Japan decline: bubble economy destroyed Japan soul

        Frank (Hongde) Li,  June 6, 2026

Recently; there were reports that parts fell off from the Fighter Jet that repaired by Japanese people; the behavior of the low quality of people made me can't help but recall Japan's decades-long economic decline. 

Now it is time that really need to dig the reason as valuable lesons. My Dec. 4, 2014 article Why did Keynesian fail in saving Japan's economy  provided answer: The bubble economy destroyed Japan soul.

Japan used all means of Keynesian but useless 

June 4, 2012, in the article Japan's Bubble Economy of the 1980s, the economic analyst and Forbes columnist Jesse Colombo who wrote  with that: "By 2004, residential real estate in Tokyo was only worth of 10%  of its late 1980s peak, while the most expensive land in Tokyo’s Ginza business  district had fallen back to just 1% of its 1989 level in the same year (Barsky,  2009)."

"Similarly, the Nikkei stock index is now  trading around 10,000, just little over a quarter of its all-time  high."

"It has been over two decades since the  popping of Japan’s economic bubble and the country is still actively battling  with deflationary forces that are so powerful that near-zero interest rates,  repeated bouts of quantitative easing (some call it “money printing”) and  constant Yen-weakening currency interventions have barely made a  dent."  

Jan 6, 2009, on Japan  Times, the report Lessons from when the bubble  burst said with that: after the crash in late 1990,  economic growth stalled various government-sponsored fiscal and economic  stimulus measures, including trillions of yen in failed public works projects,  did nothing to revive the economy. This was started roughly in 1991, when the  effects of the stock market crash became clear.

Mar 09, 2014, Japan's deficit hits record as economic growth  slows.

Mar 31, 2014, Japan factory output contracts, dims  growth outlook as tax hike looms.

Apr. 28, 2014, IMF says Shinzo Abe’s economic  policy is losing momentum and warns growth could  stall unless structural changes to the economy are made.

Jun. 19, 2014, Abenomics Fails to Shake Japanese  Firms' Addiction to Cash

Jul. 24, 2014, Japan's record trade deficit raises  fresh doubts about Abenomics

Aug. 27, 2014,  Abenomics' arrows fail to hit their  mark 

Nov. 28, 2014, As Japanese Bankruptcies Soar, Goldman Warns  "Further Yen Depreciation Could Be A Net Burden"

Sept. 15, 2014, Keynes was a failure in Japan - No need to  embrace him in Europe

Nov. 25, 2914, Soaring prices caused by the depreciation of  the Japanese yen worry off the New Year - Chinese International - China  Daily

Above reprots reveal the  terrible consequences of Japan's bubble economy, Prime Minister Shinzo Abe  economics seems not work but with a side effect to press Japanese economy  continuously toward deterioration. 

Digging the nature of Japan's economic downturn

Why that various  government-sponsored fiscal and economic stimulus measures, including trillions  of yen in failed public works projects, did nothing to revive the  economy?

Aug. 24, 2014, in  the article that Over-heated real estate  market is ruining Canadian economy from Japan mirroring  Canada, through translation of some articles that wrote by  Japanese scholars, and the people from China who are studying and working in  Japan, by their personal experiences and investigation to reveal  the reality of  the period of Japan's bubble economy 1980s, and after the economic bubble burst,  I have discussed the cause of Japan's economy decline. I excerpt some as  follow:

Bubble Economy degenerated the quality of Japanese

Why the all of the fiscal  and economic stimulus measures has been used, but have gained nothing to revive  the economy?

When talking about the main cause of  Japan’s declining from the economic powerhouse? Most people would blame the  Plaza Accord that forced  appreciation of the Yen to cause Japanese products losing competitiveness and  the Bubble Economy.

The reason, as my view, all of those  stimulus measures are from the macro elements of the economy, with ignoring the  most basic micro elements - the quality of the people, the work-ethic of the  labor, the efficiency of the production and the capacity of the  innovation.

The Bubble Economy has  rewritten the code of the DNA of the quality of Japanese people, from  enthusiastic in hard working into enamoring in greedy speculating, thus, further  affected the social moral and national’s spiritual, thereby cause the decay of  whole society of Japan.  

The easy gaining excessive  profit from speculative activities have fueled Japanese speculative mentality  with unearned ideological. It entices people keen to make living by speculating  instead of hard working and less concerning on the interest of own company and  most of Japanese people have lost the entrepreneurial spirit, hard-working  spirit, and the rational sense of social responsibility and enterprises have  deteriorated as lack of enterprising spirit and innovation dynamicI, such  negative impact is more terrible, even fatal. 

In essence, the national is the decisive  factor for a nation’s economic development; a nation's economic decline is the  decline of the quality of its national.

Whether it is a business or a country, if  its member is full of concerning for the self interest, without or lack of  concerning for the public interest, it will doom to be extinction.

So, I firmly believed that  the impact of the Bubble Economy on the  economy is just a curable social flu, but, the impact on the national’s  spiritual is incurable social cancer.

The fact of the Japanese  companies loses competitiveness and falling into declining are the vivid proof.  The shortsightedness and lack of entrepreneurial spirit of the management team,  the lack of work enthusiasm of the employees is the main reason, and also it  caused Japan's economy can not recover as expected.  

The incredible lazy of Japan’s employees

An engineer of China who works for a  German company in taking charge of the branches in South Korea, China and Japan,  after working a while in Japan, he was shocked by the lazy of Japanese  employees, and completely lost the good impression for them.

Then he wrote an article post on the website and to be widely reproduced on the internet. I excerpt and translate  some as follow. For facilitating narrative, here, I name the writer as  Jim.

The Japanese employees are  working overtime almost every day, but, only for getting overtime pay rather  than for the need of production.

Jim arranged a simple task  to a Japanese technician who dragged two days to finish. The same work, if, in  China, a new graduated young man can finish just in half an hour.

In a break time, Jim complains the matter  with German colleagues, one German said, this guy is a good one, since he did  not drag for a month as that of others. Another German even suspected that  Japanese employee was dozing when working.

Japanese employee did not  like to take responsibility, when encountering some work trouble, usually; they  will look for helping with endless complaining.

German company plans to  open new production lines in Japan, so, sent Japanese staff to Germany for  training. The same project in China, within a year, production lines was already  operating at full capacity in three shifts for 24 hours a day. But in Japan, it  took two years still in the state of machine commissioning.

The workers of China have  mastered all the skills within the three months training in Germany. The German  teacher said: you have learnt every thing on the training plan, you may go back  to China now, and we have nothing for teaching any more.

Japanese spent six months  in Germany, but, after went back to Japan; they could not work properly, and  complaining that Germans did not teach them well. Germans angered with that: in  Germany, we were teaching you hands by hands, and you also said that you have  mastered every thing already. The Japanese fought back immediately: Sorry, we  forgot, our memory is too bad to remember that.

Germans were angered and collectively  applied for vacation to leave Japan as a protest. The German company had to  allow them to China by the name of studying for appeasing their  anger.

Jim went back China with  the German colleagues together. When they held a cup of coffee to watch Workshop  through the window glass of the upstairs office, the production was in an  orderly busy, workers were loading and unloading on the production line, the  transportation-cars were running to and fro between the production sites and the  storages.

All of Germans was shocked  and some even exclaimed with that: my God, here is simply a heaven. One of them  said with that, they (Japanese) have been sleeping for 20 years, let them  sleeping for another 20 years, then, Japan will decline as a developing country,  and while, China will destine to be a developed country.

Now, in many Japanese  companies, employees are mostly 40-50 years old, rarely under 30. Many young  Japanese are staying in unemployed. Besides the cause of the economic recession,  the other cause is Japan's "special" corporate culture, which emphasizing  work-qualifications and work-records, so that young Japanese have lesser work  chance. Some girls have to do "compensated dating" for making money. Some boys  also have to make money by doing “duck” - male prostitute.

The Japanese disease ruins Sharp & Sony

Mr. Kondo Daisuke, a scholar of Japan, who wrote many articles to criticize the  Management Drawbacks in Japan's enterprises. He coined the term of "Japanese  disease".

The nature of the "Japanese  disease" is the manner of "evading responsibility" that evolved rigid  organizational structure and Inward Oriented Conservative of the Japanese  Companies. The direct result of the "Illness" is that illed-companies will  increasingly debilitate and ultimately collapse.

Jul. 11, 2014, Japan's Sharp to post $141 million  loss on Europe solar business.

Sep. 17, 2014,  Sony predicts increased losses due to struggling mobile  business.

I excerpt some section from  my article Over-heated real estate is ruining Canadian economy  from Japan mirroring Canada – 2 as follow, to show  the reason that Sharp and Sony declines. I hope that the lessons may play a role  as a mirror to mirror the enterprises of Canada, to ask that Why? How?  

The Japanese disease ruined Sharp Corporation

Sep. 11, 2012, Mr. Daisuke  Kondo who published a Mandarin article  <Angry Gou Tai-ming> on Economic Observer Online of  China, in which he criticized the “Japanese Disease” that harms Japanese  companies. I excerpt and translate some as follow.

A hundred years glorious Sharp Corporation has  suffered "Japanese disease." It is not only the Sharp, but the Sony, Panasonic,  NEC, Sanyo, Olympus, and great many Japanese companies are the serious patients  in "Japanese disease".   

For example, a Japanese company  planed to develop a new product. The product development department produced a  "plan book", with depicting the grand blueprint of best market  potential.

However, when the "plan book" spreading in  other departments of the company, this new product would face with dozens or  even hundreds of blames, in the end, it did not get any support. The reason is  simple: For the heads of departments, the most important thing is not how to  bring new products to market, to improve the turnover, but, how to  avoid the risk-taking of affecting own career in case of the sales of the new  products is not good as expected.

Because of the whole  company have infected the disease of "evading responsibility", a lot of great  new product plans have been put into the limbo. Meanwhile, in the process of  this "bad model" iterative, the staff for new products’ R & D has gradually  lost enthusiasm and morale, thus, resulting in the number of the plan for new  products’ dropped. Nevertheless, the whole company still does not repent for  that, keeping on its own way.

Once cooperation with a  Japanese business that suffers "Japanese disease", I believe, regardless, which  leaders of China's company will be angry as same as that of Gou  Tai-Ming.

Assuming, a Chinese company  raised an advantageous cooperation projects for both sides to a Japanese  company, the local subsidiary of the Japanese company will immediately report to  the International Department of the Japanese parent company. At this time, the  International Department will require the local subsidiary to present a "plan  book" as long as hundreds of pages. Just for completing this "plan book" will be  going to spend a few months of time.

Then, after the negotiations with various  departments in the head office, which cost more than six months usually,  luckily, the "plan book" may finally appear on the meeting of the Board of  directors once a month in the head office. However, most probably it will suffer  the fate of being sentenced to death, because of all the directors are not  concerns the plan book from its feasible or not, but, from the "how to use the  plan, for their personal interest, rather than the interest of the  company.

If, some directors believe  that the implementation of the plan was no benefit for them selves, or own  competitors in the company can get more benefits, they would oppose without  hesitation and then put forward some reason to postpone the decision and  ultimately to make the plan was dismissed or forced to ‘another day another  meeting’, without the rational sense of caring about the interest of gaining or  losing for the company."

The Japanese disease ruined Sony Corporation 

Feb. 6, 2014, Japan’s scholar Daisuke Kondo published  another Mandarin article The sundown of Sony: Doraemon  or Crayon on a website of  China, in which he criticized the ridiculous management that has been ruining  Sony Corporation.

"I remember that of my college days, only  the best students in science majors can enter Sony. When going out of Japan,  regardless of which country, we were able to see "SONY" huge billboard and young  people using "walkman". At that time, Sony is our Japanese pride, however,  now?”

"For this problem, one of  my college classmates, now a Sony employee replied with that: "In the company,  there one by one meetings are from morning to night, after the meetings,  everyone must deal with at least 100 internal mails from the company. So, Sony  is not an electronics manufacturer, but a downright bureaucracy! Only those  people, who are the 'Mr. Nice Guy' without any faults, could be promoted. Such a  Sony could not develop new products that can shine the world any more?”  

"Our company has a specialized team in  charge of new product development against the rival of Apple of the United  States. There was I admired executive who is in charge of the team. One day, his  immediate leader of a director of Board even ordered him to stop the investment  of 'no value' (ie, to give up the R & D) as soon as possible to vanquish to  Apple. The executive retorted: Do you have self-esteem as a member of Sony? The  Director even contemptuously asked: ‘your self-esteem can help company making  money, right? Heard of the answer of a director of Board, the executive  immediately decided to resign."

"In recent years, the elite  who left Sony were not only the executive alone. In 2006, the former managing  director who was responsible for "AIBO" R & D of futuristic robots was  demobilized; the reason was that there members of board were questioning that  ‘How much economic benefit that the robot R & D can bring to Sony? In 2007,  former chairman and CEO of the Sony Computer Entertainment Inc., Mr. Ken Kutarag  who known as the "Father of the PS (PlayStation)" was also retired after the  expiry of his Job tenure.”

"In the booming period of  before, Sony company once gathered a large number of ‘Doraemon’ talents - they can come up with  all kinds of whimsy from their "Mind Treasure Bag", and then to materialize them  into a variety of future products. But now, unfortunately, the Sony is filled  with the people who work with lips only as that of the ‘Crayon’ ”

High-quality of Japanese before Bubble Economy

Now, I think of a story in Mandarin long  time ago, the famous American marketing authority Philip Kotler who once said that: For Japan, what is the panacea to heal its  wounds of the war, to stand up on the war-ruins, and to become the economic  powerhouse? For achieving economic advantage, Japanese waged the war, but,  failed. From the pain, they learnt that, the use of economic means can achieve  more brilliant achievements than that of the use of the military. This means is  the marketing.

The economic miracle shows the high-quality  of Japanese people. Following is a story about it.

In morning August 19, 2013, I  had a chat with the father of my new neighbor in Waterloo, Ontario. He said that  his brother once was a top executive of a Canadian Steel Manufacturer and had  twice visited Japan for learning the experience of the advanced corporate  management in 40 years ago. His brother appreciates the good quality of Japanese  very much with a comparison between Japanese and Canadian in case of production  accident.

When facing production equipment fails, any  Japanese operator would immediately stop the production, and then, all of the  people gathered together to make diagnosis and treatment, after troubleshooting,  everyone immediately went back own position to resume the production. But, the  Canadian was just blindly standing, there no one was attempting for  troubleshooting.

Following are some memories about the  industrious noble quality of Japanese people. I could not recall the source of  them already, but the facts are true.

When 1973 oil crisis, the plant of the  Sony Corporation was  shutdown and the workers were staying home waiting for notification of work.  However, the workers went back to plant to do some thing available voluntarily  with the hope that company could survive.

Mr. Kazuo Inamori, the founder  of Kyocera Corporation of  Japan. In the newly established period of the company, a customer ordered  special shape of water pipes, because there was no prior experience in the  production of such pipes. In the process of heating and forming to required  shape, the water pipes were burst. Then, Kazuo Inamori was holding  the pipe when sleeping at night and slowly turning the pipe, so that pipes was  heated evenly, and made it into required shape finally.

Now, we have convinced that it was that  industrious noble nature of Japanese people created Japan's postwar economic  miracle.

People may ignore an important fact that  the birth of the Plaza Accord is also a proof that made ??in Japan was once invincible and swept  global market, and also is the proof that the high quality of the enterprises  and the employees of Japan.

Supposing that the enterprises and the  employees of Japan still remained the spirit of entrepreneurial and  responsibility, and still in hard working, today's economy of Japan will still  be over that of Germany, and those made ??in Japan will be still invincible and  sweeping global market.

This is one of the main reasons that  Japan’s economy has been long-term downturn. And it is why that the Three Magic Arrows of S hinzo  Abe did not achieve the desired results.

From above lessons, I firmly believed that,  no doubt, such Japanese diseases of the employee lazy, the "evading  responsibility", and more, is an objective results of the Japanese subjective  selfish ideological, which was developed from the Holy Baptism by Japan’s Bubble Economy 1980s.

The aftermath of the bubble economy is  still hurting all aspects of Japanese society, from the social ideological to  the personal spiritual, from the macro national economy to the micro family  life, from the world class companies to the ordinary employees, and  more.

The sad facts of Japan made me firmly  believed: it is that the quality of employees decides the fate of the  enterprise. It is that the quality of the nationals decides the fate of the  nation. And it is that social moral, social ideological impacts the quality of  the national in a great extent.

Japan, one misstep in opening real estate  market, can not get rid of the nightmare of the bubble economy.