Posted on 07/21/2013 8:57:56 AM PDT by Kaslin
If you are looking for idiotic policies in action, the theories of Japanese Prime Minister Shinzo Abe should be right in your spotlight.
Abe now tells Japanese firms "Stop Sitting on Cash"
Okuma, a Japanese machine-tool maker, has seen its stock price rise around 30% this year. Its customers have outdated machinery that needs replacing. But, for now, the company isn't investing. Instead, it is sitting on a pile of cash worth about $280 million—50% higher than its pile a decade ago, equivalent to one-fifth its annual sales, and more than twice the level required for the firm to be deemed loan-worthy by a bank.
Why? Senior director Chikashi Horie says the answer is simple. Okuma's clients "are not investing, not even to raise efficiency, so we are not investing either," he says.
Okuma's thinking embodies one of the key challenges for Prime Minister Shinzo Abe's ambitious growth plan: persuading Japan's famously stingy companies to stop stashing their earnings in the bank, and putting the money to more productive use, helping complete—rather than short-circuit—the virtuous economic cycle.
Blatantly Obvious Idiocy
What is with these central planning fools anyway?
Not only do they think they know better than the free markets, they want companies to produce what their customers clearly do not want.
The irony in this situation is that Abe is hell bent on producing inflation in Japan.
Here's a simple question: What happens to prices when more products are produced in the face of falling or static demand?
Abe is a fool in the first place for his inflation targets, but he is even more of a fool to think producing merchandise no one wants is the way to achieve that goal.
Keynsean double-think at it’s best!!
Bloody Communist is what it is.
I use a major Japanese product made by Fuji.100% are made in China.Japs are reluctant to do new products even when they are in demand.I know from personal experience.
Funny how there is always a bureaucratic bean counter working for Government (that never produced a dime), that just KNOWS how to better spend the productive fruits of a private citizen.
Why are those that just KNOW what is better so sardonic and abusive?
Odd, their reputation is anything but that, at least in the 70s-90s. But Sony is a good example.
FDR grew so frustrated by business's lack of investment that he proposed a tax to siphon off their [supposedly] idle cash. I've been waiting for Zero to try the same thing.
Not all "outdated" machinery needs to be replaced.
If your widget stamper is still stamping out widgets then who cares if it is 30 years old?
Businesses who have equipment which does genuinely need to be replaced, and if they have the cash, then they will replace it.
The fact that they are not replacing equipment is a pretty good indicator that it does not need to be replaced.
I buy parts for fishing rods. A number of us have tried to get them to buy parts that obviously are needed since their quality is so superior to their competition.Can’t get anywhere, “three or four years” later.
“I’ve been waiting for Zero to try the same thing.”
Obamacare is one exercise in trying to siphon cash from business but it has backfired. He didn’t anticipate business would convert employees to part time to avoid paying for health care benefits.
Carbon taxes are the other attempt to siphon cash from business. So far the Republican House has stood in his way. Get a Democrat House elected and we’ll see heavy carbon taxes at the producer and consumer level.
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