Japan pragmatic on new stimulus
TEXT OF INTERVIEW
Renita Jablonski: Major markets in Asia closed higher today. That’s thanks in part to a new stimulus announcement in Japan. The package calls for $150 billion in government spending.
Jeff Kingston teaches Asian Studies at Temple University in Tokyo and is with us now. Professor Kingston, what’s the goal behind this package?
Jeff Kingston: What they’re trying to do is stimulate consumption and what they’re also trying to do then is also put money in the pockets of people who are losing their jobs, giving them housing subsidies, training subsidies. All these things are temporary measures which are meant to jolt the economy back into life, because really it’s very dire here.
Jablonski: When you look closely at some of the things you mentioned — support for the jobless, loans for hard-pressed small businesses in there and subsidies for green initiatives like solar panels — it sounds an awful lot like what President Obama had just recently put on the table in the U.S.
Kingston: Well, I guess he had a lot of good ideas and they decided to borrow from him. Yeah, I mean I think that it took some time to put this initiative together, but one of the key things, though, is the social safety net in Japan is really inadequate to deal with a lot of these workers who are losing their jobs. Because up until now, in the post-war period, the government never really had to worry because businesses kept faith with their workers through thick and thin. But now, they are shedding these workers, and suddenly the government is confronting the challenge of trying to address their needs.
Jablonski: So do you think this will have the effect that the government hopes it will?
Kingston: Well, it’s very interesting that the chief of the economic team, who unveiled this package, will say well, don’t expect a lot from this, this is not going to really kick in until towards the end of the year, and what it’s going to lead to is a few bright spots. So they’re already talking down expectations, which I thought was rather interesting given that this is the largest economic stimulus they’ve ever had and is going to lead to the government issuing a record level of bonds to fund this deficit.
Jablonski: Jeff Kingston teaches at Temple University in Tokyo. He’s the author of “Japan’s Quiet Revolution: Politics, Economics and Society “. Professor Kingston, thanks so much for speaking with us.
Kingston: Thank you very much.
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