Why Abenomics Flopped by Mike Whitney
July 02, 2014
Class Warfare Saps the Economy
Why Abenomics Flopped
by MIKE WHITNEY
By every objective standard, Abenomics has been a complete flop. Household spending has plunged, wages have dropped for 23 months in a row, inflation is on the rise, the number of workers who can only find part-time jobs has ballooned to 38 percent, and most economists now expect 2nd quarter GDP to shrink to minus 4 percent or worse. So wheres the silver lining?
There isnt one. Its all hype. In fact, the only part of Prime Ministers Shinzo Abes economic strategy that has succeeded has been the public relations campaign, which has bamboozled the Japanese people into believing that pumping trillions of yen into financial assets will lead to widespread prosperity. Good luck with that. We can see how well that worked in the US where stock prices have nearly tripled in the last five years, but the real economy is still flat on its back. So why would quantitative easing (QE) work in Japan when it hasnt worked in the US?
It hasnt, and it wont. The whole thing is a farce. But political leaders like Prime Minister Shinzo Abe and their central bank lackeys continue to promote this absurd flimflam because it boosts profits for their constituents. Thats what this nonsense is all about; trying to find new ways to enrich the parasite class during a self induced long-term slump. The only problem is that everyone else is worse off than before, mainly because the silver spoon slackers at the top of the heap are getting a bigger and bigger share of the pie. That just leaves a few crumbs for everyone else, which is why economic activity has slowed to a crawl. Its because the people who typically spend money and rev up the economy, have no money to spend. Its that simple. Check out this blurb from the Testosterone Pit:
The Abe administration is doing everything in the book to bolster the fortunes of Japan Inc.: offering tax cuts, more public works, and stimulus packages, snatching the Olympics by hook or crook, and cranking up inflation. In April, prices for all items soared 3.4% from a year earlier, and goods prices a confiscatory 5.2%. Yet wages were stuck in the mire, and adjusted for inflation, they plunged
http://www.counterpunch.org/2014/07/02/why-abenomics-flopped/