History and the 21st Century Legacies of the 20 th century and the lost decade

Announcements Course is open for evaluations. Final lecture on Wed; sections DO meet this week Access to all lectures, open from this week for review Review session, pre exam: May 12, 6:00 pm, Maxwell Dworkin, G125 Final exam: May 15 (Sat), 2pm, A-14: Emerson 104. E1851: Emerson 305

Japan and Asia/non-West Attractive idea of solidarity with Asia prewar roots: Okakura Tenshin, others Postwar efforts: Normalization with Korea, China Aid to SE Asia, Africa Ongoing legacies of mistrust Comfort women Nanjing massacre POWs textbooks

Asian relations today Good neighbors?  Economic integration, unprecedented  Cultural connections, likewise  Political cooperation on key issues: N. Korea Yet, shadow of past present  Textbook revisions: downplaying wartime acts  Visiting the Yasukuni shrine A dangerous game of domestic, int’l politics, among Korea, China, Japan

Political issues: the 1990s in haiku During the time Of just one Clinton Seven Prime Ministers

Politics of 1990s-00s: Toward 2 parties LDP loses majority, 1993, briefly to coalition Breakaway elements coalesce with portions of JSP, others, to Democratic Party of Japan (DPJ) LDP rebuilds, in alliance to Komeito (CGP), under Koizumi’s leadership  “Neo-liberal” agenda: financial deregulation (1995 “big bang” 1996; 2005 postal privatization”)  Labor deregulation from 1999  Education deregulation  Neo-nationalism, as well: Yasukuni visits

Politics of 1990s-00s: Toward 2 parties Post Koizumi floundering of LDP (in a sense destroyed by Koizumi) Liberal Democrats vs. Democratic Party of Japan (DPJ) Will DPJ popularity persist?  Hatoyama on defensive, backing off of promises

Social trends, issues: 1990s  21 st century New vocabulary: “divided society” (kakusa shakai); “new poor” (nyuu pua): produces political backlash Growing socio-economic inequality: winners/losers  Income: ambiguous evidence Soaring “poverty index”: proportion with income <50% of national average Very low ratio of income of wealthiest 20% to poorest 20%, and not changing rapidly.

Contradiction of high “poverty index” and low ratio of rich/poor incomes Top 20%Bottom 20% Japan: income ratio US Income ratio Top 20%Bottom 20% Japan Poverty index 13.5% 13.7% US Poverty index

Aging Society

Economy: Japan’s “Lost Decade” and lessons for America Prelude: The bubble era, Strong GNP: up 55% over the decade Gold leaf sushi wrap Land prices boom

Economy: Japan’s “Lost Decade” and lessons for America The bubble bursts: >

Economy, Relatively strong GDP growth: annual growth averages over 2% Unemployment falls under 4% Exports rise Especially to China

Explaining Japan’s “Lost Decade” (ver. 1) 1. Systemic crisis: the bankrupt “1940s system” system that once worked, -developmental state -interfirm networks as dynamic -long-term labor commitments Stopped working?-rigid state role -ineffective finance system -inflexible corporate organization

Explaining Japan’s “Lost Decade” (ver. 2) 2. Policy failures drag down a gradually changing but still-viable system Slow response to financial crisis Tax increase choked off recovery in ‘98 Eventually, through trial and error, got it right

Lost decade lessons for America? negative

Lost decade lessons for America? positive Robert Feldman, Morgan Stanley Research report, 11/27/2008