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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: JF Quinnelly who wrote (16896)2/7/2004 2:41:50 PM
From: GraceZRead Replies (1) of 306849
 
It's one of those paradoxical situations where their high savings rate is what has worked to prolong economic contraction.

The reason they have a lower rate of social problems (fewer gun deaths, lower infant mortality, lower homelessness, lower crime, lower drug use, etc.) arising from their economic contraction than we have even during our boom years has to do with the fact that they aren't suffering from 50 years of government sponsored social programs usurping individual and family responsibilities. They are a much more capitalist country than we are. They have a strongly entrenched ethic of taking responsibility for themselves and their immediate as well as extended family. The frequently cited corporate policies towards employees isn't nearly as important as that social fabric.

If anything that "lifetime employment" aspect so frequently lauded in this country also helped to prolong the downturn because it interferes with the re-allocation of resources that would have occurred if those protected employees were allowed to become unemployed and then redeployed in industries where the Japanese might still be competitive. This is the biggest problem with protectionist policies designed to lessen the pain of unemployment caused by jobs moving to places with a lower labor cost, it keeps people continuing to work in occupations that no longer have a competitive advantage and stops them from doing what they need to do, which is retrain and move into industries and occupations where it is possible for them to be competitive.

It's the misallocation of resources that occurs when people in command positions decide they know better than what a free market system would provide.
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