Krugman: The Moral Equivalent of Space Aliens (shakes up Japan's economy)

[pampango]

To almost everyone’s surprise, Japan — Japan! — has emerged as the advanced country most willing to break with austerian orthodoxy and try a combination of aggressive monetary and fiscal stimulus. The verdict on Abenomics is, of course, still out, although early indications are good. But how did this happen?

David Pilling , writing in the FT, suggests that it was the double shock of the 2011 tsunami and China’s overtaking of Japan as the number 2 economy by market value. These shocks, he argues, broke through the fatalism and convinced the Japanese elite that something must be done.

Long-time readers know that I once joked that what we needed in America was a fake threat from space aliens, which would jolt us into action on stimulus; if the aliens were later revealed as a hoax, no matter.

Well, it looks as if Japan has found the moral equivalent of space aliens. Good for them.

http://krugman.blogs.nytimes.com/2013/05/09/the-moral-equivalent-of-space-aliens/

The appearance of space aliens would shake up the world in more ways than just economic policy. The whole paradigm of "US vs. THEM" based on race, gender, nationality, sexual orientation, etc. would seem less important than what planet (or solar system or galaxy) you were from.

[byeya]

1. The Japanese economy has never recovered from its stock market crash and the attendant

deflation. Much has been tried, including negative interest rates and large outlays for public projects and nothing has allowed the economy to gain back its robustness.
This is an attempt at something a little different along with the hype needed to get a population who has stuffed its savings under the mattress, so to speak, to start spending some of that money at home.
I recall even an acute observer of the world as Gore Vidal saying that Japan would soon overtake the USA in having the world's largest economy. Pre-crash that was.

[ThoughtCriminal]

2. The GOP has a very specific plan for Space Alien Invasion...

Tax cuts for the rich.

[byeya]

3. "Asteroid to strike Earth" - Tax cuts for the rich. You are on to something!

[pampango]

4. In all fairness, tax cuts for the rich is their solution to every other problem, so

why not in the case of a space alien invasion as well.

[muriel_volestrangler]

5. Of course - if the aliens are powerful, you must placate them with tax cuts

If it's possible to defeat them, then the job creators must be encouraged with tax cuts. It's a fact that state-run armies have never defeated an alien invasion, so it's clear that the task must be left to the private sector, which will do it much more efficiently, naturally - the free market will see to that. But it would have to be done quickly, so I propose some initial subsidies right now to allow risk takers and entrepreneurs get the industry started. When the invasion is over, we can work out if the subsidies need to continue.

And, talking of markets, clearly a futures market in aliens is needed right now. Think how devastating an invasion could be, and the job creators are currently stuck with no way of hedging this risk. Poor them. So we need a market mechanism, allowing the financial sector to disperse this risk, and calculate it efficiently. At a small fee, of course. Expect to see "LGM fee" turn up on your telecoms bills soon, and your bank statements, and restaurant bills, and ...

[uponit7771]

6. +1