Monday, February 2, 2009

Drama Geisha?

Yves Smith of Naked Capitalism passes on a report from Frank Veneroso decrying the massive collapse in Japanese manufacturing, which is the fastest on record for a major industrialized country. He complains that he's "crying from the rooftops" but it's "like a neutron bomb had gone off" because nobody cares. He blames the EEEVIL speculators, picking - of all agents to blame for a manufacturing depression - technical analysis traders. Blaming that fractious bunch earns him an "Oh Please" award.

Japan, a supercreditor nation, is now running a small trade deficit, which is what it should be doing, so the yen is about right. Of course they're getting a depression in switching from an insanely low manipulated exchange rate to a reasonable one, because they've had truly massive misallocation of resources over the past 30 years, due to the crazy low yen value. Basic economics, folks - bad prices cause bad decisions.

Venerosa is right that the rest of the world doesn't care - because we all know this is about where things should be. The depression which will result from this return to sanity isn't something we can do much about anyway. Normally there would be more sympathy but since Japan Inc. has been wrecking everybody else's manufacturing longer than most working people's memory nobody's going to feel too sorry for them now.

Maybe we can get a bunch of really, really small violins to play along with MITI's sob story about manufacturing disaster from unfair trade practices - their own. Heck, Japan's into miniaturization and classical music. Maybe they can provide the violins for us!

No comments: