Tag: japan

Bring Home American Forces from Okinawa

Could the U.S.-Japan alliance founder as a result of alcohol? Apparently. At least, that’s the implication of the U.S. Navy’s ban on drinking by personnel stationed on the Japanese island of Okinawa.

It would be far better to phase out America’s military presence on Okinawa, turning U.S. bases back to the Japanese government. More than seven decades after the end of World War II, Tokyo should take over responsibility for Japan’s defense.

Washington currently bases and personnel on the island of Okinawa, with just .6 percent of Japan’s land mass. Local anger exploded in 1995 after three American service members raped a 12-year-old girl. The Japanese government sought to placate islanders with financial transfers and plans to move Futenma airbase and relocate Marines to Guam. These schemes failed to satisfy, however.

Base opponents, bolstered by the 2014 gubernatorial victory of Takeshi Onaga, continued to resist. Fueling popular anger has been a seeming spate of high-profile offenses committed by U.S. military personnel (who, in fact, have a lower crime rate than locals). Last month a sailor pled guilty to rape. Also last month a contractor and former Marine was detained in a murder case.

Immigration Restrictionism Hasn’t Helped Japan’s Labor Market

Japan is a developed nation that allows little immigration, thus winning occasional praise from American immigration restrictionists. If the reason for copying Japan’s immigration policy of almost no immigrants is that it will improve the labor markets, conditions there do not provide evidence for that claim, at least on the surface. 

Japan’s immigrant population is minuscule compared to the United States, as a percent of either country’s population (Figure 1).

Figure 1: Immigrant Stock as Percentage of Population

Source: World Bank.

Although there is little immigration to Japan, real average monthly cash earnings have declined slightly since 1995 (Figure 2). During the same time period, U.S. wages have actually grown, albeit not as fast as many want (Figure 3). If those graphs were unlabeled, my hunch is that most immigration restrictionists would assume the better graph is Japan. Japan’s sluggish wage growth in a low-immigration environment doesn’t match the restrictionist fairytale while American wage growth contradicts it.

Japan’s Descent into Keynesian Parody

It’s very hard to be optimistic about Japan. I’ve even referred to the country as a basket case.

But my concern is not that the country has been mired in stagnation for the past 25 years. Instead, I’m much more worried about the future. The main problem is that Japan has the usual misguided entitlement programs that are found in most developed nations, but has far-worse-than-usual demographics. That’s not a good long-term combination.

As I repeatedly point out in my speeches and elsewhere, a modest-sized welfare state can be sustained in a nation with a population pyramid. But even a small welfare state is a challenge for a country with a population cylinder. And it’s a crisis for a jurisdiction such as Japan that will soon have an upside-down pyramid.

To make matters worse, Japanese politicians don’t seem overly interested in genuine entitlement reform. Instead, most of the discussion (egged on by the tax-free bureaucrats at the OECD) seems focused on how to extract more money from the private sector to finance an ever-growing public sector.

But the icing on the cake of bad policy is that Japanese politicians are addicted to Keynesian economics. For more than two decades, they’ve enacted one “stimulus package” after another. None of these schemes have succeeded. Indeed, the only real effect has been a quadrupling of the debt burden.

The Wall Street Journal shares my pessimism. Here’s some of what was stated in an editorial late last year.

Japan is in recession for the fifth time in seven years, and the…Prime Minister who promised to end his country’s stagnation is failing at the task. …Mr. Abe’s economic plan consisted of three “arrows,” starting with fiscal spending and monetary easing. The result is a national debt set to hit 250% of GDP by the end of the year. The Bank of Japan is buying bonds at a $652 billion annual rate, a more radical quantitative easing than the Federal Reserve’s. …The third arrow, structural economic reform, offered Japan the only hope of sustained economic growth. …But for every step Mr. Abe takes toward reform, one foot remains planted in the political economy of Japan Inc. In April 2014, Mr. Abe acquiesced to a disastrous three percentage-point increase in the value-added tax, to 8%, pushing Japan into its first recession on his watch. More recently, he has pushed politically popular but economically ineffectual spending measures on child care and help for the elderly. …only 25% of the population now believes Abenomics will improve the economy. Reality has a way of catching up with political promises.

You might think that even politicians might learn after repeated failure that big government is not a recipe for prosperity.

But you would be wrong.

Contrary to Trump-Sanders Theory Imports Rise in Booms and Fall in Recessions

Real GDP Growth and ImportsNearly all surviving Democrat and Republican presidential candidates (except John Kasich) have essentially endorsed the shared campaign theme of Donald Trump and Bernie Sanders that the U.S. economy is weak because we import too many goods from foreign countries.  If only we could raise the cost of imports with tariffs, according to the Trump-Sanders theory, then the U.S. economy would supposedly have more jobs and higher real wages.   

Paying more for anything (such as Fords or iPhones) is no way to get rich.  Yet that concept somehow eludes many non-economists.  Theory aside, the idea that fewer imports are good for the economy is the exact opposite of what we have experienced.  The fact is that U.S. imports always fall when the economy slips into recession and imports rise briskly whenever the economy does.

Is Reconciliation for Japan and South Korea a Warning for China?

History weighs heavily on East Asia. To Washington’s enduring frustration, its two most important democratic allies, Japan and the Republic of Korea, have been at odds for decades.

The divergence between the two grew especially sharp over the last couple of years, during which ties between Seoul and the People’s Republic of China notably warmed while those between Japan and the PRC sharply deteriorated, driven by the dispute over the Senkaku/Diaoyu Islands. Moreover, South Korea had its own contentious territorial contretemps with Tokyo.

Both parties deserved blame. The South was determined to hang onto emotional grievances—serious and real, but long past. Japan insisted on justifying indefensible actions whose perpetrators were long dead. Destructive domestic politics ruled.

At the end of December, however, the two countries tried to put the issue of the “comfort women” behind them. Beginning in 1931, with Japanese military operations in China, Tokyo created brothels for its soldiers. For years Japanese officials insisted that the women were prostitute voluntarily engaged, despite evident coercion.

Now Japan has apologized and agreed to create a compensation fund. In return, the ROK promised to drop the matter and “address” the issue of the private statue of a young girl, representing the comfort women, facing the Japanese embassy in Seoul.

China’s Enduring Hatred of Japan Could Spark Renewed Conflict Involving U.S.

BEIJING—There are many obscure tourist sites in Beijing. One missed by many foreigners is the Chinese People’s Anti-Japanese War Memorial Hall.

The museum illustrates why China, America’s most fearsome potential competitor, and Japan, Washington’s most important Asian ally, often are at odds. The two are a conflict waiting to happen, which could draw the U.S. into war with a nuclear power.

Chinese President Xi Jinping presided over last week’s World War II victory parade in Beijing. However, the conflict with Japan continues in many people’s minds.

Following Washington’s lead, Tokyo did not recognize the PRC until 1972. Since reestablishing official ties the two countries’ relationship has gyrated up and down. More than talking is necessary to resolve four major disputes: history, trade, territory, and security.

Although the Chinese Communist Party manipulates history for its own benefit—young Chinese learn little about the 1989 Tiananmen Square protests—the CCP has been quick to criticize Tokyo for failing to take responsibility for Imperial Japan’s actions.

Military Cooperation with China: RIMPAC as a Model for the Future

The Rim of the Pacific Exercise recently concluded in waters near Hawaii.  For the first time China joined the drills.  It was a small but positive step for integrating Beijing into more international institutions.

RIMPAC started in 1971.  This year there are 23 participants, including the People’s Republic of China, which explained that the maneuvers are “an important mission of military diplomacy” and a means to strengthen “friendly relations with countries of the South Pacific through public diplomacy.”

Beijing’s participation comes at a time of significant regional tension.  The PRC’s more aggressive stance in asserting its territorial claims in the South China Sea and Sea of Japan have led to dangerous maritime confrontations. 

RIMPAC offers an opportunity to create some countervailing pressure in favor of a less threatening regional naval environment.  At the political level inviting Beijing to participate demonstrates respect for China’s increased military power and international role.   Doing so also counters the charge that Washington is seeking to isolate and contain the PRC.

Moreover, inclusion hints at the benefits for Beijing of a civil if not necessarily friendly relationship with its neighbors as well as America.  No doubt, the direct pay-off for China from RIMPAC is small. 

But to be treated as an equal and regular participant in international affairs is advantageous.  Although any great power must be prepared to accept unpopularity when necessary, in general a friendly environment is more conducive to ensuring both peace and prosperity.