March 14, 2011


The silver lining of Japan’s earthquake: A massive earthquake and tsunami have accomplished what Japan's fiscal policy and central bank could not. Rebuilding a large swath of Japan will stimulate domestic growth and global demand, energy-efficient technologies, while helping to integrate China and Japan. (Nathan Gardels / March 14, 2011 , CS Monitor)

Japan has been wallowing in stagnation for years despite massive government stimulus programs and zero-interest rates because, simply put, in such an advanced, mature economy, there was too little demand to generate sufficient returns to attract private investment. Thus the famous “bridges to nowhere” and other projects that amounted to pushing a string.

By taking Japan’s mature economy down a notch, Mother Nature has accomplished what fiscal policy and the central bank could not. Now there are more bridges to somewhere to be built than one can count. Entire cities and regions need to be reconstructed in toto, from housing and commercial buildings to roads, rail lines, information networks, the energy grid, and even the tsunami warning system that must be digitally revamped. Twitter- and Facebook-like platforms will need to be integrated into a system reliant on old technologies like warning sirens and radio or TV broadcasts.

Best of all, the work will be done by mass immigrant labor. If the Japanese could adjust to the idea of that immigration being permanent their country would have a future. Otherwise, they're just polishing the brass on the Titanic.

Posted by at March 14, 2011 5:04 PM

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