But, after its property bubble burst about 1990, it largely avoided the excesses in housing markets and derivatives that caused the serious credit problems in the US in 2008. Its unemployment rate remains very low because its employment polices insure a job for almost all citizens. And, of course it is very different from all other developed nations in that it is still an island state home to 130 million people, 90 percent of whom are pure ethnic Japanese with few religious issues and minimal immigration.
How have they navigated these past two decades with such steady results? Despite a lot of political turnover they are still a monolithic society with a remarkable sense of togetherness. One small but telling example is that a large percentage of Japanese people start their days exercising either in public, or at home to the same TV hosts. (Is it possible that a nation that exercises together and works together stays together?) There is a much smaller gap between the highest paid and least paid than in the US; although, there is also less social mobility and less innovation and entrepreneurship than in the US.
It is generally easier to allocate more than less. But the Japanese seem to have done more with less by making their people reasonably happy despite fewer resources. This surely has roots in Japanese welfare, with its remarkably fair treatment of people of all ages and needs, and Japanese education, a world leader built on intensive early literacy lessons and a "distillation" methodology that identifies and caters to the best students. Throughout their education and lives, Japanese teamwork and collective good is stressed and rewarded. This all for one, one for all mentality is rare in today's world, but it serves Japan well.
Overall Japanese economic growth appears to have stalled in the last twenty years, and as a result its public debt has reached dramatic levels that would make American deficit hawks shudder. But unlike the United States, the Japanese own much of their debt, and their willingness to save through government bonds pays off in infrastructure investments in transportation and internet access.
Global headlines describe Japan as a sluggish basket case. But as Europe comes to grips with a common currency and fractured fiscal policies and the United States faces its own excesses, one has to wonder whether Japan may not have quietly, possibly even unintentionally, discovered a new way to manage its economy: a low-inflation system that sacrifices dynamism for steadiness.
The Japanese seem to have discovered that their national wellbeing can be achieved even with declines in relative economic prosperity. Their population seems to be willing to make shared sacrifices to maintain the elements of daily life that they consider most important: social harmony and order, safety and environmental health.