A Slice of Japan's Economic Life

I'm going to start into a short monologue about Japan's economy in a few moments, but I want to direct you to a Japanese manga called Usagi Drop for now.

Usagi Drop, or Bunny Drop as it is known in English-speaking bookstores, is a slice of life manga about a 30-year-old bachelor, Daikichi, struggling to raise a 6-year-old orphan girl, Rin. That's the whole story in a nut-shell, but for some reason I found it to be a very interesting read. It doesn't have much to say on Japan's economy, but it is something worth looking into if you get the chance.

Another slice of life manga I read a while back is a really long one called Living Game. The art is a bit old-fashioned, and the story is dragged on for a while. I'm also not a big fan of the main characters, which tends to spoil a slice of life manga for me. Nonetheless, I found it interesting, because the fall of Japan's bubble economy (1986 to 1991) plays a huge role in Living Game's story.

Japan's bubble economy was one of overinflated real estate and stock prices, due in no small part to easily obtainable credit. That should sound familiar to a lot of folks, but unlike America, Japan's bubble economy collapsed as early as 1991. Japan has been in a deflationary spiral ever since. Since 1991, Japan's stock value has continued to plummet, and it reached an all-time low in 2008.

Here's a link to a Yahoo financial graph of the Nikkei 225, an index for Japan's stock market: Yahoo Graph of Nikkei 225. By default, the graph is on a logarithmic scale and only shows a few days. I changed it to start in 1984 and have a linear scale, which makes the rise and fall of Japan's bubble economy look more dramatic.

However, what is most disturbing to me regarding Japan's economic disruption is what it did to its government: almost nothing. Since 1955 to 2009 the Liberal Democratic Party has been the majority party in Japan's government. The LDP's stance on their economy is that it is a unique blend of socialism and capitalism, such that it can not be compared to any other economy, and that if a measurement seems to indicate something is wrong with Japan's economy, it means that there is something wrong with the measurement.

Still, even in rigid Japan, change is happening. The new Democratic Party of Japan, formed from merging four opponents of the Liberal Democratic Party, has taken control of the government. Time will tell if the DPJ takes the country in the right direction.

On a side-note, though, Japan's unemployment rate is fairly stable at under 4% right now. Although the stock values are still low and Japan is still in a deflationary spiral, one could argue that Japan's economy really is just fine. I'm not making that argument, though. :P