Uncertainty is the Strength of Occupy Wall Street

Now seems as good a time as any to start reading The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb. He writes in a passage on negative empiricism that "you know what is wrong with a lot more confidence than you know what is right." This statement resonates with me as the ethical backbone of the "occupation" style protests that have swept the world this year.

What do they want? is the common refrain in the media. It's OK that nobody knows yet. In fact, it would be sheer arrogance to assume that a small cadre has all the answers. The point is that when even in rich societies like the United States tens of millions of people are living in poverty, new processes are needed for people to debate the actions, rules, and directions of our societies.

The protesters in lower Manhattan have opted for a process of collaborative consensus. We shouldn't expect them all to be policy wonks (though even a Nobel laureate economist has stopped by). They are instead what Paul Hawken calls our social immune system. Here is their first statement:

STATEMENT OF THE NYC GENERAL ASSEMBLY

As we gather together in solidarity to express a feeling of mass injustice, we must not lose sight of what brought us together. We write so that all people who feel wronged by the corporate forces of the world can know that we are your allies.

As one people, united, we acknowledge the reality: that the future of the human race requires the cooperation of its members; that our system must protect our rights, and upon corruption of that system, it is up to the individuals to protect their own rights, and those of their neighbors; that a democratic government derives its just power from the people, but corporations do not seek consent to extract wealth from the people and the Earth; and that no true democracy is attainable when the process is determined by economic power. We come to you at a time when corporations, which place profit over people, self-interest over justice, and oppression over equality, run our governments. We have peaceably assembled here, as is our right, to let these facts be known.

They have taken our houses through an illegal foreclosure process, despite not having the original mortgage.

They have taken bailouts from taxpayers with impunity, and continue to give Executives exorbitant bonuses.

They have perpetuated inequality and discrimination in the workplace based on age, the color of one's skin, sex, gender identity and sexual orientation.

They have poisoned the food supply through negligence, and undermined the farming system through monopolization.

They have profited off of the torture, confinement, and cruel treatment of countless animals, and actively hide these practices.

They have continuously sought to strip employees of the right to negotiate for better pay and safer working conditions.

They have held students hostage with tens of thousands of dollars of debt on education, which is itself a human right.

They have consistently outsourced labor and used that outsourcing as leverage to cut workers' healthcare and pay.

They have influenced the courts to achieve the same rights as people, with none of the culpability or responsibility.

They have spent millions of dollars on legal teams that look for ways to get them out of contracts in regards to health insurance.

They have sold our privacy as a commodity.

They have used the military and police force to prevent freedom of the press.

They have deliberately declined to recall faulty products endangering lives in pursuit of profit.

They determine economic policy, despite the catastrophic failures their policies have produced and continue to produce.

They have donated large sums of money to politicians, who are responsible for regulating them.

They continue to block alternate forms of energy to keep us dependent on oil.

They continue to block generic forms of medicine that could save people's lives or provide relief in order to protect investments that have already turned a substantial profit.

They have purposely covered up oil spills, accidents, faulty bookkeeping, and inactive ingredients in pursuit of profit.

They purposefully keep people misinformed and fearful through their control of the media.

They have accepted private contracts to murder prisoners even when presented with serious doubts about their guilt.

They have perpetuated colonialism at home and abroad.

They have participated in the torture and murder of innocent civilians overseas.

They continue to create weapons of mass destruction in order to receive government contracts.*

To the people of the world,

We, the New York City General Assembly occupying Wall Street in Liberty Square, urge you to assert your power.

Exercise your right to peaceably assemble; occupy public space; create a process to address the problems we face, and generate solutions accessible to everyone.

To all communities that take action and form groups in the spirit of direct democracy, we offer support, documentation, and all of the resources at our disposal.

Join us and make your voices heard!

*These grievances are not all-inclusive.

[PHOTO CREDIT: David Shankbone (CC).]

Overcoming Divide and Conquer Strategies: 99.9% of the US Population Should Support the Public Unions’ Fight Against Occupying Economic Imperialists

Quick Summary: The global bankers, who caused our economic crisis, are attempting to deflect blame and divide the American public by escalating attacks on public-sector workers. The battle in Wisconsin, which is spreading across the entire nation, should be viewed in a global economic context. Do not let the obsolete Republican vs. Democrat charade confuse you. Even if you believe Unions have been corrupted, in this case you have to go with the strategy: “The enemy of my enemy is my friend.”

The Global Economic Elite have launched a war on 99.9% of the US public, we must unite and rally together. Unions have played a key role in uprisings from Europe to the Middle East. We must seize this opportunity and let Wisconsin be a spark to light the fires of non-violent rebellion throughout the United States.

Overcoming Divide and Conquer Strategies: 99.9% of the US Population Should Support the Public Unions’ Fight Against Occupying Economic Imperialists
By David DeGraw, AmpedStatus Report

There is a rule of war that many people are failing to understand: “Do not fight the last war.” In The 33 Strategies of War, Robert Greene calls this “The Guerrilla-War-Of-The-Mind Strategy:”

“What most often weighs you down and brings you misery is the past, in the form of unnecessary attachments, repetitions of tired formulas, and the memory of old victories and defeats. You must consciously wage war against the past and force yourself to react to the present moment. Be ruthless on yourself; do not repeat the same tired methods.”

The sad truth is that most people are still fighting yesterday’s war. The Republican vs. Democrat charade — good cop, bad cop nonsense — is a mere smokescreen. Don’t be confused by obsolete preconceptions and propaganda. There is one war being fought, The Global Economic Elite Vs. The People.

A global banking cartel has looted nation after nation, the world over, the United States is no exception. They’ve looted trillions from the US public and now they are trying to cut the throat of the public unions. While in the process of attacking private-sector workers and small businesses throughout the country, they are also cracking down on the last layer of worker protections within the public-sector.

The same economic central planners that have systematically exploited workers in Europe, the Middle East, Africa, Australia and Asia, have exploited American workers as well. One-tenth of one percent of the population got luxurious life boats, while 99.9% of us are being left behind to drown in a sea of debt and social upheaval.

We are all on the same sinking ship – me, you, teachers, construction workers, fire fighters, police, Egyptians, Europeans. We are all under attack by the same people. The sooner you understand this, the better off we will be.

All of the global uprisings, against the global bankers, are popular reactions to the implementation of a worldwide Neo-Feudal economic order. People can dismiss and ignore me all they want, but I know what I’m talking about. In fact, I invite Ben Bernanke and Timothy Giethner to a debate. I’ll take them both on at the same time. I’ll expose the two imperial pawns within a minute, faster than Tyson knocked out Spinks.

The bottom line is this: It is imperative that 99.9% of the US population actively supports the public unions uprising against the occupying economic imperialists who have conquered our country. If the economic imperialists think they’re going to continue their attacks, by cutting more American workers’ wages and benefits, after looting the nation of trillions, they are going to get a much deserved rude awakening. If they want to steal trillions, increase the price of food and oil, and make further cuts into our income, they are going to get crushed. 239 million Americans are currently living paycheck to paycheck. Push them another inch, and the global bankers might as well go hang with Gaddafi and Mubarak.

Seriously, think about this: They’re going to cut pensions on people who make $25k per year, while all-time record-breaking profits and bonuses are raining down on the economic top one-tenth of one percent. That is sick and twisted. Lloyd Blankfein gets five-times the annual salary of Wisconsin public employees when he simply gives a 30-minute speech on “doing God’s work.”

These banks were bailed out after causing this mess, the American people own them now as far as I’m concerned. Let’s stab the vampires in the heart. Seize their assets and all these budget problems disappear. Break these bloodsuckers up. Spin them off, free the market, free the people, free the planet from this global banking cabal.

We can easily let hard-working Americans keep their pensions and health benefits.

Do you want to start on the state and individual level, before breaking up the big rackets? Fine. Look at how easy it is to solve Wisconsin’s budget deficit, as Paul Jay stated on The Real News Network:

“How about Wisconsin passes a law that takes the estate tax level back to 2001? And let’s say the first million’s tax free. The collective net worth of the esteemed group on the Forbes 400 from Wisconsin comes to around $21.7 billion. That would make Wisconsin’s share of their estates at the time of passing around $4 billion. We just paid down the debt.”

Look at that. Deficit eliminated.

As I wrote in The Economic Elite Vs. The People:

“When you take the time to research and analyze the wealth that has gone to the economic top one percent, you begin to realize just how much we have been robbed. Trillions upon trillions of dollars that could make the lives of all hard-working Americans much easier have been strategically funneled into the coffers of the Economic Elite. The denial of wealth is the key to the Economic Elite’s power. An entire generation of massive wealth creation has been strategically withheld from 99% of the US population.”

In a report entitled, “Nine Pictures of the Extreme Income/Wealth Gap,” Dave Johnson helps make the point:

“Many people don’t understand our country’s problem of concentration of income and wealth because they don’t see it. People just don’t understand how much wealth there is at the top now. The wealth at the top is so extreme that it is beyond most people’s ability to comprehend. If people understood just how concentrated wealth has become in our country and the effect it has on our politics, our democracy and our people, they would demand our politicians do something about it….

Top 1% owns more than 90% of us combined….

400 people have as much wealth as half of our population.”

In this context, every American should take it personally. They’ve already robbed 99.9% of us. Now they want to further limit our rights and income, with talks of QE3 already creeping up. Satan is overreaching. Survival instincts are going to kick in within the US just like they are throughout the rest of the world. They shall reap what they sow.

The Global Economic Elite better watch their assets, hell is about to freeze over. Say hello to your puppets Mubarak and Gaddafi on the way down.

As for your US puppet, one more statement of caution for the American people: Do not let Obama fool you, yet again, with his public statements in support of the people of Wisconsin. Obama is using the exact same playbook in Wisconsin that he used in Egypt, which is to publicly declare support for the people, while working behind the scenes to undermine them. Obama is a divide and conquer imperial puppet. Never forget that. Do not let his rhetoric confuse you. Just look at his chief of staff and head economic adviser, a former JP Morgan executive and a NAFTA thug. It’s clear whose side he is on.

As a great Anonymous poet wrote:

“Their divide and conquer strategies are old and feeble
The people begin to see through
Cyberspace air
chokes your oxygen
Decaying, crumbling
foundation
Free radicals
multiply
I becomes we
Down goes the
Aristocracy
Tyranny
beneath
me”

The global awakening is taking shape, from Cairo to Madison, the revolution has begun.

We’re fighting today’s war! And we have a whole lot of friends…

Join the Movement.

>> Also read David DeGraw’s extensive report: Analysis of the Global Insurrection Against Neo-Liberal Economic Domination and the Coming American Rebellion

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Why is Texas in Number One Position of All US States?

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Simply for this reason-- Texas WILL survive by exports. We are the largest export state in the USA.

For this reason, California and several other states will soon be in Washington DC begging for a bailout, and Texas will be booming right along.

This is because Texas don't spend it if they don't have it.

So, we will all tighten our belts a bit, and keep pumping the oil and shipping beef. Texas did not get in top place in the USA by printing funny money and getting loans from Charlie Wong. We live on what comes in via sales tax, and that will work again.

Also, we don't let people go on welfare until they have worked in Texas, and then they don't get unemployment forever when they lose a job. You work, or you starve, or you go back to Taxechusetts.

Also, living under a bridge is not dishonorable in Texas if that is how you want to live. Just don't expect to be entitled by your choices.

Finally, Texas has one natural resource that is lacking in almost all other states. In fact some states try to outlaw it and criminalize it. That natural resource is attitude. If you don't have one when you get here, you better get one in a hurry, or you will be left behind.

Ecclesiastes 9:10 (KJV) Whatsoever thy hand findeth to do, do it with thy might; for there is no work, nor device, nor knowledge, nor wisdom, in the grave, whither thou goest.

We have plenty of land left to bury losers-- get to work.

Now, Bunkie, I bet you are troubled by this blog, right? Well, I will tell you what to do-- Just look up at the top of the page, left corner. See that arrow pointing to the left? Click it, and you will never have to read stuff like this again :-)


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Slowing Japan's Galapagos Syndrome

Enjoy, a play by Japanese playwright Toshiki Okada, opens with two characters working at a comic book cafe in present-day Tokyo who spend nearly the first act solely ruminating about the etiquette of public toilets. The brilliant drama reveals the world of a Japanese generation of self-centered but lovable slackers who are accused by their peers of "destroying the future of Japan." While watching this play in Manhattan this month, it occurred to me that like these characters, who were lost in the minutiae of their own lives, Japan too has turned inward.

It's true that shyness is so common in Japan that it almost considered a virtue. Where else would one find DVDs for sale to practice "just looking" at people or "Miterudake," as the product is called? But given its cultural proclivity for and historical experience with isolation (during its policy of sakoku), the last thing Japan needs is a reason to curl up inside its shell. An isolated Japan would be especially unfortunate as it would further erode the country's relevance in international politics as well as its economic competitiveness and prosperity.

Amid economic doldrums and deflationary mentality, a declining population and growing anxiety about Japan's place in the world, and an enormous letdown after high hopes in the governing Democratic Party of Japan (DPJ), there is a danger that Japan might further withdraw. Japan's "Galapagos syndrome," a phrase originally coined to describe Japanese cell phones that were so advanced they had little in common with devices used in the rest of the world, could potentially spread to other parts of society. Indeed signs suggest it is happening already.

The first sign is the current generation of Japanese in their 30s and 40s who have been distinguished by market experts for their adeptness at online shopping and generally avoiding the rest of society. More dramatic is the number of hikikomori or shut-ins who have given up on social life. According to a Japanese government website, the figure may stand at 3.6 million or about 3 percent of the entire population. This figure is far larger than the previous estimate of 1 million by renowned Japanese psychologist Tamaki Saito.

As I argued earlier this year, Japan as a nation seems to be withdrawing and giving up on the world. Akiko Ikeda-Wei, a Japanese sociologist based in New York told me recently, "I am saddened by Japan's economic slump that has caused misery: the record-high unemployment rate and extremely unsettled and insecure feelings among thousands of Japanese employees."

Echoing many of the Japanese professionals I have met in New York, Ikeda-Wei advised her countrymen to look for opportunity away from home--and don't look back. "If I were one of them, I would forget about seeking employment in Japan and leave, and look for a volunteer job somewhere in Africa or in the Middle East and try to use this opportunity to explore something new and innovative that can help others who are in great need."

The problem is that the attitude of Japanese younger people today results in just the opposite. While her advice might be apt for many Japanese, "The fact is actually the other way around. Young people especially have become more inward-looking than ever, totally not interested in going abroad to work or to study," she said.

An odd expression of this phenomenon is in the puzzling decision this month by Japan's largest business newspaper Nikkei to dissuade readers from linking to its website. As part of its strategy to require readers to pay for access, Nikkei has stipulated that people who wish to link to its website must fill out a written application. Nikkei's print circulation surpasses that of the New York Times and even The Wall Street Journal. But in the Internet world, the move looks as if the company were saying, "We are doing just fine with our print edition, so go away, Internet."

Jean-Pierre Lehmann, a Japan expert at IMD Business School in Switzerland, has noticed a shift in attitude at companies such as Toyota Motor. In the 1980s, Lehmann would accompany Western managers to Japan to learn about its venerable production techniques. But over the course of the decade, he noticed "a subtle change." As he wrote this month in the Taipei Times, "Western management delegations continued to be politely received, but more often than not professional guides were appointed to show them around, and there was no dialogue with the Toyota managers, who previously had been keen to teach and learn. On the contrary, there was an undisguised sense of condescension toward the visiting foreign executives."

Most distressing is that, like the creatures of Galapagos, the products of Japanese research and knowledge generation are becoming increasingly evolved yet nonetheless separate from global society. As recently chronicled by Japanese economy experts Hajime Ito and Jun Kurihara, Japan leads in number of patents in solid waste management and is number two after the United States in air pollution control, water pollution control, medical technology, pharmaceuticals, and biotechnology. Yet despite these impressive accomplishments, the country lags in cited research or core articles in the same fields, not even making the top ten. Why is this the case?

Ito and Kurihara point to one possible cause: Japan's lack of international cooperation in the area of knowledge creation and the falling number of Japanese students attending U.S. universities.

At elite American universities like Harvard and Berkeley, the number of Japanese students is falling and relatively small compared with their counterparts from South Korea and China. Japanese enrollment at Harvard has been declining for 15 years while enrollment from China and India has more than doubled. Only five Japanese students attended Harvard as undergraduates in 2009, and only one of them matriculated as a freshman. According to a study by the Institute for International Education, overall India is the leading sender of students to the United States, and while Japan was the fourth largest sender, its number was down by 4 percent to 33, 974 in 2008, down for a third straight year. Since 2000, undergraduate enrollment in U.S. universities has dropped 52 percent. These are figures incommensurate with the world's second largest economy.

In March, Harvard President Drew Gilpin Faust even made a special trip to Japan to encourage more Japanese high school students to apply to the university. Faust met students in Japan who preferred to stay in the comfort of their own homes rather than going abroad. A Washington Post article this month featured students from Japan who passed up degrees from top U.S. universities to stay in Japan.

To be sure, Japan's population is shrinking and the number of children under 15 has declined for 28 consecutive years. But these trends don't entirely explain this more inward-looking attitude, which comes from a combination of domestic political dysfunction and economic malaise that has crept into popular culture. While Japan was once a larger consumer of American degrees, "an international degree is not as valued" in Japan, Faust is quoted as saying in the Washington Post article. While U.S. college degrees are becoming ever more expensive, enrollment from developing countries India and China have nevertheless led the pack and have risen in 2008 by 13 and 20 percent respectively.

Pointing to the falling enrollment of Japanese in U.S. top universities, Ikeda-Wei told me, "Economic difficulty is already sad enough but I am even more saddened by this very short sighted, pessimistic, and unproductive attitude of young Japanese." She concluded, "If young people's attitude remains as such, it is very difficult to hope for Japan's bright future."

Okada's play Enjoy whose endearing characters brought the world of Japan to audiences abroad was made possible by support from Japan Foundation and Japan Society, as well as the U.S. National Endowment for the Arts. With a declining population and exploding government debt, the future of Japanese military or "hard" power is uncertain. That is why for Japan to remain relevant, prosperous, and influential, institutions like the Japan Foundation, which is supported by the Japanese foreign ministry and promotes international exchange, and the Japan External Trade Organization (JETRO), which is supported by the economy ministry and promotes international trade and investment, have become increasingly important. (Full disclosure: I have worked with both institutions.)

"Isolation hurts Japan's economy, especially in services," Robert Dujarric of Temple University Japan has recently noted. "If so few Japanese conglomerates have managed to establish themselves in the premier league outside of manufacturing, it is partly due to their mono-cultural and exclusively Japanese management. It puts them at a severe disadvantage when competing with foreign rivals run by multinational and multicultural staffs." Japanese language, which is considered by experts to be among the most difficult to learn, is highly adaptive to the Japanese high-context culture but irrelevant in most of the world outside this island nation.

Institutions like the Japan Society in New York can act as powerful vectors of positive influence, coalescing Japanese innovators abroad to bring change to Japan. Unfortunately, just as the role of these cultural and economic institutions has become more critical, the mood in Japan for spending has unsurprisingly turned sour. While the government's approval rating has fallen to 24 percent, the one bright spot for Prime Minister Yukio Hatoyama has been the public spectacle he has made of the budget review process or "shiwake." Like corporate restructuring or "risutora" years ago, "shiwake" has become a word laden with controversy in Japan today--to some it is the democratization of the country's spending process, bringing openness and transparency; to others it is a sign of the country's decline and malaise. The fears were epitomized by a now-infamous comment downplaying scientific spending by a Japanese lawmaker who asked, "What's wrong with being number two?"

For Japan to slow its Galapagos syndrome, it will need to support its soft power and foreign engagement institutions. The question mark in my mind is: Do the majority of Japanese want to slow their country's withdrawal from the world or would they prefer a comfortable decline? That's to be determined.

Reposted from the Huffington Post.
Photo by Strana.

Is Japan Giving Up?

Reposted from Huffington Post:

Just as the success of Toyota Motor was a symbol of Japan's confidence on the world stage in the 1980s, the automobile company's recent troubles are symptomatic of a nation withdrawing from the world, as I noted this week in a Newsweek article. Avoidance was the Japanese public's initial reaction to Toyota's recent acceleration problems, which resulted in 34 deaths and nearly 10 million recalled cars worldwide. The reaction is typical of a modern Japanese culture wrought with victimization and self-doubt over questions of national identity.

In all likelihood Toyota's slump in sales will recover and the whole episode will fade in the public's memory, blending with many other product recalls in recent history. "Management will correct the problem. Toyota Motors sales will bounce back; most consumers will soon forget this latest news cycle and remember why they bought the Camry, the Corolla, and the Prius," said Paul Scalise of Temple University in Japan. But Toyota's problems are an essential part of understanding Japan's zeitgeist today. The car company's troubles have compounded Japan's already sour mood. Interviews I have conducted in Japan over the past several years increasingly cause me to wonder: Is Japan giving up?

Toyota not only had a special place in Japan in terms of the country's identity of quality craftsmanship, it will have a short-term impact on Japan's reputation and economic reverberations in its manufacturing sector. Even more, the company's problems partly originated from characteristics that are seen as uniquely Japanese. Culture can change, but the story has further damaged Japan's spirit, which is vulnerable from decades of economic doldrums and China's rise.

Some of the blame for Toyota's woes has been placed on the Japanese value of consensus-building, face-saving, and keeping outliers to a minimum. "The nail that sticks out, gets hammered down," it is often said in Japan. The public relations response was also plagued by Japanese cultural characteristics, such as open communication hampered by formality and a general avoidance of conflict. Toyota's problems may have simply come from the company's over-expansion, increasingly global operations, and cost-cutting, but the cultural explanations are felt in the Japanese discourse. "Japanese companies are generally reluctant to speak in public, both on positive as well as negative issues. This imposes a real cost on their ability to interact with foreign investors, businesses and customers," noted Keith Rabin, an Asia-focused business consultant, echoing a sentiment that appeared in recent Japanese newspaper editorials.

All of this comes against a depressed national mood of in Japan as China is expected to overtake Japan as the world's number two economy this year--a symbolic phenomenon with primarily psychological consequences. At New York University, a Japanese student approached me a few weeks ago after a class I teach to tell me the critical lesson on Japan the other students should remember: "Japan must give up and admit that it is number two in East Asia." What is the origin of this defeatism?

Patrick Cronin, of the Center for a New American Security, recently published an article in Foreign Policy, identifying a link between Toyota's troubles and Japan's global profile. He also sees Toyota's problems serving as a symbol for Japan's malaise. "Toyota's debacle comes at exactly the wrong time for Japan. For the past 20 years, Japan has been in decline: declining population, receding competitiveness, slipping power in Asia. Social strain abounds. Throughout this period, Toyota was seemingly the exception, steadily growing, finally overtaking GM to hold the chalice of number one," Cronin told me. "It was a symbol of the one thing Japan did the best: make things. Now, the dream lies shattered."

"Unless Toyota can repair the damage, however, the Japanese people are left looking at the future through a glass darkly," Cronin continued. "What the Toyota crisis demonstrates is a tight connection between economics and security, and that both are in turn sensitive to the national psyche. If the Japanese continue to doubt their technological prowess in the face of a rising China, especially given Japan's demographic disadvantages, how will they ponder their future geostrategic role and circumstances in the Asia-Pacific region? Soft power loss equals a loss of hard power, and Japan's influence vis-a-vis rising China has been devalued by this blight to a sterling reputation."

A morbid manifestation of this darkness is in the country's suicide rate. It has topped 30,000 per year for 12 years; this means about 100 people per day or one person every 15 minutes will kill him or herself in Japan. Despite government efforts to stop suicide, by funding hotlines for example, the rate has recently increased and is expected to rise. The rate is double that of the United States and second only to Russia among the rich G8. On the other side of the equation, the country's birthrate is the lowest in the world and significantly below replacement, owing partly to a disinterest in sexual intercourse as well as gender inequality. A study conducted by Japan's Family Planning Association found that one-third of couples surveyed have effectively "given up on sex" due to fatigue or boredom with the act, and researchers were surprised that the trend is actually expected to get worse. A 2006 study by the University of Chicago found that Japanese report the lowest sexual satisfaction among the 29 nations polled. According to an Asia-Pacific Sexual Health and Overall Wellness survey last year, Japan ranked lowest in satisfaction of the 13 Asian countries surveyed.

As a consequence of low birth and migration rates, the country's population is predicted to fall from 127 million to 95 million by 2050, creating unparalleled demographic pressures. At 229 percent, Japan's debt-to-GDP ratio is the highest in the developed world as is its level of public debt. It is unclear how Japan, given its poor fiscal health and expected worsening debt burden, is going to provide for a rapidly aging population and a growing proportion of poor.

The country's apathetic attitude is epitomized by a new generation of arasa and arafo (those in their 30s and 40s) and sugomori (nesting) people who prefer to stay at home, seek bargains online, and soshoku-kei danshi (grass eating-men) who avoid going out, taking risks, or trying to find a career for themselves. Even Japan's Olympic hope Miki Ando played it safe and downgraded her triple-triple jump combination in the figure skating competition in Vancouver. More dramatic is the presence of the hikikomori or shut-ins who have given up on social life and number about 3.6 million, according to the Minister of Internal Affairs and Communications Kazuhiro Haraguchi, citing a Japanese nonprofit. This figure is far larger than the previous estimate of 1 million by renowned Japanese psychologist Tamaki Saito. In Shutting out the Sun, author Michael Zielenziger points to hikikomori as well as high rates of suicide, low marriage and birth rates, and low levels of sexual relations among adults to argue that Japanese who have begun to think outside the rigid conformity of Japanese society have made a rational choice to stay home and avoid social life.

While many fund managers are pessimistic about the Japanese economy for the long-term, some are bullish on certain Japanese equities, calling them undervalued. Paradoxically, the companies that are forecast to do well have given up on the Japanese domestic market and have expanded abroad. Successful Japanese companies will either target foreign markets in the United States, China, and Europe or will act as a "gateway" to business in a booming Asia.

A promising strategy for Japan as a whole would be to act as a bridge between the West and East, but that assumes Japan's political relations with the West are harmonious. Unfortunately, the ruling Democratic Party of Japan has decided to complicate its relationship with the United States by reexamining the location of a military base in Okinawa. Meanwhile relations with Australia have moved into rocky waters over Japan's whale hunting; over which Australia has threatened to take Japan to the International Court of Justice.

It would be absurd to give up on a country purely on the basis of its national mood. In fact, Japanese manufacturing output has risen, GDP is picking up, exports have grown their fastest in 30 years, and the trends I have described will all be familiar to any Japan watcher. Moreover, Toyota's sales surged 48 percent last month in Japan. But I have never seen the mood bleaker. Let's hope that this new low provides a rock bottom from which Japanese optimism can rebound.

Photo by Gustty.

Resilient Cities

I just attended a hopeful presentation by Australian urbanist Peter Newman on his concept of Resilient Cities. We're at the toxic intersection of several trends: peak oil, global warming, and scattered, car-dependent residential growth fueled lately by subprime mortgages. According to data he presented from the UK Industry Taskforce on Peak Oil and Energy (Nov. 2008), "the underlying trend in the price of oil is 6 percent growth per year." Combine this with the IEA's recent World Energy Outlook that says the "natural annual rate of [oil output] decline is 9.1 percent from 2009" and it becomes pretty obvious that massive changes in our energy and transportation infrastructure and technology are around the bend.

Newman lists four courses the modern city may take:

Collapse: It's happened before and could happen again. Newman cited the ancient examples of Ephesus and Babylon, and while total abandonment seems less likely in today's world, a tour through Rust Belt American cities such as Gary, Indiana, should suffice as a warning of potential decay.

Ruralization: Food production moves to the cities somewhat, as happened in Havana when the Soviet Union cut off energy supplies. Total ruralization with every apartment complex growing its own food seems unlikely because it would disrupt the whole logic of the city as an opportunity factory.

Division: Wealthy eco-enclaves will coexist with and be surrounded by Mad Max suburbs. This is a highly probable outcome if market forces play out sans smart urban and regional planning. This pattern is already prominent in the developing world where gated communities abut slums.

Resilience: Combining all the dream elements of renewable energy, distributed systems, smart grids, carbon neutrality, and sustainable transport, resilient cities are basically environmental utopias--only impossible if viewed as overnight projects. Alone among these four types, resilient cities are founded on hope not fear, though division, ruralization, and collapsing neighborhoods may all accompany the transition to resilience.

Newman focused today on the fact that land use follows transport, thus illustrating the importance of public transit-oriented development. His sense is that the stimulus and transportation initiatives of the Obama era must move dollars from freeway construction to sustainable options. Spending $100 million per mile on a freeway, as Houston did, seems like Stone Age economics at this point.

I suggested to him that transition to high gas mileage electric vehicles (100+ mpg) might forestall investment in public transit, but he seemed optimistic that, given the bigger picture of climate change pressuring the economy, plug-in cars and vehicle-to-grid technologies will prove a win-win situation. Let's hope he's right.

Directionless Japan?

The Bank of Japan could be leaderless within a week is the headline today in an article in the Times of London online:

The central bank of the world’s second largest economy could be “leaderless within a week” after an assault on the Japanese government by the opposition party.

The opposition Democratic Party of Japan (DPJ) today successfully blocked the government’s nomination of Toshiro Muto as the next Governor of the Bank of Japan. Analysts claim the gambit could force a general election.

The piece goes on to paint a very bleak picture for the Japanese economy:

With nobody selected to replace Toshihiko Fukui as governor when his term ends next Wednesday, the BoJ faces its worst crisis since gaining independence a decade ago. The turmoil also coincides with a Japanese stock market in tatters and the economy balanced on the edge of recession.

It reminds me of the lashing the Economist gave Japan a few weeks ago. On the cover of an issue that covered Japan’s economic and political problems, the magazine inserted an “i” in Japan to create “Japain.” Here is the essence of their argument:

A few years ago, people hoped that Japan, which is still a bigger economic power than China and has some marvellous companies, would help take up some of the slack in the world economy if America tired; that now looks unlikely. Productivity is disastrously low: the return on new investment is around half that in America. Consumption is still flagging, thanks in part to companies' failure to increase wages. Bureaucratic blunders have cost the economy dearly, and Japan needs a swathe of reforms to trade and competition without which the economy will continue to disappoint.

The leaderless central bank seems to be an apt symbol for Japan in general.

During my trip to Japan last week, I heard several stories from businesspeople about an overall lack of direction in the country.

One employee of a major Japanese manufacturing firm said that current economic growth is the result of hard work and innovations made five to ten years ago. The manufacturing sector operates on a five-year product cycle, so if we want to know what is in store for Japan’s future, we should look at what is happening now. In his view, hard work and the “samurai spirit” are long gone in Japan. The recent entrants into the labor force are lazy, he said. His forecast was therefore bleak for Japan’s manufacturing sector.

What’s more, he said that Japan as a society needs instructions on what the next goal is. He said that firms are great at reaching centrally-mandated goals. The problem is that no one has a sense of what is next for Japan.

His friend, a Japanese entrepreneur, told me that there are still few incentives to become an entrepreneur in Japanese society. As an entrepreneur, one can expect no favors from the government and lower earning power compared with salaried employees. Where is the productivity and innovation going to come from?

As many people know, Japanese bureaucrats briefly considered promoting nanotechnology and biotechnology as alternatives to manufacturing. Now that the consensus is that manufacturing is Japan’s strength, panic is setting in about Japan’s relative competitiveness in that sector.

I heard one story about a major manufacturing company hiring consultants to build a new business strategy from scratch. As the story went, the company asked the consultants, “What should we do next?”

Another businessman told me about some of the young entrepreneurs he has met. In his view, they have no ideas and are simply throwing away their careers because they launch businesses without a business plan or experience.

The same businessman went on to tell me that executives looking for new employment opportunities are only concerned about two things: the salary offered and the benefits available. In his experience, no one talks about finding rewarding work or making a difference. This mentality may be a hangover from the restructuring that took place over the previous decade. Moreover, during the Koizumi years, restructuring and the use of part time labor only provided a temporary fix.

Here is a fairly pessimistic assessment from economist Krassimir Petrov in the Market Oracle:

To summarize my expectations about the Japanese economy in 2008, the macroeconomy and the stock market should perform poorly, while the Yen has a strong potential to rise. The long-term strategic investor should stay out of the Japanese stock and bond markets.