Admitting trouble has never been a strong point of the Japanese government, nor has planning ahead, but the failure to promptly and directly confront the current recession will have serious long-term effects. As news from abroad pours in, it is equally clear that Japan, one of the world's largest economies, has its share of urgent economic problems. Unprecedented in its global and regional impact, the worldwide recession is not only about large corporations, banks, and international financial institutions; it is also about people.
As figures for GDP, consumer spending, exports, stock levels and capital investment nosedive, the government should offer more than one-time cash benefits. Cash is always welcome, but action directed toward easing the burden of working people is still a necessity. The relatively high savings rates of many Japanese families will ease some of the economic pinch, but not all.
The effects on people's lives of this shrinking economy are already appearing in consumer spending, for example. Sales of luxury items at designer boutiques in Tokyo's upscale shopping areas have slowed dramatically since early summer. Not buying a new designer bag may bring few tears for most people, but when spending drops in other sectors, the cumulative effects hit average workers as much as high-end corporations.