Japan goes to an election accompanied by a very confused economic debate

These notes will serve as part of a briefing document that I will send off to some interested parties in Japan. Japan is about to go to the poll for a snap national election on February 8. The recently installed Prime Minister, Ms Takaichi is betting that her recent solid showing in the polls will allow her to capture more seats in the Diet and reduce or even eliminate her dependency on the ‘uncomfortable’ coalition partner, the Japan Innovation Party (JIP) aka Ishin. That coalition was formed after Mr Ishiba, the previous PM, also bet on a snap election result, which saw the ruling Liberal Democratic Party (LDP) go backwards (losing 68 seats) and the coalition partner Komeito also lose seats. Together the ruling coalition lost its majority in the National Diet (for the first time since 2009) and Shigeru Ishiba’s popularity began to evaporate. The background to that loss was a major political funding scandal among the Cabinet ministers and the election result signalled that the Japanese people had seemingly had enough of the corruption at the top. Ms Takaichi took over after Mr Ishiba could no longer sustain his position as PM. The old coalition between the LDP and Komeito fell apart because the Buddhist Komeito could no longer stomach the new PMs imperialist ideology nor her unwillingness to deal with he insidious corruption in her party. This forced Ms Takaichi to forge a new coalition – hence the rather unlikely pairing with Ishin, which is a right wing populist party espousing neoliberal economic policies. The government is proposing a major fiscal expansion but the debate during the campaign that is now underway is very confused. The confusion arises because all the main players keep wheeling out mainstream economic arguments that tie them up into nonsensical policy proposals.

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Recent extended discussion with RadioMMT – Part 1

It is a public holiday in Australia today celebrating our national day – the day that the colonial powers of Britain first decided to set us up as a penal colony because they had run out of prison space in the old country due to the massive incarceration rates following the enclosures. The impoverished small scale farmers who relied on the open ‘commons’ to survive were dispossessed by the privatisation of the communal lands. They were then criminalised as a result of their poverty and starvation and shipped off to what is now Australia. A sorry start to white settlement. However, the country was settled at least 30 thousand years prior to white settlement by the first nation peoples. They call today ‘invasion day’ as do the whites who are sympathetic to their oppression (such as me). Today is thus a highly conflicted one – big street marches recognising the invasion, competing with traditional white Australia Day events, and, then, being challenged more recently by the so-called March for Australia movement rallies which are a front for neo-nazis who hate immigration and most nearly everything else. The call to abandon today as our national day and instead shift it to a date that would not cause the first nations people such angst falls on deaf ears. Anyway, today I am not writing any more but am promoting a recent discussion I had with the RadioMMT program on Melbourne’s community radio station 3CR. I will be back on Thursday with some analysis of the upcoming Japanese national election, which is providing lots of opportunities for education.

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Australian labour market – stronger as employment growth outstrips the growth in the working age population

Today (January 22, 2026), the Australian Bureau of Statistics (ABS) released the latest labour force data – Labour Force, Australia – for December 2025 – which showed a relatively strong increase in employment and the rising participation rate – both good signs. Taken together the demand-side of the labour market outstripped the growth in the working age population and, as a result, unemployment fell. The increase in employment was concentrated on full-time employment, which meant that working hours rose and underemployment fell significantly. However, the reality is that it is nonsensical to argue that Australia is close to full employment.

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Curbing the freedom of writers will not advance human rights

Today’s blog post is a little different to my usual posts because I am writing it as a writer rather than as an economist. I write tens of thousands of words every year and have done so for many years. People have asked me whether I enjoy spending my time in that way, given that it would seem to be quite a discipline. It is. But it is also my freedom. My freedom to express an alternative viewpoint. My freedom to publish the results of my research, framed in my own particular way. Many people hate what I write and I get a lot of hate E-mails telling me that. Anytime I mention Palestine, the hate mail floods in. I am told to delete the posts and/or die. Anytime I criticise the US, the hate comes in. I am surprised, frankly, that people have that much time on their hands, and, moreover, think that I will somehow crumple in a heap when accused of being an anti-Semite, when all I have ever done in that space, is to criticise the indecent, genocidal and illegal policies and actions of the Israeli government acting out their Zionist ideology. There is zero anti-Semite intention in that despite the way the current debate has successfully conflated the two. From one perspective, I have known ‘cancel culture’ my entire career. The dominant and destructive Groupthink in my profession has always tried to sideline my point of view. But I sense at this period of history that we are in a time where authoritarian viewpoints are once again becoming dominant in the wider society and as a writer I see the danger in that for individuals and our posterity.

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India’s employment guarantee sabotaged to the point of extinction by the neoliberal Narendra Modi

I have closely followed the progress of India’s – Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) – since its inception on September 7, 2005. The scheme has been a major success in reducing rural poverty and providing income security to poor rural communities in India. It has also reduced the so-called ‘desperation migration’ from the rural areas to the already crowded and dysfunctional urban areas. And, the work produced massive community benefits – infrastructure, amenities, etc. The neoliberals in India have always hated the scheme. PM Narendra Modi has long railed against it. Now, finally, they have repealed the governing legislation and replaced it with a new Act that scraps the employment guarantee and puts a fiscal straitjacket on the remaining job creation opportunities. Neoliberals 1, the Indian poor 0.

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Is there hope for a post neoliberal world?

I grew up in a society where collective will was at the forefront and it is true to say people looked out for each other. The state – at all levels – had various policy structures in place to provide levels of economic protection for the least advantaged members of society. Having grown up in a poor family, those structures were important in allowing me to stay at school and then go onto to university. It also allowed my friends on the housing commission estate (state housing) who had different skills (not academic) to get apprenticeships and build careers that gave them material security in that way. It wasn’t a perfect period – there was racism, misogyny, and xenophobia – but as mass education spread, my generation left a lot of that behind. I was thinking about that when I read the recent article by Robert Reich in the UK Guardian (December 29, 2026) – Americans are waking up. A grand reckoning awaits us – which carried a resonance of some of the things that I have seen emerge in Australia as well as this 4-decade or so neoliberal nightmare reaches some sort of denouement.

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When contraction is called expansion – Japanese government style

Well my holiday is over. Not that I had one! This morning we submitted the manuscript to the publisher for the Second Edition of our Macroeconomics text, which will come out later this year. Finishing a massive project like that is always non-linear – the last few months are hideous – checking everything and filling gaps. Anyway, that was the Xmas break. And as the New Year starts, one always hopes that humanity learns from the mistakes of the previous year. In economics, though, that is the hope of the forlorn. I read this morning’s Japan Times newspaper and lo and behold there are predictions of dire consequences as a result of the current Cabinet decision to shift focus away from pursuing a primary fiscal surplus to massaging the public debt ratio. The mainstream economists are arguing about the relative virtues of each and forecasting gloom. The reality is that neither target is worth attention. Meanwhile, the privatised rail companies are negotiating with communities for the closure of certain rail segments because they are loss making. All that discussion is about costs per passenger km, rather than satisfaction gained from bringing people together. The priorities are all wrong.

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Video – Japan at a Crossroads: Fiscal Policy, China, and the Growth

I have limited time today to write a blog post and last night I was sent a new video that I recently recorded with my research colleague at Kyoto University, Professor Fujii where we talk for some hours on the topic – Japan at a Crossroads: Fiscal Policy, China, and the Growth. It was a conversation we had via Zoom that was recorded on Friday, December 5, 2025. We reflect on recent developments in Japan and its relationship with other major countries (US, China, etc) and consider the policy challenges facing the new Takaichi Cabinet. It is a very long session. The transcript was generated by YouTube AI I believe and then edited and is not perfect. A lot of unnecessary aspects are edited out and the latter part of the transcript is really just an AI summary. But I think the record is acceptable. At times, the discussion changed from English to Japanese, where there was some ambiguity in terminology etc, and those segments have been cut from the transcript. I put in timestamps during the transcript to help you zoom into topics of interest. I hope you find something useful in our long discussion.

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