Comments on: Japan “Wasted Trillions” on Stimulus Programs

By: When the Stimulus Money Stops Flowing Will the Recession Get Worse? | Financial and Economic news

Sat, 12 Sep 2009 15:46:21 +0000

[...] Japan “Wasted Trillions” on Stimulus Programs [...]

By: Greg Atkinson

Greg Atkinson — Sat, 21 Feb 2009 02:20:54 +0000

By the way we could add a bushfire warning system to the list of infrastructure spending....that might not make economists happy but it is in the long term interests of the nation. How about a few fire spotting towers, heat sensors, refuge shelters, fire monitoring cameras and perhaps having some full time paid fire prevention staff stationed in high fire risk areas? We could create jobs and save lives..wouldn't that be better than home insulation and painting schools?

By: Greg Atkinson

Greg Atkinson — Tue, 10 Feb 2009 23:47:50 +0000

Keith, economic justification is not always a priority with much national infrastructure in any country. Take for example building and maintaining isolated roads in Australia? Or providing medical services to rural Australia? How about parks and national parks? The list goes on. If economists ruled the world they would simply relocate people to major cities and we would all be living in irrigated shoe boxes. In any case people assume that the Japanese spending of the 1990's was a failure...was it really? Did the country fall into social chaos after the bubble burst? Didn't the country emerge from the decline and even deal with a massive earthquake along the way? Yes there were problems with the spending done but many experts say it was not the sort of spending undertaken in Japan but the stop-go nature of the spending. Anyway regarding this subject I have written a few more thoughts here: Bridges to somewhere

By: Keith

Keith — Tue, 10 Feb 2009 12:29:41 +0000

The point is not whether infrastructure projects are well engineered or not in Japan, but the reason for undertaking such projects. I am sure a bridge to nowhere can be an engineering marvel, but it does not mean there is economic justification for it. The Japanese governemnt did use infrastructure spending as a way of boosting the economy to no avail. While this is clearly more meaningful than handing out $950, but as Bill has pointed out this strategy has not pulled Japan out of economic slump. The point is that for any country to emulate this, the result is very likely to be the same. I would however like to ask Bill what would be his solution to the current crisis? I mean we can't just abandon the fiat monetary system and going back to gold standard, or can we?

By: Travis

Travis — Tue, 10 Feb 2009 04:25:26 +0000

Greg,
Thanks for the reply. I have the bitter-sweet condition of youth which makes it hard to appreciate things in historical context so thanks for spelling out the headstart the US had.

Assuming ethics doesn't exist, which I think is easier to argue than the existence of, why didn't the US see this coming and launch destabilising wars to weaken their competitors?

DR,
Would love to see an article on the breakdown of India's IT industry. Are they doing basic bread and butter stuff like server maintenance and call centre work or is their a lot of software/hardware design....in consumer, commercial, and miliatary applications. What is the growth like?

Also, what is the minimum education requirements for employees and thus is the education pipeline growing at the same pace as the IT sector growth?

Im starting to suspect that India and China may have to share the top dog podium in the future....

By: Greg Atkinson

Greg Atkinson — Tue, 10 Feb 2009 01:27:29 +0000

Travis..thanks. But not much wisdom resides in my head, it is just that eventually some things sink in. Regarding the U.S and how it competes with Japan, Germany etc. the simple answer is in my view is that it cannot in many cases. I wrote some views about the U.S economy a while back in: The US Auto Industry..you might find this interesting..or not.

Simply put, the U.S gained at least a 10-15 year head start over Japan and Germany after World War 2. (and the Chinese economy was even further back) The U.S. had no major global competitors, the U.K was bankrupt, France was in worse shape and so who exactly was the mighty U.S economy up against up to say the 1960's? The USSR?

But now the world is a very different place and in many areas the U.S simply cannot compete in many sectors from the auto industry to even IT. (think of all that IT outsourcing to India for example)

We are seeing I believe the long term decline (not fall)of the U.S. as the world's greatest economic power. Nobody stays on top forever, not even Ricky Pontings men It is hard to take I guess for the Americans but so is losing cricket to the South Africans!

By: Travis

Travis — Mon, 09 Feb 2009 07:27:06 +0000

Greg Atkinson, you the man! Feel free to impart wisdom more often!!

You know, I cant help but feel I have stepped a loong way into the future when I go to Japan. No doubt they didnt recover quickly from the bubble. But surely, despite high debt, they have a good medium to longterm outlook given the quality of infrastructure and systems. (not just transport but across the board).

Going further, How exactly can America compete with countries like Japan and Germany (and to an increasing extent china) with their better foundations? It certainly cant compete with a outrageously strong dollar!!

By: Greg Atkinson

Greg Atkinson — Mon, 09 Feb 2009 04:41:34 +0000

Bill, The western media often makes serious errors when discussing infrastructure spending in Japan. The biggest blunder is they forget or overlook one important factors..earthquakes! Here in Japan you will often see a very solid looking bridge on a small rural road but it is not built to be impressive or because of over spending, it is built that way so in the event of a major earthquake it will hopefully remain usable and not collapse and isolate small villages etc. (hard to dig people out of rubble if you can't get equipment to site)

Having worked as an engineer for many years in Japan I gradually came to appreciate why some things seemed "over engineered" and often the reasons for this apparent over engineering is even overlooked by commentators in Japan, and almost always by western commentators who just do not bother to get past the easy Japan bashing routine. Quite simply things are built in Japan to survive in a mountainous earthquake prone nation that also gets hit by a few typhoons every year! (I bet the citizens of New Orleans wished the U.S has a similar approach)

Another example cited is often the impressive community centers in small towns. And why are they built like forts and seem overly large? Because they are also evacuation centres! In the event of a typhoon, flooding or earthquakes people are evacuated from the surrounding areas to a place where they can be safe. These centres also have supplies of food and water etc...so I guess you do not want them falling down when a major quake hits?

Food for thought hey? I wonder what long term life saving wonders the Rudd government will build?