Byrd: Abe tops the Pope


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Last week, Time magazine gave its (somewhat) prestigious honor of “Person of the Year” to the recently inaugurated Pope Francis, due to his reforming, almost radical tonal (but not policy) shifts on gay marriage and women’s ordination while also taking a rabble-rousing, populist economic stance, slamming trickle-down economics and the “idolatry of money.”

This is a perfectly fine choice; Francis has certainly added life and vigor to an institution plagued by corruption and stagnation. However, I believe a certain dark-horse candidate deserves some recognition for completely shifting the debate on an issue that, given his recent statements, means quite a lot to Francis: the structure of our economic systems.

In this regard, the Person of the Year is clearly Japanese Prime Minister Shinz Abe.

Following his election in late 2012, Abe embarked on an audacious economic experiment, appropriately given the portmanteau “Abenomics.”

The monetary aim of Abenomics, to simplify a great deal, is to reverse decades-long deflation trends in the Japanese economy by lowering interest rates, effectively weakening the Japanese currency, the Yen. The intended effect, as Business Insider’s Joe Wiesenthal has pointed out, is to encourage spending that boosts domestic economic activity.

Fiscally, Abenomics requires massive amounts of public works and stimulus spending (around $60 billion for 2013 and around $260 billion over the next five years) with the goal of spurring economic activity through such activities as building roads and bridges and repairing the large swathes of Japan damaged during the 2010 earthquake. 

Finally, there are the structural aspects of Abenomics that have the much more long-term goals of modernizing and keeping the Japanese economy competitive. These reforms include encouraging more female participation in the labor force, creating an environmentally friendly regulatory apparatus, and the promotion of Japanese culture worldwide.

To dumb down all that complex economic mumbo-jumbo, Abenomics is basically a mammoth, New Deal-style, Keynesian program of direct government intervention in the economy, the complete opposite the cut and slash austerity politics proposed and implemented by right-wingers in the United States and Europe.

As Slate’s Matt Yglesias notes, industrial production, household spending, and the Japanese stock market index all rose substantially in the wake of Abenomics’ implementation, and the Japanese economy has done nothing but grow in 2013, including an astounding 3.8 percent gain in the first fiscal quarter.

The economic theory behind austerity is horribly flawed, and Abenomics proves that. While Europe has languished under regressive cuts to public expenditures (which have done zilch to ease the Eurozone crisis), Japan continues to grow thanks to a plan of colossal government spending and aggressive monetary policy that is anathema to the prophets of austerity.

On a more humanistic note, however, Abenomics reaffirms the principle of an activist government whose role is to ensure a basic and comfortable standard of living for its citizens.

This government does not simply exist in the minds of bleeding hearts like yours truly, but on a practical level it works. Just look to the nation of the Rising Sun for proof.

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