Asset Accumulation: Not a Good Sign for Japan

I think what Steve Mollman meant to say in his article "The 'New Economy' in Japan (And Never Mind the Net)" is that if he weren't "coddled" by the Japanese-style service he'd be suffering "UK-style" service levels, rather than, as he wrote, "US-style service levels". (See JIN No. 133.) The service level here in the US is not really that bad. Go in a restaurant in England if you want to see bad service.

Seriously, though, Steve says that he likes being coddled by the "superfluous" workers in the Japanese service sector, and "wouldn't have it any other way", but he also points out the tremendous over-capacity in the service sector that makes it so inefficient. So I'm confused as to what his message is. Everyone likes to be coddled, I suppose, but this economic model is not working in Japan any more -- being coddled is very expensive. Steve mentions the huge financial assets that Japan (the world's No. 2 economy) is sitting on and trumpets the fact that it dwarfs that of the second-tier economy of South Korea (if Japan is measuring itself against South Korea now, things are not looking good), but he fails to mention the tremendous public debt that Japan is building up with its dangerous fiscal policy. Steve -- if you're sure that you "wouldn't have it any other way", I hope you're also prepared to accept the down side of the equation as well. You can't have it both ways.

Regards,

Christopher Beck
japan-ecn@onebox.com

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