Krugman sad

D.L. boddhisatva at mindspring.com
Wed May 5 20:58:26 PDT 1999


C. Redmond wrote:


>In terms of GDP, growth in the high-tech sectors is being counterbalanced,
>for now, by contraction in the medium and low-tech sectors. Financially,
>though, Japan continues to rack up vast trade surpluses, and is sitting on
>maybe a third of the world-system's liquidity. When you're a global
>creditor, you can afford to sit back and harvest the returns of other
>people's GDP growth. And as for the Japanese inability to innovate
>ultra-high-tech products -- can you say, "Emotion Engine"?
>
>-- Dennis
>

"Emotion Engine?" - no, but I can repeat: "Where is the growth?" If Japan is sitting back and collecting world rents, where is the growth? If everything is so great, where is the growth? Of course "Japan" is not sitting back and collecting world rents, Japanese capitalists are. As I said, the rate of accumulation - and yes, savings are accumulation - is stifling the economy. Japan is probably the clearest example of this phenomenon. "Japan" is not a world creditor, Japanese capitalists are world creditors. That means that they are satisfied to buy foreign bonds and let their own economy hang fire. The BOJ is satisfied to open their coffers to the bankers and let them do nothing with it.

There is an important difference between liquidity and accumulation: liquidity is accumulation that has a chance of going and doing something.

peace



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