If there is something that needs doing to revive the economy, then get it done
The actions of Prime Minister Kan and the Bank of Japan governor have been slow — too slow. The world knows that Japan's business sector has stalled. The unfavorable exchange rate, low stock prices, meager consumption, spiraling deflation and rising joblessness all run the risk of getting worse. And yet the government and the Bank of Japan are still slow to act. The alarming truth is that those in government who should be taking responsibility are enjoying leisurely summer vacations.
The information coming from government sources is all about small policy matters. They talk of extending the eco-point system, supporting the job searches of new graduates, offering financial support to small and midsize businesses. Well, if there's something they can do, they ought to act soon. But the worsening condition of Japan's economy is not going to improve with small policy steps.
Of all the major newspapers, the Nihon Keizai Shimbun seems to have a sense of urgency. From August 17, it started running a front page column above the fold entitled, "The Economic Slowdown: What Must be Done?" The first article featured University of Tokyo Professor Motoshige Ito proposing that the corporate tax be dropped 5%. In a part of the feature where the reporter expresses his or her opinion, called "Through the Reporter's Eyes," this journalist explained that there is ¥5.4 trillion allotted for child welfare, but a drop in corporate tax by 5% would erase ¥1 trillion or so in tax revenue. If the child welfare budget were cut, the reporter continued, the budget could be maintained.
I believe a corporate tax cut is necessary. Professor Ito said of the Democratic Party of Japan, "They are not getting out a message about what they are thinking." I agree.
The second article featured Masayuki Oku of Mitsui-Sumitomo Bank saying that to end the high yen rates, the government needs to take a firm stance. I believe that's true. The government and the central bank need to take a strong stance. Oku said of the DPJ, "I wish it would show some urgency and tension." I agree with this too.
We have no need for a government or central bank that's unwilling to act. If you're not going to do your job, then step down.