As Prof Stiglitz correctly notes, Abe doesn't have the clout to do more than ask employers to raise wages. But he has recklessly embarked on a policy of inflation, regardless of whether employers do so. (For this to lead to increased growth in real terms requires of course that they increase wages in excess of the rate of inflation.) Even if they comply, this will only benefit those who are employed by firms.



Unfortunately, everyone in Japan is affected by inflation: at least 60% of Japan's food calories are imported, including an even higher percentage of soy beans and soy bean products, which are important staples. Bigger bonuses from employers won't help Japan's elderly, unemployed, or single mothers who have only part-time and/or temporary employment. Abe's advisers, such as Takenaka Heizo, are the same Koizumi-era proponents of "structural reforms" that led to making employment more precarious. It is unlikely they will reverse their policies now that they're back in power.



It's especially galling that Prof Stiglitz highlights that the BoJ's exchange rate manipulations have made Japanese goods "more competitive." He should check the statistics of his old employer, the World Bank. Far from being an export-dependent economy, in 2011-2012 Japan earned only 15% of its GDP from exports -- the lowest figure in the G7 other than the US (14%), and among the lowest in the world. But that figure, accomplished during the DPJ administration and with a strong yen that benefits Japan's residents, is near a HISTORICAL HIGH: during the heyday of "Japan Inc.," the figure was in the single digits.



The discourse of exports is a smoke-screen to hide the fact that the financial economy, not the economy of goods and services, is the real reason for the exchange rate. A weak yen benefits the earnings statements of Japan's multinationals. It does nothing for Japan's GDP, since those multinationals are producing and selling goods overseas -- which is also precisely why they want a weak yen, so that repatriated profits will appear plumper. Those companies are hiring overseas, too, so it doesn't help reduce unemployment in Japan, which although low by global standards is near historical highs by domestic ones.



Like most economists, Prof. Stiglitz ignores the political dimensions of what is happening in Japan. Nobel laureates of course speak to Very Important People, such as academics and businesspeople who have been schooled in mainstream economics at major US or UK institutions. What elevates the mood of such august persons may be far removed from -- or even antithetical to -- what makes the average Japanese better off. To the extent that average people in Japan are positive about the Abe Administration, is it really because of the government's inflation policies? because of Abe's determination to open Japan up to competition?



There are at least two important factors at work that help to explain high approval ratings for Abe. One is his stand on foreign affairs, which have nothing to do with the economy. The DPJ administrations were all terrible in this regard, and now that China and the Koreas have been more aggressive, each in their different ways, the country is shifting to the right. Another is that there isn't a free press in Japan. The press cooperate with the government to get the government's message out -- otherwise, they will lose access or even licenses. If you don't live in Japan, the extent of this self-censorship -- or outright propagandizing, in the case of some of the more conservative media companies like Yomiuri -- may be hard to appreciate.



The Abe Administration especially needs to rely on media manipulation because it is entirely lacking in democratic legitimacy. It and its coalition partners took over the country with a minority of the popular vote between them (41% of the votes cast, 25% of the electorate). Moreover, the election law under which they were elected was unconstitutional. They are in fact usurpers, though it is very possible that Japan's ultra-conservative Supreme Court will let them get away with it, as they have done with many other unconstitutional elections held in the past (unconstitutional, mind you, according the Supreme Court's own judgment, not merely my or constitutional scholars' opinions).



Abe's recent comments about increasing the number of women in the workforce need to be seen in this light, too. The context was a hint of his "new growth strategy," the first to be released by a Japanese administration since 2010. The release is expected for June. In July, there is an election for the Sangiin, the upper house of the Japanese parliament a/k/a the Diet. Abe's party doesn't yet hold a majority there, which means he faces some possible resistance in his project to amend the constitution (mainly to broaden the role of Japan's military, but also to limit the human rights of Japanese citizens, as a draft released earlier this year makes clear). His comments were meant to flatter female voters. In fact, his proposal to allow women to keep their jobs through 3 years of maternity leave will probably have exactly the opposite effect from its ostensible intention: many companies simply will hire fewer women. (Even though the parental leave would in theory benefit men, too, management and peer pressure in Japanese companies already prevent men from taking the full amount of parental leave to which they are currently entitled. One professional acquaintance in his 40s proudly told me he took off the afternoon when his first child was born earlier this year.)



Among finance professionals here, "Abenomics" has been replaced by a new buzzword, "AKB". A sarcastic allusion to the Guinness world record-holder for Largest Pop Group, the cloying and talentless Japanese girl group AKB48, it stands for "Abe-Kuroda Bubble." Prof. Stiglitz ought to learn more about the local music before he lends his prestige to destructive policies such as the ones he endorses here.