Japan Press Weekly

Tweet

2012 November 21 - 27 [ECONOMY]

Shii shows a way out of deflation spiral

Japanese Communist Party Chair Shii Kazuo on November 24 said that the key to a way out of the present deflationary recession is to boost working people’s incomes to increase domestic spending.

During a street speech in Saitama City, Shii proposed as an exit from deflation that the consumption tax increase be cancelled and that 260 trillion yen in corporate internal reserves be used for job creation and support to small- and mid-sized enterprises.

Shii explained that Japan has been mired in a vicious cycle between a decline in workers’ wages and dampened domestic demand, and that the world’s major countries are focusing on how to stimulate domestic demand after the Lehman collapse in 2008.

Shii pointed out, “The basis of economic development is an expansion of domestic demand, and household consumption of working people is the largest component to domestic demand.

“The government has taken measures not to strengthen but to destroy the household economy,” Shii said and blamed misgovernment for the ongoing deflationary recession.

Regarding unlimited monetary easing as called for by the Liberal Democratic Party, Shii stated that it will be totally ineffective because at a time when the real economy is not in good shape, no matter how much the Bank of Japan supplies banks with more money, the money will not be used for capital investment. Shii indicated that the money will rather be used for speculation which will cause a rise in oil and grain prices.

Shii called on passersby to give a verdict of “No!” to the tax hike coalition made up of the Democratic Party, LDP, and Komei Party in the coming general election by saying, “Their plan of taking 13.5 trillion yen away from people’s income at a time like this will bankrupt Japan’s economy.”

Shii presented more JCP suggestions to overcome deflation as follows: an end to the rampant practice of dismissals by large corporations and to the downsizing of 130,000 jobs currently taking place in the electronics industry; conversion of non-regular workers into regular workers; a substantial increase in the minimum wage; the legalization of restrictions on dismissals; and establishment of fair and equal deals between large corporations and small- and mid-sized enterprises.