Major reforms needed to prevent Japan sliding from Noda to Hoover

In economic circles, no slight stings more than being compared to Herbert Hoover. The 31st US president, who helped make the Depression of the 1930s great, ranks among history's worst growth killers.

Ryutaro Hashimoto, Japan's prime minister from 1996 to 1998, went to his deathbed in 2006 seething over being tagged as Asia's Hoover. Among those doing the labelling was former Sony Corp chairman Norio Ohga. Hashimoto's crime? The same as Hoover's - an ill-timed and ill-advised tax increase that ended Japan's post-bubble recovery.

Hashimoto may soon have company in the annals of Hooveresque economics - Yoshihiko Noda, Japan's current leader. Last week, Noda made significant progress in raising the consumption tax by 10 per cent over the next three years. Never mind that deflation is deepening, the population is shrinking and the ranks of the working poor are swelling. Noda says higher taxes are needed to pay down the nation's debt, the largest in the world relative to the economy.

Read more: http://www.smh.com.au/business/major-reforms-needed-to-prevent-japan-sliding-from-noda-to-hoover-20120406-1wgkh.html#ixzz1rJjlalpU

Major reforms needed to prevent Japan sliding from Noda to Hoover

Major reforms needed to prevent Japan sliding from Noda to Hoover

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