Naoto Kan, the former finance minister, is the new Prime Mininter, replacing PM Hatoyama who lasted in the job for only nine months. Hatoyama succumbed to controversy over the US base on Okainawa and not the economy. Still, the changing leadership in Japan has not been able to solve the slow growth problem. Japanese stocks did not advance on the news.
It is hard not to make economic analogies with the US. The situation is different, but there has been a significant lack of clear leadership with high government turnover because of continued voter frustration. Fiscal policy has been used extensively only to fall flat because of inefficiencies in spending. Monetary policy has been taken to zero, quantitative easing has been tried, but deflation continues. There are no new ideas and no solutions that seem to be in the works. What was a lost decade is now almost 20 years old. How is what the US doing different from Japan? Hard to say.
It is hard not to make economic analogies with the US. The situation is different, but there has been a significant lack of clear leadership with high government turnover because of continued voter frustration. Fiscal policy has been used extensively only to fall flat because of inefficiencies in spending. Monetary policy has been taken to zero, quantitative easing has been tried, but deflation continues. There are no new ideas and no solutions that seem to be in the works. What was a lost decade is now almost 20 years old. How is what the US doing different from Japan? Hard to say.
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