'Economy is bottoming out,' but in which country? -- Akahata editorial, May 19 (excerpts)
The Koizumi Cabinet declared in its monthly economic report that the economy is bottoming out. For which country is it talking about? Can't it see the people being badly off and small- and medium-sized businesses facing serious financial difficulties and going bankrupt?
The government attributed the "bottoming out" to increases in production, exports, and the business barometer of major companies, especially major manufacturers. This doesn't or will not mean an increase in domestic demand.
Major manufacturers are doing well due to an increase in exports to the U.S. in which mining and manufacturing industries have to meet growing demand for war supplies and increased debt-financed consumption.
Another reason for the rapid recovery of major companies' profits is that under massive restructuring they have dismissed many workers and cut personnel expenses.
Even Toyota Motor Corporation, which is the first Japanese manufacturer to report more than one trillion yen in ordinary profit, refused a base pay raise in this year's annual wage negotiations.
Under the "profit first" theory, major manufacturers have shifted their production bases from Japan to other countries, forcing local economies throughout Japan into further declines.
Under the circumstances, domestic consumption is naturally declining. Personal consumption has continued to fall for four quarters in a row since April-June 2001. It's impossible for the economic situation to improve while personal consumption, which accounts for most of the domestic demand, remains sluggish.
Major companies' business strategies are depriving workers of their jobs and putting restraints on wage increases.
The Koizumi Cabinet supports such restructuring, calling it "structural reform." It is also giving "pains" to the people by an "early and final disposal of bad debts" and plans to increase medical expenses and taxes.
There will be no economic recovery as long as such politics continue. (end)