Lessons from Japan

After having spent a bit of time in Japan, there's a few things that the US could probably learn from them. First of all, the real estate crisis and aging population was seen in Japan many years before it hit the US and is part of what caused them to be in a state of deflation with near 0% interest rates for so many years. The main reason I hear that we don't end up the same way is that we have a growing population, but that seems mostly due to immigration.

Another thing Japan does different from the US and we seem to be trying to head toward is health insurance is required. When I went to get my alien registration card I noticed the sign that said if I don't have health insurance, I will be required to buy the government run one. We don't have the government run health insurance, but I'm not sure what kind of cost their government run insurance creates. They are saddled with debt as well and it'd be interesting to know how much cost this program puts on the government. I've also heard that their health insurance companies are NPOs, which could be interesting to try in the US.

For energy and green ideas, we seem a bit behind the times here too. First of all, our cars are entirely too big and consume too much gas. Something like the smart car isn't a safety hazard in Japan cause all the other cars on the road are fairly small too, including the trucks. The buses are usually the biggest vehicles on the road by far. Added to that, their mass transit system is way ahead of us in coverage, convenience, and punctuality. I tried taking the bus from Binghamton to Poughkeepsie, but never again. Absolutely dreadful. The trains are also not only faster, but nicer.

Nuclear power also seems to be fairly widespread in Japan. I have noticed some windmills as well, but not nearly as many as in Europe. I think one of the energy resources that work for Japan though is the geothermal energy. With all their on-sens, this seems to be a naturally rich source of energy for them that's not in limited supply. If Brazil and Japan have figured out native sources of energy, why can't we?

Energy conservation also seemed to be bigger in Japan. The AC at work is not cranked nearly as high there as it is here. There's a fixed almost uncomfortable temperature of the office during the summer and everyone uses hand fans at times. In the bathroom there's no paper towels. There's an air blower but most people carry a handkerchief for drying their hands. They don't observe daylight savings either... and they don't know why we do.

As far as CEO compensation goes, my understanding was that it is not nearly as out of control there as it is here. I'm not sure how that gets controlled though. Could it be that the shareholders and populace in general is a bit more frugal when it comes to finances and so they can't get away with the outrageous stuff they get away with here?

The Stimulus Packages

I'll just come out and say it... I hate the stimulus program! Media and politicians like to float the number of people employed but that doesn't seem to answer the practical question. What is the net benefit we are getting from it?

There's a walkway in front of work that they've demolished and repaved a number of times. On my office board we have guesses as to how much money has been spent on this walkway. We're sure it's in the tens of thousands by now with all the equipment and workers that have been employed. The problem we have though is we didn't know the sidewalk had any problems to begin with. Sure it's nice and new and has some nice crisp curbs, but what was the overall benefit to the business? I could maybe see if this was the sidewalk in front of the main lobby for customers to see a really nice exterior, but it's not like it had any cracks in it or was discernibly uneven. The point is, you could spend a ton on making things look nice but that doesn't help you sell more product. You don't want it to be a dump, but just spending more on something doesn't mean you'll get more.

Those that are not familiar with www.recovery.gov should check it out some time. I do have to give President Obama and his administration props for creating this website. It has spending broken down by the following categories: entitlements, tax benefits, contracts, grants, and loans. It even has pretty charts and pictures for all you ADD types.

I'm going to ignore the entitlements part since that's just a way of pushing money into one of our current budget gaps and not really about stimulus or creating jobs. Also paying someone to do nothing isn't job creation. Helping someone provide for their basic necessities during a down turn is a good thing, but the bad part is how this promotes fiscal irresponsibility. We had negative savings rates for too many years when we could have been saving for the bad times and keeping our debt more in check. There are some other negatives as mentioned by the following article. I can't blame government for bailing out businesses when it's become such common practice for individuals. News flash: welfare and unemployment insurance is main street's bailout.

Tax benefits I can understand and if the government is running up our debt (thus my portion of the US debt) by giving people the money for that debt at the fed low interest rates then fine by me. I don't understand why some people get upset about the debt going up to give tax breaks. They gave us the money to pay it back should they then raise the tax rate instead cutting the budget. Where's the problem? My only issue is when you are targeting certain groups of people to get the tax break and not all people who pay taxes...robbing Peter to pay Paul.

That being said I am not a big fan of the tax credit for new home buyers. It does help the economy, but we are encouraging further creation of debt while at the same time giving large sums to a select number of people that very well would've bought a house anyway. Pretty close to cash for clunkers but at least the additional home buyers means new sources of income for schools and local government.

So that brings me to the next 3 for which you can see the breakdown of awards by state and look at the state maps to see exactly who was awarded what. Wonderful! Looking out there for my area I pretty much just see universities and schools being awarded the money. In the case of schools I'd have to assume they are classifying it as saving a job (what govt refers to as job creation... must be from a special course like Govt Econ 101). With all the money we are paying in school taxes, why is it never enough? Schools will have to make cuts eventually... we are just holding off the inevitable which is the exact opposite any normal business would do things.

In the case of universities I can only guess what academia would be doing with it. Are we funding all the pet research projects going on there or is this some big experiment academia is doing to see if they can figure out how to create jobs? Basically I am left having no idea what this money is trying to accomplish because it doesn't seem to be about creating new permanent jobs.

So instead of this government talking about "creating" jobs. I want to hear leadership. I want to know what we as a country should be focused on creating here that will provide value. Maybe it's high speed rail. Maybe it's rare minerals. Maybe it's alternative energy. Maybe it's education reform. If they want to talk stimulus, that's what they should be selling us.