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Little things keep reminding us of the astonishing power of technological change. Brian Dean checked his family's cell phone use during the show tonight and found that his teenage daughter had sent more than 1500 text messages (SMS) in a month, and spent just 5 minutes talking on the phone. Just ten or fifteen years ago, the thought of a teenager spending just five minutes on the phone in a night would've been preposterous. With the rise of text messaging, some people have complained that it's making users illiterate, but that's a faulty assumption - - text messaging is simply a different form of literacy, not better nor worse than others. Today's text message is composed much like a telegram was a hundred years ago. The syntax varies a little bit, but the essence is very much the same.
Japan just had a landmark election in which the minority party has just taken power after about half a century of rule by one opponent. The differences to us are probably as difficult to make out as the Democrats and Republicans look to the rest of the world (that is, they probably have a lot more in common with each other than with any of the parties we'd be familiar with). But the change marks a huge new era in politics in Japan, and that's going to have some very serious effects on us. Are they going to deal with the country's real problems, like its huge debt, aging population, and over-protection of uncompetitive industries by a government that wants to look like it's "protecting jobs"? (Do some of those problems sound just a little bit familiar?)
America and Japan, far more than we probably realize, are like conjoined twins. Our economies are enormously interdependent, as are our national security interests. And Japan, meanwhile, has encountered several of our biggest pending problems before we have. 21.5% of the Japanese population has reached retirement age. We're at 13% now, but should reach 19% in 20 years. That means we have to learn things from them about adjusting to an older average population and doing things like automating our workforce.
Our national savings rate (which includes everything we earn but don't spend, including our retirement funds and life insurance plans) has only recently moved back into the 4% to 6% range, after a very long time hovering right around zero. Japan's household savings rate is four times larger, but their government is in twice as much debt, compared to the size of the country's economy. Now, our national debt is still huge: $11,725,477,836,090.85 as of Friday, which divided among the 307 million of us here now, is $38,154 per person. We absolutely can't keep that up forever. But the Japanese situation is twice as bad, and it's gotten that way in large part because of the same practices that have swelled our debt -- including massive government spending intended to prop up the economy in a time of recession. It hasn't worked for Japan, and we shouldn't be eager to repeat their mistakes.
Some bondholders in the Tribune Company are accusing the guy who cobbled together the company's buyout scheme of what they call "fraudulent conveyance" -- promising that the company could pay them back when it had no intention of so doing. Oddly, that sounds a lot like what our politicians have been doing in Washington on our behalf -- borrowing recklessly with no intention of being accountable for the consequences. So perhaps we ought to observe our own feelings about those Tribune bondholders: Were they tricked, were they ignorant of the risks, or were they complicit in a scheme where they should have known better? Do we hold ourselves as voters (and "shareholders" in our own country) to the same standard?
Stock-charting wizards are back with their hocus-pocus, which is a real disappointment for those of us who think that capitalism and stock ownership are about owning pieces of real businesses in whose future we have a vested interest -- not pieces of paper to be traded like baseball cards.
But there is good news out there, too: Western investment may make Ukraine's fertile land agriculturally productive again, after a long period of neglect. It's good to see that the profit motive still causes useful and good things to happen.
Keywords in this show: aging • agriculture • automation • capitalism • debt • defense policy • economics • elections • Federal debt • food production • fraud • investing • Japan • jobs • profit motive • retirement • savings • security • stock ownership • technological change • telegrams • telephones • text messaging • Tribune Co. • Ukraine