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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Raj who wrote (19218)	8/9/1998 7:50:00 PM
From: James Strauss	Read Replies (1) \| Respond to of 50167

Raj: I think if there were permanent Tax Cuts in Japan, that would go a long way towards increasing consumption... Also, There needs to be a fresh change of younger politicians with the power and energy to make the necessary banking and economic reforms... Until that happens the mattress will be the Yen depository of choice... : > Jim

To: Raj who wrote (19218)	8/10/1998 3:53:00 AM
From: IQBAL LATIF	Read Replies (1) \| Respond to of 50167

Jim- Raj and Kelly- I think size of income and size of your abode has a direct relationship- the problem about mind set as Kelly has highlighted is very little regarded by economists. I also think that geographical limitations of land supply and social habits to share even as ordinary a thing as bathrooms have left Japanese very little room to consume. Consumer spending and demand is a backbone of any society economic growth, US is in this enviable position because their incomes are modestly rising, they have average or even better returns on their stock investments once these two elements are in place June 14.7 million cars binge would not be one time phenomenon. GDP growth cannot be out- sourced permanently on a contract, it has to be the demand within I was looking at some economic research in relation to my stock market predictions and I tell you that core GDP growth has been phenomenal. core GDP is consumer spending plus Business inventories plus Housing. Now in last two quarter we have this core GDP rising like we had in last quarters of 95 before US markets headed north for this tryst with prosperity. From 5300 to 9314. I look around at my expenditures my largest outlays are on my houses- if I am little better off I want a bigger TV but Sony 60 inches will only find place in a big living room but big living rooms need acre or half acre houses not the pigeon holes Japanese are living. It is standard of living they need to improve but 'satisfaction' with limited things in life is underlying spirit of Buddha. Lavish spending and loud expression of wealth is considered as a decadent symbol of par venu or noveux riche. Any amount of stimulus will not work until associated with sea change of culture and the point remains does Japan have geographical potential to grow, it is the limitation of growth potential I am more worried, may be some countries only want to make their living through export led revolutions but than they would need to create big markets - Japan should out source its production to China- and Sub -continent, they will find enough people around who like to earn and spend as well. The physical constraint on Japanese of living space is one reason I think they like to buy LMVH products so much. All economics is local in my opinion, it is the habits which collectively make fortunes or devastate nations. The bubble in Japanese economy or Oil rich economies all trace back to one common problem lack of assets producing solid returns. It is not only the bottom line but as I have always emphasized the gross revenue growth is the most important issue, Hondas , Toyotas or Mazda's even Sony to their peril now realize that big repatriation of profits to Japan did not `generate wealth' for their shareholders. The disregards of `returns on investments' is the difference between global GE and Coke or a Honda or Sony. It is the compounded return of invested dividends that makes the backbone of a powerful company and helps the national economy. Saving alone is an scourge if it is not producing enough wealth. What difference is their in modern age Japanese which holds its investments on 0% returns and my great- great Grand father living somewhere in northern sub-continent and burying his wealth in a hole. Some economic issues need to looked from a slightly different perspectives- economists sometime fail to appreciate the fundamental forces at work it is this reason economics has not emerged as a science.