Pro-Inflation Policies Show Signs of Helping Japanese Economy at the New York Times
excerpt:
But Mr. Abe reassured the public Friday, telling Fuji Television that the trickle-down to consumers from the weaker yen was already starting. Tourism from overseas was already picking up, for example, as foreign visitors took advantage of the weaker yen, he said. “It might take a year or two for everyone’s incomes to grow, but we’ve already seen things start to improve this year,” he said.
I seem to remember hearing something similar during the 1980s and 90s.
An article by Mike Whitney expresses my concerns far more succinctly and with more than my own anecdotal evidence and gut feelings.
Final paragraphs:
Free trade, deregulation, privatization and labor “flexibility”. Where have we heard that before? This is just the Shock Doctrine wrapped in a Keynesian bow.
Abe wants to kick-start the economy and win the upper House in July elections so he can advance his neoliberal agenda; pump up stock prices, privatize more publicly-owned assets and industries, deregulate energy and financial sectors, and pass laws that will allow corporations to fire workers without review. Is that why Krugman is so euphoric?
While there may be some short-term improvement from Abenomics (which could as easily be called “Rubenomics”), the long-term battle against deflation will undoubtedly be lost. Monetary easing and the wealth effect are no substitute for a strong, vibrant economy and solid wage gains. As Waseda University finance professor, Yukio Noguchi, told the New York Times, “Without a revival of the real economy, this is all just voodoo economics.”