This is just a normal effect of their macroeconomic woes. Their money supply is contracting because despite building every bridge to nowhere they could no one wants to take out loans. They have a crushing burden of debt now having followed all the advice of those who argue for massive stimulus (though even though their stimulus programs have been massive the economists insist it isn't enough).
The only upside to a depression is that prices fall for those who still have jobs and this is just that coming home for people. If that means that prices everywhere have to fall then all the better. The market is trying to heal itself and correct the imbalances and the government really needs to start letting it.
It's not like anything they've done has done much good for anyone-outside the bridge to nowhere supported industries that is. I'm pretty sure we're going to see falling prices here for years to come too as the money supply continues to shrink.
Is there any reasons why the Japanese government stubbornly stick to supporting the "Bridge to Nowhere" project instead of trying other solutions for fixing the economy, including doing nothing?
Doing nothing seems so counterintuitive a solution that people almost never seem to consider it. Lately, I've been seeing this in college. "What, the students are making mistakes and asking questions? I'd better lecture more and write longer explanations in the assignments."
I imagine that a politician who ran on a platform of, "I'm going to do nothing: these kinds of pains are how an economy gets back into adjustment," would have a hard time getting votes. But, I've never been to Japan, and indeed, in the U.S., such a platform would not make you an instant laughingstock.
The only upside to a depression is that prices fall for those who still have jobs and this is just that coming home for people. If that means that prices everywhere have to fall then all the better. The market is trying to heal itself and correct the imbalances and the government really needs to start letting it.
It's not like anything they've done has done much good for anyone-outside the bridge to nowhere supported industries that is. I'm pretty sure we're going to see falling prices here for years to come too as the money supply continues to shrink.