This company created a fake job advertisement, and conducted a several interviews for a position that sounded like a pretty good title to have: Director of Operations. Sounds good right? Well not really. The job requires working 135 hours a week, 365 days a year, standing, no eating for long periods of time, no holidays, no breaks, and the silvering, NO PAY. 1 billion people currently hold this position. Half-way through you should begin to understand what is being unravelled. At least I did. I just don’t want to give it away. This video above is unequivocally the best ad of the year.
Japan has been a nation that I have fascinated by for a number of years. This past academic year, I decided to learn more about it from a social, political, and economic perspective. I even started learning the Japanese language. I hope to travel to the island state in the near future. Today I would like to focus on the economics.
By all measures and accounts Japan is described by the World Bank as an "OECD High-income Country". And yet we continually hear economists remind us that the Japanese Economy has been stagnated ever since the collapse of the Heisei Bubble in 1991, with nearly 15 straight years of deflation (opposite of inflation, so when prices drop). How is this possible? The short answer goes something like this: instead of restructuring its economy with spending cuts similar to EU’s current approach with Greece, Japan has opted for anti-austerity strategy similar to the current US’ approach with 0% interest rates and quantitative easing. If a household is no longer able to pay their mortgage, and they and decide to downsize to a smaller house that they could afford they would be Greece. On the other hand if they decide to stay and refinance their mortgage (taking a larger loan to cover the increase in costs), they could be described as Japan and the US. Budget cuts implies rising borrowing costs by increasing bond purchases, meanwhile refinancing implies that a state will lower borrowing costs by increasing bond purchases. Refinancing allows countries to continue to grow their economy but creates a larger debt obligation in the future. Japan’s debt to GDP ratio is the highest in the world at 244%. This has allowed the economy to grow marginally since the 1989 bubble collapse, maintaing that World Bank labelled "OECD High-income Country" status. This why Japan still “seems” and “feels” like a rich country.
Japan’s current pathway to economic growth is not sustainable. Their current debt burden (244% of GDP) does not consists of large foreign ownership, as with the case of the United States, whose largest creditor is China. Instead it is made up of local creditors, the Japanese people. There is only one problem. This is a population that is shrining in size. Unlike the US, Japan does not operate an open immigration policy, so it is quickly running out of possible creditors to service the debt for future economic growth. If I was the World Bank I would describe Japan more accurately as an "OECD High-Income Country that is constantly on the verge of collapse". Japan wants to avoid looking outwards for loans (although they might be forced to in the short run), so instead it is looking for inwards solutions to this complex problem.
Japan is a democratic state, so why has the status-quo remained the same for such a long time. From 1991-2012 Japan has been effectively been operating the same monetary policy. In 2013, something drastically changed. Prime Minister Shinzo Abe return to power, bringing with him "Abenomics". A set of macroeconomic policies and structural reform that might finally be able to put an end to consecutive years of deflationary pressure on the Japanese Economy. It consists of 3 so called arrows: 1- Expansionary Monetary Policy, 2- Fiscal Stimulus, and 3- Structural reform. So far, Abenomics has appeared to work in 2013 by ending deflation. Yet it is pertinent to keep in mind that it has not approached its most challenging third arrow of structural reform. In the video above Justin Wolfers, a Senior Fellow of Economic Studies of The Brookings Institution in Washington D.C. states that Japan has successfully escaped the deflationary trap in 2013. At the same time, Wolfers points viewers to a paper written by Joshua K. Hausman of University of Michigan and Johannes F. Wieland of University of California, San Deigo, titled: Abenomics: Preliminary Analysis and Outlook. In the article, the economists describe the history of Japan’s economic troubles, the short-term success of ending deflation in 2013, while forecasting the long-term outlook explaining what measures will need to be taken in order for Abenomics to be successful in helping Japan restore the health of its economy to its pre-1989 days. For a long time I have been searching for a single document that could help me better understand the dilemma of the Japanese economy. I have finally found it.
This past academic year, I got the unique opportunity to evaluate the economic impacts of hosting the Olympic Games, particularly looking at the key pull factors that motivate cities in emerging markets to bid for the large scape sporting event, when you consider that it tends to be a money losing event. The 3 main pull factors in my argument: Boosting Global City Competitiveness, Infrastructure Development, as well as beyond economics in the form of branding and soft power. Back in 2009 Rio de Janeiro not only became yet another emerging region city to win the rights to host, but also historically, Brazil’s former capital became the first city in South America to be awarded an Olympic Games. Despite everything not going according to plan (although I might be alluding more to the imminent 2014 World Cup), the video above shows that ROCOG has indeed made progress. I am really hoping for 2016 to be my first live Olympic experience, and wish they city nothing but success in the run up to the event.
There is little under two months until I am finished my graduate program here in Singapore. I am indeed excited for what comes next. Yet at times, I do find myself wishing that we were enrolled in a two year format instead of our one one year format. Less for the educational content, and more for the social experience. When I look around our study area, its cool to see fellow colleagues interacting with others that they would not be caught speaking with in the first or second trimester. Yet it all seems to be coming to fruition far too late in the game. One year is simply not enough time. Two years might be. Yet at the end of day, I think the opportunity cost of spending two years in grad school is simply too much to bare.
On April 8th, 2014 Dirk Nowitzki surpassed the great Oscar Roberson to become the 10th all time leading scoring in NBA history. He will enter his next game with 26,714 points. I have been a Dallas Mavericks fan for the last 14 years, and it goes without saying that Mr. Nowitzki is my favourite player to ever play the game of basketball. There is no telling how much longer Dirk will play, but for the present moment and unforgettable 14 years, thank you for the incredible memories.
We truly live in a globalized interconnected world when a Thai based insurance commercial can gross viral everywhere. I will join in the wide spread admiration for this ad by sharing it. Or should I say, sharing it forward?
The Trailer for Bryan Singer’s X-Men:Days of Future Past is here. There are lot of house hold name actors return from both irritations of this series. I am not overly excited for this film, but at the same time I would not mind checking it out. By the way, seems really late to be marketing a final trailer for a film this large, which comes out 2 months from now. The film opens wide on May 23rd, 2014.
The Finish Line Episode 3 - The Blacklash. The series has examined what might very well be the end of Steve Nash’s iconic basketball career.