Japan: Drunk ministers, collapsing economy, despised leadership, oh my...
Three months ago, I noted that Japan entered recession before us. Baffled by the willingness of the Japanese people to re-elect the same party decade after decade despite its stewardship of the longest recession in the industrialized world, I diagnosed Japan with bipolar manic-recession, "alternating between periods of extreme stagnation and hyper-productivity." At the end of the post, I noted that the nation has recently been run by "a series of controversy-prone bureaucrats who have deftly succeeded in doing absolutely nothing, which is just how the [Liberal Democratic] party likes it. The latest PM, Taso Aso, took office in September and appears to be no different."
Quelle understatement. Quelle understatement. The Japanese economy contracted 3.3% (12.7% annualized) in 4Q08, Japan's worst decline since 1974--and that includes the burst of its own real estate bubble and decade long swoon from which it had only recently recovered. By contrast, the U.S. economy shrank 1% (3.8% annualized). And economists forecast "a drop of around 4% in 2009--a contraction twice as severe as in America and Europe."
Fortunately, Japan's finance minister, Shoichi Nakagawa, has taken aggressive actions to deal with crisis. He has a 12 step plan:
