Stagnation Is Not Just the New Normal–It’s Official Policy
Japan is a global leader is how to gracefully manage stagnation.
Although our leadership is too polite to say it out loud, they’ve embraced stagnation as the new quasi-official policy. The reason is tragi-comically obvious: any real reform would threaten the income streams gushing into untouchably powerful self-serving elites and fiefdoms.
In our pay-to-play centralized form of governance, any reform that threatens the skims, privileges and perquisites of existing elites and fiefdoms is immediately squashed, co-opted or watered down.
So the power structure of the status quo has embraced stagnation as a comfortable (except to those on the margins) and controllable descent that avoids the unpleasantness and uncertainty of crisis. We all know that humans quickly habituate to gradual changes in circumstances, and that if the changes are gradual enough, we have difficulty even noticing the erosion.
So wages/salaries stagnate, inflation eats away at the purchasing power of our net income, junk fees, tolls and taxes notch higher by increments too modest to trigger protest, fundamental civil liberties are chipped away one small piece at a time, healthcare costs rise every year like clockwork, and the gap between the bottom 95% and the top 5% widens, as does the gap between the top .1% and the bottom 99.9%, productivity stagnates, the growth rate of new businesses stagnates, but it’s all so gradual that we no longer notice except to sigh in resignation.
Japan is a global leader is how to gracefully manage stagnation. Here’s how Japan is managing to maintain a comfortable secular stagnation:
Japan’s central bank creates a ton of new currency every year, which it uses to buy Japan’s government debt/bonds. This keeps interest rates near-zero, so the cost of government borrowing is kept minimal.
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