If he were really a tough guy looking for serious solutions to Japan’s economic woes, he might consider the following proposals:
Arrow number one: stabilize the yen. Fire everyone who currently works for the Bank of Japan and replace them with free market economists. Stop playing the game of raising and lowering the exchange rate. Tie the currency, even if at only a small percentage like 10%, to a specific quantity of gold or silver held by the government. This suggestion will be unpopular with politicians because they like to manipulate the money supply, and tying the currency to precious metals will take that away from them, but it would be good for monetary stability and that would be good for the Japanese people.
Arrow number two: stop wasteful government spending. No more “stimulus packages.” If a town needs a road, the government should build a road, but it should not build a road because it thinks it will stimulate the economy. It should not spend even one extra yen.
Likewise, reduce the size of government and sell some assets to pay down the debt. Close down some ministries and reduce the size of the bureaucracy. Start by closing the Ministry of Education, Culture, Sports, Science, and Technology (MEXT) and selling the building it is housed in. MEXT does absolutely nothing useful for the Japanese people and, in fact, does much harm. Consider, for example, what many Japanese believe is the most important job of that ministry—education. Everything the ministry does related to education is harmful. Mediocrity is spread across the land. Look at the poor quality of second language education (i.e., English); Japan spends the most of any Asian country and has the worst results. Similarly, Japanese universities, which are the worst in the industrialized world, would be able to grow and improve without the suffocating hold MEXT has on them. For example, how many people know that MEXT determines how many students may enter a university each year? If a university comes up with a plan to attract twice as many students to its chemistry program because it just hired a famous scholar and has built a new laboratory, it cannot do so without MEXT’s approval.
The government should also close down the Ministry for the Environment, the Ministry of Land, Infrastructure, Transport, and Tourism, and demand that all other ministries not hire any new employees for five years and after that only replace bureaucrats who quit or retired.
Arrow number three: deregulation. Arguably Japanese businesses are not as heavily regulated as American businesses, but that is not to say that Japan has anything resembling a free market. One industry which should be deregulated is agriculture. The era of the family rice paddy is gone and young people no longer want to live in their ancestors’ village. Get rid of the regulations that make it difficult for big farming companies to buy up the land. Big farming companies can make rice production--as well as production of other grains, fruits, and vegetables--more efficient, cheaper, and higher quality. Other industries like banking, import-export, retail sales, and manufacturing would also benefit from less government. The government’s role in business should be in protecting people against fraud and theft, not in telling Mr. Yamaguchi how to run his farm or telling Mr. Sato how to run his tool repair shop.
Of course, none of these suggestions are likely to happen with the Abe administration. The only hope for Japan is that some young, open-minded, and fearless politician reads this article today, sees some truth in these arguments, and makes them real in the future.