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December 01, 2005

01:30:38 pm Permalink Tuesday, November 29, 2005 - Cape Town, South Africa - Sunny to mid-day, cloudy in the afternoon, High 70s. Includes comment on Argentina, Japan.   English (US)

Took a walking tour of downtown Cape Town that was quite interesting. Cape Town has good colonial architecture and also Art Deco architecture from the 1930s and 1940s. Before I went to bed, I finally got all of the pictures on the web site up to date, adding over 100 pictures today. The web site is now back to normal after five weeks of being behind due to death of my old PC.

We leave South Africa tomorrow morning and I'm not sure what to conclude about it. We had a great time here, better than anticipated. I arrived expecting to be bearish on the country's future. Now I see reasons to be bullish, although I recognize that the short amount of time we spent here was entirely in one of the nicest parts of the country, so my perspective could be skewed. The reasons for my bearishness before arrival were that: 1) from afar, what little I had read on the country, indicated to me that government policy was from the two-wrongs-make-a-right school (I'll explain that) and 2) African countries have a poor record post-independence. Although South Africa's independence dates from 1910, you could consider 1994--the end of apartheid and the beginning of non-white rule--as a second independence. I wish the second fact were not the case, but you only have to look to the northern border with Zimbabwe to see a country that has been an absolute disaster since its independence in 1980. It used to be a significant food exporter, now--due to seizing of white farmland--Zimbabweans are starving. South Africa is no Zimbabwe, but with its elaborate quotas since 1994 as to what percentage of jobs and ownership each business must provide to blacks, I wonder if it has abolished one race-biased system for another. This is not to suggest that the present system has the mean-spiritedness of apartheid. It is well intentioned. But history is full of examples of good intentioned government policy with unintended consequences. I wonder about the consequences of South Africa's present policies when I hear of a 28-person business artificially divided into seven different companies--each with four employees--to avoid the quotas and rules that kick in once you have five employees.

So before my visit to South Africa, I thought this might be a chance to see the country before it deteriorates economically. Now I am not sure it will deteriorate at all. Its future could be bright. I hope it will be. But I am still not sure. Talk to a few people with knowledge of the country and you will get widely different views of its future. Opinions range from former citizens who have left the country permanently, disgusted with the new rules, vowing never to return, expecting it to sink slowly into the abyss that consumes much of Africa. Others I know who are familiar with the country, but not resident there are sadly pessimistic, against their desire to see it do well. On the opposite end of the spectrum though, we met people widely enthusiastic about South Africa's prospects. Many people are in the middle--hoping for the best, fearful of the worst, with at least a vague exit strategy in the back of their mind should their fears play out.

In assessing countries, I think it helps to have a long-term view and to consider the position contrarian to the common view. From afar, this calls for a negative view on South Africa as 1) the long-term view is that over the past several decades much of Africa has moved backwards and thus South Africa might slowly, imperceptibly, do the same even if things look good on the surface; and 2) the jubilation over the end of apartheid may be misplaced. If those with the technical abilities to run the country are no longer in power or even no longer in the country (e.g. as Zimbabwe has learned, expropriating farms and giving them to unskilled people who do not know how to farm increases hunger, not equality), the country could fall apart. However, this negative view from afar is common enough, especially in conservative circles, that it may have become the conventional wisdom. Thus, maybe the contrarian view ought to be that South Africa will actually prosper.

Visiting--again admittedly we were there only four days and only in nice parts--you can construct the case for optimism. Positive factors include cheap prices, good infrastructure, and great weather, attracting people for vacations or to live there. Also, labor is inexpensive, plentiful, and English-speaking, making the country a possible location for outsourcing (I do not understand why this has not occurred with greater frequency). The consistent friendliness of blacks to white outsiders was noticeable and commendable, and in stark contrast to the indifference displayed often throughout Caribbean countries. At first impression, everyone in this multi-racial, multi-ethnic society seems to get along remarkably well--far better than one would expect given the history.

Negative factors are high crime, concern that current infrastructure investment is inadequate (but relative to India the infrastructure is light years ahead), and fear that government policy may not protect property rights or may create onerous bureaucratic rules.

Cape Town is doing well. There is obvious investment in retail, restaurants, and housing. Tourists are plentiful. Real estate prices, according to what I read, have risen rapidly in recent years. But it still feels like a small city, known and cosmopolitan, but still undiscovered by most of the outside world. The local newspaper is running a series on traffic congestion, but the streets seem pretty empty to me. There are condos along the oceanfront, but compared to other world cities, the coast is less developed and the prices cheaper. What may seem like out-of-hand growth to locals appears to me to just as likely be the early stages of a prolonged boom. If the government does not screw it up.

Anecdotally, a person I was talking with in Botswana told me that many people who left the country after 1994 have returned because they found they could not have the same standard of living and quality of life in the UK or Australia. I was skeptical of this, but after visiting I understand it. A middle class person in South Africa could have big house on a big lot in a good location with several domestic helpers. In the UK, this person might be in a cramped apartment with a long commute and of course no domestic help and poor weather. Australia can match South Africa's weather and does have lower prices than the UK, but prices are still higher than South Africa and with low unemployment, domestic help is not common.

My conclusion is that I am less certain of which future South Africa will have--optimistic or pessimistic--than before I arrived. That is unusual. With most countries on this trip, I have a strong view of the country, good or bad, by the time I leave. Sometimes the view is the same as before I arrive, sometimes it is different, but I have a view. With South Africa, I'm not sure of my view. I am leaning toward optimism. Offhand, the other country that comes to mind where I was less certain about its future at the end of my visit than at the beginning is Argentina. Arriving in Argentina, I was down on the country because of its recent 2001/2002 debt default, the shameful way it has handled that default, and its long history of always screwing up just when things are going its way. Leaving, I thought Argentina might be--and I say might, without deep-seated conviction--continue to be a good investment for a few years (it certainly was in 2004 and so far in 2005 as it bounced off the bottom). But I still suspect the country will screw things up at some point down the road, as they did for at least the last century. Thinking more, maybe Japan is another example. My long-term bearishness on Japan remains because of their demographic crisis and their opposition to immigration, but I think they could be in an upswing in the short- to medium term that will put off their day of reckoning for a while. These short-term views on Argentina and Japan aren't put forth as unique insight; I largely am just pointing the recent positive results in their financial markets. Where I differ from the markets might be that I think those two countries are just having a positive interlude without the negative long-term picture having changed.

Finally, with most countries we visit, I don't see myself returning right away, as--even if I liked the country--our visit satiates my interest for the time being. With South Africa, our visit stimulated my interest and I would like to spend more time there. If only it was not so far away!

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November 27, 2005

12:14:10 am Permalink French Diary VI   English (US)

Tuesday, November 15, 2005 - Paris, France - 50, rainy.

Orsay Museum (art 1848-1914; begins where Louvre ends); World War II section of Invalids; Catacombs. Deanna continues to be sick with a sore throat and now no energy. She went back to hotel after Orsay Museum, but then ventured out later to Invalides by herself.

The Paris subway is among the best in the world. You are never much more than 500 meters from a station and the trains are frequent, the maps are plentiful, and the system is well maintained. It is similar to London in layout, but less prone to breakdown. I don't remember if it is physically uncomfortable in summer; London definitely can be, but Paris's warmer temperatures may mean they have addressed the cooling problem out of necessity. Probably Paris and Tokyo have the best systems overall, although each has a deficiency of escalators/elevators that are present in more newly built systems. Their absence is an inconvenience if you have luggage. Singapore is the sleekest system in the world, in my opinion, although it is not yet as comprehensive. Also, its stations verge on being too big, requiring you to walk long distances to get from the train to the street. Seoul's subway is excellent also, nearly as comprehensive as Paris and Tokyo, but occasionally suffering from the huge station syndrome like Singapore.

Saturday's International Herald Tribune had a great op-ed piece by Roger Cohen on the speech that French President Jacques Chirac has not given, but should, in response to the French riots. Before I discuss what Cohen said, I do have to say that Chirac's feeble response has been so invisible and lacking as to make George Bush's initial handling of Hurricane Katrina look like a model of crisis management. Also illuminating to me is that while in general the IHT has criticized Chirac, it has taken a rather mild tone, before dashing back to its comfort zone of haranguing Bush on everything he does, devoting far more column space to far less serious matters than the French riots. This unbalanced contrast, following the horribly biased Katrina coverage in Europe a few months ago, again shows me that Bush--a man who admittedly does provide much to criticize--is unlikely to get a fair evaluation by the European/US east coast media establishment for the remainder of his term. The sore loser phenomenon of 2000 has a long half-life, especially once the Iraq war re-stoked these passions.

Anyway, regarding France, Cohen providing a soaring speech that pinned the trouble assimilating immigrants to failed economic practice and a welfare state that "inhibits us, saps our creative energy, and extends a culture of dependency into suburbs of despair and vandalism." The answer Cohen says is not more government programs, but a break with past practices such as the 35-hour week and lifelong unemployment benefits that oddly have resulted in more than 60% of French citizens opposed to capitalism.

One thing I will have to commend France on is that they reject affirmative action out of hand, and have continued to do so after the riots, despite some calls to adopt this (most surprisingly by Nicolas Sarkozy, the leading conservative candidate for president in 2007). They also collect no census information on ethnic origin or religious practice, not wanting to put people in groups. Everyone is a French citizen of equal standing, with no distinctions made. Unfortunately, as the riots have revealed, in practice there has been discrimination and immigrant assimilation has not worked as well as in other countries, including the US, which falls all over itself to create ethnic and minority distinctions. I think the US success in immigrant assimilation is due to its economic model that gives hard-working people the opportunity for advancement, rather than its census taking procedures or quota systems, and I would hope if France were to adopt any of our practices it would look to the former and not the later. France's colonial past is full of historical mistakes, but this does not approach the magnitude of US slavery. Thus, I think any justification for affirmative action for France falls short. If they were to adopt any form of positive discrimination, I would hope they would base decisions on economic factors and not race or ethnicity. This might be a better method for the US to switch to as well.

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September 18, 2005

05:17:36 am Permalink News Roundup   English (US)

Tuesday, September 13, 2005 - Galway, Ireland

Mainly a day of to do's. I made forward travel bookings while Deanna did laundry. An experience we've had throughout this trip is that you begin to learn the current event of local culture, but just as you become tuned in to all that is happening--local sports, currency rate movements, interest rate trends, economic growth, politics, ongoing news stories--you leave for another country. Events in the countries we have traveled through continue after we leave, and we do follow them as best we can, but usually I don't have time to comment on them because I'm writing on the issues in our next location. So now, let's catch up some random things from countries we have left behind.

- England won The Ashes over Australia on Monday (that's cricket) in what was regarded as the most exciting Ashes series in history. Now that I understand the sport, I find it much more interesting than I would have ever imagined. Like baseball, it's rich with strategy and statistics. I find it superior to soccer, a sport I have tried my whole life to like, but which never really ignited a passion in me. While I can't deny that it is the world's most popular team sport, I find soccer to be too modest in terms of excitement, strategy, and statistics. It has all of things of course, but in quantities too small for my taste.

- The Australian Rules football season has ended and the playoffs are underway. This is a hard sport to follow outside of Australia and New Zealand. Since leaving, I have seen one match on TV in Indonesia (a popular Australian vacation spot), and I have seen scores printed in an Irish paper (since Aussie rules and Gaelic football are similar).

- I've been meaning to write for months that two Pacific economies--Japan and Australia--that appeared as if they were on the verge of recession early this year are performing much better than I expected. I did not get around to noting this after each released better-than-expected Q1 GDP numbers, so I'll say something now that the Q2 numbers are out. I don't have the number in front of me, but Japan's Q2 GDP growth, announced in the last two days, was much higher than expected, something in the 5% annualized range, similar to their strong Q1 showing. In Q4 of last year, they had a flattish or down (I don't remember which) quarter, leading me and others to think they were heading for recession yet again. Job growth there has been strong this year and it appears their 15-year slumber could be ending, although they have had many false starts before. Their prime minister Koizumi won a landslide election last week and appears to have a mandate for domestic reform. This includes privatizing the post office, which in addition to delivering the mail, also happens to be the world's largest financial institution. Whether he will tackle the country's demographic time bomb remains to be seen. I think Japan's near-term outlook is more promising than I thought at the beginning of this trip, but I think their long-term problems remain, and I am not sure that they will be addressed sufficiently. Again, I don't have the number with me, but Australia's Q2 GDP growth number was quite good, something like 4%-5% annualized. The Q1 number was in the 2%-3% range, so the flattish Q4 result appears to be just a blip. Their central bank has continued to keep rates at the 5.50% level. They last raised in February or March just before we arrived in the country.

- New Zealand's central bank has also kept rates steady at the 6.75% level (I think this is correct--New Zealand is small and remote enough that you don't get much news on it outside of the region) they increased to while we were in New Zealand.

- Germany has a key election on Sunday. If we had a vote, we'd cast it for opposition Christian Democratic Union leader Angela Merkel for prime minister. We wrote on Germany and France's economic woes in one of our New Zealand posts. She has styled herself as a Ronald Reagan agent for change after a decade and a half of economic stagnation. France's next presidential election is not until 2007, but already the leading opposition candidate is casting himself in a similar role, and openly urging German voters to elect Merkel. Notable for Americans, both leaders reject the anti-American tilt of their countries present leaders, Schroder and Chirac. Merkel plainly states that an anti-American Europe cannot remain vibrant and relevant to the world. Germany knows it needs to change, but they are fearful of what the change entails. How well Merkel's party does on Sunday will say a lot about whether the country is ready to take the tough medicine it needs.

- We've written how flat income tax rates have swept through Eastern Europe and Russia, and noted with irony that these former communist countries now have a tax regime that we would prefer to that of the US. Merkel's finance chief advocates a 25% flat income tax rate for Germany and now the Conservative Party in the UK is considering whether they should adopt a flat tax theme after being routed earlier this year in the last parliamentary election. (They need to do something--like the Democrat party in the US they seem completely devoid of ideas. Why, they have so little to offer, that I would have voted for the Tony Blair and the Labour party, and that's saying something.) The integration of the EU tends to encourage economic competition between countries, and that makes it possible that the flat tax will spread to Western Europe. If it does, look for it to receive more serious consideration in the US.

- In an election result I don't really understand, Norway voters, apparently not content with a booming economy, being rated the best place in the world to live, and having one of the world's highest standards of living, have ousted the tax-cutting incumbent party and elected a Red-Green alliance that has pledged to spend part of the country's oil trust fund on welfare. That's like eating the seed corn when you are already full. The kind of thing you might consider if you were in a recession, but not during a boom time. Don't underestimate the ability of foolish politicians to project blue sky and sunshine forever when times are good, as many US state governments did when they spent their windfall in the late 90s and faced huge deficits in the early 2000s. There must be some local issues at play in Norway that we don't understand, but on the surface, this seems quite a bad decision. I'm bearish on Norway until I learn more, although I acknowledge that high oil prices can cover a multitude of management errors.

- I've seen two conflicting stories on housing prices in the UK. One said that prices were down again in the most recent month, and have fallen every month this year. The other showed a slight increase from July to August, but the rate of increase is declining.

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September 01, 2005

02:51:04 pm Permalink Most Expensive Places   English (US)

Based on gut feel and memory, here is my list of the most expensive places we have been to this trip (some of these are not cities):

1. Bora Bora
2. Reykjavik, Iceland. Clearly to me it is more expensive than the cities listed below, but because of its small size it may not be listed in many of those most expensive cities in the world rankings.
3. Oslo, Norway
4. London, UK
5. Tokyo, Japan. Before this trip, Tokyo was the most expensive place I have been, but it's now not as expensive as it once was. It's hard to distinguish London and Tokyo as each city is clearly more expensive in some areas and less expensive in other areas--I'd have to examine this more systematically to confidently put one ahead of the other. I list London first if for no other reason than to draw attention to Tokyo's deflation.
6. Moscow, Russia. It's much less expensive for locals than for foreigners, but unless you speak Russian, you are going to pay for the foreigner experience.
7. Copenhagen, Denmark

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July 02, 2005

05:31:29 am Permalink Japan   English (US)

Country Background:
Population: 127 million
Per capita GDP: $28,000 in purchasing power parity; $35,000 in absolute terms. This is the first country we have visited on this trip where the purchasing power number is below the absolute number. Translation: it's expensive here (but not as bad as it used to be; deflation is occurring--see commentary)
Size: slightly smaller than California
Currency: yen, 110 per US dollar
Language: Japanese. English spoken some. For us, we found the level of English good, but then we've been traveling for six months, and are used to getting by in foreign language countries. When Nick was here in 1989 he thought English was uncommon. English usage probably has increased some since then, as it has almost everywhere in the world, but what has changed more is his comfort level with being in a foreign environment.

Itinerary:
Japan Airlines flight from Seoul to Tokyo
Four nights at Sunroute Asakusa
Nozomi Super Express Shinkansen (bullet train) to Kyoto, 2 1/2 hours
Four nights at Tomiya Ryokan in Kyoto; ryokans are traditional Japanese inns, with a Japanese bath, where you sleep on a futon mattress on the floor.
Local train to Osaka, 30 minutes
Two nights at Comfort Hotel in Shinsaibashi area, the heart of Osaka shopping and nightlife.
Nozomi Super Express Shinkansen (bullet train) to Hiroshima, 1 1/2 hours
Two nights at Comfort Hotel Hiroshima. Comfort Hotels, part of the US chain Comfort Inn, are an excellent value for Japan. We stayed at them in Osaka and Hiroshima and they are located throughout the country. $70-$80 per night, centrally located, with free breakfast and high-speed in-room internet. Rooms are small, but clean and modern. The Osaka hotel was new, the Hiroshima hotel's public areas were faded, with new carpet needed, but it was still a good deal.
Nozomi Super Express Shinkansen (bullet train) back to Tokyo, 4 hours, for flight out of country.

Tokyo
Friday, June 17, 2005 - Tuesday, June 21, 2005
Temperature high/low during our stay: 85/65
Population: The New York Times Almanac says 8 million in one place and 35 million in another. Lonely Planet says 12 million. We have frequently seen numbers between 15 and 20 million also. As usual it depends on how narrowly you define the city or how broadly you define the metropolitan area. By the broadest measure (35 million), Tokyo is the largest metropolitan area in the world according to UN figures, taking this title from New York City sometime in the 1950s or 1960s. Mexico City and Chongqing, China also lay claim to this title by alternate methods of counting and there is no real agreement as to who is biggest.

Tokyo is the capital and largest city in Japan. The city hosted the 1964 Summer Olympics and was the lead city in Japan when it co-hosted the 2002 World Cup, along with South Korea.

Notable Activities:

Yushukan Museum. This museum, commemorating Japan's wartime past, is one of the most stimulating museums we have ever been to, but not for the reason the curators intended. See commentary section below. The museum is on the same grounds as the Yasukuni Shrine, honoring Japan's war dead, including executed World War II criminals. Continued visits to this shrine by Japan's politicians, including Prime Minister Koizumi, have enraged Japan's Asian neighbors, most notably China and South Korea. In China in April, the shrine visits and other examples of Japan's sanitized view of its war history, led to widespread protests and destruction of Japanese property.

Japanese baseball at Jingu Stadium. We saw the first place Pacific League team Chiba Lotte Marines, coached by former Rangers and Mets manager Bobby Valentine, beat the second place Central League team 5-1. See previous post on Asian Baseball.

Tokyo Metropolitan Tokyo-Edo Museum. Good city museum covering Tokyo (known as Edo prior to the 1860s) throughout the centuries.

Tusukiji Fish Market. This is a strictly commercial operation, so don't expect anything similar to the touristy fish market on Seattle's waterfront. Still, it's interesting to stroll around for a half hour and view the infinite varieties of seafood available for sale. Leave the little kids elsewhere; they undoubtedly would be run over by the bikes, forklifts, and other vehicles zooming in and out of the crowded aisles.

Walking around different neighborhoods and commercial centers. For bustle, shopping, people watching, try Ginza (good on Sunday when the streets are closed) Shibuya, Shinjuku, and Roppongi. The latter destination is geared to Westerners, although you can get by fine about anywhere. Akasuka, especially the area around Sensoji Temple, is a quieter, older neighborhood, interesting for its contrast to the other areas.

This is just a small list of what Tokyo has to offer, and is not inclusive of everything we did. Buy a guidebook and do whatever interests you.

Kyoto

Tuesday, June 21, 2005 - Saturday, June 25
Temperature high/low during our stay: 85/70
Population: 1.4 million

Kyoto is the cultural capital of Japan. The imperial family lived here from 794 to 1868, although at times the political capital was elsewhere.

Notable Activities:

There are so many temples and historical sites available that it is easy to suffer from temple fatigue. We skipped doing these on our own, as the Johnny Hillwalker Walking Tour (see below) visited many temples, satiating our interest.

Johnnie Hillwalker Walking Tour. We read in the Lonely Planet guide that an older Japanese man (see image gallery), with an Anglicized name of Johnny Hillwalker, gave personalized group walking tours of Kyoto three times per week, departing from the train station, about a block from where we were staying. So we did this 5-hour walking tour of Kyoto the first full day we were there. Johnny led us through streets and alleyways of Kyoto that many tourists do not see as they are rushing off to the main attractions. Highly recommended.

Kyoto Museum for World Peace at Ritsumeikan University. A breath of fresh air after the unbelievable propaganda of the Yushukan Museum in Tokyo. Unfortunately, after properly providing the unvarnished truth about Japanese wartime atrocities, the second half of the museum degenerates into Neville Chamberlain-like wishful thinking that war is never necessary, and all we need to do is give peace a chance. This part of the museum can't seem to make up its mind. In one place it says war should only occur with UN sanction, yet another display seems unfavorable on the Korean War, Persian Gulf War, and post 9-11 Afghanistan War, all fought with UN approval. Is it trying to suggest that the world would be better off if South Korea was communist, Kuwait was controlled by Iraq, and the Taliban still ruled Afghanistan? In another place it deplores ethnic violence in Yugoslavia, but elsewhere it cites the Kosovo bombing as a post-Cold War example where the US can flex its military muscle unchecked. That may be true, but the larger point of noting that the NATO-backed bombing stopped the ethnic killing of Albanians goes unmentioned. Despite this naiveté, the museum is worth visiting for its accurate view on Japanese military aggression.

Bicycle rental. There are plenty of affordable places around the city to rent a bike (about $10 per day)--something we did and recommend.

Osaka

Saturday, June 25, 2005 - Monday, June 27, 2005
Temperature high/low during our stay: 90/75
Population: 2.5 million

Osaka International Peace Center. We went to the Osaka Museum of History, with its impressive building and modern displays, and were generally underwhelmed by the content. Then noticing the something called the Osaka International Peace Center on a local map, we walked 10 minutes to this place, which was not in our guidebook, and came away very impressed. So skip the history museum and come straight here. Like the peace museum in Kyoto we discuss above, this museum has none of the revisionist justification of the Yushukan Museum in Tokyo, instead painting the Japanese as brutal aggressors in World War II who caused unnecessary pain and suffering throughout Asia. This museum covers World War II in more depth than the one in Kyoto and does not fall into the peacenik trap of thinking war is never justified.

Minami area. The hub of Osaka shopping, eating, and nightlife. We stayed in this area, which is great for people watching.

Amerika-Mura. Adjacent to Minami, an interesting if not entirely accurate urban area that attempts to mimic the US. Populated by teenage and college student fashion victims, whose knowledge of the US is probably drawn from MTV and Hollywood movies. Reminds us of late 1980s New York City, before the graffiti was cleaned up. Yes, Japan has graffiti, more than we would have ever expected. See commentary.

Hiroshima

Monday, June 27, 2005 - Wednesday, June 29, 2005
Temperature high/low during our stay: 90/75
Population: 1.1 million

Peace Memorial Museum
Peace Memorial Park
A-Bomb Dome

All of the atomic bomb history you want to see is in one area in central Hiroshima: Peace Memorial Park. Peace Memorial Museum is the main building in the park, and you really must spend a couple hours there if you are in Hiroshima. There are numerous other memorials to view as you stroll through the park. Just outside the park is the A-Bomb Dome (see image gallery), one building near ground zero left in its damaged state.

Commentary:

Impressions of Japan

Below are generalized observations of Japan and its people. Of course, when commenting on an entire nation and its population, what you say is not true of every person. There are exceptions. For example, we would have no hesitation writing "Americans are fat" or "Americans have dirty public bathrooms" because statistically as a nation we have a larger percentage of overweight people than other countries, and by observation it is rather obvious that our public toilets are not as clean as those in most developed countries. This does not mean, of course, that every American is fat or that every American public toilet is dirty. But to let the exceptions restrict you from writing about the common, would leave you with nothing to write about. So with that said, here are a few tendencies we observed in Japan.

- Cleanliness. Japan is very clean, on par with Singapore. The Japanese are obsessed with cleanliness, be it personal hygiene or public areas. As mentioned in our Asian baseball post, ushers pick up trash in the middle of the game. Ever seen that in the US? There is hardly any trash on Japanese streets despite relative few trash cans. People think nothing of carrying their trash with them, disposing it later if by chance a rare trash bin appears, or if not, taking it home with them. And just as Americans on occasion may find fault with the personal cleanliness and bathing habits of some Europeans, the Japanese often consider all Westerners--yes, including those from the US--to be a bit smelly and offensive.

- Punctuality. In Japan, if a train is to depart at 7:38 and arrive at 8:23, you can be sure that each time will be met--not one minute earlier and not one minute later. To say someone is not punctual is a great insult. Japanese who travel in the US complain that planes are always delayed. Americans complain about this too, but not necessarily from the perspective that transportation should never be delayed by even one minute.

- Economy. Japan has been in an economic funk for 15 years. The Nikkei stock market index peaked at 39,000 in December 1989. Today it is only around 11,500. House prices are lower today than in 1989. Consumer prices are falling and have been for most of this period. Unemployment is around 5%--still a low level relative to most countries--but up from the 1%-2% common during most of its post-war history. If you did not know any of this, however, you would never guess it from walking the streets and traveling around the country. Everything looks prosperous--there are no signs of closed businesses, poverty, or any visible sign of economic trouble. In 12 days, we think we saw four homeless people. Maybe that's up from none 15 years ago, we don't know, but by the rest-of-the-world's standards it's incredibly low.

- Prices. First impression: Japan is very expensive. Second impression (after being in the country a while, gaining some sense of the price differentials that exist in every country, and remembering to compare Japan to the US, not the rest of relatively cheap Asia where you have been for the past two months): Japan is not as expensive as we thought. It's more expensive than the US, but it may not be the most expensive country in the world any more.

Deflation for 15 years while the rest of the world has had some inflation has made a significant impact in reducing Japan's traditional lack of affordability. Yes, there are outrageous prices--a taxi from the international airport to downtown Narita is $150, for example. But once you are there a while, you start to make economic choices like everyone who lives there. Because taxis are so expensive, most people don't use them. You remember that you also would not take a taxi from London's airport to downtown because of cost. The train from Tokyo's airport is around $10 (local) or $20 (express), less than a Chicago cab, albeit not quite as convenient. Once in Tokyo, the subways are about the same price as Chicago and much more convenient (more stations, more lines, less time between trains--we probably never waited more than two minutes). We ate an excellent breakfast in Tokyo for about $10 for the two of us. Lunch for two with waitress service was readily available for $20 or less. You could easily spend more in Chicago without trying hard.

- Toilets. Japanese lead the world in toilet design. US toilets are primitive by comparison. Most of our hotel rooms, and we were not staying in expensive places, had a western-style sit down toilet with numerous amenities. There were multiple built-in bidet features to wash your private parts in numerous combinations of directed streams, showers, and water temperatures. Never should you have to bear a cold toilet seat, for the seats are heated, with adjustable settings. Why it’s a wonder that anyone ever leaves the bathroom, such are the water park of tushy delights available to you.

- Food quality. Even if you do not like Japanese food, you have to marvel at the quality of its preparation. Even in diner-type places where an entrée goes for 5 bucks, you get a well-prepared fresh-tasting meal, served quickly and efficiently. The US is upset that Japan will not allow US beef imports over mad cow concerns. Each side has a point here. Yes, Japan is being somewhat too restrictive, to promote domestic production. But at the same time, the US fails to understand Japanese cleanliness and food quality standards. This is not just how the Japanese government thinks, it is how Japanese consumers think and act. Consumers here just don't want any food product that has the slightest chance, no matter how remote, of being tainted. The Japanese think food standards in Japan are higher than in the US, something Americans just can't believe is true, but likely is.

The Group versus the Individual

Just when you think we've gone native and this post is a lovefest for all things Japanese, let's point out a basic flaw Japan has, which at times can be fatal. Like most Asian societies, in Japan the emphasis is on the group rather than the individual. The needs of the many outweigh the needs of the few. This has many advantages--clean cities and public bathrooms, low or non-existent crime rates, excellent public transportation and trains that are nearly always exactly on time. People willingly subordinate their needs on a daily basis, so that society prospers. Your first few days here may have you thinking you have traveled to a much more advanced place than you are used to.

In Western societies, the emphasis is more on the individual than the group. There is an extreme focus on individual rights, and the results of this at times are exasperating. With everyone having a no-one's-gonna-tell-me-what-to-do attitude, we have dirty cities, dirty bathrooms, massive traffic problems, excessive litigation, insubordinate youth, high crime, and so on.

However, all is not good with group-focused societies and all is not bad with individual-focused societies. Let's hone in on the Japan and the US, arguably the extreme examples of each. To a lesser extent, what we say here is true of other Asian group-focused societies and other Western individual-focused societies. US societies, with their messy free market of everyone asserting their individual rights all the time, tend to be self correcting. Through a noisy, untidy process that at times may turn your stomach or even defy description, problems in society do tend to be identified and solved in the US. In Japan, with everyone subordinating their needs most of the time, problems often are not raised, addressed, or solved. The most obvious and extreme example of this was Japan's acquiescence to the actions of its military government during the first half of 20th Century. Clearly, citizens of Western governments were similarly guilty, although the degree of personal sacrifice in Japan--civilian island populations obeying military command requests for mass suicide to avoid American control--does exceed what Western cultures did or would seem willing to do.

Facing its Problems

Now in some areas the Japanese are phenomenal problem solvers--manufacturing quality, public transportation efficiency, for example. They are relentless in the pursuit of perfection and improvement, and they often end up with a system or process better than that of any other country. But in other areas, obvious problems never are addressed, for reasons that we and other Westerners fail to comprehend.

The best current examples of this are 1) the financial crisis that began in 1990 and continues to this day, never fully tackled; and 2) the looming demographics problem of an aging population, which by some estimates could shrink Japan's population by 2/3 over the next century. This population decline could create its own financial crises, as fewer workers exist to pay retirement benefits and shrinking government tax revenue makes it impossible to maintain Japan's expensive infrastructure.

We've talked about these problems in past posts. The solution to the demographic problem is straightforward--maintain the population by either increasing immigration or incentivizing more childbirth, or both. If faced with the same problem, the US or China would address it head-on: after some period of national debate, the US would increase immigration levels and tax credits for children, while China would plaster cities and the countryside with posters and slogans exhorting parents that is better to have more than one child. (Then if that did not work, China would fudge the numbers to show the population increasing even if it is not--but we jest.) Japan is doing none of this and its male population has already begun to decline.

The solution to the financial problem is less straightforward, but actually more discussed, as the Western press for 15 years has laid out various reforms that Japan ought to take to reform its banking and financial system. Other than some timid half measures, Japan has stood pat, like the proverbial frog in the pot of water that is being brought to a boil, gradually enough that the frog never jumps, but eventually it dies.

So why does Japan not address obvious problems? We've read many explanations for this, and even come up with a few ourselves, but no explanation has ever really satisfied us. Any possible explanation that begins to make sense loses credibility if you just ask, "Okay if that's true, then explain why Japan is better than anyone else at solving other problems." We don't know why manufacturing excellence is obtainable but financial reform is not. Perhaps solving issues with inanimate objects is easier than issues involving people. Who knows? We would like to.

We know that Japan is unlikely to turn to immigration to solve its population problem. Frankly, a century and a half after the US forced Japan to re-establish contact with the outside world, it remains rather xenophobic. Okay, why then, no national campaign of raising awareness and providing incentives to have more children? We don't know. Many Japanese don't have more than one child because of the high cost of housing and raising children in Japan, and because of some degree of economic uncertainty about their future. That's understandable, but why the government does nothing is not. From our perspective, we are not confident that Japan can defuse its demographic timebomb. (As we have written in other posts, other countries--Russia, Italy, and many others--have similar timebombs. But Japan's situation, with the oldest citizenry of any country and high resistance to immigration--appears the most severe to us.)

Another shortcoming of group-focused societies, albeit not a fatal one, is that they tend not to encourage creativity and innovation to the degree that individual-focused societies do. This seems only natural when you think of it--of course of these two societal models, the one focused most on individuals will foster more individual accomplishment--and it has been much discussed elsewhere so we won't belabor this point. It is worth pointing out that Japan is more creative and daring than their stereotype. They are more fashion conscious than any country in the world in our opinion, and we don't just mean the suited-up salaryman. Walk the streets of any Japanese city and you'll be surprised by the clothing, hairstyles, and appearance of the teens and twenty-somethings. Even though much of their fashion emulates the West, especially hip-hop culture, you as a Westerner might even feel outdated in your mode of dress, if you were prone to care about such matters. We were not greatly troubled by this. And of course we must acknowledge Japan's culture gifts to the world--karaoke, Nintendo, and anime and magna cartoons (think Speed Racer, but with Trixie revealing her midriff).

Japan since the Bubble Burst

Nick visited Japan briefly in December 1989 a few weeks before the peak of the Japanese bubble. He did not realize then that his visit was so well timed. Fresh off his disaster speculative foray into airline merger stock arbitrage that fall, he even bought a book in Tokyo about how to invest in Japanese stocks. He remembers the book advising that it was normal for Japanese stocks to trade at high PE multiples because the perspective of the Japanese investor was long-term oriented. Fortunately, his short-term financial situation prohibited another speculative foray into equities he did not understand.

What observable changes were there in Japan during this 15-year interlude? Really things did not appear that different, but Nick did notice three things. First, the Japanese, while quite fashionable in 1989, were even greater slaves to fashion now, as noted above. Colored hair, wild haircuts, and an MTV-style of dress are quite common. Second, prices, as noted, are relatively less expensive. Third, there is graffiti. Not that bad now, but present. He remembers none in 1989. His stay was short then, just a couple of days, but giving his built in radar for noticing this, more likely is that it was not there. In some places, there is quite a lot now, and given the Japanese fastidious for cleanliness and order, this is puzzling. You would think they would be like Singapore and be hyper-zealous in its removal and prevention. But removal seems minimal. This may seem like a trivial observation, but it seems so counter to the Japanese character, it struck Nick as the most surprising observation of our visit. He is tempted to assign great meaning to this, wanting to see it as a visible sign of the country's economic stagnation and loss of will. Or perhaps it indicates that today's youth is truly different from their parents, and does not hold the view that society and the group is more important than the individual is (this would not be all bad by the way). Or maybe it has been there all along and he just overlooked it. We would be interested in comments on this point from readers who have traveled to Japan.

World War II in Asia--Animosities Still Simmering

In the Notable Activities section above, we mention our visit to the Yushukan Museum in Tokyo. It was the most memorable thing we did in Japan, and we recommend it highly. This is not because it is a good museum. It is good in the sense of it being a new building, with modern displays, and English translations. But it is a terrible museum. This museum tries--with a straight face--to pace off Japan's wartime aggression as a logical and justified reaction to external pressures the country faced. Atrocities? What atrocities? The Rape of Nanking? Why you must be referring to the Nanking Incident where the Chinese were to blame for not surrendering and for its commander abandoning his troops! The Japanese of course were under strict instructions to observe military rules to the letter of the law (Klingon law perhaps?), with severe punishment promised for any Japanese soldier who disobeyed (proving that a promise is easier to make than to keep). Why, once the Chinese military was defeated, the citizens of Nanking went back to living their lives in peace (that is the few hundred thousand citizens not murdered).

We are no stranger to museums with ridiculous levels of propaganda. Certain history museums in Cuba, Vietnam, and China have all made us involuntarily laugh aloud at times when reading some of their most outlandishly biased statements. But that is almost to be expected. Those are still communist countries with limited or no mechanism of free speech, and those museums are poorly put together, with out-of-date exhibits, poor lighting, and grammatically incorrect English translations. You almost expect those museums to be laughably biased.

The Yushukan Museum is not that. It was built in the last 10 years at great cost with exhibits created with great care. Japan is one of our strongest allies with a half century of democracy and free speech. It is the second largest economy in the world, with uniformly high education levels and living standards. In such a society, a revisionist museum such as this is shameful, inexcusable--a real embarrassment to the country. Such a museum could not exist in the US. Protests would have closed it within a few weeks or months of opening.

Equally upsetting as the museum's exhibits were some of the comments written in notebooks at the end of the exhibits. Amid an occasional thoughtful comment pointing out the hypocrisy of the place, was comment after comment mainly from Americans, thanking the museum for enlightening them as to other side of the story. It reminded us of the terrorist apologists who, after 9/11, opined that we really had it coming to us because we had not single handedly solved all problems in the Middle East. Yes, the terrorists and the Taliban and the World War II Japanese military leadership had a perspective. Rapists and mass murderers do too. That does not mean there is any validity to their perspective. While there are gullible idiots at all times in all societies, we wonder if the comments we read are the product of an American educational system that has become so politically correct that students are unable to make any value judgments, not able to distinguish between right and wrong, seeing every opinion and view expressed as equally valid.

We had a good sense of why--even 60 years after World War II--there is a smoldering hatred of Japan throughout parts of Asia before visiting this museum, but this visit really drove home the point through a personalized experience more impactful than what you gain reading a newspaper.

The quick background story is this. While there is nothing to match the Holocaust Germany perpetrated on Jewish civilians, Japan treated prisoners of war horribly, paying little attention to the Geneva Convention. With regard to civilians, Japan brutalized most of the populations they conquered, raping and murdering at random and without cause. In the West, the horror of the Holocaust overshadows these acts, but in the Pacific Rim, it is the Japanese crimes that are documented in history museum after history museum. The museums of Australia and New Zealand (which had POWs in the Pacific); as well as Singapore, Hong Kong, Brunei, Malaysia, the Philippines, Korea, and China, all countries partly controlled and brutalized by Japan, all tell this story. After World War II, Germany, led by Konrad Adenauer, profusely and repeatedly offered heartfelt apologies, expressing genuine sorrow. And while the occasional German joke still exists, Germany's enemies have for the most part forgiven them. Japan has apologized numerous times too, but only in the last 10-15 years, only when coaxed into it, and never with the same emotion and deep felt feelings as the Germans. So much of Asia, who on the surface works side by side with the Japanese, below the surface deeply resents them. There is probably a lot of economic jealousy and rivalry at play here as well. While Germany may be first among equals in Europe (and in recent years its economic leadership is in doubt), Japan, despite 15 years of stagnation and a fast-rising China, is still the economic giant of Asia, with numerous followers.

For years, Japanese government officials have visited the Yasukuni Shrine, which honors all of Japan's war dead including 12 executed Class A war criminals. This of course irritates Japan's neighbors, especially China and Korea. Japan tries to justify and explain the visits, which of course is pointless. No matter how sound their logic may seem to a Japanese domestic audience, the visits are stupid and the solution is simple. Either remove the war criminals or just stop going. Take your pick--either will work. End the hand-wringing national debate about building a second secular shrine, or trying to educate Asia about why it would be dishonorable to the non-criminal fallen servicemen not to visit the shrine. Asia ain't buying your story Japan. It's time to switch tactics. And this is becoming so obvious, that even some right-wing proponents of the shrine visits are now calling on the prime minister to stop going.

The other issue is that over the past 10 years Japanese school texts have gradually become more opaque in their discussion of Japan's wartime behavior, with references to the Rape of Nanking and Comfort Women (foreign female sex slaves forced to serve Japanese soldiers) softened. The latest row in April occurred when Japan approved one textbook where these references were removed altogether. This led to protests, rioting, and destruction of Japanese property in China. Now, let's be clear, China is quite guilty itself of whitewashing history, and we imagine its own textbooks are more distorted than Japan's. Further, it is surely stoking nationalistic fires by allowing the protests to occur. But two wrongs don't make a right, and Japan as a democratic, developed country ought to be above such Orwellian attempts to alter the historic truth. Moreover, South Korea is also angry over the shrine visits and textbooks, and while all countries act in their self interest, we don't think South Korea protests are strictly to promote patriotism. There are genuine unhealed wounds in Asia over World War II.

Fortunately, it is a minority in Japan who want to downplay its troubled past. Museums in Kyoto and Osaka, and to some degree Hiroshima, lay out the plain truth in black-and-white language. One plaque in Kyoto read:

"Japanese military forces conducted indiscriminate bombing and used poison gases and biological weapons against countries such as China. In war zones, they killed and tortured soldiers and civilians alike, their operations aimed at totally destroying areas that put up resistance."

So for now the right-wing revisionists in Japan have a long way to go for their version of history to take hold.

Hiroshima: Shameful Decision or Brave Action by Bold Men?

Of as much concern to us is the peace-at-any-price crowd present in the West, which does not know its history and does not think critically, and thus could condemn its or a future generation to an unfortunate and completely avoidable fate by repeating mistakes of past generations. The apologist crowd was present again in Hiroshima writing all sorts of statements condemning the US bombing there. Now what happened in Hiroshima was so horrible that most people focus only on that event in isolation. Dropping an atomic bomb on a defenseless city was a terrible thing to have to do, and the people of Hiroshima did not deserve what happened to them, just as citizens of any city would not deserve a similar fate. But we are convinced that this action and a second atom bomb on Nagasaki three days later saved millions of lives, most Japanese, by ending the war far earlier than otherwise would have occurred. Far from condemning President Truman for this act, we praise his bold decisiveness to do a bad thing and thus save so many others from the death they otherwise would have met.

To evaluate the atomic bombings, you must answer the question the apologists never address: how would you have ended World War II? Although the war was over in Europe and Japan had been steadily losing for three years, the Pacific War was far from concluded. Japan's imperial government refused to see the writing on the wall. In its mind, surrender was unthinkable, a fate worse than death. It commanded its citizens to prepare for "100 million deaths with honor" defending Japan from Allied invasion. It was training ordinary citizens to resist invasion and fight the Allies in hand-to-hand combat. When the Allies took Okinawa, a Japanese island on the way to the mainland, tens of thousands of civilians died, about 25% of the island's population. Some were involved in the fighting; many killed themselves in a mass suicide, following the instruction of the military commander. They believed self-inflicted death to be more honorable than living under American rule. The figures we viewed in one museum suggested that 95% of the Japanese soldiers died on Okinawa, many of them in suicidal attacks designed to inflict as much damage as possible on the enemy before an inevitable death occurred.

Facing an enemy that refused to give up, the US military planned to invade Japan, beginning on November 1, 1945, in a sort of Pacific D-Day. Their estimates of deaths: 500,000 to 1 million US soldiers and 1 to 3 million Japanese civilians. The war certainly seemed likely to have dragged into 1946. Obviously, the US planned for victory and presumably the death estimates represented a victory scenario. Giving the Okinawa experience, we wonder if the estimates were too low. Fortunately, we will never know. Two atomic bombings and some 200,000 Japanese civilians gave their lives involuntarily so that millions of their fellow citizens did not have to do so. (Exact estimates of Japanese deaths from the atomic bombings are difficult to calculate because many died from radiation poisoning months and years afterward. The Peace Museum in Hiroshima estimates that 140,000 died in Hiroshima by the end of 1945. We did not visit Nagasaki, but we believe the number of deaths there may have been about half of Hiroshima's level, bringing the total to around 210,000.)

One can take the what-if analysis two steps further without being too carried away. What would the Soviet Union's role have been in the invasion of Japan? Recall that the Soviet Union declared war and attacked Japan in the waning days of World War II. By agreement at Yalta, their attacks in August 1945 were limited to Japanese-controlled areas in China and some of Japan's northern islands (which today remain the source of a territorial dispute), leaving the Japanese mainland to the US. The atomic bombings ended the war abruptly before the Soviet Union was able to make much of an incursion into Japanese areas. But if the war dragged into 1946, as it likely would have without the atomic bombings, the story might have been different. The Soviets might have stretched the Yalta agreement to suit their interest. If the Japanese invasion was extremely difficult, might the US have even been forced to call upon their Soviet allies for assistance? Could Japan have been divided into a communist north and a democratic south for the four or five decades that followed? Could Japan have been the site of a hot war, between communist and capitalist forces, ala Korea and Vietnam? Could Japan even be divided today, like Korea?

The other what-if question is what would have happened since 1945 if there had not been the deterrent effect of actually seeing atomic bombs used on civilian populations. Maybe atomic weapons would have been used in Korea, Vietnam, or in a Japanese civil war if that country became divided as outlined in the paragraph above. Even if not used in all of those cases, perhaps the Cuban Missile Crisis would have played out differently if the parties on each side had never witnessed the power of the atom unleashed on a population. Of course, any later use of a first atomic bomb would have been far more powerful, deadly, and destructive than what occurred in Japan in 1945. It seems fortunate that if there were to be two uses of atomic weapons, that they would be at the very beginning of the development of such weapons, when the weapons--as powerful as they were then--were still relatively basic compared to what was developed later.

So if opposed to the usage of atomic bombs in Japan in 1945, you must answer how to end the war against a country that vowed never to surrender--and meant it. This was not rhetorical propaganda. Japan never intended to surrender. The population was not calling for surrender. There were no protests or demonstrations in favor of surrender. Even after the horror of Hiroshima, there was no surrender--it took a second bombing to demonstrate what would occur in city after city if surrender did not occur. Only then did the emperor decide to surrender, a decision that was controversial and which many disagreed with, seeing it as premature and unnecessary. But duty bound, it was a decision accepted by the military and public.

We have not seen any evidence that suggests that a negotiated settlement acceptable to the Allies was realistic. Japan, despite three years of defeats, still had its armies spread across much of Asia, holding territory in many countries. The only settlement Japan might have accepted would have been completely unacceptable to the Allies--one with Japan's military strength intact and perhaps still holding some territories such as Korea and Taiwan, countries colonized decades prior to Pearl Harbor. No, unconditional surrender was the only desirable outcome, and there were only two ways to achieve it. Neither choice was good, but atomic bombings until surrender seems strongly superior to the thought of a conventional invasion that would have drawn out the war, killed millions of additional people, and potentially introduced Soviet control into parts of Japan. The involuntary sacrifice of the citizens of Hiroshima and Nagasaki was well worth it we think, when one considers the benefits their tragedy brought to their fellow citizens and their country, their Asian neighbors (who immediately realized peace), the Allies, and the rest of the world in the decades hence.

The nature of this post on Japan may leave the reader in doubt as to our feelings about the country. Let us be clear. We had a great time there. It is a modern, efficient, and friendly place to visit--one of our favorite countries on our trip so far. We expect an American visitor to Japan would probably have an easier time than a Japanese visitor to America, in terms of language, cultural differences, and politeness. We admire what the country has become, and we wish them success at addressing the problems they now face. It is better for the US and the rest of the world if they do overcome financial and demographic issues in front of them. You won't notice these problems if you go there, and we recommend you do visit.

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