Richard Katz

Expertise: Japan economy, Japan politics, U.S.-Japan relations

Richard Katz is Editor of The Oriental Economist Report (TOE), a monthly newsletter on Japan published by Japan Watchers LLC, the semi-weekly TOE Alert, and a New York City correspondent at Weekly Toyo Keizai, one of the three leadings Japanese business magazines.

Mr. Katz has taught about Japan’s economy as an Adjunct Associate Professor at the New York University Stern School of Business, and as a Visiting Lecturer in Economics at the State University of New York (SUNY) at Stony Brook.

Mr. Katz is the author of two books on Japan's economic travails. The first was Japan: The System That Soured--The Rise and Fall of the Japanese Economic Miracle (M.E. Sharpe 1998). A Japanese edition was published in 1999 under the title Kusariyuku Nihon To Iu System (Toyo Keizai Shimposa).

The book received favorable reviews from such publications as the Wall Street Journal, Business Week, Nihon Keizai Shimbun, Asahi Shimbun, Toyo Keizai, The Japan QuarterlyThe Journal of Japanese Studies and the Far Eastern Economic Review, among others. Toyo Keizai named it "one of the 20 books needed to understand the 21st century." In 2002, his second book was published, entitled Japanese Phoenix: The Long Road to Economic Revival (M.E. Sharpe) in English and Fushicho no Nihon Keizai (Toyo Keizai) in Japanese. It also received favorable reviewsBoth books have been widely used in university courses.

He has testified several times about Japan and Asia to Congressional committees. He has frequently been invited to meet with senior officials in both the US and Japanese governments to provide analysis. In the year 2000, he served on the Council of Foreign Relations' Task Force on the Japanese economy. He regularly lectures at universities and conferences.

Mr. Katz’s essays have been published by Foreign AffairsThe Washington Quarterly, The International Economy Magazine, Current History, Challenge and The American Prospect. Op‑eds have appeared in such papers as the New York Times, London Financial Times, Asian Wall Street Journal, Asahi Evening News, Christian Science Monitor and the Investors Business Daily. He is the author of the article on the Japanese economy in the Microsoft Encarta Encyclopedia. Mr. Katz's comments on Japan are frequently quoted in major publications, including the Washington Post, Wall Street Journal, New York Times, Los Angeles Times, London Economist, London Financial Times, Chicago Tribune, Time Magazine International, Newsweek International, and the San Jose Mercury, and he has been interviewed on CNN, The PBS Newshour with Jim LehrerMarketplace, Bloomberg TV, and BBC's The World.

Having received his B.A. degree in History from Columbia University in 1973, Mr. Katz went on to obtain his M.A. in Economics at New York University (NYU) in 1996.

Japan will eventually reform and revive. Its tragedy is that it is filled with smart, ambitious, creative individuals who are trapped in once vibrant but now ossified political and economic institutions. The whole is so much less than the sum of its parts. The country will revive when it finally undertakes the necessary institutional overhaul. But that takes a visionary leader; Shinzo Abe is not that leader.
Hits:
  • Japan’s economy could not recover without structural reform and structural reform would not occur until the emergence of genuinely contested elections.

  • The Koizumi economic boom would not last; there was less economic reform than analysts claimed

  • The JGB market would not crash (several times over the past decade or so when stories about imminent crashes emerged)

  • There would be no run on the banks in 2003

  • The rescue of Resona Bank in 2003 was the beginning of a real change toward solving the nonperforming loan crisis

  • The “decoupling” theory popular in 2006-07 was wrong and a recession in the US would cause a horrific recession in Japan, as it did in 2008-09

  • The Democratic Party of Japan (DPJ) would lose power if it passed the consumption tax

  • All of Japan’s nuclear plants would end up being shut down in the aftermath of the Fukushima disaster

  • China would not intentionally use military force to take Senkaku Islands and would pull back on economic pressure because it needs Japan just as much as Japan needs China

Misses:
  • While the Koizumi boom did peter out, as predicted in 7b, it took longer to occur than I had predicted

  • The DPJ would gain a single-seat majority in the Upper House in the 2010 elections (made shortly after the DPJ’s big Lower House win in 2009

  • The DPJ would not pass the consumption tax out of fear of losing power

  • The 2009 DPJ victory meant the emergence of a genuine two-party system in Japan (hinged on prediction a being correct) and, if the DPJ won the 2013 Lower House election, the Liberal Democratic Party (LDP) disappearing

What I Learned:

Foreseeing the direction of events is one thing; timing is a lot harder

Key points: - If Trump fulfills plans to deport 11 million illegal aliens, launch trade war with China and Mexico, and perhaps withdraw from NAFTA, it could spark serious recession ​- But failure to take action could lead supporter to regard him as another phony ​- Stock market and most economists are betting Trump will not fulfill these plans ​- His big tax cuts are seen as bullish: stimulus to economy from tax cuts will more than offset drag caused by rise in interest rates and the dollar ​- Economists still a bit higher growth under Trump than Clinton in 2018 (2.3% vs. 2.0%) ​- Dollar index vis-à-vis all trading partners has spiked to 15-year high, including weakening of yen back to ¥110/$ ​- Reason is widening gap between US and Japanese interest rates
In his latest alert, Richard reports that Trump’s dilemma is that voters won’t like consequences of what they asked for: withdrawal from NAFTA and high tariffs against China would cause enormous dislocation for firms producing in the US; 40% of all US imports from Mexico consists of US content embodied in Mexican goods and the blue states that Trump turned red in this election, some by very thin margins, are very dependent on both exports to NAFTA and China, and imports from them.
Third Term for Abe, Early election escapades, The Politics of Japan’s trade strategy, Economy Watch
Rick's October issue of the Oriental Economist includes topics of Risk Averse Culture or Adverse Risk/Reward Ratio - Nurturing Entrepreneurs, Abe’s Agenda 2017 -Election being Planned, BOJ Waves the White Flag, Rightist Nihon Kaigi Organization-Is It Really a Menace? Japan Business Pessimistic Japan-China Political Ties Sour
Key points: - TPP, like other FTAs, is copied and pasted from past FTAs - More text from past American FTAs was copied verbatim into TPP than text from any other country; Japan came in eighth - US share was even higher in chapters where it had a high priority, e.g. nearly 80% of text on investment in past US FDI’s was lifted into TPP’s investment chapter ​- Since TPP is intended to be the template for future FTAs and to incorporate more and more Pacific countries, including China, this gives US big leg up on others

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Resources

Expertise

Japan economy, Japan politics, U.S.-Japan relations

Location

United States

Experience

Current Experience

Editor of The Oriental Economist Report

Past Experience

  • Visiting Lecturer in Economics at the State University of New York at Stony Brook.

Education

  • M.A. in Economics at New York University