Traditionally more interventionist than the US -- Japan is synonymous with industrial policy and is the only developed country to have a higher corporate tax rate than the US (there was talk of cutting the corporate tax but I can't determine if this ever occurred) -- it is easy to see why the left is eager to defend this model against its free market critics. Indeed, perhaps this explains why Ezra Klein felt the need to highlight the column.
Japan’s average life expectancy at birth grew by 4.2 years — to 83 years from 78.8 years — between 1989 and 2009. This means the Japanese now typically live 4.8 years longer than Americans. The progress, moreover, was achieved in spite of, rather than because of, diet. The Japanese people are eating more Western food than ever. The key driver has been better health care.
Japan has made remarkable strides in Internet infrastructure. Although as late as the mid-1990s it was ridiculed as lagging, it has now turned the tables. In a recent survey by Akamai Technologies, of the 50 cities in the world with the fastest Internet service, 38 were in Japan, compared to only 3 in the United States.
Measured from the end of 1989, the yen has risen 87 percent against the U.S. dollar and 94 percent against the British pound. It has even risen against that traditional icon of monetary rectitude, the Swiss franc.
The unemployment rate is 4.2 percent, about half of that in the United States.
Why is Japanese unemployment so low?
Japan has been able to maintain relatively low unemployment rates because large numbers of women who are temporary or casual workers withdraw from the labor force when they lose their jobs, rather than becoming unemployed — that is, they stop working and do not look for another job. Temporary workers, both male and female, represent an increasing share of Japanese employment. Such workers generally bear the brunt of labor market adjustments in Japan. In this way, Japanese employers have flexibility in their work forces during economic downturns, enabling full-time workers with permanent employment contracts — predominantly men in larger Japanese enterprises — to keep their jobs.
The conventional unemployment rate misses a great deal of labor underutilization in Japan, namely workers on reduced hours for economic reasons and discouraged workers (those who want a job, but are not actively seeking work because they believe their search will be futile). A more broadly defined rate which takes these other elements of underutilization into account increases the Japanese rate beyond that of the U.S. rate.
According to skyscraperpage.com, a Web site that tracks major buildings around the world, 81 high-rise buildings taller than 500 feet have been constructed in Tokyo since the “lost decades” began. That compares with 64 in New York, 48 in Chicago, and 7 in Los Angeles.
Japan’s current account surplus — the widest measure of its trade — totaled $196 billion in 2010, up more than threefold since 1989. By comparison, America’s current account deficit ballooned to $471 billion from $99 billion in that time. Although in the 1990s the conventional wisdom was that as a result of China’s rise Japan would be a major loser and the United States a major winner, it has not turned out that way. Japan has increased its exports to China more than 14-fold since 1989 and Chinese-Japanese bilateral trade remains in broad balance.
As longtime Japan watchers like Ivan P. Hall and Clyde V. Prestowitz Jr. point out, the fallacy of the “lost decades” story is apparent to American visitors the moment they set foot in the country. Typically starting their journeys at such potent symbols of American infrastructural decay as Kennedy or Dulles airports, they land at Japanese airports that have been extensively expanded and modernized in recent years.
William J. Holstein, a prominent Japan watcher since the early 1980s, recently visited the country for the first time in some years. “There’s a dramatic gap between what one reads in the United States and what one sees on the ground in Japan,” he said. “The Japanese are dressed better than Americans. They have the latest cars, including Porsches, Audis, Mercedes-Benzes and all the finest models. I have never seen so many spoiled pets. And the physical infrastructure of the country keeps improving and evolving.”
In the 1990s, while Japan was being widely portrayed as an outright “basket case,” its rate of increase in per-capita electricity output was twice that of America, and it continued to outperform into the new century.
If the Japanese have really been hurting, the most obvious place this would show would be in slow adoption of expensive new high-tech items. Yet the Japanese are consistently among the world’s earliest adopters. If anything, it is Americans who have been lagging. In cellphones, for instance, Japan leapfrogged the United States in the space of a few years in the late 1990s and it has stayed ahead ever since, with consumers moving exceptionally rapidly to ever more advanced devices.
"I believe the iPhone (a phone that uses the traditional TCP/IP model) is closer to the mobile phone of the future, compared with the latest Japanese mobile phones."
Update: Forgot to mention that the American Enterprise Institute held a forum on Japan this week at which Taro Kono, a member of Japan's Diet, called for deregulation and said that the country was "going downhill."
Update: Perhaps this is less of a left-right issue than I thought -- Paul Krugman also thinks Fingleton is wrong.
Update: Fingleton fires back, and I respond here.