Economic Pessimism

While Prime Minister Shinzo Abe keeps on selling his economic agenda, real economy does not get rid of concern on negative scenario. Economists are skeptical about relevancy of Abe’s focusing on revitalization of regional economy and taking advantage of woman power. Even how he encourages distribution of wealth to every corner of Japan, economic entities does not release their profit. That is fundamental structure of continuous failure of economic policies delivered by Liberal Democratic Party. Female workers will not find their space as long as lazy male workers are protected by paternal ideology of LDP. Abe has shown no sign to deal with those structural problems.

Abe has already realized that his policy had been leaning on major corporations in Tokyo. That is why he stresses his effort to distribute the fruit of Abenomics to all around Japan. However, he has poor prescription on it. The package for supporting regional economy he released last December was a long list of subsidies for local communities. That was still based on a concept that Tokyo would control everything through rewarding preferable local governments.

Local communities have different needs. One city may need deregulation for exporting its famous fishery products, while another wants flexible standard for preserving historical buildings to invite more foreign visitors. One size fits all policy does not apply to every local community. But bureaucrats can do nothing except universal ruling.

Womanomics is simply the matter of mathematics. As long as labor market is saturate, there is no way for woman to find new job. Male workers are overwhelmingly occupying the market. The fact has been that Abe has not created new job, but reduced official workers and increased unofficial workers.

Big concern of Japanese economy is accumulated national debt. By the delay of consumption tax hike, achieving the target of fiscal balancing in 2020 is in jeopardy. In the calculation of Cabinet Office last summer, there will still be ¥11 trillions of national debt, even if the government would raise the tax in April 2015 as once planned. It is impossible to cut social security budget to achieve the international promise. But national budget is bottomless bucket as long as LDP pours money into inefficient infrastructures.

Major victim of Abenomics is old-agers. Additional support of pension benefit for low-income old-agers will be dismissed with postponing consumption tax hike. Eligibility of receiving pension benefit will not be expanded from current mandate of twenty-five years payment. Pushing old people into a corner of poverty, Japanese society will be further divided.