take over him? No! No one knows what will happen “after Kan”.

Should Kan Step Down?

There has been a growing tendency to hope that Mr. Kan will leave the office. But I can’t find the clear reason for his leaving the office and can’t understand the people who request him to leave. Yomiuri Shimbun also agrees to his resignation, and reasons that he hasn’t took the leadership to deal with the Big Earthquake disaster on 11 March, and the nuclear power crisis that the quake caused. However, I can see the reasoning as rather the disguise that the oppositions use to draw him out of the office.

What Kan Faces Now

I reduce the political challenges into three that the Kan Administration should tackle: (1) reconstruction of the disaster area, (2) fiscal reform on tax system and social welfare for the coming aging Japan, (3) negotiation for EPA with EU and TPP with the US. And then I would ask you: could someone else solve the problems? Or help the victims better their situations? First of all, we have to ask these questions for those who agree. It is the voters’ right.

If the Democrats (especially faction closer to Ozawa) requested Mr. Kan to step down, they would have to explain to us who will take over him and what better will happen to us. Moreover, if the oppositions requested that (as Mr.Oshima of the LDP did), and then they promised to cooperate with the Democrats to vote for the government budget, the Democrats would have to ask the explanation for who they think will take the next leadership and what they plan to do for the recovery of the disaster and the large budget deficit. (as Mr.Yamai of the Democratic Party did) That should be the responsibility of the ruling party.

What is a True Leadership?

Kakuei Tanaka, now the legendary ex-prime minister of Japan, the accused in the Lockheed Scandal in the late 1970s, and the father of Makiko Tanaka, Democrat, once said to a reporter for the Mainichi Shimbun, “your job is to accuse me, my job is to be accused by you”, and accepted a dinner with him. This is the episode, an old-timer political pundit, Hisaichi Miyake, introduced on a TV program.

Many blame Mr. Kan for his lack of the leadership, but some years ago, ex-Prime Minister Junichiro Koizumi, whom now many appraise for his strong leadership, was blamed and cast doubt on by the press.

Needless to say, a leader always faces a fierce conflict of interests in his leading party and Parliament, and has hardship in making an important political choice and decision that may have a great influence on many people’s everyday life and status. The larger his party and Parliament, the more time it takes to harmonize the Diet members’ interests and to get his or her to understand and to pass the budget in Parliament. That is what keeps Mr. Kan inactive and slow to tackle the nuclear crisis. Yes, of course, Mr. Kan should have the responsibility to ask the opposites to pass the bills much more quickly.

It is so natural to blame him for his slow action, unclear statements, and weak leadership that might bear a great risk of a political vacuum. In the background of saying that “a leader should be one accused and criticized”, there should be a political responsibility he should take by completing a careful verification and confirmation of whether the decisions he takes a lot of time to make is really consistent to his belief and idea of politics he talks to the people or the pledges he commits. And this is the leadership that we need now and that we ask Mr. Kan to take.

People usually need a leader like “a knight in a white horse”, which means the leader who leads them to the right direction that they really need to take. However, that’s untrue and, we should note that the best friend of decision-making and action in a parliamentary democracy is “time” itself.

It is natural to ask Mr. Kan to take the action much more quickly for the victims who have no house, but his slow decision and action cannot be the critical reason for his resignation. Not only Mr. Kan but all the Diet members should also tackle and solve the problems at the same time. (How many bills have they submitted since the 3.11 crisis? )

Your Platform, Your Trust

Yomiuri Shimbun suggests that the ruling party completely revise the Democratic Party’s platform, what is called “the Manifesto”. We could remember the very hot summer when the Democratic Party won the general election. It was on 30, August in 2009. It won more than half the seats in the House of Representatives.

The reason is not only that people got rid of the political show of alternating Prime Ministers directed and produced by the LDP, but also that the pledges the Democratic Party committed seemed so new and fresh: for example, the restructuring of civil service, monthly allowance to a family with children (¥26,000 per child), cut in gas tax, free tuition for public high schools, banning of temporary work in manufacturing, and halting of increase in sales tax for the next four years and so on. (Democratic Party of Japan; Wikipedia) These had so a large impact on voters that the LDP, ex-ruling party lost the election.

In the background of the birth of the now Kan Administration, there was the irresponsibility of Mr. Hatoyama, ex-Prime Minister (now a harsh critic of Mr. Kan) who promised to draw the US Army Air Forces (USAAF) out of Okinawa, which I think had much more impact on the Japanese people, but later broke this promise and left the office, and of the factions of the Democratic Party who criticize Mr. Kan just as a TV show pundit without regarding themselves as the leaders belonging to the ruling party.

The Manifesto is a promise to the national people. Some of them vote not for the Democratic Party, but for the Manifesto itself. If they would try to revise it, they should ask the will of the people. That’s the way they can keep themselves trustful. Mr. Ozawa insists that he fulfill the Manifesto, and it is worthwhile praising. Politics should be on the base of a “promise to the people” and begins to have the raison deter by fulfilling it. In the case of breaking it, distrust of politics begins to spread among people, and leads them further into the depth of the political chaos, “the merry-go-round Prime Minister”.

Yes, Kan “Kan”.

Politics builds on the basis of the mutual trust between leaders and the people. Some political philosopher might say it is the “contract” between them. That is why the leaders can lead the people. A true leader is not a knight in a white horse, but one who can face harsh critics sincerely. If you request Mr. Kan to step down, you should post what you think to do next beforehand. The press, I think, should also show the public who will be the next possible Prime Minister, and what he or she should do as a good opinion leader in Japan, even though it is so ridiculous.

In conclusion, I support Mr. Kan.Who is better than him as a Prime Minister to tackle the post-crisis political and fiscal problems? Some pundits predict that it will be much more difficult for Mr. Kan to pass the bills because the oppositions will not support him in Parliament. But who can get the support easier? No one can. Only can Kan, right?

Mr. Kan should pass the budget for the reconstruction of the disaster area first and tackle the related problems. That’s the best (or the only) way to avoid a political vacuum in Japan many fear most, and to help better the victims’ health and welfare.

私はそれでも菅首相を支持する

内閣不信任案
菅内閣に対する不信任決議案は２日午後、衆院本会議で採決され、賛成１５２、反対２９３（投票総数４４５、過半数２２３）で否決された。

不信任案は自民、公明、たちあがれ日本の野党３党が共同提出した。菅首相の政権運営や党運営に批判的な小沢氏支持議員らが、野党に同調して賛成する動きをみせた。５月３１日夜に会談した鳩山由紀夫前首相が首相に退陣を要求。小沢氏は１日夜、不信任案に賛成する意向を表明するなど造反の動きが広がり、不信任案可決の公算が大きくなっていた。（産経新聞、６月２日木曜日）

読売新聞（６月３日）の玉井政治部長は、不信任案の否決は「菅内閣の『信任』」を意味しない、という。「期限付きの延命措置」だという。しかしながら、それは、「延命措置」というより「残された唯一の選択」ではなかったか。このまま総選挙をやれば、民主党は負け、自民党が与党になるかもしれない。しかし、その自民党、又は公明、みんなの党に後を引き継ぐだけの指導力を発揮する者がいるだろうか。いなかった、のではなかったか。

何故菅首相はやめなければならないか
「菅首相退陣」、そして「ポスト菅」の期待が高まっている。しかし、私はどうも菅首相がやめるべき理由が見えない。「菅退陣」を声高に言っている人々を正直理解できない。読売新聞は６月３日の社説で「政府与党が一丸となった機動的な震災対応ができない」ことを「菅首相の責任」とし、「首相退陣」の具体的な理由に掲げるが、理由にはなっていない。むしろ、「3.11」が「首相退陣の理由」として、政治利用、つまり与野党の政局に利用されているように見える。

「ポスト菅」の姿とは
今我々が考えるべき政治課題を３点にまとめよう。①震災復興、②税・社会保障の改革、③TPP・EUとのEPA交渉。そして、こう問いかけよう。「菅首相の退陣」によってこれら３点の問題が早く解決するのか。さらに、「菅首相の退陣」はより多くの国民、特に震災の被害者の理解と福祉向上に役立つか。

この点を我々は真剣に政権与党ならびに野党議員に問わなくてはならない。これは有権者たる我々の責任と義務でもある。

そして、民主党内部の一部（小沢グループ他）が「菅首相の退陣」を要求するならば、「ポスト菅」の具体的構想と、「ポスト菅は菅首相よりもいい政権運営ができること」を早急に国民の前に示すことが必要である。「・・・レポート」でもいい。西岡議長による「西岡論文」はただの「首相退陣要求」に過ぎず、「首相退陣後のヴィジョン」を示さなければならない。

さらに、野党が首相の退陣を要求し（自民大島氏）、その引き換えに予算関連法（特例法）案の成立に協力する、というのであるなら、政権与党である民主・国民新党は「ポスト菅」についてどのように考えているのか、対案を示すように野党側に強く要求すべきである（この点は民主山井氏が指摘している）。これこそ、政権与党の責任である。

指導力とはなにか
昔田中角栄元首相は政治記者に「あなたは批判するのが仕事、私は批判されるのが仕事」と言って、政治記者との会食に快く応じた、というエピソードを政治評論家の三宅久之氏が語っていた。

「指導力のなさ」が菅首相に対して言われるが、強力なリーダーシップを評価される小泉首相もかつて「丸投げ」と揶揄され、そのリーダーシップにマスコミは疑義を投げた。指導者は常に様々な利害調整の場に立たされ、難しい選択とその政策実行を迫られる。指揮する組織が大きければ大きいほど、その調整と意思決定には時間がかかる。国会・党・政権内部での見解・意見の相違も当然でてくる。法案成立のため、協力を仰ぐのに時間がかかる。菅首相の法案成立の「鈍さ」はそこにあるのではないか。もちろん、菅首相は野党に早期に協力をしてもらうことを嘆願すべきである（自民谷垣氏に入閣要請しているが、谷垣氏は断っている。）

とにかく、リーダーに対する「対応が遅い」、「発言がはっきりしない」、「政治空白だ」といった非難・批判は、当然のことである。「指導者は批判されるもの」と言う言葉の背景には、なによりも時間のかかる意思決定が、野党との調整もさることながら、常に自らが信条としてきた政策理念または、国民に約束した公約（マニフェスト）と果たして整合性があるのか、という「周到な検証と確認作業」を常々やり通さなければならない政治的責任を背負っていることがある。この政治的責任を全うすることこそ、「指導力」ではないか。菅首相にそれがあるのか問わなければならない。

人は「白馬の騎士」のようなリーダーを求めるが、議会制民主主義における意思決定と実行の最高の友人は「時間」なのである。「時間がかかる」事を理由に「首相退陣」を求めることは、3.11の対応を早くして欲しいと言う世情から当然ではある。が、3.11の対応は、首相だけの問題でなく、全国会議員の政治責任の下で果たされるべき問題であるはずだ。（国会内で、予算関連・震災復興のための議員立法がこれまでいくつ出ただろうか？地元の後援会の写真ばかりHPに載せてる議員の先生方が多いように思うのは私だけだろうか。）

マニフェストの大きさ
ところで、「首相退陣」とならんで、マニフェストの「大胆な見直し」を読売新聞は唱えるが、２００９年８月３０日に第一党として、衆議院議員総選挙で勝ったのは、首相交代劇に明け暮れる自民党政治への苛立ちもあったが、なによりも「子供手当て」に代表される「民主党のマニフェスト」も大きい。そのマニフェストの政策原資は、特別会計などの霞ヶ関「埋蔵金」でまかなうとし、徹底した「無駄の排除」を掲げて「事業仕分け」にも、ややパフォーマンスであったかもしれないが、着手するとした民主党の意思表明は，国民に自民党にはない「新鮮味と爽快感」を与えたのではなかったか。

しかしながら、「普天間基地問題」について自ら責任を取り辞任した鳩山首相に代わり、菅首相が政権運営するにいたった背景には、そうしたある種の国民に与えた「新鮮味と爽快感」を踏み潰した鳩山首相の、思いつきとしかいえない発言の転換と、自分たちが政権を担うと言う気概に欠如し、評論家郡と化した「（小沢系）民主党議員」がいたのではないだろうか。

マニフェストは国民との約束である。民主党よりも、そのマニフェストに票を投じた人もたくさんいよう。もしこれを変更するのなら、民意を問わなければならないのではないか。マニフェストを何が何でも実行する、という小沢氏の姿勢は評価に値する。政治は「国民との約束」の上で成り立ち、それを果たすことこそ政治の存在理由である。これを裏切れば、政治不信は深まり、日本人はさらなる混迷の淵に突き落とされよう。

嘘つきはあなただ！
そう、政治は「信頼」なのであり、「約束」なのである。政治哲学者なら「契約」と言うかもしれない。その時々の情勢で、もしその契約を変更するのなら、事前に報告し、民意を問うのが、政治の信頼を損なわない良策である。

そして、その「約束」に基づき、信任された松木議員の「造反」についても疑問がわく。松木氏に問いただしたい。「先生、『造反』を国民と約束してきましたか」と。横粂議員について、「先生、民主党を離党すると約束されましたか？」と。そして、いささか政治家として「発言の重み」を自覚しない「不信任案に賛成するといって反対に転じた」民主党議員の方々に「あなたがたこそ、嘘つきだ」と。「あなたがたこそ、政治不信の元凶だ」と。

評論家をしたいのなら、議員バッチをはずし、私と同じように民間で活動すべきだ。税金で評論家活動をしないでいただきたい。政治家の仕事は、「菅辞めろ」などという「評論」ではなく、日々日本を取り巻く環境を研究し、関係者のヒアリングを重ね、法律を作り、実行に向けたスキームを国民に示し、国民と対話することである。それができないであるなら、議員辞職すべきである。

菅首相のやるべきこと
真のリーダーとは「白馬の騎士」ではなく、「厳しい批判に真剣に直面できる」人である、と私は考える。メディアのいっていることはやはり間違っているように思う。「菅首相退陣」を求める読売新聞も、「ポスト菅」を示していない。「世論形成」に値する誠意と責任ある報道をやるならば、多少ばかげた空論でもいいから、「ポスト菅」を示すべきだ。

しかし、私は菅首相は辞めるべきでない、と考えている。「第２次予算案・特例法案を成立させ、３．１１対応に全力を尽くすべきである。」この一言に尽きる。誰かもっといい首相候補がいるだろうか。誰が、何を、どのようにするのか。ちゃんと示してから、「首相退陣」を論じるべきだ。菅首相は今ただやるべき上記のことを実行すればよい。これこそが、政治空白を防止し、国民の福祉に寄与する唯一の残された良い選択なのである。

Stagnation and Inflation

Here's Paul Krugman's article. That's awesome!

Worry Makes Us Happy!?

...worry about success causes students to study harder to gain admission to better universities. It makes assistant professors work harder to earn tenure. It leads film makers to strive harder to create the perfect scene, and songwriters to dig deeper for the most pleasing melody. In every domain, people who work harder are more likely to succeed professionally, more likely to make a difference.

Good post! If we face difficult situations to tackle, we should remember that this is the next step we should take.

自殺について

自殺についての詳細なデータである。

（１）自殺死亡率の年次推移をみると、明治32年の5,932人から昭和11年の15,423人までは増加傾向を示しているが、昭和12年から戦時中まで減少傾向となっている。戦後についてみると、ドッジライン以降のデフレ不況（1949～1950）、なべ底不況（1957～58）と第１次平成不況（1991～93）、第２次平成不況（1997～2000）では特に高い推移を示しているように見える。明治以降一貫して、自殺率は増加しているように見える。

（２）性・特定年齢別自殺死亡率をみると、自殺死亡率は男性の方が多く、男性の５０～５４歳台の自殺率の増加が目に付く。

（３）性・年齢階級別死亡数に占める自殺死亡数の割合、自殺の死因順位をみると、平成15年の自殺死亡数の総死亡数に占める割合は、男女とも「25～29歳」が最も高くなっている。

（４）死亡曜日別にみた自殺をみると、月曜日が多く、死亡時間別にみた自殺では、男は「０時台」「５時台～６時台」が多くなっており、女は「５時台～６時台」「10時台～12時台」が多い。月別にみた自殺では、多くの年で４・５月がピークになっており、配偶関係別にみた自殺では、男は平成７年・12年ともに「離別」がすべての年齢階級で高く、女は40歳以上については、「未婚」が「離別」と同程度となっている。

（５）都道府県別にみた自殺では、　最高は男女とも秋田県、手段別自殺死亡数割合では、「首吊り」が最も多く、男女ともに14大都市では「飛び降り」が多くなっており、郡部では「縊首」「薬 物」が多くなっている。

（６）職業・産業別にみた自殺では、「就業者総数」では男32.9、女8.9、「無職」では男70.8、女21.9となっており、特に男の「無職」が高くなっている。また、就業者を職業別にみると、男女ともに「第１次産業」が高くなっている。男では特に「サービス職業従事者」が高くなっている。

非常にラフなまとめであるが、「男で、２０歳代後半、未婚か離別、無職または第１次産業かサービス産業従事者、秋田県在住で、４月か５月の月曜日の明け方５時ぐらいに自殺しやすい」と言う結論が得られる。これが何を物語るのかは分からないが、傾向として見られるようだ。

On Suicide

I am used to watching the newspaper reporting the suicide of the well-known in Japan. I am interested in this social problem because there are some people who don't want to live longer even in one of the economically well- developed countries in the world, Japan.

The Economist seeks the cause a little bit, though it seems to be somewhat frequently pointed out by western people:

The samurai tradition views suicide as noble (though perhaps out of self-interest, since captured warriors were treated gruesomely). Japan's main religions, Buddhism and Shintoism, are neutral on suicide, unlike Abrahamic faiths that explicitly prohibit it.

As is known in Japan, Japanese people have not been more religious. Rather, that may be possible to think of as one of the causes: they are less likely to think that life is something blissful given to us from the heaven, or, that committing a suicide is morally a bad thing as the above excerpt implies.

The Economist goes, Financial concerns are cited in one-fifth of suicide notes; almost half of all suicides are unemployed.

However, the unemployment rate is much higher in France(7.4%) and Germany(7.5%) than in Japan(4.0%). (Data is as of 2008, OECD) It seems to me that unemployment is not so closely related to suicide rate. Economic reason is one of the influential, but is not most influential in the suicide behavior. Anyway, this suicide rate tells that something is wrong with the Japanese society.

Facebook, Blogger, Twitter, and Youtube

Ten years ago, we never had blog, twitter, facebook and youtube. Now we enjoy them everyday and, for many people, joining facebook has became part of their everyday life. Recently I've been busy dropping comments on the facebook and haven't updated this blog.

What does this change in informational technology bring to us?

While updating the blog, I am wondering if we've really changed the world view by using facebook, twitter, youtube and blog: We can so easily catch up with what is happening in the world by using them.

We don't necessarily need to find the people in other place. Use facebook to search whom you want to make friends with. We don't necessarily check up TV programs. Use youtube to find out what we want to watch most. We don't necessarily meet people at the cafeteria to chat. Use twitter to say something trivial. We don't necessarily opine to the press. Use blogger to write down what you have in mind.

Certainly we are now in the world that is different from the ten-year-ago world. Could we have imagined what this world is like ten years ago?

Now we spend our time on some activities that were never experienced ten years ago. Our society and economy must change in some different way. We never imagine what the end will be like. I don't have any pessimistic view on this technologically informational change.

Rather I would feel like writing that our future will be very bright: People talk to each other without any political constraint. In Egypt, people drew down Mubarak from the power. We never thought of it without having this informational change(How could a very large number of people get together immediately?). We now have a powerful tool to change the world view and the world itself.

I try to foresee what this technological change is bringing to us.

Rebuild the Economy

Japan is in a government-financial problem: the government tax revenue is less than the expenditure and issues a lot of bonds to meet the deficit. Japan is in a serious debt. How to solve it?

Just only three ways to have in mind:
(1) raise the tax
(2) cut the spending
(3) boost the economy as a whole

Should try all of these? Should try two of the above? Should try one of the three? Say, if you boost up the economy and raise the tax at the same time, you should spend less and the whole economy goes bad and the tax revenue decreases. So should the economy do if you cut the spending and boost the economy. We seem to have such a trilemma.

Regarding this old and new problem, Alberto Alesina of Harvard University and Roberto Perotti of IGIER might have the hint:

fiscal adjustments

(1) which rely primarily on spending cuts and cuts in government wage bill have a better chance of being successful and expansionary.

(2) which rely primarily on tax increases and cuts in public investment tend not to last and are contractionary.

The above research is empirically derived not theoretically, but (which I think Kan's advisors know) Prime Minister Kan has to know this because he tries the latter to increase the consumption tax and to cut the public spending. Pls don't miss the coming social experiment!

On Growth Strategies

Takeo Hoshi of UC San Diego and Anil Kashyap of the University of Chicago give some remedies for the stagnating Japanese economy:

They say what cause the stagnation are (1) the aging of the workforce, (2) the natural limits to export-led growth, (3) the tolerance of a dysfunctional banking system that supports 'zombie firms', (4) bad fiscal and monetary policy.

They say the policies are needed to improve growth and to raise productivity.

They recommend the following policies:
(1) accepting high-skilled foreign workers to increase the labor force,
(2) promoting more research collaboration between universities, companies and government to help technological progress
(3) enhancing free trade areas to help the industries raise productivity
(4) eliminating the regulatory separation of kindergartens and nursery schools to improve child care services and to encourage more talented people.

These suggestions are very interesting, but these have been already accepted and tried(not enough now, but gradually) by some policymakers. I think these might work if more people vote for them and believe these will help the Japanese economy revive.
The resource: 26/01/2011, WSJ

How To Read the Income Data

The elasticity of son's income with respect to father's income is about 0.5 in the United States.

Regarding this study, Mankiw says that that 0.5 estimate is roughly the correlation between father and son income, ...and that the fraction of variance of son's income explained by father's income (R-squared) is only 0.25 and is called the "heritability" of a characteristic.

...some of the heritability of income must come not from inequality of opportunity but from the genetic transmission of talent. ...it would be shocking if we did not find some significant heritability of income. And that would be true even if equality of opportunity were perfect.

Needless to say, this low income mobility observed in the United States should be (1) the result of the tax system(Americans face lower tax rate than do Europeans) and, in my conjecture, should have been (2) an Americans' motivation to get ahead and, what's more, one of the causes of the dynamism of the American society: people work harder if they can get rewarded larger and longer. If they know they should pay more tax as they earn more, they are less likely to work harder from the outset and thus are more likely to earn at least no more than they used to earn.

I am not sure whether the above data can tell us about the heritability of character or talent(it is clear that we should research more on it to make it sure), and its resource research says nothing about the difference of race, the places where they live, career and education.

At any rate, we should be careful of the income data that we can get from some academic or official researches when we talk about the recent income gap observed in several developed countries.

How To Cut the Deficit

I like Mankiw because he thinks up an interesting (ironic) analogy when he talks about difficult economic issues;

Plan to reduce the budget deficit: the federal government writes me(=health care) a check for $1 billion and increases the tax(=for fiscal sustainability) by $3 billion. This means that giving me that $1 billion will reduce the budget deficit by $2 billion.

This is not about the fiscal problem that America has, but that Japan has:

Plan to reduce the budget deficit: the federal government writes me(=child care) a check for 1 billion￥ and increases the consumption tax(=for fiscal sustainability) by 3 billion￥.

How to Tackle Your Exam

Science 14 January 2011: Vol. 331 no. 6014 pp. 211-213
DOI: 10.1126/science.1199427

Writing About Testing Worries Boosts Exam Performance in the Classroom
Gerardo Ramirez and Sian L. Beilock*

Simply writing about one’s worries before a high-stakes exam can boost test scores.

Anti-Consumptionism!?

Many young Japanese has not bought goods and service recently: they cut the spending on the fashion and food, don't buy a car, don't go on a trip, and try to save money. They are about to play a big and new role in the goods market in Japan.

Last year a book titled A Study on the Generation of Anti-Consumptionism (this title is translated by Taro and this book is published from Toyokeizai and only in Japanese), and subtitled "Stupid to buy a car, isn't it?" was released and went through several printings.

Anti-consumptionists are the young people of late 20s, and they were born after the bubble economy in late 1980s burst. They have generally a trend toward or taste for less consumption even though they have regular earnings. Interestingly, some of them are low paid part-timers and others have a regular job or full-time job and thus stable earnings.

They consume much less than older generations expect: they don't go to karaoke(to enjoy singing in a room with friends) and a restaurant without coupon, prefer eating at home to eating out and don't like a drink that is harmful to their health.

I found the article on almost the same topic and it said that some of the young people have become"grass-eating men" who prefer clothes and cosmetics to cars, and avoid life in the fast lane. (The Economist, November 20th-26th 2010, special report) So they can also tend to be "grass-eaters", but the men named grass-eaters are generally the ones who don't like making or having girlfriends.

The reason they consume less is, the article says, as follows: when they were teens, they went through the Hanshin-Awaji Earthquake, the subway attack in 1995, the bully in the schools and suicide, the Big Bang in Japan(the reform of financial and banking system) . Especially, they were damaged by the bully in the schools and were forced to be inconspicuous, to read the atmosphere in the schools and to make a shallow friendship with each other.

They tend to fear being made fun of and really want to look smart, which promotes buoyancy and rivalry among them, and thus makes them want to look carefully at others' face and to look nice: Such a common generational experience brings about a common generational mentality, which makes them worry about their future and thus consume less.

The above sounds reasonable, but it seems to me that it doesn't tell what makes them consume less, or what makes them worry about their future. I think there's more an economic cause behind this than a sociologistical or philosophical one.

Many business people are worried about such anti-consumptionists because they consume less and give a negative impact on the economy as a whole; They are more likely to shrink the dampening Japanese economy. However, they are reported to be attracted by the people from abroad and may turn out to be a new Japanese generation who pursues a new and different lifestyle from that of the older generations, as some optimists say.

In my view, a new generation gives a new lifestyle, and changes the structure of preference and thus of demand in the economy, say, in which they change a demand for a peaceful music to a fancy car and TV set.

But in the short term, anti-consumptionism should decrease the aggregate demand of the Japanese economy. Today's newspaper said that almost half of the child benefit offered first by the government this year goes to saving for their children. The child benefit doesn't make them save, but spend more on their children. They save more and consume less, which leads to more depressed economy which forces people to save even more and consume even less. It is called "the paradox of thrift".

Anti-consumptionism may be another or a new version of thrifty lifestyle.

We should need the policy to boost up the economic activity and to stimulate the people's spending in a weakened economy. Anyway, no wonder the Japanese economy will not soon recover from this slump. (Source: Diamond online, 08/12/2010)

Mobile phone in Chaplin's Circus (1928) ?

Many people have been surprised at the scene. I don't think she had a cell phone to make a call.

On Marrying Self

(Reuters Life! 22/10/2010) - Chen Wei-yih will marry herself. Uninspired by the men she's met but facing social pressure to get married, the 30-year-old Taipei office worker will hold the reception next month in honor of just one person.

"Age thirty is a prime period for me. My work and experience are in good shape, but I haven't found a partner, so what can I do?" Chen said. "It's not that I'm anti-marriage. I just hope that I can express a different idea within the bounds of a tradition."

Taiwanese women are marrying later and less often as their economic status advances, fuelling government concerns about a drop in the birth rate and its impact on productivity.

Only 40 percent of women surveyed earlier this year by the education ministry said they imagined married people could live better than singles, local media said.

But as Chen cannot officially register a marriage to herself, if she finds a man later she will wed again."If I had a steady boyfriend, I wouldn't do this," Chen said. "it would be offensive to him, anyway."

When I read the above post, it was so interesting and I was a little surprised that we could marry ourselves: I didn't have such an idea!

Some people who firmly trust tradition may say that this is not called a wedding and marriage and that she just wanted to attract public attention; Some of them may feel bad about or resist it. Marriage should come true when men and women love and agree with each other on it; Marriage is a social union or legal contract between people that creates kinship.

However, recently it has not been unusual for some men/women to get married with some other men/women and it is called the same-sex marriage. I do not say that it is good or not and I have no idea about it, but I know that some people may feel bad about it and that it is open to dispute. Self marriage might also catch public attention and new discussion.

By the way, when I studied economics, my professor said that getting married is just like finding a job. Now I see. Before getting married, we have to find a good partner; We can't marry a bad partner. It's almost the same in finding a good job: we can't work for a bad company all day long.

In my opinion, if the self marriage is a good/the best choice of life for you and it doesn't violate others' interest, health and property, I believe you can do it without any other restriction /obstruction. I don't understand those who want to marry themselves though(we can't have a good night without a good partner!), but if they are satisfied and they don't disturb others' lives, I have no reason or I can't find any reason for disagreement on it. Do whatever they want and be happy!

Nobel Prize 2010

I hope the Nobel prize of economics will go to Nobuhiro Kiyotaki of Princeton as the first Japanese Nobel winner.

Facebook Unfriending

I saw an interesting post in the newspaper. One grad student found some reasons for Facebook unfriending.

Facebook is, as you know, a worldwide social online networking where friends meet to share photos, news and gossip .

The word 'unfriend' came from Facebook and it is defined as “to remove someone as a 'friend' from a social networking site such as Facebook.”

The reasons for Facebook unfriending are as follows:

No.1: frequent, unimportant posts.

No2: posting about polarizing topics like religion and politics.

Moreover, the research found that those making friend requests stood a much higher chance of being abruptly unfriended and that at the same time, those doing the unfriending seemed to hold the upper hand in the relationship.

I think this may be something helpful for some other research on how to keep better relationship between, say, employees and employers in the labor market, men and women in the marriage market, and so on.

At any rate, Facebook itself is UNIMPORTANT. People just enjoy unimportant posts, don't they? They just break boring time. I believe in our life we sometimes need unimportant things as well as important things.

BOJ Follows Roger Farmer?

NY times(05/10/2010);TOKYO — In a surprise move Tuesday, the Japanese central bank lowered its benchmark interest rate to a range of 0 percent to 0.1 percent, a tiny change from its previous target of 0.1 percent but a symbolic shift back into an age of zero interest rates.

The Bank of Japan (BOJ) also said it would set up a fund of ¥5 trillion, or $60 billion, to buy Japanese government bonds, commercial paper and other asset-backed securities amid concerns about weakening growth in the economy, the world’s third largest, after those of the United States and China. The bank also kept its credit facility for banks at ¥30 trillion.

According to the one book written by Roger E. A. Farmer of UCLA, How the economy works,Oxford University Press, Roger says in this book,

"Control of an index fund(=mutual fund*) is the ideal way to implement this idea(=stabilizing stock market movements and preventing them from devastating the real economy),..."pp.159
*mutual fund : a basket with some stocks, bonds and other assets

"To maintain the interest rate, Fed(=US central bank) intervenes in the market by buying and selling Treasury bills(liabilities issued by government) in exchange for money,... (and at the same time) announces a price path for index funds and stands ready to buy and sell these funds each day at the announced price." pp.160

However, BOJ didn't announce the purchase of index funds/mutual funds and didn't say it follows Prof Farmer, but when I heard this news tonight I recalled Farmer; it seems to me that BOJ's announcement of purchase of Japanese government bonds, commercial paper and other asset-backed securities will have similar effects on the economy to what Prof Farmer's suggested.

I am not sure what Farmer says is going to happen in the Japanese economy when BOJ seeks the above new policy measures, but I would like to watch what's going on.

By the way, the press seemed surprised at the BOJ announcement, as Hirokata Kusaba of Mizuho Research Institute says, “The latest move gives off a much more powerful impression than past, incremental measures, which had sparked market disillusionment”

“Though there will be debate over the effects of the monetary loosening, I believe the Bank of Japan has done all it can at this time”

At the same time we can say that BOJ has no more policy tool to shore up the economy, as Richard Jerram of Macquarie Securities says,

“despite the (BOJ's) exaggerated language claiming that this is radical,...BOJ is apparently acting reluctantly and de-emphasizing the temporary nature of the measures, which is likely to limit the impact" and “There is a stark contrast with the Fed’s ‘whatever is necessary’ approach.” **The parentheses are added by Taro.

At any rate I am sure that this BOJ's action will soon lead to a widespread debate among economists and policymakers all over the world.

Behind the Boom of Brain Training

What is called 'brain training' or 'logical thinking' is booming among the people in Japan.

I don't know whether I should say 'brain training' and 'logical thinking' in the same context (these words may be quite different to some people), but anyway I can see many books titled 'brain training' and 'logical thinking' in the amazon.com.

It shows that many people want to become more brainy/smarter than ever, doesn't it? I try questioning myself about it and it seems to me that many people, especially business people as well, think that they should be smarter on their own in their everyday life.

I don't know if it is good for them to become brainy. Let me assume some situation of chat: while we are chatting, I always try asking, "what is it?", "what do you mean by this?", "it doesn't make sense", "that part of your tale sounds illogical", and so on. It is as if we were always in a discussion/meeting in class at school. I would get tired if I were always asking and questioning while chatting.

The issue I would raise is," do we really have to be smarter/thinking logically everywhere and every time in our life?" To be honest, I am not sure if we should do.

I don't always respect people trying to be rational or logical: I would like to ask such a king of people, "what part inside you do you defend?" It seems to me that they are likely to care themselves only, or that they just try to look nice and smart. It is just as if I dressed up.

This effort for trying to be smart is a kind of the waste of the time and money. Anyway it doesn't always help.

What 'efficiency' means?

In bookstores, I can always see some books on 'an efficient resource management' or 'efficient corporate governance' or 'efficient blah blah blah'.

By the way, what do you mean by 'efficient blah blah blah'? I don't understand it at all! What is efficient? Are you efficient? Hmm...I have no idea.

My English dictionary tells me that it means 'working well'. It's a good answer and most people who say 'efficient blah blah blah' probably may mean so by it.

However, economics tells me somewhat different definition of it: efficient means 'happier'. It's a little ambiguous and it sounds subjective although economics deals with objective social problems, but for me it is rather a correct way of using this word.

When I think of what to change in my life, say, what to cut down on in my spending, what to throw away in my bookshelf and how much to drink in this bar and so on, I usually think of 'the Pareto-efficient' and it means 'happier', say, "if I drink a little more, to what extent will I be happier?".

Usually this word is used on the public policy conducted by policymakers and the effects on the economy and the people's lives: Assume there are two people, A and B and they try to trade each other. If A can't be better off/happier than ever unless A tries to make B worse off/less happier, A is in the 'Pareto-optimal/efficient' condition and vice versa.

Pareto is an Italian sociologist in the 19th century and the Pareto efficiency is used when economists think about the deals between some people, that is, an 'inter-personal' trades, but it's not the wrong usage when I talk of an 'intra-personal' trades between today's Taro and tomorrow's Taro on what or how much to choose to eat/drink*.

Anyway in terms of economic thinking, an 'efficient resource management' should be the one that makes the people related to it happier/more satisfied, rather than that reduces the cost and raises the profit.

*Some alert readers may say, "if you want to talk about Pareto-optimum/efficiency, you should touch on the Edgeworth box, contract curves, core and the first/second theorem of welfare economics". I know I should use these ideas if I talk about it formally.

The Fall Comes

Looking at the above picture, I feel the fall has come. The man in the picture who harvests rice for a festival is, with all due respect, our emperor. (The picture is from Jiji press.)

Money is Important, But...

In some major countries like the US, Germany and here Japan, it is not easy to get a new and good job. Many people fear that they will have no job and lower pay. Some of them may also fear that they will have no more moderate and stable life.

Everyone hopes that he or she will have a good job. What I mean by 'a good job' is, of course, high-paid job.

However, some people may say that money is not so important as we expect in our life. There are many different views on that, but to live a healthy life in our modern society, making money should be considered first like this, "how much can I earn by working for your company?"

Here in Japan, maybe, in some other countries, there's a saying: "well fed, well bred". When surfing the web, I found another saying, "manners and money makes a gentleman", "poverty is an enemy to good manners."

Our job or career should be always our major concern in our life and when thinking about living a good life not to feel poverty, we must rethink of our current job and career, "will we be able to keep it for long?".

Good job depends on what we think as a good job, but how much we earn is always first concern and we can't tell a lie on it like,"money is not important, but happiness is always important." Happiness and money must be closely connected each other(and some research prove it) and needless to say, there's no happiness in a one-dollar-in-a-day life.

However, at the same time, there's happiness in a one-million-dollar-in-a-day life, isn't there? That should be another question to think of. Personally I can't imagine what it is like to be such a life, but there may be another problem, say, on how to manage to choose what kind of assets or how to inherit their property to whom.

In my opinion, I am happy that I can eat, read and sleep in a house with a well-built roof. I don't hope too much that I will live in luxury (I would like to live in luxury, having nice dinner and drink and bedroom), but I actually hope I will live a simple and stable life. If I can't live such a life now, then I should take some action to better it and that time should make me think money important in my present life. (No inflation is considered now. If there's the fear of inflation, my above view will be quite different. Behind my view the value of money, the purchasing power of money is important, not money itself when considering what kind of life we would like to lead.)

I believe that saving money doesn't mean just cutting down on our expenditure(cutting down on our standard of living makes no sense!), but thinking carefully of what to buy.

Some commentators on TV or in today's newspapers suggest that we should save money for our uncertain future life, but our future is always uncertain and the most certain thing on the future is that the future is always uncertain. And that's why we should think carefully of what we need most in today's life.

Don't be afraid of our future life too much, yes of course, we need to think of it, but thinking too much is not so helpful when we face some difficulties in our career. We should think of what we can do now because it is clear that we can't do what we can't do now.

If we think that we need something for our current or future job, we should now be studying or preparing for it(there's no money but there's much time! Time is also as important as money in our life), and if we need higher paid job to keep our current life stable, we should be looking for it in the job advertisement on the Internet or in the newspapers.

Please don't be influenced by someone near us(otherwise, you will be hurt!), just listen to or sometimes pretend to listen to what other people mean. However, some advise should be listened to. We remember they don't always think of us or they don't always try to be helpful to us. They just talk about what they want to talk(they just break time!). We should keep in mind that finally"do it yourself". Don't take too much time to talk about ourselves to someone, take time for us to prepare for another chance in the future.

Money is important but it doesn't choose our life. Moreover other people don't choose our life at least here in Japan and in some developed and democratic countries where the law protects our freedom to choose our career. Our life chooses our money. 　

'Frosh' means 'Fresh'

While reading my favorite blog, I was sure I found the wrong spelling in it.

'Frosh' should spell "Fresh".

But I looked up the online dictionary, it has that word: 'frosh' means 'a freshman in a college.' My dictionary doesn't have it. Why not a freshman is 'frosh'? These sound very different. I am not so serious though, just I am wondering why.

It's an American English word. I realize that there's really a lot in the world that I don't know.

円高、株安そして景気

2010年8月下旬の急速な円高、株安そして景気の動向が注目される。菅総理大臣、野田財務大臣の対米ドル８４．３４円、対ユーロ１０６．３５円近辺に対する「当面見守る」発言が、株式市場に失望感を与えて（同年8月24日）、さらに株値を落としている、といわれている。

さて、問題は以下2点。①これらの指標、日本経済をどのように見るか。②政府・日銀は何らかの手立てを打つべきか。以上2点を考えていこう。

①日本経済の現状
まず円高である。円が外国通貨に対して高いか低いかの判断基準は「購買力平価説（PPP）」という指標を使うのが基本とされている。これは例えば、米国で売られているトマト1個と日本の1個とが、同じ大きさ、同じ重さ、同じテースト（味）であれば、同じ価値、価格を持つという仮定（一物一価の法則という）のもとで計算される対外貨為替レートのことである。

英国エコノミスト誌の有名なビッグマック指標もPPPの考えのひとつで、対米ドル：1ドル＝85.7円であり、現在（2010年8月27日6時）対米ドル：1ドル=85.24円と比べれば、ほぼハンバーガPPPが指し示す水準値である。

円高は一般的に、日本国内の製品価格が海外製品と比べて割高になるため、外国へ製品販売している業者にとっては不利である。しかし同時に、外国から製品を購入する業者にとっては、外国製品が相対的に割安となるために有利である。円高は「輸出企業には不利、輸入業者には有利」と言われる理由である。

問題は円高は日本経済・景気にとって不利、または有利なのか。日本経済の構造を見ながらそのことを考えよう。どこの国であれ、いつの時代であれ、経済活動・景気変動は、

（１）　（需要）＝（供給）

の均等式が成り立つよう変動する。「需要」とは購入者（消費者・企業）であり、「供給」とは生産販売者（労働者・企業）である。　＊労働者は労働サービスを企業など生産者に生産販売している。

もし、このとき

（２）　（需要）＞（供給）

が成立すれば、需要超過と言う。このとき、購入者が経済には多く存在し、モノの値段（物価）が上昇し、利益拡大のチャンスと考える企業は生産・雇用を増やす。結果、供給が増えて、（１）式の均等式に回帰する。逆も然りで、供給が多ければ、物価が下がり、企業は生産・雇用を縮小させる。丁度（２）式が、「好景気」を表し、逆の不等号のときは「不景気」を表す。

経済は（１）式がバランスするように動くのである。　

＊いわゆる「ケインズ派」の考えは、「需要が供給を生む」という「有効需要の原理」を唱え、「古典派・RBC派」は「供給が需要を生む」という「セイの法則」を唱える。どちらも正しい議論ではあるが、一部の経済学者はモノが余る「成熟社会」ではケインズ派が、モノが不足する「発展途上社会」では古典派の考えが妥当すると言う解釈を与えている。ここでは、ケインズ派の理論に則って議論を進める。

この考えをもとに経済全体の需要（GDE）の項目を詳しく見ると、

（３）　（需要）＝（消費）+（投資）+（政府支出）+（輸出）-（輸入）

である。問題はこれら各需要項目の全体に占める割合である。消費（個人・政府消費）の対実質GDE比（2008年）はおよそ73％で、海外の需要項目、外需すなわち（輸出）-（輸入）は4.9％にすぎない。乱暴に言えば、マックス（最大）で１００％だけ外需が下落すれば、つまり、まったく外需がなくなったとき、日本経済の需要を約５％押し下げる計算になる。金額に換算するとおよそ27.8兆円。国内需要（内需）がおよそ95％、528.7兆円を考えるとさほど大きな数字ではない。割合だけで見ると、外需の消失はスーパーの５％還元ポイントセールが無くなったのに等しい。

＊GDEは国内総支出のことで、GDP（国内総生産）と同値である。これはちょうどGDEが「需要」に、GDPが「供給」に該当すると考えてもよいが（厳密には、これらの数字は同じものを違う面で見ているため、GDPが供給と言うのは正しくない）、これらの値は常に均衡する。また、需要項目で、なぜ「輸入」を差し引くかというと、国内の消費には外国製品の購入が必ず含まれるからである。輸出は外国への販売、すなわち外国人の需要（外需）で、輸入は日本人の購入、つまり内需である。2重計算を避けるために差し引く。また、（需要）＝（内需）+（外需）である。

なお、（３）式から

（４）　（需要）-（消費）-（投資）-（政府支出）＝（輸出）-（輸入）

が成立し、（需要）-（消費）-（政府支出）＝（貯蓄）、また、（政府支出）＝（税金）、（需要）=(所得)である（GDE=GDPが成り立つから）ことを考えれば、

（５）　（貯蓄）-（投資）＝（輸出）-（輸入）

が成立する。これは何を意味するか。（５）式を書き換えると、

（６）　（供給）-（需要）＝（輸出）-（輸入）＝（純輸出）＝（貿易サービス収支）

であり、上記式は常に均衡が成立する。すると、（6）式の右辺の解釈は、「国内の経済・支出活動の反射鏡」であることを示す。景気が悪くなれば、需要が冷え込み、（６）式右辺はプラスになり、輸出超過、すなわち貿易黒字になる。＊財務省の「貿易統計」での貿易収支と上記の数字は一致しない。

このことから、

（７）　（景気の低迷）＝（貿易収支黒字）

といえる。円高は外需の押し下げ要因、景気低迷要因であるが、たとえ外需が消失しても、日本経済には５％のマイナス影響しかない。このことより、日本経済は欧米諸国に比べても「内需主導型経済」であると言える。

＊貿易収支の黒字は、海外への販売である輸出が外国からの購入である輸入よりも多いことを意味し、この裏では外貨の受け取りが支払いよりも多くなる。国内企業は外貨を邦貨（円）に換え、決済しようとするので円のニーズが強くなり、「円高」になる。また、国内物価の下落も「円高」要因である。名目為替レート：1ドル＝E円とすると、実質為替レート：米国のトマト1個＝日本のトマトF個とすると、

E=F×（日本のトマトの値段）÷（米国のトマトの値段）

となる。日本のトマトの値段、つまり日本の物価が下がると、名目レートEは減少つまり「円高」になる。さらに、国内の資産にかかる金利上昇も「円高」要因とされるが、内外の金利差（日米間の長期国債金利）は米国金利のほうが高い。

②政府・日銀の政策
以上の５％の変動が日本の実体経済（GDE）にマイナス影響を及ぼし、日本の株価を押し下げているのだろうか。単回帰分析を使って考えたい。これは、株価（日経平均）と経済（名目GDP）との関係を

（８）　（日経平均株価）＝a×（名目GDP）+b

という中学校で習った１次関数の形に直して、お互いの相関関係（因果関係ではない）を見ようということだ。データは過去１０年（２０００年～２００９年）の日経平均（終値）、名目GDPを使った。すると、

（9）　（日経平均株価）＝0.225×（名目GDP）-99413.7

となる。定数項、名目GDPの係数の推定値ともに有意水準5％で帰無仮説（係数＝0）を棄却でき、日経平均の変動を説明するには、名目GDPが必要であるといえる。（相関係数＝0.84）このことから、外需の対名目GDP比は、5.3％であり、かりに外需が消滅すれば、0.053×0.225＝0.011、つまり１％だけ株価を押し下げる計算になる。

＊もちろん、サンプル数を増やす、変数を増やす、また経済の構造変化を考慮に入れるなどより細かく計算すべきだが。さらに、実質GDP(物価の変動を取り除いたGDP)を用いて、同様の単回帰を行うと、帰無仮説を有意水準５％で棄却できない。このことからも、日経平均は実体経済と強い関係があるとはいえない。また、為替レート（東京市場）でも同様の分析を行うと、これも日経平均と強い関係は確認されない。

＊＊株価には東証株価指数（TOPIX）も存在する。日経平均は日本経済新聞社が作成・公表し、東京証券取引所1部上場約1，700銘柄から代表的な225銘柄の株価の単純平均として表されるため、高い銘柄の動きに左右されやすい。そこで、高い銘柄の動きに左右されないように、上場銘柄の株式数を考慮して加重平均として表したのがTOPIXである。TOPIXは、株式数の多い大型株（資本金100億円以上）の動きが大きく投影される傾向がある。

＊＊＊日経平均の変動は輸出関連・ハイテクなどの値による影響が大きいのに対し、時価総額を基準とするTOPIXは、時価総額の大きい大手銀行株をはじめ、内需関連株による影響が大きい。

＊＊＊＊株価は一般的に「先行指標」とされ、景気に先行して動く。

直近の日経平均は８月８日以降、９５００円を割り込み、円も６月下旬以降９０円を割り込み、２７日現在株価は８９00円程度、円は対米ドル８５円程度である。

乱暴に言えば、円高により外需が消滅しても、株価は１％の下落、つまり９５００円からだと９５円程度のマイナス、９４０５円程度になることが予想される。このことからも、株は円高による実体経済、外需減少要因だけではなく、他の要因にも大きく左右されているのではないかと考えられる。

この単純計算からも、昨今の株価下落と円高の実体経済（外需）に与える影響とに大きな関連はなく、政府による為替の介入、日銀の一段の金融緩和などといった対応には注意が必要である。

そもそもこれらの政策の目的は何か。「景気対策」か、それとも「円高対策」か。たとえ、

（10）　（円高対策）=（景気対策）

だとしても、円を仮に安くでき、外需が１００％増加しても（２倍になっても）、GDPにはプラス２７兆円だけの増加である。GDPギャップが20、30兆円程度だと言われているから、それを埋めるのにちょうどいいかもしれない額だが、欧米などの海外の景気が悪化している中、ありえない話である。

＊GDPギャップとは、潜在的な生産能力と需要との差で、日本経済は20、30兆円程度需要が足りないと言われている。

政府の為替介入は「円を売る」ことであり、日銀の金融緩和は「流動性（円）を増やす」ことである。どちらも市場に円供給を増やす政策で、「円を安く」させよう。ただ、仮に円を安くできても、それにより、景気にどう影響するのか。小生が示すように、外需が倍にならないかぎりGDPギャップを埋めることができないし、日銀は金融緩和を続けているし、政府財務省の円売り介入も他通貨が安いうえ、ハンバーガーPPPで見て円は適正値であり、政策効果は非常に限定的であるだろう。「何もしないこと」と変わらないかもしれない。

＊経済通なら「乗数効果」（ある需要項目の経済全体への波及効果）はどうした、と聞くかもしれない。ご承知のとおり、45度線分析で海外部門を導入（限界輸入性向）し、海外部門を考えな国内経済における政府支出の増加による経済波及効果（政府支出乗数）に比べて、外需（輸出）が増えることの乗数効果は小さくなる。

③まとめ
１、外需の内需（実質GDP）に占める割合は小さい（５％）
２、外需の低迷・円高と株安（日経平均）との関係もごくわずか
3、政策的対応は非常に限られ、その効果も非常に小さいだろう

How To Create Jobs and Income

10/21/07 revised

The world economy has been in crisis and here in Japan some policymakers and economic policy nerds have some ideas of how to boost up the weak demand of the economy.

In my opinion (and I think many people interested in economic issues will agree with it), there're generally two kinds of the problems the economy has: the structural one and short-run business-cyclical one.

As a structural problem, the older people get, the more money they need to make a living. Thus the government should pay them as a medical insurance and national pension plan, which consequently puts the budget into deficit and thus a long-term debt. So we need much more tax revenue as resources to pay them.

On the other hand, and as a short-run problem, many young people now have difficulties in finding a good job in such a weakened economy and many (how many? ...good question, but it doesn't matter at present) of them should put up with low-paid and insecure jobs.

The Prime Minister, Kan, and his economic team seem to want to solve the above two kinds of them at the same time: raise the tax to create jobs and income. It sounds weird in a traditional economic thinking, but they are so serious that they think they can. The government raises the tax and gets the revenue, which it can use to employ the unemployed and to boost up the income and consumption in a whole economy. Now the Kan administration can solve the two problems: it can get more tax revenue to employ the unemployed (it can solve the short-run problem), and thus it can get more and more tax revenue to finance the budget deficit and to shrink the long-term debt because more people can earn income and pay the tax on it in a whole economy(it can solve the structural problem).

Yes of course, there's always a lot of jobs that need young people in the economy from the viewpoint of a whole society, but I mean these jobs may not necessarily keep them on and what's more, we are more likely to have ability-oriented or region-oriented gap: some people can complete the work they are offered, but others can't. Or, in some cities there're many jobs to take but in other cities not many. Always there're jobs that need us as long as we live on, but some of them may not make them eat enough food to live on. (Why are there some job ads that we can always see in the newspaper?)

Although the economic policy the Kan Administration sounds logically coherent, unfortunately I am not sure how successful the solution Mr. Kan proposed is in solving the two problems, and I am wondering what happens to the economy if the government tries to do it.

I am Still Alive

For more than 3 months I have not updated my blog. That doesn't mean that I have nothing to write and to update, nor that I have no time to write.

Recently I have read some books some of my favorite economists recommend, and wanted to concentrate on them carefully. Of course, while reading them, I've been busy working and teaching.

Soon I will write and discuss on the books I read.

On Fiscal Policy (1)

I am teaching elementary economics at school, and I touch on fiscal policy - government budget, spending, cut tax, how built-in stabilizer works, tax collection, bond issue and fiscal reform of the Japanese government.

When I think of the fiscal problems that the Hatoyama administration should solve, this report may greatly help though it is on the fiscal policy of the US.


Fiscal policy has three functions: (1) allocation of resources, (2) income redistribution, and (3) economic stabilization.


This report is almost entirely on the function of fiscal stimulus, or comment on textbook Keynesian view on fiscal policy and here's the summary of this report:

(1) On the effects of government spending

There are two effects of government spending on aggregate demand(=consumption + investment). These are positive and negative effects:

The positive effect is multiplier effect, where government purchase leads to higher income and thus today's demand.


On the other hand, the negative effects are growth-retarding effect, where government spending leads to higher taxes in the future and thus less demand today to prepare for the higher tax, and crowding-out effect, where government spending results in higher interest rate and thus less today's demand.


(2) On the effects of tax cut and spending on demand


Generally, I say that government spending is more effective on demand than is tax cut. However, some researches say that it isn't, rather it is the opposite: tax cut is more effective on demand than government spending.

Moreover, (interestingly) successful, growth-promoting fiscal stimulus is tax cut whereas unsuccessful stimulus is spending more and transfer payments, which are now (unfortunately) the Hatoyama administration's main dishes!

A Japanese Shrine

This is Manshu-in Tenman-gu.

Visit to Kyoto

It's a Japanese heart-Cherry blossom.

マクドへのファンメール

日本マクドナルド株式会社さんへファンメールを書いた。以下のその一文。

御社での製品(特に、マックシェイク、フィレオフィッシュ)は幼いころから楽しんでおり、「マクドファン」としてメールいたしました。

街中を歩いておりますと、御社の使用済み包装が散らばっているのを良く見かけます。包装については、衛生上の観点から必要であり、「過重包装」についても何度も御社では改善されたことを伺っております。

基本的に食後の包装の処理は消費者の責任でありますが、御社としては難しいとは存じますが、一度「デポジット制度」についてご検討されては、と存じます。例えば、お持ち帰りの包装に関して紙袋代やポテトの紙箱など一律10円を正規価格に上乗せし、店舗に持ち込めば、10円返金する、という制度です。

街中のゴミも減り、環境配慮を全面的にアピールする狙いを込めて、御社が積極的にこれに乗り出せば、更なる企業イメージアップも図れ、他社さんもこれに追随するやも知れません。

ご検討されれば、と存じます。拙文失礼致します。

Inequality and Education

Recently I've read the latest Mankiw's article and wondered how to solve an income (or opportunity) inequality. Not only has this problem been considered important in the US, but also in Japan.

Since around 1970s, the age of oil and dollar crisis, an income inequality has been wider in some developed countries and especially since late 1990s, when IT(information technology) revolution, the Internet, came across and changed our everyday business and life, we've got concerned about what is called "digital divide", which means that those who use IT are more likely to get higher income than those who don't.

"Kakusa society", in Japanese, means "income-gap society" and is now a well known word to a lot of modern Japanese people. Income gap leads to a wider opportunity gap; Those who get higher income are more likely to have good friends and spouses and live a better and happier life, and thus so are their children.

When Gary Becker & Kevin Murphy talk about the income inequality, they point out the role of "human capital" played in an income gap:

The initial impact of higher returns to human cap­ital(Taro added: a higher education of college and university) is wider inequality in earnings.

...Higher returns to educa­tion will accelerate growth in living standards as existing investments have a higher return, and additional investments in education will be made in response to the higher returns.

Why is the earnings gap widening? Because (of) the demand for educated and other skilled persons (and) ...a general shift in economic activity to more edu­cation-intensive sectors, such as finance and professional services... At the same time, world demand has risen for the kinds of products and services that are provided by high-skilled employees.

They tell us that initial impact of higher education on income widens income gap, but as time goes by, it decreases and leads to higher income and benefit spilled over more people. Moreover, they criticize the usual policy response to an income inequality:

...the solution to an increase in inequality is ...to raise taxes on high-income households and reduce taxes on low-income households. .. (That is just like advocating) a tax on going to college and a subsidy for dropping out of high school in response to the increased importance of education.

They suggest that we should encourage higher education for more people. I completely agree with them.

Teach Economics

Since last year I have been given some opportunities to teach elementary economics as a lecturer to students who are thinking of entering university and working for governments.

Here in Japan before we work for governments we should take the exam on law, history, and economics and have some interviews. These subjects are, however, at an elementary level,but to teach elementary economics is not easy for me because almost all the students don't know a lot about economics.(that's why they come up to me!!)

They need good lectures and thus they paid a lot for schools. I should talk frankly about economics and watch them study hard.

During this lecture I had some lessons on giving a lecture: I found I didn't understand what I had thought I knew a lot about. Moreover, I found good lecture depends on how much I prepare for it: If I didn't read the textbook very much beforehand, I couldn't teach well and would give the students an impression in which I don't know a lot about what I am talking about. That's true but I hadn't found it until I gave some lectures.

I believe it is a good experience and I should study more on how to teach elementary economics. But at the same time I should begin to write some papers for the doctor degree.

A Love From Russia?

Recently I've got some emails from someone that I've never met. They say that they came from Russia and girls. They say that they broke their love and looked for another good love.

It looks interesting and I've tried to reply to them. After a while, they emailed me and they said they found me an ideal guy... and I continue to email her(?) and she(?) says that she wants me, needs me and loves me....(like Elvis's song?)

What is that? I have no idea. Why do they email someone that they never meet?

Anyway, if you have some idea of such an anonymous email, I would be happy to hear it.

Trip to Old Japan

I found a good collection of old pictures of more than 100-year-ago Japan. Enjoy it.

Haiti Tragedy

It is a very sad news of Haiti's earthquake. What Krugman says is also what I really want to say: As far as one can tell, those with the power to help are doing all they can. One can only hope that enough help arrives fast enough to avoid the second-round calamities — deaths due to lack of food and water and/or disease — that can all too easily follow a natural disaster.

It also reminds us of the Kobe-Awaji earthquake that happened 15 years ago.

American Obesity

WSJ says on 13/01/2010 that:

WASHINGTON—One-third of American adults are obese, according to new U.S. government figures released Wednesday, but the rate of increase seen in recent decades has slowed.

Figures from the National Center for Health Statistics showed 34% of American adults age 20 and older were obese in 2007-08 while 68% were considered overweight or obese. In children ages 2 through 19, 17% were considered obese while 32% were considered overweight. Broadly, the figures are similar to rates seen in 1999-2000.

"Obesity remains high and is a significant public-health problem in the U.S.," said Cynthia Ogden, one of the main researchers involved in tabulating the data and an epidemiologist with the Centers for Disease Control and Prevention's health-statistics unit.

..."I see this as relatively good news," said William Dietz, the director of CDC's division of nutrition, physical activity and obesity. "It suggests we've halted the progression of the epidemic."...."The administration recognizes that control of obesity is related to health reform," Dr. Dietz said.

The obesity figures were taken from 5,555 adults and nearly 4,000 children who are considered representative of the U.S. population. For adults, researchers looked at body mass index, a measure that estimates body fat by using a person's height and weight in the calculation. Those with BMIs of 25 to 29.9 are considered overweight and those who are considered obese have a BMI of 30 or greater. A BMI of 18.5 to 24.9 is considered a normal weight for adults.

Interestingly, we can see this article in the site of Yahoo JAPAN! although it is a piece of the American news that doesn't seem to have anything to do with our own life. I'm not sure how many Japanese are obese and what growth rate of obese Japanese we have seen for the past decades, but I'm sure it is not other people's affairs.

We have already lived a civilized life here for long: the foods we eat are more similar or closer to those the American eat, and we do less exercise for long and so do they. Our life style becomes quite closer to American one. I think we need to take a good look at the data of obesity in America for good reference.

Herd Society

We are the same as monkeys.

The Conscience of a Conservative

What is a conservative? I don't think I am a conservative but I sometimes wonder what the idea of a conservative is like. Let me tell you about it:

Longman dictionary says that a conservative means a person who dislikes changes. My definition of a conservative is a little different: Generally, a conservative has three principles of behavior, or beliefs.

(1) To love his or her own culture, custom and tradition

That's natural to what is called a conservative. There's always such a person no matter which part of the world he or she lives in. Such a person always says that he or she loves and tries to protect his or her own tradition.

(2) To be tolerant

When you meet someone who doesn't agree with you, if you blame him or her, you are not a conservative in my definition.

What a conservative is like is tolerance for disagreement or misunderstanding. I know if you are hard for someone to understand you feel bad with him or her. But try to keep calm and to listen to him or her because someone who doesn't agree with you probably has a different point of view from you that might sometimes help you broaden your outlook. (It is difficult to keep calm when you are harshly blamed. That's our nature!)

A conservative is basically not a violent one, rather a gentle and kind one in this way.

(3) To know that changes are sometimes needed

"Change to remain the same!" Ichiro Ozawa, a politician of the Democratic Party, now a ruling party in Japan, likes this phrase. Ozawa has been considered to be and called a neoconservative, who believes the power and dynamism of freedom. I like this phrase too.

When we see the world in which we live changing fast, we should not stick to our own opinion or idea. We should first rather learn how the world is changing and what is changing in the world. And then if we feel the need to change the way in which we behave due to changing social and economic surroundings, we should try to change our idea, or if needed, ourselves to remain the same as what we are and how we live on.

Change is not always a good choice, though. We should think of the effect of the change we make on our life and society. I know it's a difficult task. It's not a simple matter of cost-benefit analysis. It can be said that it's a great decision to make a change in our present life and society.

The Peter Principle

It's very interesting! The Peter Principle says that the less productive a worker, the more likely will she succeed.

...There are, though, perhaps more basic messages here. Competition needn’t necessarily yield optimum outcomes; “survival of the fittest” mightn’t be the most efficient principle. And the organization of corporate hierarchies might be inefficient, not (just) from heterodox perspectives, but from the perspective of conventional neoclassical economic theory itself.

Now might be the time for us to study such a kind of economics; Just before, Koizumi and Takenaka tried to conduct an economic policy of a traditional neoclassical version of competition and privatization(Reaganomics), in order to boost up the stagnant Japanese economy.

Recently a lot of people have doubt on an attempt to make such a policy because the Japanese economy is still stagnant. The Peter Principle would not be a key solution to the difficult problem of the Japanese economy, but greatly influence the ideas of political and business leaders.

Economics

Paul A. Samuelson died. (The picture is from NY times.)

When I was a freshman at college, I took a course of international economics. The lecturer introduced one econ textbook to the students. That was the Samuelson's economics. Of course, it was the one written with Nordhaus and soon I dropped from this course because I felt it was enough to read it.

I can't talk about Samuelson and his work because I don't know what he really did in economics. However, he is so famous in the area of economics that most of people should find his name in any introductory econ textbook.

Of course, Japanese economists of older generation studied economics with his textbook and if they were asked who wrote a great econ text, they would definitely answer "it's Samuelson". He is certainly a brand name in Japan too and influenced them so greatly. Unfortunately, I have never read his economics (I've read Mankiw's one instead.) but I heard most of econ textbooks have followed his style of economics by introducing micro, and then macroeconomics.

Recently, I have been wondering what's the true meaning of the distinction between micro and macroecon. Well, I think it's easier for econ teachers to teach beginners economics. But as an econ beginner I struggled to understand what econ is like; Micro seems very different from macro in intro econ textbooks. To be precise, Keynes theory(AD-AS analysis) seems different from New Classical one(Demand-supply diagram).

I know Barro of Harvard tried to integrate them into one. I am not somewhat happy with the Barro's style of economics and I cannot give alternative version of econ(it's really a big task!), but I would say there's no more need than to make the distinction.

I would say macroeconomics should be described as an applied microeconomics and this trend has been already accepted. Why have many of intro econ textbooks still followed an old-fashioned Samuelson's style of econ text? It might be a stable equilibrium of econ style.

Tax Cut Or Spending?

This is one of the conventional themes in macroeconomics and most of students in introductory economics class may study which policy is more effective on the stagnant economy, tax cut or government spending.

As introductory macroeconomics(say, the Keynesian Cross) says, government spending is more influential, more likely to increase the national income(GDP).

The reason is quite simple: government does a debt-finance.

Imagine two people earn income of $100 a day, buy food from each other at a cost of $10 and the income tax imposed is $10. Thus each of them has $90 in hand and spends $10 on food a day.

In this economy, the total income (the sum of two people's incomes) is $180.

Due to economic stagnation, one of them becomes unemployed and earns $0 a day. If the government cuts income tax (-$10) to stimulate the economy, the employed will have more(she has now $100 in hand a day) but the unemployed will not. So the unemployed has no food to eat this day. (In this case the unemployed can earn money to sell food to the employed, because both eat nothing.)

In this tax-cut economy, the total income is $100.

Alternatively, if the government provides the unemployed with a job that makes him earn $10 a day, that is, increases the government spending, then the unemployed will get the benefit(he has now $10 a day in hand) but the employed will not (her income remains $90 in hand) .

In such a spending economy, the total income is $100. The same! This is not more effective than tax cut.

The reason is in government-spending economy, she is still imposed income tax of $10. The point is, in a tax-cut economy, income distribution is done through the exchange from each other, whereas in a spending economy through the government that just takes $10 from the employed and gives $10 to the unemployed.

If there were no income tax on her(government made a policy of debt-finance) in a spending economy, the total income would be $110 and thus more effective than tax cut policy (of course, later a tax increase will come). Keynesian policy is always a debt-finance policy!

Money and Life

I read a comment from one of the readers of Yomiuri Shimbun, a major newspaper in Japan, and it caught my eye:

Yomiuri shimbun, 09/12/2009

A letter from a mother in her 40s says,

"I have two children, one is an elementary school student, the other a junior high school student. The older one is not good at plugging at study, but quick in understanding, and began to go to cram school and the grades are going up.

We need more money in education for my children. My husband's income was always low and due to recent recession, it is even lower. Less overwork and work on holiday made him stay longer at home. My husband is a good man and kind to our children, but his income is low!

I am working part-time and have a lot to do for children, but I am so nervous that our low income may be going to give them few accesses to good opportunities. Looking at his face, I feel hatred for him. I am worried that our conjugal life may be broken and may do our children harm. First of all, I feel so sad that I cannot give my husband a smile."(Translated by Taro)

During the economic stagnation, people feel so nervous and disappointed at their future life. "Money can't buy happiness", some people say, but nobody disagrees that money is very important for life. What is really needed for good life? Money! Probably, but probably not at the same time.

Money can buy good education and good access to good career and good life. That's why many students go to the US to get MA or PhD at higher-ranked university. However, they know that school may not guarantee happy life with good partner and children. They feel after graduation they may be unemployed or poor or alone all their life.

Some economists may say that economics gives a good hint on what and how to do for living a good life, but I don't know it clearly. I know while many people are seeking for better and happier life, very few people really know what and how to do for it.

Which is better for you in your life, a poor life with warm-hearted partner or a rich life with a cold-blooded partner? As Milton Friedman says, "free to choose!". The point is what you need most all your life. If you need a stable life, you should choose to work for government, and if you need an unstable but, if you are lucky and good at business, a rich life, you should choose to become a business entrepreneur.

If you think happiness is to put up with any hardship both for your good life and for your children's life, you should choose a partner who agrees with you. If you think happiness is not to be miserable or not to be poor, you should check your partner's bank account and payroll before choosing him or her as a lifelong partner. Anyway, free to choose, right!?

When Was Japan Born?

I think if you drop in at this blog, you will probably be one who may be interested in Japan or other Asian countries. I happened to see the Japan page, NY times, I knew that I hadn't known
the birth(or independence) year of Japan. Here's the page;

Japan at a Glance

Official Name: Japan

Capital: Tokyo (Current local time)

Government Type: Constitutional monarchy with a parliamentary government

Chief of State: Emperor Akihito represented by Yukio Hatoyama, prime minister

Population: 127.43 million

Area: 145,902 square miles; slightly smaller than California

GDP Per Capita: $33,100

Year of Independence: 660 B.C.

Since I saw "Year of Independence" here, I haven't known what year Japan became dependent. In fact I can't remember if I learned at school when Japan appeared in the world history. At the beginning of the histry class that most Japanese people have, the origin of the Old World is first introduced and after that the dawn of Japan is introduced, but never is that Japan was born in 660 B.C. taught! We just learned that early Japanese used stone tool at that age.

What's "the Year of Independence, 660 B.C."? To be sure, it comes from part of the Nihon Shoki, and Wiki says,

"Most scholars agree that the purported founding date of Japan (660 BC) and the earliest emperors of Japan are legendary or mythical."

What Makes Us Rich?

Daron Acemoglu, professor of MIT, answers a big question, "what makes us rich?".

He says incentive is the key role in what makes us rich or poor:

People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions — the rule of law and security and a governing system that offers opportunities to achieve and innovate. That's what determines the haves from the have-nots — not geography or weather or technology or disease or ethnicity.

Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments.

Very simple answer!

Welcome, Anonymous!!

Recently, (it's about you, right?) an anonymous has come to my blog and post the same comment. Of course, I like to be given some comments on my blog. I always welcome you, but if you like, please read it out and then give your comment on it.

Of courese, you disagree with me and if so, I hope you'll give me the disagreement. At any rate, just I wish you enjoyed this small blog a lot.

Soshokukei Danshi

One article in NY times tells about the Japanese men and caught my eye:

Two phrases have been coined to describe them: soshokukei danshi or “herbivorous males,” and Ojo-man – or “girly men.”

Definitions vary, but the new herbivores could be described as metrosexuals without the testosterone. Although most of them are not homosexual they have in common a disdain for the traditional accoutrements of Japanese manhood, and a taste for things formerly regarded as exclusively female. Girly men have no interest in fast cars, career success, designer labels and trophy women. Instead, they hold down humble jobs, cultivate women as friends rather than conquests and spend their free time shopping at small boutiques and pursuing in Japan what is regarded as a profoundly feminine pastime: eating cakes.

Seeking to tap into this market, Japanese manufacturers have launched underwear, cosmetics and clothing designed to appeal to herbivorous males – including bras for men and lacy male tops.

...Masahiro Yamada, a professor of sociology at Chuo University, Tokyo, believes that the new demographic is the result of economic decline: most young men in Japan simply cannot afford fast cars and designer labels, he says. Yamada also worries about the effects of soshokukei danshi on Japan’s shrinking population, noting that almost half of Japanese men aged 20–34 are unmarried and that nearly 30 percent of these have never had a girlfriend:

“I worry that herbivorous boys are the future of Japan. … As young Japanese men become more timid and more averse to taking risks, it will affect the energy and vitality of the society.”

According to a July 2009 article in The Japan Times, go-getting “nikushokukei joshi” – or “carnivorous women” – have emerged as a counterweight to soshokukei danshi.

Next Recession

Roubini predicts that another recession is coming.

...rising fiscal deficits in most economies are now pushing up the yields of long-term government bonds. Some of the rise in long rates is a necessary correction, as investors are now pricing a global recovery.

But some of this increase is driven by more worrisome factors: the effects of large budget deficits and debt on sovereign risk, and thus on real interest rates; and concerns that the incentive to monetize these large deficits will lead to high inflation after the global economy recovers in 2010-11 and deflationary forces abate.

The crowding out of private demand, owing to higher government-bond yields – and the ensuing increase in mortgage rates and other private yields – could, in turn, endanger the recovery.

As a result, one cannot rule out that by late 2010 or 2011, a perfect storm of oil above $100 a barrel, rising government-bond yields, and tax increases (as governments seek to avoid debt-refinancing risks) may lead to a renewed growth slowdown, if not an outright double-dip recession.

...But much of the rise in asset prices is not justified, as it is driven by excessively optimistic expectations of a rapid recovery of growth towards its potential level, and by a liquidity bubble that is raising oil prices and equities too fast too soon. A negative oil shock, together with rising government-bond yields – could clip the recovery’s wings and lead to a significant further downturn in asset prices and in the real economy.

EMH Is Wrong?

Modern economists are always criticized for mainly 2 hypotheses: (1) REH and (2) EMH. The reason is easy. These hypotheses seem to be fictional, not real.

(1) REH
Rational Expectation Hypothesis - It is a very important idea in modern macroeconomics and originated from John Muth. Shortly, it says that the economic equilibrium we reach is determined by what we "expect" for the future economic behavior. That means our economy is the mirror of our expectation.

(2)EMH
Efficient Market Hypothesis - It is a very essential idea for modern financial theory and originated from Eugene Fama. Briefly, it states that the prices of securities reflect all known information that impacts their value. The hypothesis does not claim that the market price is always right. On the contrary, it implies that the prices in the market are mostly wrong, but at any given moment it is not at all easy to say whether they are too high or too low.

Many people claim that EMH is the main culprit of the Crisis, but Prof. Jeremy Siegel says in reply that the fact that automobiles today are safer than they were years ago does not mean that you can drive at 120 mph.

A small bump on the road, perhaps insignificant at lower speeds, will easily flip the best-engineered car. Our financial firms drove too fast, our central bank failed to stop them, and the housing deflation crashed the banks and the economy.