Hilsenrath blunder at the WSJ

He says: The U.S. and U.K. appear to have gotten something right, while the eurozone and Japan have fumbled. Unemployment rates after the crisis peaked at 10% in the U.S. and 8.5% in the U.K., and are down to 5.8% and 6%, respectively. The eurozone rate has climbed in the past few years to 11.5%, while Japan’s economy has fallen back into recession.

Let's talk Japan.  Japan went into debt more than the UK and less than the USA since the crisis.  In other words, debt based budgeting was about the same between all three nations. Yet Japan stumbles  going into and out of negative growth as they have been doing for some time.

Here is their growth chart since 2000.  This economy has been dealing with a pension crisis, plain and simple.  Notice in 2014, the most recent reading, barely clear on the chart, that Japan has a spurt in growth just before the consumption tax hike and a drop in growth just after the tax hike.

This behavior is not unusual for a change in government policy.

Here is what Hilesnrath says:

Japan is a case in point. It has run up large government debts, amounting to 1.35 times national output, compared with 0.8 times in the U.S. and U.K., according to the International Monetary Fund. Efforts to lower that debt now are interfering with Prime Minister Shinzo Abe ’s campaign to push the Japanese economy out of its long-running funk. In November, the government reported Japan’s economy contracted for the second straight quarter due largely to a consumption-tax increase adopted to bring down the debt.

So, he claims the 'recession' is  a stumble in their debt based spending. Is it?  The most recent quarter of negative growth could just easily be Japan struggling with their usual problems.  What makes it a recession is that two negative growth in consecutive quarters.  But that is a definition, quite arbitrary.  We have no idea whether the consumption tax has permanently damaged the economy, all we know statistically is that  it caused a one time adjustment to consumption.

We saw the same thing in the US economy with Obamacare, a one quarter shift or adjustment in the health care industry.  Hilsenrath is simply repeating a standard story with no basis in fact.  Japan has done all the Keynesian crap that some Keynesian economists have demanded, to no effect as near as we can tell.