Isaac Meyer

Historian, teacher, podcaster

Tag: Asset Bubble

Episode 294 – What Goes Up, Part 5

This week, the effects of the collapsing asset bubble spread as the extent of the damage caused is revealed; Japan’s financial and political leaders scramble to respond, while refusing to admit the scale of the crisis. Plus, the legacies of the bubble era for Japan today.

Sources

This chapter by Dr. Ohno Kenichi of Japan’s National Graduate Institute for Policy Studies on the bubble and its effects

Nakaso Hiroshi’s paper on the financial crisis and its effects during his BOJ tenure

A New York Times article on nostalgia for the bubble era.

Tett, Gillian. Saving the Sun

Images

The old Long Term Credit Bank of Japan; nationalizing the LTCB was the moment the Japanese government finally found a systemic response to its crisis of confidence.

Japan’s unemployment rate has spiked since the bubble; it still remains low compared to other industrialized countries, but the effects on Japanese society have been substantially disruptive.

Prime Minister Abe is now Japan’s third longest serving prime minister ever. Yet his policies of Abenomics have failed to substantially revive the economy.

A graph from Nakaso Hiroshi’s paper showing the fall in Japan’s economic growth rate after the bubble.

Initiatives like “Premium Friday” are attempts to revive the Japanese economy, but they don’t address the lack of confidence consumers have in their economic futures — which is what holds them back from spending money.

 

Episode 293 – What Goes Up, Part 4

This week, it all starts to come crumbling down. Japan is plagued by scandals that destroy public confidence at the system right as some begin to look around and say, “hey, does this all seem a bit unsustainable or is it just me?”

It’s not just them.

Sources

The quoted New York Times article from 1996.

Werner, Richard. Princes of the Yen

Kingston, Jeff. Japan in Transformation, 1945-2010.

Dubro, Alec and David Kaplan. Yakuza: Japan’s Criminal Underworld. 

Images

Ezoe Hiromasa, the head of Recruit Corporation, whose illicit money laundering via the stock market touched off the first major 1980s scandal.

Sumita Satoshi, BOJ governor 1984-89. He is often blamed for the bubble, though responsibility is not solely his.

Kanemaru Shin giving an apologetic press conference as the scale of the Sagawa Kyubin scandal becomes clear. Kanemaru would die just a few years later, but the damage to public confidence would linger.

Recruit HQ via Google maps. The company still exists today, and surprisingly has not rebranded.

Land like this is prime target for yakuza jiageya, who would try to convince the home owners to sell so that the home could be bought up and developed.

Episode 290 – What Goes Up, Part 1

This week, we turn our attention to the 1980s. Japan and the United States find their relationship wracked by increasing tensions over political and economic relations, and turn to the solution of an agreement designed to ease the pressure of Japan’s economic growth. The result? Japan’s infamous Bubble Era!

Sources

Pempel, T.J. Regime Shift

Anchordoguy, Marie. Reprogramming Japan

Jansen, Marius. The Making of Modern Japan.

Images

The murder of Vincent Chin in 1982 was symptomatic of the level of tension (both economic and racial) in the US-Japan relationship by the 1980s.

The negotiators of the Plaza Accord. James Baker III (USA) is at center. Takeshita Noboru (Japan) is at right.

Ginza’s Yonchome in 1955.

Ginza Yonchome in the 1980s. You can see the incredible growth in just two decades and change.

Another shot of the Ginza in the 1980s. By the height of the bubble, one square meter of commercial real estate here cost $750,000.24

Episode 21 – The Crash

For our final outline episode, we’ll be tackling the origins and effects of the real-estate bubble which devastated the Japanese economy in 1991, and which so brutally halted the story of Japanese growth. In particular, we’ll be focusing on the ways in which the various problems outlined last week were brought to the fore by the economic chaos of the 1990s.

Listen to the episode here.

Sources

Anchordoguy, Marie. Reprogramming Japan.

Pyle, Kenneth. Japan Rising.

Tett, Gillian. Saving the Sun: A Wall Street Gamble to Save Japan from its Trillion-Dollar Meltdown.

The full text of the Murayama Statement

Images (Courtesy of the Wikimedia Foundation unless otherwise noted)

The five men who negotiated the Plaza Accord in 1985. From left to right they are Gerhard Stoltenberg (German Federal Republic), Pierre Bérégovoy (France), James A. Baker III (United States), Nigel Lawson (United Kingdom), and Takeshita Noboru (Japan).

The five men who negotiated the Plaza Accord in 1985. From left to right they are Gerhard Stoltenberg (German Federal Republic), Pierre Bérégovoy (France), James A. Baker III (United States), Nigel Lawson (United Kingdom), and Takeshita Noboru (Japan).

The grounds of the Imperial Palace in downtown Tokyo. According to some estimates, during the height of the asset bubble this ~2 square mile area was worth more than the entire state of California.

The grounds of the Imperial Palace in downtown Tokyo. According to some estimates, during the height of the asset bubble this ~2 square mile area was worth more than the entire state of California.

The Ginza district of downtown Tokyo. In 1989, 1 square meter of this district would have run you $200,000.

The Ginza district of downtown Tokyo. In 1989, 1 square meter of this district would have run you $200,000.

Murayama Tomiichi, the last of the three non-LDP Prime Ministers of the 1990s. Murayama's most famous accomplishment during his year in office was the issuing of the Murayama Statement apologizing for Japanese behavior in World War II.

Murayama Tomiichi, the last of the three non-LDP Prime Ministers of the 1990s. Murayama’s most famous accomplishment during his year in office was the issuing of the Murayama Statement apologizing for Japanese behavior in World War II.

Hikikomori suffer from an accute form of social withdrawal in which they refuse to leave a confined area (usually either a house or a single room).

Hikikomori suffer from an accute form of social withdrawal in which they refuse to leave a confined area (usually either a house or a single room).

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