Japan's priorities shifting?

Yesterday (25-08-2010), Japan's Foreign Minister Okada issued a new policy to shift 100 diplomats from the developed countries to new emerging countries. The re-focus away from traditional western powers towards the likes of India, South Africa, Brazil and Turkey will be manifested institutionally in the creation of a "Emerging Countries Bureau" at the Ministry of Foreign Affairs.* In particular, the Japan's embassy in the EU (economic branch) is to have its numbers reduced to make way for increases elsewhere.

Citing the development of the G20 as a forum in which emerging powers are holding great sway Okada said, "as a power shift in the world economy occurs, so too does the Ministry staff. Moving quickly is very important."**

There is also movement to bring in the influential (but not ministry-level) institutions of JETRO, JBIC, and JICA under Foreign Affair's control by bundling them in with the other embassy functions.

See article here.

* Not the first Bureau that Okada has set up, also the 'FTA Promotion Bureau' has been significant.

** "世界経済のパワーシフトに応じて、外交の人員も変えていく。迅速に行っていくことが非常に大事"

Status and Saving

The house-hold saving rate in the US is soaring, up from about 1% prior to the crisis to nearly 6.4% this quarter. Without dwelling too much on whether this is sufficient, the mechanics of why the rate is changing is worth thinking about.

Indeed, a crisis is usually associated with growing debt. No doubt the US government is doing so on behalf of households, but it does not follow necessarily that the household sector saving rate would automatically increase. Indeed, in a globalized world it is possible that US government, firms and households might all opt to save less.

I am beginning to think that house-hold rate increase in the US is only in part a rational response to economic conditions (i.e. increased uncertainty), rather a more sociological phenomena. To whit, people are starting to save as an expression of their status, identity and morality.

Whereas before, as the US became a society of leisure and consumption became a conspicuous marker of status, the new marker of high status is reserved to 'saving.' Saving can be thought of as conspicuous in terms of the goods and services foregone. Saving is now a marker of moral fiber (aka high status) whereas before it was scoffed at. Indeed, as one bank ad claims, "saving is the new spending."

Video

(Quite why a bank is promoting this, and people following another avenue for thought).

Moreover, the new savers are not in general the lower class I imagine - but rather aspirant middle class. These new savers in the US are also likely to be well educated and highly skilled, circumstantial evidence for which might be found below.

http://www.nytimes.com/2010/08/08/business/08consume.html?src=me&ref=general

My thoughts concluded, saving as a social activity? The concept certainly challenges the rational model and suggests that there is an extra social variable in determining when the US pulls itself out of its current economic problems.

I dug this chart out of data360 looking for something else, it shows the cost of torts relative to the US economy.

At nearly 2%, the US has to be the world's most litigious society.

Australia seems be heading the same way, discussion of tort costs outstripping GDP growth (no evidence on the site). Peter Gordon's blog further quotes from the Fin Review a comparison with other countries (2004);

Denmark 0.4
UK 0.6
France 0.8
Canada 0.8
Japan 0.8
Switzerland 0.9
Spain 1.0
Australia 1.1
Belgium 1.1
Germany 1.3
Italy 1.7
U.S. 1.9

Interesting, eh?