Japan Should Stay Clear from Economic Predictions by Paul Krugman: European Vibrancy

Japan Should Stay Clear from Economic Predictions by Paul Krugman: European Vibrancy

Lee Jay Walker

Modern Tokyo Times


It appears that Japan is clutching at straws if the government is going to take note of Paul Krugman. After all, this individual was doing the same when predicting Europe and the exit of Greece. In other words, little good will come from taking advice from the American economist Krugman, apart from learning about the “ego.” Therefore, the government of Japan should concentrate on the specific dynamics that apply to this nation and equally refrain from being over ambitious.

Indeed, looking at the bigger picture, the prose of “financial experts” sadly rings hollow. After all, look at the enormous mountain of debt being generated by America and Japan respectively. On top of this, the banking sector – and economy in general – often leeches from taxes generated by the masses in order to help fresh bailouts. In other words, big government followed by more endless creative accountancy and the manipulation of language.

It is regrettable that the Japanese government is listening to Krugman because just like other economists before him, the simple reality is that you have no magic wand. This especially applies to when listening to an individual who clearly gets big issues wrong. After all, look at Krugman’s view of Europe being deemed “The Comeback Continent” in 2008.

Krugman said “… Since 2000, employment has actually grown a bit faster in Europe than in the United States … If you think Europe is a place where lots of able-bodied adults just sit at home collecting welfare checks, think again. … Europe’s economy looks a lot better now – both in absolute terms and compared with our economy – than it did a decade ago.”

However, like Jonty Bloom (BBC) reports in 2015 in relation to Greece, other nations including Ireland, Portugal, Spain and Cyprus have all been in the same boat. However Greece was the first and its problems have been the longest lasting. The Greek government gave misleading financial information to get into the euro in the first place and then manipulated the figures to mask the extent of its deficit right up to the time when the credit crunch exposed its deep-rooted problems.”

In other words, “The Comeback Continent” of Europe didn’t materialize. On the contrary, other governments like the United Kingdom had to bail out the banking sector. Similarly, unemployment remains problematic in other nations like Italy, especially in certain parts of this country. Therefore, what happened to Krugman’s over-optimistic assessment of the situation in Europe?

Indeed, ignoring the economic situation and how various nations oppose an increasingly dictatorial Germany under Chancellor Merkel, it is clear that enormous problems exist outside of economics. After all, terrorism is an increasing problem for nations like Belgium and France. Likewise, mass immigration to Europe is creating enormous strains and this applies to social factors, political concerns, cultural differences and responses to the crisis within respective European nations.

At the same time, geopolitical issues in Europe are creating tensions about how to deal with the Russian Federation, Turkey and the Ukraine. In a similar light, it is clear that North Africa is looming large since the destabilization of Libya. Therefore, major geopolitical disputes, terrorist attacks on both sides of the Mediterranean, growing divisions within Europe and spending vast resources on migrant issues are all dragging Europe down.

If Krugman was so wrong about Europe, then why is Japan even entertaining this individual? The same Krugman predicted many false statements about Greece and you can equally focus on other issues related to America and the United Kingdom. Overall, it is time for Japan to focus on solving the crisis internally rather than listening to failed elites like Krugman. After all, does it really need a genius – despite Japan needing to raise tax given the current predicament – to state that now is not a great time to increase consumption tax?




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