Source: dashuxiangzhang (id:dashuxiangzhang)
Economics is a good thing. It can study the laws of the world.
But economics on paper is not necessarily a good thing, because it is always secretive and wants to say nothing.
Just like everyone knows the “comparative advantage”, those who produce shirts and socks at a low cost should always engage in sweatshops, those who are easy to exploit oil and gas should always sell mineral resources, and those who are capable of producing aircraft chips should always engage in high technology.
From a static point of view, it is indeed more efficient for everyone to divide their work and cooperate like this.
But the theory won’t tell you why those who produce aircraft chips have the ability to engage in high technology?
Where did their primitive accumulation come from?
Can their development path be copied?
The theory won’t tell you, what should those who make shirts and socks do if they want to upgrade the industry?
They will only say that you don’t have the capital and technology to make things uneconomical and durable. It’s better to buy them than build them. Those who make shirts and socks should always make shirts and socks honestly.
But the proponents and practitioners of economics have their own ideas.
When the United States was still catching up with Britain, the United States was known as the “birthplace and fortress of modern trade protectionism”. It wanted to introduce the McKinley Tariff Act, protect the weak infant industries in the country through high tariffs, and give birth to industries that did not originally exist in the country;
When the United States became the world’s hegemon, it changed, took over the British flag of free trade, became the leader of the liberal world, and took the road of low tariff free trade.
Therefore, Schumpeter, the master of economics, wrote in his book Economic Development Theory: “nothing is purely economic, and other dimensions always exist, and often more important.”
Since the implementation of “abenomics” in Japan, it has encountered nails in other dimensions, and hit head and blood.
The content of “abenomics” is not complicated. It can be summed up in three parts: loose monetary policy, active fiscal policy and liberalized economic structure reform.
These “three arrows” have no innovation in theory. The core is still the set of stimulating demand in Keynesian macroeconomic regulation and control. To put it more bluntly:
Let water devalue the currency to promote the economy.
How to discharge water?
First, the central bank purchases Japanese government bonds on a large scale, so that the government has the money to engage in fiscal stimulus, but the Japanese government has therefore become the only country in the world whose debt exceeds twice its GDP;
Second, the Bank of Japan reduced interest rates to -0.1%, making Japan the first country in Asia to implement negative interest rates.
Is it useful to drain water?
It’s still useful. When you throw a stone into the river, you can always hear a noise, not to mention trillions of yen of water?
During the flood, the Japanese economy was statistically decent.
The first is the long business cycle. The period from the end of 2012 to the end of 2019 is called “Abe business cycle”, which is the longest business cycle in Japan after the war.
But what about the growth rate? The average annual growth rate is only about 1%.
However, before the end of the drainage and the arrival of the new crown, Japan’s GDP has turned downward in the fourth quarter of 2019, with a negative growth rate of 7.1%.
Japan’s GDP growth rate during Abe’s business cycle
The second highlight is the bright performance of the stock market.
Less than a year after the central bank released water, the Japanese stock market rose by 80% from the end of 2012 to June 2013; By the end of 2019, the Nikkei average index was 23924 points, an increase of 2.34 times.
The third highlight is the rising profits and market capitalization of Japanese companies.
The devalued yen was naturally conducive to Japan’s exports. At that time, the world maintained low oil prices, and it was natural for profits to increase.
But why did the market value of these enterprises increase significantly?
Enterprises that get a lot of money at almost zero interest are neither willing to raise workers’ wages nor invest in new industries. Why? Repurchase of shares.
In 2018, Japanese Listed Companies repurchased their own shares with a value of about $600billion; By the first half of 2019, the share repurchases of listed companies had exceeded US $500billion in only half a year.
So, who will be respectable after draining water? Whoever has money is decent, and whoever has assets is decent.
Money flowed out of the central bank and into the government. It was used to repay old and new debts, and the money revolved in the bond market;
The money flowed to the bank and then to the consortium, but the consortium did not raise wages and did not engage in industry. The money eventually flowed to the stock market, and the money rotating in the stock market made the major shareholders smile.
After talking to you about a set of data, you will understand everything: the average annual income of Japanese households was 5.15 million yen in 2012, and 5.1 million yen in 2018, and even fell under the continuous depreciation of the currency.
Moreover, due to low interest rates and excessive currency issuance, the yen has also been depreciating externally. When high energy costs are imported into Japan, the consequences of rising prices are only borne by ordinary Japanese people.
Even if such “abenomics” has brought about a recovery, it is also a “K” recovery. The capital basin is full, and the people turn around.
In Japan under Abe’s economics, the Matthew effect of “the way of man is not enough to give more than enough” is incisively and vividly displayed.
Some people say that although Japan’s GDP looks bad, Japan has huge overseas assets, and its GNP is certainly good.
This is both a question and an answer. The huge overseas assets are the assets of consortiums. What does it have to do with ordinary people? The overseas GDP is high. Have 100 million Japanese gone to work overseas?
In the first distribution of labor and capital, if the consortium keeps overseas profits without raising wages, how much overseas development achievements can ordinary people share?
In the second distribution of tax revenue, if the government has carried out liberalism oriented reforms to reduce the burden on enterprises and continue to loosen economic regulation, what will the government do to transfer payments to ordinary people?
If consortiums and enterprises that get a lot of cash do not invest in the real economy or technological upgrading, and let the money turn in the financial market, it seems to be profitable, but the profit eaters will eventually be eaten by the profit.
In the era of traditional energy vehicles, Japan has established an automobile Kingdom, but in the era of new energy vehicles, where is Japan’s kingdom?
So, does the law of reducing interest rates and releasing water to stimulate the economy no longer work?
Of course not. To make this law work, first of all, the premise of establishing the law should be clear; Secondly, we should pay attention to factors outside the dimension of economic law.
Take a very simple example. If you are an entrepreneur, in a cycle of economic downturn and few investment opportunities, if you don’t see a relatively certain profit growth space, will you lend money to expand production capacity? Obviously not.
If there is no interest on the loan at this time, you may be tempted, but what if I tell you that the interest rate will be significantly increased after a year? The best you can do is to borrow a little short-term loan to try your luck and let you borrow money to make a medium – and long-term investment.
This is a major premise: in a downward cycle, the trend and expectation of interest rate reduction are very important.
This is also why Japan is desperate to maintain the expectation of low interest rates, giving up the exchange rate and pushing up government debt, because Japan must maintain a low interest rate environment in order to maintain the vitality of enterprises and allow enterprises accustomed to flooding to continue to survive.
The Japanese government has given up its goals. They know that as long as enterprises do not collapse, they can ensure that the domestic economy does not collapse. This is the last bottom line.
If interest rates are raised, asset prices may collapse and enterprises may go bankrupt.
Then why not upgrade the industry after getting the low interest money?
This is the second premise: you must compete in a free market, and you must compete in a deterministic market, which has nothing to do with the economic dimension.
Japan’s semiconductor industry has also defeated the United States. In 1985, Japanese enterprises accounted for more than 50% of the global storage chip market share, and five of the world’s top 10 semiconductor companies were listed in Japan.
Then came the familiar plot: arrest.
On May 27th, 1987, the Japan police department arrested Lin longer, head of the casting department of Toshiba machinery company, and Hiroaki Tanimura, head of the machine tool business department. What about the charges? Export high-tech products to the evil country Soviet Union.
Then came the long arm jurisdiction – taxes, fines, bans, everything. In addition, the CIA of the United States asked Toshiba to investigate its semiconductor technology on the grounds of national security, so Toshiba must hand over its core technology to the United States for inspection.
Finally, the Japanese Prime Minister personally went to the United States to apologize. It is called “Toshiba incident” in history.
Take this example to tell you that many times Japan does not want to climb the industrial peak, not does not want to, but cannot!
As we all know, among capital, technology, raw materials, labor and other production factors, mastering capital and technical factors is the most profitable. Mastering raw materials can make money lying down. Only selling labor is the hardest to make money. This is the economic law.
However, technology will spread and knowledge will accumulate. Those who sell labor can “learn by doing”, and they can also save money and make primitive accumulation from their teeth, so as to master capital and technology. This is also the economic law.
However, if you put a gun on your forehead and don’t let you upgrade, only his rules are rules. This is not an economic law.
Cutting interest rates and releasing water cannot save the Japanese economy, which has been decided since the moment Japan chose to be a dog.
Reducing interest rates and releasing water does not benefit ordinary people, which is Japan’s own choice.
The country cannot be expected because there is no bone in the top and no one mind in the bottom.
At present, China is surrounded by strong enemies, which is both good and bad.
Mencius said, “if you enter, there will be no dharmapala, if you leave, there will be no enemy and foreign invaders, and the country will die forever”. We are not afraid of the enemy being strong. We are most afraid that the strong enemies around us have provided us with so many bloody examples, but we have not learned any lessons at all. This is the most terrible thing.
It’s no problem to release water itself, but we should be alert to the group of people who are the most popular. It may not be our jobs that are saved, but the pockets of small groups that are rich.