Prime Minister Abe on the Saturday Morning Cartoons
Until a couple years ago Japan’s national broadcaster had a weekly news program for children called Kodomo News. It featured fun, hands-on graphics like the ones in the photo above, and explanations of complex world events, with all their background history given in terms ten-year-old could understand. A veteran male journalist played the role of father and lead explainer, while a female journalist played a supporting role of mother, commenter and questioner. Three intellectually precocious children were chosen to play the role of the children in this “family.” Everyone knew they were not a real family, but the journalists were referred to as okaa-san and otou-san (mom and dad) as they made a pretense of being a family.
Aside from the blatant paternalism, it wasn’t a bad show. My children gained a pretty good understanding of the conflicts in the Middle East, for example, and various other current events that appear in the daily news. Without such explanations, the news is just a constant stream of random, de-contextualized chaotic events, for children and adults alike. This, in fact, was the reason the show was cancelled. Audience research revealed that children weren’t watching. As the elderly came to make up a greater share of the population, more of them were at home tuning in to Kodomo News, and they loved the clear explanations of issues which, during their busy careers, were most likely heard about as random bites of information that told them nothing about why the information was relevant and newsworthy.
The cancellation of Kodomo News seemed to come with a realization that the adult news audience might as well be treated like children all the time. This picture above comes from an NHK News program that aired between 8:30 and 9:30 AM on Saturday January 12, 1013, and you can see that it kind of looks like Saturday morning cartoons. There is Prime Minister Abe in the top right corner commanding the levers of the economy, directing the Bank of Japan to start printing money and aiming for an inflation and employment target. Money is going to flow from the Bank of Japan to banks, then it will be loaned out to private companies or spent on public works projects, and the economy will be stimulated. It’s all so simple a ten-year-old could understand it, right?
The guest panel of experts provided some critical commentary and asked some challenging questions about whether workers could really expect wage gains to come quickly with this inflation target. In general, however, the whole show came across as a sestumeikai (explanation meeting), the sort of meeting where those in control of the message explain how things are going to be. A setsumeikai is not a discussion, debate or negotiation. This one-hour discussion never touched on the enormous national debt that can never be repaid, nor did it mention energy policy. Last year, the crushing expense of increased imports of fossil fuels, necessitated by the shutdown of nuclear plants, was said to be a fatally serious problem in the economy. This year, under the new so-called "Abenomics," a weak yen is apparently the savior, even though it makes fossil fuel imports more expensive. The plan seems to be that energy issues are out of the discourse until the LDP safely gets a majority in the Upper House next summer. After that, they can really get going on their agenda. For the next few months they will be dazzling the nation with PR campaigns trumpeting everything they are doing with their $116 billion stimulus budget. So far, the plan is working.
The panelists on yesterday’s morning show also never touched on the underlying cause of economic problems: the inverted demographic pyramid. Abe and the LDP are harking back to the early 1960s, thinking that if they host the Olympics again they will usher in another fantastic era of economic growth. They have falsely attributed a causal relation just because the Olympics and economic growth were once observed to have occurred one after the other. They conveniently ignore other factors of the time such as that Japan was starting from a much smaller GDP that had a lot of potential for growth. The nation had a baby boom, a young work force, and the economic stimulus provided by American economic growth and American spending on the Cold War, and the Korean and Vietnamese Wars. In any case, from this point forward, a repeat of the quadrupling in energy consumption is not possible or desirable, and this leads to another remarkable flaw in the LDP fairy tale: climate change doesn’t exist.
Perhaps the most alarming statement I heard on the NHK program was that the host said Abenomics promises interest rates will not increase as a result of this policy of a weakening yen and inflation. Most homeowners in Japan opt for one-year or three-year mortgage contracts at about 1.5% in order to save the extra one percentage point they would pay to lock in at 2.5% for 25 years. No one alive now has any experience with a high interest rate environment. Homes and condominiums in Tokyo still, after the bubble pop of 1991, cost upwards of $500,000, and most people can afford them only at the very low rates. A tripling of that 1% rate would be bring on a lot of home foreclosures, and the government would default on the national debt in the same way.
Today New York Times Japan correspondent Hiroko Tabuchi tweeted on this topic, asking who is right on Japan: J. Kyle Bass (hedge fund analyst who protected his investors from the 2008 housing crash), or Paul Krugman (NYT writer and winner of a Nobel in economics). J. Kyle Bass thinks Japan is headed for higher interest rates and default, while Paul Krugman seems to think debt is irrelevant and Abenomics is a “worthwhile Japanese initiative” that, “on the macro level” is something America should envy. Time will tell.