As the campaign kicks off for Japan’s December 14th general election, the “Abenomics has failed” narrative appears to be gaining traction. According to a recent Nikkei poll, only 33% of the public have a positive take on the reflationary strategy, against 51% who are negative. Much of the media commentary, both domestic and overseas, has been relentlessly critical, almost as if people have a deep emotional need for Abenomics to fall apart and the Japanese economy to slide back into the doldrums.
In an attempt to provide some balance, we enlist the help of the Monty Python team. What have the Romans ever done for us is a comedy routine from the classic Life of Brian film. In it a resistance leader, played by John Cleese, gives a barnstorming anti-Roman speech, only to be reminded of the various blessings the occupiers have brought – aqueducts, sanitation, wine, public order, etc.
A contemporary Japanese version might go something like this –
John Cleese – What has Abenomics ever given us? Absolutely nothing!
Voice from back – How about full employment?
Cleese – What?
Voice – Full employment. With the job-offer-to-applicants ratio at a twenty two year high, everyone who wants a job can get one. Isn’t that pretty remarkable in today’s world?
Cleese – Alright, alright. I’ll grant you full employment, but apart from that what has Abenomics done for us? Nothing!
Second voice – Stock prices have doubled in two years. That must be good, no? It was the collapse in asset prices that set off the balance sheet recession that’s been going on for ages.
Cleese – Well, obviously stock prices. That goes without saying, doesn’t it? So apart from doubling stock prices and achieving full employment, what has Abenomics done for us? Absolutely nothing!
Third voice – And real estate prices. They’re rising all over the country now, even in regional cities. Home-owners are going to feel better about that.
Cleese – Okay then. Apart from achieving full employment, doubling stock prices and getting real estate prices moving…
Fourth voice – And corporate profits are through the roof too.
Fifth voice – Female labour force participation is at an all-time high.
Sixth voice – Didn’t you say the bond market was going to collapse and interest rates would soar? Well, rates have gone down, not up!
Seventh voice – Tourists are flooding into the country
Eighth voice – And exports seem to be taking off at last.
Ninth voice – From next April wages will be rising faster than consumer prices.
Tenth voice – And companies are revising up capital investment plans.
Eleventh voice – The corporate governance reforms are having a visible effect. 60% of companies in the MSCI Index now have two or more outside directors and share buyback announcements are up 60% year-on-year.
Cleese – Alright, alright. Apart from full employment, higher asset prices, lower interest rates, record-high profit margins, better corporate governance, a tourism boom, more working women, exports and capex, what has Abenomics ever given us?
Twelfth voice – Nominal GDP growth?
Cleese – Growth! Oh, SHUT UP!
With apologies, love and respect to Monty Python.