Losing the New York Times?

| February 6, 2009

First it was the NY Times editorial telling Tom Daschle that he needed to step down as the Obama Administration nominee for Secretary of Health and Human Services — which Daschle did the same day the editorial came out, specifically citing the Times as he did so (“I read the New York Times this morning…”).

Now today the Times is running a major story talking about how Japan ran up massive goverment debt in an attempt to stimulate their economy, with at best mixed results:

Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery.

Now, as the Obama administration embarks on a similar path, proposing to spend more than $820 billion to stimulate the sagging American economy, many economists are taking a fresh look at Japan’s troubled experience. While Japan is not exactly comparable to the United States — especially as a late developer with a history of heavy state investment in infrastructure — economists say it can still offer important lessons about the pitfalls, and chances for success, of a stimulus package in an advanced economy. . . .

Economists tend to divide into two camps on the question of Japan’s infrastructure spending: those, many of them Americans like [US Sec’y of the Treasury] Mr. Geithner, who think it did not go far enough; and those, many of them Japanese, who think it was a colossal waste.

Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. Much of the blame has fallen on the Liberal Democratic Party, which has long used government spending to grease rural vote-buying machines that help keep the party in power.

The overall tone of the article seems to be in favor of some form of stimulus spending, but it’s clear that the authors have put down several markers to indicate just how the US stimulus package could fail or at least be ineffective for the amount of money spent.

Take the time to read the whole article. I’ve been aware of Japan’s stimulus effort for many years and the fact that (IMHO) it was largely a failure and a disaster. I don’t want to see the United States go down the same road and end up with the same massive government debt.

UPDATE: Did I mention that the Times has even come out against higher taxes?

UPDATE: Ann Althouse points out that the Times is also critiquing Obama over how the Zinni ambassadorship to Iraq was bungled. When it rains. . . .    ..bruce w..

Be Sociable, Share!

Category: Economics, Geopolitics, Journalism, Main, Obama Administration, Recession Watch, Stimulus, US Politics

About the Author ()

Webster is Principal and Founder at Bruce F. Webster & Associates, as well as an Adjunct Professor of Computer Science at Brigham Young University. He works with organizations to help them with troubled or failed information technology (IT) projects. He has also worked in several dozen legal cases as a consultant and as a testifying expert, both in the United States and Japan. He can be reached at bwebster@bfwa.com, or you can follow him on Twitter as @bfwebster.

Comments are closed.