We consider modern politics in the United States to be pretty messed up lately, but when a country has its sixth Prime Minister in five years and is characterized by a split parliament, one can take some consolation that our frustration with the current state of politics is shared.

I'm talking, of course, about Japan, which has just recently elevated its finance minister, Yoshihiko Noda, to be prime minister:

While we're already getting tired of recession and think that it's been going on forever, the Japanese have had to deal with anemic growth since the early 1990's. Deflation is well-documented, the strengthening yen damages export profits, and its distribution system adds layer after layer of unnecessary cost to consumer goods. And of course, there is the ever-graying population to be considered, a problem common to all developed nations.

The Bank of Japan's poor decision to raise interest rates as an economic recovery seemed imminent in August 2000 (thus choking it off) didn't help either.

Some of the older gorillas on this board may remember that this used to be the economy that "everyone knew" would one day surpass the United States. Now "everyone knows" that "Japan is finished," yet I'm personally hesitant to make that claim.

It's still the world's second or third-largest economy (depending on which method you use), it's still a very important consumer market and currency, and its companies are at the forefront of many global industries.

"But Flesh, Japan hasn't had solid growth for twenty years; what's going to make it start now?" I can hear you ask. Recall that for twenty years in the 60s and 70s, the US economy wasn't exactly sprinting ahead of the pack either; economies cannot be in a state of perpetual boom.

Are you convinced either way? Is Japan due for a rev-up? How does Noda kickstart the engine?

The WSO Advantage - Land Your Dream Job

Financial Modeling Training

IB Templates, M&A, LBO, Valuation. Learn More.

Wall St. Interview Secrets Revealed

30,000+ sold & REAL questions. Learn More.

Find Your Mentor

Realistic Mock Interviews. Learn More.

Comments (3)


the economy and society of japan is geared toward the maintenance of the privileges of the old.

that's the cause of the malaise. the rest is details.

In reply to ivoteforthatguy

the economy and society of japan is geared toward the maintenance of the privileges of the old.

that's the cause of the malaise. the rest is details.

What's frightening about that analysis is that the United States is following in Japan's footsteps...

In reply to Babyj18777

To unlock this content for free, please login / register below.

  • Facebook
  • Google Plus
  • LinkeIn
  • Twitter
Connecting helps us build a vibrant community. We'll never share your info without your permission. Sign up with email or if you are already a member, login here Bonus: Also get 6 free financial modeling lessons for free ($200+ value) when you register!

What's Your Opinion? Comment below:

Login or register to get credit (collect bananas).
All anonymous comments are unpublished until reviewed. No links or promotional material will be allowed. Most comments are published within 24 hours.
WallStreet Prep Master Financial Modeling