Nobel-winning Economist Tells Japan What's What

Paul Krugman (a Nobel Prize-winning economit who write an excellent blog for the Times) visited Tokyo this morning, and Fuji TV followed him around.

Krugman scores Japan’s attempts at revitalizing their ailing economy (via Japan Probe)

  • Lowering expressway tolls to a fixed fee of 1,000 yen – 40/100 points. This might only increase sales of gasoline, and will cause traffic jams.
  • 12,000 yen in free money to every resident – 0/100 points. Krugman notes that similar policies have been tried in America and have achieved nothing.
  • Giving “eco points” to consumers who buy environmentally friendly appliances – Still under evaluation. As there are few details available about the final form this plan will take, Krugman cannot give it a score. (But he does find the idea interesting.)

The 12,000 yen ($120ish) voucher program is the stupidest idea in the world. When you give a population with a high savings rate a chunk of money, they save it (duh). If they want to secure their economy for the long term, Japan needs to end its culture of salarymen pretending to work, teachers pretending to teach, students pretending to learn, and the government pretending it can work itself out of this mess without welcoming in long-term, skilled foreign labor (or getting people frisky enough to reverse the declining population).