Kan Cabinet's Economic Policies Would Sink Japan

Premier's plan should make full employment a top priority

The economic thinking of the Kan Cabinet is flawed. Actually, it's more than just flawed; it's a terrible, ruinous policy. The mass media, which has cozied up to the Kan administration, actively advertises the abnormal thought process of Professor Ono, known as "Kan's brain," who espouses the idea that "tax hikes can result in growth." It's a ridiculous economic hypothesis. To raise taxes significantly in the midst of a deep deflationary spiral is a death wish of sorts. Follow through on this plan and the economy will be crushed. I can think of nothing more dangerous than putting our trust in the soft-minded politicians who believe Professor Ono's bizarre theory.

While not as extreme as Professor Ono, a fair number of Democratic Party of Japan legislators believe that social welfare can spark economic recovery. Prime Minister Naoto Kan said before the August 4 upper house election that "welfare will bring about a recovery."

The government's hottest topic these days is what to do to escape this deepening deflationary spiral. It must reduce unemployment. That needs to be the urgent priority in any economic policy. The objective of government is to reduce joblessness and realize full employment. A society is stable when all the able-bodied and mentally capable people have work and can provide for their families. Social welfare programs tend to those people who cannot work. Taking a large view, the biggest boost in social welfare would be to realize full employment. This needs to be the priority.

The best policy to bring this about would be to start a public-works program to renew the nation's infrastructure. But to pull this off, the mass media would need to stop its prejudicial and malicious coverage of public works.