I recently found the very interesting New Deal 2.0 blog, thanks to this post by Marshall Auerback. I find the content in itself - mostly an overview of recent Japanese monetary policy - fairly interesting. But what really intrigues me is that this is billed as "What Happened to Japan" - that is, a kind of definitive statement of the last 20-odd years of disappointment. Auerback provides enough economic data to make this a convincing claim, at least for a blog post - but only if you accept the centrality of central banking to macroeconomics.
I, of course, have a tendency to see things in a different light. I don't have ready to hand the stats that would back my assessment up (disdain for math being essential to my intellectual identity), but the ideas that surface again and again when I talk to Japanese people or read about the situation is that the economy has been crippled as much by cultural problems as economic policy. Paramount among these is the inflexibility of the Japanese labor market, especially for educated young people. I spoke last night to a guy in his mid-40s who lamented the fate of Japanese now entering their thirties, who had had the bad luck to graduate from college at a low point among low points. I cited to him some statistics I'd heard recently saying things were rough for low-ebb graduates in the States, too, who needed 20 years on average to match the earning power of those lucky enough to graduate at high tide.
"Well, that would be great!" he marvelled. "In Japan, if you get stuck on that lower rung, there's no way out, at all." He described what he saw as the lingering power of privilege and luck, rather than skill and performance over time, in determining who was hired and retained by prestigious Japanese firms. As years go by, the sometimes ineffective, entrenched workers, who are keeping jobs from potentially more skilled or educated people continuing their part-time work as convenience store clerks, weaken their companies from within. He also described the lack of immigration keeping educated and talented Japanese in "3D" jobs - Dangerous, Dirty, and Dull . . . though interestingly he sort of couched this as a good aspect of a low-immigration and egalitarian society. This is not to mention, of course, the persistent love of Japanese corporate culture towards inefficient overwork for show.
Like I said, I don't have empirical evidence to back up these claims, except to the degree that my conversations with Japanese workers are that. It's at least a widely spread perception, though, that Japanese corporate culture, and the system of social sorting more generally, is broken. Now, everyone hates their jobs, I know, but the real clincher here is that the people I talk to are eager to move to the U.S. because they perceive both work and daily life there are easier - and these are people who have lived in the U.S. and seen its complexity up close, and are well aware of the problems of social inequality.
I don't mean to suggest Auerback is wrong - I know enough economic history to grant the importance of central bank policy. I just think it's interesting to compare my drastically different perspective.