Thursday, June 30, 2011

2.0

Bonus points to those who gets the reference in the title.

So undoubtedly if you talk to me regularly, I would have linked you to this post on Sankaku. If you didn't, now you know.

So seeing Japan's ever-determined quest to eliminate the need of the female gender, some people have invariably asked the question "Why?"

How could something like this

Shown: Inferior Good

ever match up to this?

Shown: Normal Good

Actually, the answer is older than you think.

In the 80's, Japan was an economic superpower. You'd be surprised at how quickly economies develop when there's no need to spend on defense and the world's biggest power trying their ass off to prop you up.

However, it's not easy being someone else's bitch.

When the 70's Stagflation hit due to OPEC raising their prices (In OPEC's defense, they were pretty much being exploited for all they're worth, and probably will just get discarded like a used whore when their oil runs dry.) Suddenly, Americans aren't so keen to have their little pawn be so economically significant.

So what do you dor you bitches got out of line? Slap them!

Americans quietly sent an ultimatum to Japan, and, Japan being Japan, they quickly accepted.

The result was the Plaza Accord. Because of this "agreement", the value of the yen doubled overnight.

Sounds like a good thing for Japan, right? Money in your pocket just doubled in value.

Not. So. Much.

See, unless you have over seven digits in your bank account in dollars, odds are, you're living on your wages.

But, unless the place you're working at is completely domestic (which, in an international-trade-driven country like japan, is almost impossible), all other things equal, your place's nominal revenue will go down (up to half of what it was before).

No problem, right? Just pay employees less.

Well, according to the currently prevailing macroeconomic theory, Keynesian Economics, it's an impossibility.

Nominal aggregate wages are downwards inflexible. In other words, in general, you cannot pay people less for what they made before on paper.

Sure, inflation will invariably erode the purchasing power of wages/salaries, but generally, if you pay them 100k/yr now, they won't accept 90k/yr later, and certainly not 50k/yr, even if the purchasing power stayed the same.

Why is this the case? To put it in simple terms, obligations.

What is the central financial system of a country? Its banks.

How do banks make money? With lending.

In other words, for any stable, modern financial system to function, it must be driven by debt.

If this sounds like a bad idea to you, think about this:

Economic growth requires new businesses. New businesses require liquid capital to start. Most people's wealth are not liquid capital. They have it in stocks or other things that "make your money work for you". However, No vendor will sell you equipment for MS shares, nor will people work for you for any part of your portfolio. Banks enable this conversion of wealth into liquid capital, so you can start new businesses.

Similarly, credit card agencies exist to facilitate stability without having to resort to savings. (They also exist to make money, but this is the reason why most people use them instead of a debit card). Why is savings bad? This is due to the multiplier effect. For example, you have five guys, A B C D E. You give A 500 dollars, and A gives it all to B for B to render 500 dollar's worth of goods and services to A (not like that, you fucking perverts). B in turn gives it all to C for 500 dollar's worth of goods and services, and so on until E. The total amount of goods and services generated by these people is $2500 (assuming A also did 500 dollar's worth of goods and services to you), or 5 times the amount of capital existing in this system ($500). Assuming there's more people, these $500 dollars can go on to generate infinite amounts of value.

There's an old story. A and B bought a keg in town together, splits it into two smaller kegs, and decides to sell it back in their village. However, they were hit by snow on the way back, and both were freezing. A found $5 in his pocket, and asks B to sell him a mug of beer for $5, B agrees, and A drinks it to warm himself (Warning, Mythbusters proved that alcohol doesn't actually save you from hypothermia, but in fact makes it worse, so don't try this at home). B decides that since now the $5 is his, he can buy a mug from A too. And so when they reached home, they were drunk silly, and were surprised to discover that their entire keg only sold for $5. This is the multiplier effect at work. As long as there's no saving, any amount of money can generate value equal to all the resources available in the system.

Saving, therefore, reduces this potential for money to generate money. Let's say that A B C D and E all saves $100 of their income. Now A pays B $400, B pays C $300, C pays D $200, D pays E $100. E saves it all. So the total amount of value generates is only $1500, a full $1000 less than what would have been generated without saving.

This is why banks run the "make your money work for you" investment schemes. This is why credit card agencies would happily give you free money that you can pay back later. Savings detract from consumption, which detracts from profits from companies, which results in the economy shrinking, which is VERY, VERY bad.

Back to the original point. Because the economy is debt-driven, people are in debt. Debt does not adjust for inflation or deflation. It is nominal. Lenders make money by keeping the interest rate above the inflation rate, but they're sure as hell not going to give you back interest if inflation becomes negative.

So, what does this mean? Deflation is very, very bad for debtors. They now have to pay back much more purchasing power than they had to before. This is why US farmers were so distressed during the deflating Gilded Age, because their crops are subject to supply and demand, which meant that deflation resulted in lowered nominal income (Even if their crop output remained the same), which meant that they would have to bear a much heavier burden of debt.

Ironically, with contracted workers, the situation is reversed. Businesses have to pay them their contracted salary unless they have acted against company conduct. For wage workers, a decreased salary also will result in people quitting (which, in a country with a high saving rate like Japan, is often affordable for a length of time for which they can find new work). However, because companies, like the US farmers before, saw their revenue whittled down by deflation, they cannot in fact hire more.

So, unemployment, which leads to economic shrinkage, which leads to defaulted loans, which results in mass chaos. People in the US now probably are feeling it now.

Because nominal wages are not downward flexible, however, the corollary is that prices are not downwards flexible. There's no reason to assume people would pay less than they would have before, since their nominal wages didn't go down. Thus, despite being in a depression for the past 30 years, Japan still charges more for goods than the rest of the world.

What does this mean?

It means that, due to increased unemployment, the people who can afford to lead lives according to previous standards have dropped significantly.

This, however, is not a fact any business or government official wants to acknowledge to the common people.

Why? If a company erode people in their faith of making ends meet, why would they purchase that company's products and services? If a government official acknowledges that the country is in deep shit and they can't do anything, who would vote for him?

So despite such economic troubles, Japan still remains consumerist, which also results in prices not decreasing.

Now we get to the gender issue. Why do women in Japan seemingly demand ridiculous salaries from their husbands?

Connecting from the above, because they're being lied to.

They're led to believe that their ridiculous image of how life should work is normal for Japan. They think that as the 3rd largest economic power (not counting the EU as one entity), they're entitled to eating out more than once a month and more than one vacation a year. They're also inclined to believe that as tradition dictates, they don't have to work.

(Aside: Equality Advocacy groups never advocate for increased related responsibility to go with increased powers for the group they're advocating. Also, Japan being tradition-bound shouldn't come as a surprise to anyone who knows anything, even superfluously, about that country).

So this means that the men they look for, are in fact men who are capable of scraping together enough for their ridiculous lifestyle, and whatever he might need to subsist.

Some have no qualms, btw, about letting her husband live barely better than a slave.

Wives managing money might come as news to Westerners, but this is anything but new in Asia. The Chinese novel Dream of A Red Mansion, written in the Qing Dynasty, described a large aristocratic family of over 400 people (including servants), being managed by one woman, the wife of the son of the patriarch. In Ancient Asia, the man's day job will almost never give him time to manage finances, which has became a deep-seated tradition.

I'm not saying this is women's fault, btw. It's not their fault that they're being raised in such ridiculous conditions. As the Chinese proverb goes: Those in cinnabar are red, and those in ink are black.

But let's look at it from the Guys' perspective. To get a woman, they need to:

Make $80k a year (I doubt, as a UC Berkeley prospect-graduate, that even I can even make this much right out of school).
Give it all to them.
And get an allowance of $10 a day.

I don't know about you, but I don't think any amount of sex is worth this, especially, as noted here, that sex is not even a guarantee. Any country with feminists in it will never give a man free reign over sex. This isn't news.

So, we come to another economic rule.

When demand of a normal good (women) decreases, demand of an inferior good (autoerotic toys, pron, virtual women) increases.

Economically, an increased demand means increased investment, which is why these things are being developed.

What about women, you say?

Next In the News: Development of a ATM-Sybian Fusion is complete.

Who said science was useless?

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