Bubble economy buried the Japanese economy forever
Bubble economy buried the Japanese economy forever
Frank Li April 18, 2026
Recently, I've been thinking about and writing articles about saving manufacturing of Canada, and I think of the tragic lessons of economic decline of Japan.
I have been digging the nature of Japan's economic downturn. Why that various government-sponsored fiscal and economic stimulus measures, including trillions of Yen in investment of public projects, did nothing to revive the economy?
When talking about the main cause of Japan’s declining from world economic powerhouse. Most people would blame the Plaza Accord that forced appreciation of the Yen of Japan currency and caused the products of Japan losing competitive; and made Japan into Bubble Economy. But that was not the essence.
Aug. 24, 2014, I once wrote article Over-heated real estate market is ruining Canadian economy from Japan mirroring Canada, through translation of some articles that wrote by Japanese scholars, and the people from China who are studying and working in Japan, by their personal experiences and investigation to reveal the reality of the period of Japan's bubble economy 1980s, and after the economic bubble burst, I discussed the cause of Japan's economy decline.
Dec. 4, 2014, I once wrote Why did Keynesian fail in saving Japan's economy: the Bubble Economy has rewritten the code of the DNA of Japanese people, from enthusiastic in hard working into enamoring in greedy speculating, thus, impacted the social moral and national spirit and made the decay of Japan.
The decline of morality and national spirit made people keen to make living by the speculating instead of hard working and less concerning on the interest of company and most of Japanese people have lost the sense of responsibility.
This is reason that the corporate executives of the Japanese leading enterprises are constantly bowing and apologizing for their falsifying data during test for production and produced products from the process of daily manufacturing.
In essence, the national is the decisive factor for the economy; the decline in the economy shows the decline of the quality of the nationals; which is as same as that of the democracies in the West; Japan has also decayed hopeless.
The bubble economy fostered a greedy nature in the Japanese, altered the genetic code and causing them lose their diligence and the sense of responsibility.
Look at lessons; we may say that it is the quality of employees in deciding the fate of a enterprise. It is the quality of the nationals in deciding the fate of a nation.
So I asserted that bubble economy has buried Japanese economy forever.
Contents
1...High-quality of Japanese people before Bubble Economy
2...Japan used all means of Keynesian but useless
3...Bubble Economy degenerated the quality of Japanese
4...The incredible lazy of Japan’s employees
5...The Japanese disease ruins Sharp and Sony
6...The decline of Sharp Corporation
7...The decline of Sony Corporation
1...High-quality of Japanese people before Bubble Economy
Now, I think of a story in Mandarin long time ago, the famous American marketing authority Philip Kotler who once said that: For Japan, what is the panacea to heal its wounds of the war, to stand up on the war-ruins, and to become the economic powerhouse? For achieving economic advantage, Japanese waged the war, but, failed. From the pain, they learnt that, the use of economic means can achieve more brilliant achievements than that of the use of the military. This means is the marketing.
The economic miracle shows the high-quality of Japanese people. Following is a story about it.
In morning August 19, 2013, I had a chat with the father of my new neighbor in Waterloo, Ontario. He said that his brother once was a top executive of a Canadian Steel Manufacturer and had twice visited Japan for learning the experience of the advanced corporate management in 40 years ago. His brother appreciates the good quality of Japanese very much with a comparison between Japanese and Canadian in case of production accident.
When facing production equipment fails, any Japanese operator would immediately stop the production, and then, all of the people gathered together to make diagnosis and treatment, after troubleshooting, everyone immediately went back own position to resume the production. But, the Canadian was just blindly standing, there no one was attempting for trouble shooting.
Following are some memories about the industrious noble quality of Japanese people. I could not recall the source of them already, but the facts are true.
When 1973 oil crisis, the plant of the Sony Corporation was shutdown and the workers were staying home waiting for notification of work. However, the workers went back to plant to do something available voluntarily with the hope that company could survive.
Mr. Kazuo Inamori, the founder of Kyocera Corporation of Japan. In the newly established period of the company, a customer ordered special shape of water pipes, because there was no prior experience in the production of such pipes. In the process of heating and forming to required shape, the water pipes were burst. Then, Kazuo Inamori was holding the pipe when sleeping at night and slowly turning the pipe, so that pipes was heated evenly, and made it into required shape finally.
Now, we have convinced that it was that industrious noble nature of Japanese people created Japan's postwar economic miracle.
People may ignore an important fact that the birth of the Plaza Accord is also a proof that made in Japan was once invincible and swept global market, and also is the proof that the high quality of the enterprises and the employees of Japan.
Supposed that enterprises and the employees of Japan still remained the spirit of entrepreneurial and responsibility, and still in hard working, today's economy of Japan will still be over that of Germany, and those made in Japan will be still invincible and sweeping global market.
This is one of the main reasons that Japan’s economy has been long-term downturn. And it is why that the Three Magic Arrows of Shinzo Abe did not achieve the desired results.
From above lessons, I firmly believed that, no doubt, such Japanese diseases of the employee lazy, the "evading responsibility", and more, is an objective results of the Japanese subjective selfish ideological, which was developed from the Holy Baptism by Japan’s Bubble Economy 1980s.
The aftermath of the bubble economy is still hurting all aspects of Japanese society, from the social ideological to the personal spiritual, from the macro national economy to the micro family life, from the world class companies to the ordinary employees, and more.
The sad facts of Japan made me firmly believed: it is that the quality of employees decides the fate of the enterprise. It is that the quality of the nationals decides the fate of the nation. And it is that social moral, social ideological impacts the quality of the national in a great extent.
Japan, one misstep in opening real estate market, it cannot get rid of entering the nightmare of the bubble economy.
2...Japan used all means of Keynesian but useless
June 4, 2012, in the article Japan’s Bubble Economy of the 1980s, the economic analyst and Forbes columnist Jesse Colombo who wrote with that: "By 2004, residential real estate in Tokyo was only worth of 10% of its late 1980s peak, while the most expensive land in Tokyo’s Ginza business district had fallen back to just 1% of its 1989 level in the same year (Barsky, 2009)."
"Similarly, the Nikkei stock index is now trading around 10,000, just little over a quarter of its all-time high."
"It has been over two decades since the popping of Japan’s economic bubble and the country is still actively battling with deflationary forces that are so powerful that near-zero interest rates, repeated bouts of quantitative easing (some call it “money printing”) and constant Yen-weakening currency interventions have barely made a dent."
Jan 6, 2009, on Japan Times, the report Lessons from when the bubble burst said with that: after the crash in late 1990, economic growth stalled various government-sponsored fiscal and economic stimulus measures, including trillions of Yen in failed public works projects, did nothing to revive the economy. This was started roughly in 1991, when the effects of the stock market crash became clear.
Mar 09, 2014, Japan's deficit hits record as economic growth slows.
Mar 31, 2014, Japan factory output contracts, dims growth outlook as tax hike looms.
Apr. 28, 2014, IMF says Shinzo Abe’s economic policy is losing momentum and warns growth could stall unless structural changes to the economy are made.
Jun. 19, 2014, Abenomics Fails to Shake Japanese Firms' Addiction to Cash
Jul 24, 2014, Japan's record trade deficit raises fresh doubts about Abenomics
Aug. 27, 2014, Abenomics' arrows fail to hit their mark
Nov. 28, 2014, As Japanese Bankruptcies Soar, Goldman Warns "Further Yen Depreciation Could Be A Net Burden"
Sept. 15, 2014, Keynes was a failure in Japan - No need to embrace him in Europe
Nov. 25, 2914, Soaring prices caused by the depreciation of the Japanese Yen worry off the New Year - Chinese International - China Daily
Above reprots reveal the terrible consequences of Japan's bubble economy, Prime Minister Shinzo Abe economics seems not work but with a side effect to press Japanese economy continuously toward deterioration.
3...Bubble Economy degenerated the quality of Japanese
Why the all of the fiscal and economic stimulus measures has been used, but have gained nothing to revive the economy?
When talking about the main cause of Japan’s declining from the economic powerhouse? Most people would blame the Plaza Accord that forced appreciation of the Yen to cause Japanese products losing competitiveness and the Bubble Economy.
The reason, as my view, all of those stimulus measures are from the macro elements of the economy, with ignoring the most basic micro elements - the quality of the people, the work-ethic of the labor, the efficiency of the production and the capacity of the innovation.
The Bubble Economy has rewritten the code of the DNA of the quality of Japanese people, from enthusiastic in hard working into enamoring in greedy speculating, thus, further affected the social moral and national’s spiritual, thereby cause the decay of whole society of Japan.
The easy gaining excessive profit from speculative activities have fueled Japanese speculative mentality with unearned ideological. It entices people keen to make living by speculating instead of hard working and less concerning on the interest of own company and most of Japanese people have lost the entrepreneurial spirit, hard-working spirit, and the rational sense of social responsibility and enterprises have deteriorated as lack of enterprising spirit and innovation dynamicI, such negative impact is more terrible, even fatal.
In essence, the national is the decisive factor for a nation’s economic development; a nation's economic decline is the decline of the quality of its national.
Whether it is a business or a country, if its member is full of concerning for the self interest, without or lack of concerning for the public interest, it will doom to be extinction.
So, I firmly believed that the impact of the Bubble Economy on the economy is just a curable social flu, but, the impact on the national’s spiritual is incurable social cancer.
The fact of the Japanese companies loses competitiveness and falling into declining are the vivid proof. The shortsightedness and lack of entrepreneurial spirit of the management team, the lack of work enthusiasm of the employees is the main reason, and also it caused Japan's economy cannot recover as expected.
4...The incredible lazy of Japan’s employees
An engineer of China who works for a German company in taking charge of the branches in South Korea, China and Japan, after working a while in Japan, he was shocked by the lazy of Japanese employees, and completely lost the good impression for them.
Then he wrote an article post on the website to be widely reproduced on the internet; I excerpt and translate some as follow. For facilitating narrative, here, I name the writer as Jim.
The Japanese employees are working overtime almost every day, but, only for getting overtime pay rather than for the need of production.
Jim arranged a simple task to a Japanese technician who dragged two days to finish. The same work, if, in China, a new graduated young man can finish just in half an hour.
In a break time, Jim complains the matter with German colleagues, one German said, this guy is a good one, since he did not drag for a month as that of others. Another German even suspected that Japanese employee was dozing when working.
Japanese employee did not like to take responsibility, when encountering some work trouble, usually; they will look for helping with endless complaining.
German company plans to open new production lines in Japan, so, sent Japanese staff to Germany for training. The same project in China, within a year, production lines was already operating at full capacity in three shifts for 24 hours a day. But in Japan, it took two years still in the state of machine commissioning.
The workers of China have mastered all the skills within the three months training in Germany. The German teacher said: you have learnt everything on the training plan, you may go back to China now, and we have nothing for teaching any more.
Japanese spent six months in Germany, but, after went back to Japan; they could not work properly, and complaining that Germans did not teach them well. Germans angered with that: in Germany, we were teaching you hands by hands, and you also said that you have mastered everything already. The Japanese fought back immediately: Sorry, we forgot, our memory is too bad to remember that.
Germans were angered and collectively applied for vacation to leave Japan as a protest. The German company had to allow them to China by the name of studying for appeasing their anger.
Jim went back China with the German colleagues together. When they held a cup of coffee to watch Workshop through the window glass of the upstairs office, the production was in an orderly busy, workers were loading and unloading on the production line, the transportation-cars were running to and fro between the production sites and the storages.
All of Germans was shocked and some even exclaimed with that: my God, here is simply a heaven. One of them said with that, they (Japanese) have been sleeping for 20 years, let them sleeping for another 20 years, then, Japan will decline as a developing country, and while, China will destine to be a developed country.
Now, in many Japanese companies, employees are mostly 40-50 years old, rarely under 30. Many young Japanese are staying in unemployed. Besides the cause of the economic recession, the other cause is Japan's "special" corporate culture, which emphasizing work-qualifications and work-records, so that young Japanese have lesser work chance. Some girls have to do "compensated dating" for making money. Some boys also have to make money by doing “duck” - male prostitute.
5...The Japanese disease ruins Sharp and Sony
Mr. Kondo Daisuke, a scholar of Japan, who wrote many articles to criticize the Management Drawbacks in Japan's enterprises. He coined the term of "Japanese disease".
The nature of the "Japanese disease" is the manner of "evading responsibility" that evolved rigid organizational structure and Inward Oriented Conservative of the Japanese Companies. The direct result of the "Illness" is that illed companies will increasingly debilitate and ultimately collapse.
Jul. 11, 2014, Japan's Sharp to post $141 million loss on Europe solar business.
Sep. 17, 2014, Sony predicts increased losses due to struggling mobile business.
I excerpt some section from my article Over-heated real estate is ruining Canadian economy from Japan mirroring Canada – 2 as follow, to show the reason that Sharp and Sony declines. I hope that the lessons may play a role as a mirror to mirror the enterprises of Canada, to ask that Why? How?
6...The decline of Sharp Corporation
Sep. 11, 2012, Mr. Daisuke Kondo who published a Mandarin article Angry Gou Tai-ming on Economic Observer Online of China, in which he criticized the “Japanese Disease” that harms Japanese companies. I excerpt translate some as follow.
A hundred years glorious Sharp Corporation has suffered "Japanese disease." It is not only the Sharp, but also the Sony, Panasonic, NEC, Sanyo, Olympus, and great many Japanese companies are the serious patients in "Japanese disease".
For example, a Japanese company planned to develop a new product. The product development department produced a "plan book", with depicting the grand blueprint of best market potential.
However, when the "plan book" spreading in other departments of the company, this new product would face with dozens or even hundreds of blames, in the end, it did not get any support. The reason is simple: For the heads of departments, the most important thing is not how to bring new products to market, to improve the turnover, but, how to avoid the risk-taking of affecting own career in case of the sales of the new products is not good as expected.
Because of the whole company have infected the disease of "evading responsibility", a lot of great new product plans have been put into the limbo. Meanwhile, in the process of this "bad model" iterative, the staff for new products’ R & D has gradually lost enthusiasm and morale, thus, resulting in the number of the plan for new products’ dropped. Nevertheless, the whole company still does not repent for that, keeping on its own way.
Once cooperation with a Japanese business that suffers "Japanese disease", I believe, regardless, which leaders of China's company will be angry as same as that of Gou Tai-Ming.
Assuming, a Chinese company raised an advantageous cooperation projects for both sides to a Japanese company, the local subsidiary of the Japanese company will immediately report to the International Department of the Japanese parent company. At this time, the International Department will require the local subsidiary to present a "plan book" as long as hundreds of pages. Just for completing this "plan book" will be going to spend a few months of time.
Then, after the negotiations with various departments in the head office, which cost more than six months usually, luckily, the "plan book" may finally appear on the meeting of the Board of directors once a month in the head office. However, most probably it will suffer the fate of being sentenced to death, because of all the directors are not concerns the plan book from its feasible or not, but, from the "how to use the plan, for their personal interest, rather than the interest of the company.
If, some directors believe that the implementation of the plan was no benefit for themselves, or own competitors in the company can get more benefits, they would oppose without hesitation and then put forward some reason to postpone the decision and ultimately to make the plan was dismissed or forced to ‘another day another meeting’, without the rational sense of caring about the interest of gaining or losing for the company."
7... The decline of Sony Corporation
Feb. 6, 2014, Japan scholar Daisuke Kondo published another Mandarin article The sundown of Sony: Doraemon or Crayon on a website of China, in which he criticized the ridiculous management that has been ruining Sony Corporation.
“I remember that of my college days, only the best students in science majors can enter Sony. When going out of Japan, regardless of which country, we were able to see "SONY" huge billboard and young people using "walkman". At that time, Sony is our Japanese pride, however, now?”
"For this problem, one of my college classmates, now a Sony employee replied with that: "In the company, there one by one meetings are from morning to night, after the meetings, everyone must deal with at least 100 internal mails from the company. So, Sony is not an electronics manufacturer, but a downright bureaucracy! Only those people, who are the 'Mr. Nice Guy' without any faults, could be promoted. Such a Sony could not develop new products that can shine the world anymore?”
"Our company has a specialized team in charge of new product development against the rival of Apple of the United States. There was I admired executive who is in charge of the team. One day, his immediate leader of a director of Board even ordered him to stop the investment of 'no value' (i.e., to give up the R & D) as soon as possible to vanquish to Apple. The executive retorted: Do you have self-esteem as a member of Sony? The Director even contemptuously asked: ‘your self-esteem can help company making money, right? Heard of the answer of a director of Board, the executive immediately decided to resign."
"In recent years, the elite who left Sony were not only the executive alone. In 2006, the former managing director who was responsible for "AIBO" R & D of futuristic robots was demobilized; the reason was that there members of board were questioning that ‘How much economic benefit that the robot R & D can bring to Sony? In 2007, former chairman and CEO of the Sony Computer Entertainment Inc., Mr. Ken Kutarag who known as the "Father of the PS (PlayStation)" was also retired after the expiry of his Job tenure.”
"In the booming period of before, Sony company once gathered a large number of ‘Doraemon’talents - they can come up with all kinds of whimsy from their "Mind Treasure Bag", and then to materialize them into a variety of future products. But now, unfortunately, the Sony is filled with the people who work with lips only as that of the‘Crayon’”