"If markets were rational, we'd be out of a job"
"Excess capital can definitely hurt innovation"
The Roundtable has slid noticeably in a bearish direction. The mid-year rebound is out the door. The optimists (Capelli, Cohen) pin their hopes for an end of year turnaround on the american consumer - implying that consumer debt will have to punch above its historical limit of 14% of disposable income (incl. mortgage debt), where it sits currently. I suppose it is possible, but it would be a new situation for consumer debt. What is its current rate of increase?
As for Takenaka-san's 'supply side' blabber, a recall of "the second time, a farce" would be a useful corrective. Supply side, American style had a consolidated right-wing coalition bloc behind it under Reagan. That made it powerful. In Japan, the rise of Koizumi actually marks a sharp split in the ranks of the Japanese Right. That makes it weak. It really does resemble an "Eighteenth Brumaire" where, it might be recalled, two rival monarchist parliamentary parties were compelled to commit political suicide, while Bonaparte the nephew ended up as the modernizer and favorite of "foreign capital" - just like Koizumi.
Except for a key difference in domestic social base, for whereas Bonaparte also mobilized the wealthy peasant provinces against Paris, under a economic program of state-led development, Koizumi does the opposite: seeks to crystallize a social bloc of "socially liberal/ economically conservative" urban high tech yuppies against the "provinces" - the latter being the traditional base of both the "old" LDP and right-wing politics in Japan - behind a economics of "privitization". In this respect, Koizumi is ironically more of a "Clinton" than a "Reagan".
But the most key difference of all is this: whereas the defeat of the Parisian proletariat was the condition for the original farce, in Japan the proletariat has yet to even enter the stage, let alone be swept off of it. In this regard, compare Japan with its next door neighbor, Korea - or with the tumult in China that we only hear rumors of.
But there is one common thread between the two historical situations: neo-militarism and neo-imperialism. Bonaparte the nephew, backed by the Army, founded the "Second Empire", but only to work together as junior partner with its formor rival, Britain. It is the only political theme with the power to unite the entire Japanese Right, provincial and urban. That is why as soon as he became Prime Minister, Koizumi led off, not with his economic program, but with a call for the repeal of Article 9 of the Japanese constitution. (A snap poll afterwards showed 65-70% of Japanese opposed to Koizumi's call,sensibly enough, despite his unprecedented current popularity, and in favor of an unchanged Article 9).
But that is yet another set of contradictions in the extraordinary political and economic situation emerging in Japan. Stay tuned - it will be interesting.
-Brad Mayer
At 06:46 PM 6/25/01 -0400, you wrote:
>Date: Mon, 25 Jun 2001 16:06:56 -0400
>From: Doug Henwood <dhenwood at panix.com>
>Subject: Re: Tokyo election results
>
>How traders think: Rick Santelli, one of CNBC's talking heads from
>Chicago, said this morning that "the yen had elections overnight" -
>i.e., Japan held elections yesterday, when it was nighttime in the
>U.S. midwest.
>
>Doug