Dogs and Demons_ Tales From the Dark Side of Japan - Kerr [115]
Bad as they are, these figures do not take into account dubious reporting, such as the numbers game the Housing Public Agency plays with apartment sales, showing unsold units as sold in its official statistics. Turn over a stone among government agencies and strange things come crawling out. The Housing Public Agency's subsidiary, Japan Unified Housing Life (JUH), developed a large office tower in Shinjuku that opened in 1995. Given that this was a stagnant real-estate market, everyone was surprised to learn that the building was 95 percent leased-the tenants turned to be JUH itself and related companies, which occupied the building at nearly four times market rents. Nobody knows the degree to which the cooked books of tokushu hojin and koeki hojin could drive up Japan's true indebtedness.
Japan may have a high deficit but not to worry, economists advise us, because the Japanese are such high savers that they have stored away in the banks more than enough money to pay their debt. Japan's high savings rate is the glory of its economy. For decades, American households consistently saved at only about one-third of the Japanese rate, leading the economist Daniel Burstein to label the two nations «grasshoppers and bees.»
What the experts overlooked in the «Large GNP, Large Savings» formula was that capital in Japan earns consistently low returns. For the past decade, Japanese government bonds have yielded between 0.2 and 3 percent, far below the United States' 5 to 8 percent. No feature of the Ministry of Finance's magic system charmed financial experts as much as this, for the sacrifice by the public for the good of the national economy seemed unbeatable. After the Bubble deflated, the Ministry of Finance, in an effort to prop up the stock market and the banks, lowered interest rates as far as they could go-the lowest levels in world banking since the early seventeenth century – which is to say, close to zero: in the latter half of the 1990s, interest rates on ordinary deposits earned their owners less than a quarter of 1 percent.
To get some idea of how such rates affect the lives of ordinary Japanese, consider the case of an average salaried employee. He retires with a lump-sum pension equal to about ¥20 million, half of which he will use to pay off his mortgage, leaving ¥10 million in the bank. At 0.25 percent, his deposit brings him about ¥25,000 in interest income; that's $200 a year. «It's not worth the effort of taking your money to a bank,» says Senba Osamu of Daiwa Securities. «In a year, you'll have earned just enough interest to buy yourself lunch.»
Large segments of the public have agreed with Senba, and banks report unprecedented use of safety-deposit boxes to store cash, while piggy-bank sales have risen at department stores. By 1996, the Seibu Ikebukuro Department Store stocked sixty-eight kinds of money boxes – for example, Рака Рака Kan, a container that clacks its lid when you pass, demanding to be fed ¥500,000 in 500-yen coins. A Seibu spokeswoman said, «There has been an increasing number of people who would rather use a Piggy bank at home than a bank after interest rates declined with the end of the Bubble economy boom.»
They knew much better uses for their money during the mercantile heyday of the seventeenth century, when Saikaku wrote his novels of city life in Kyoto and Osaka, lovingly counting out each kamme and momme (weights of gold and silver) that his protagonists made from lending at interest. A clever young man
was able to loan out his one kamme at twelve percent annual interest, and by redepositing his earnings for thirty years, he found himself in possession