Savers are "dead weight" for the economy

When Consumers Cut Back: An Object Lesson From Japan


The economic malaise that plagued Japan from the 1990s until the early 2000s brought stunted wages and depressed stock prices, turning free-spending consumers into misers and making them dead weight on Japan’s economy.

Comment: HT from the Woot blog ... more below:

New York Times: Thrifty Consumers Are "Dead Weight"


Scoop! The current economic crisis isn't the fault of unregulated lenders making bad decisions, or of financial traders leveraging themselves too heavily with phony paper wealth. It's because millions of people have banded together in a conspiracy not to spend money on things they don't need.

That's according to a New York Times piece on Japan's "lost decade" of low growth. These "misers" are "dead weight on Japan's economy" because they "tend to shun conspicuous consumption", "to disastrous effect". Horror of horrors, sales of Louis Vuitton handbags are down as "Young Japanese women even seem to be losing their once-insatiable thirst for foreign fashion."


And it's no excuse for the irresponsible actions of Tokyo housewife Hiromi Kobayashi, whose family "has not gone on vacation in two years and still watches a cathode-ray tube TV." (Wait a minute - that describes me exactly. I'm a traitor and I didn't even know it! Somebody arrest me, for my own good!) Kobayashi says she plans to buy a flat-panel TV, but this dastardly fiend is scheming to "find a bargain, then wait until it gets even cheaper." And yet, at press time, Japanese authorities allow this monster to walk the streets.

Comment: Nice to be called a eco-consumer-terrorist!

1 comment:

  1. I feel like Mohammed Atta with my lack of spending. I guess I should max out my credit cards to help things along right now.

    Or maybe I'll re-read Bastiat and remember that "that which is unseen" eviscerates Keynes' concept of the "paradox of thrift," and did so nearly a full century before Keynes came up with his idea.


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