Remora

"Is there any point to which you would wish to draw my attention?"
"To the curious incident of the dog in the night-time."
"The dog did nothing in the night-time."
"That was the curious incident," remarked Sherlock Holmes.


That was, indeed, a curious incident, for those who have ears to hear (that there is nothing to hear) and eyes to see (that there is nothing to see). Well, campers, consider the curious incidents that await us in today's newspaper. One headline says, The surprise recovery is here. America is in great shape, happy days are here again, and Bushiepoo has avoided the curse of the house of Bush, which, before, has always gloomily exuded recession around its slimy walls. But what is this, Watson? Chap says Japan in deep recession, make that depression, with an incredible 4.5 percent drop in GDP. Curious. The stats the Financial Times packs into its first graf are heart stoppers:


"Japan's economy shrank in the fourth quarter of last year on falling exports and a plunge in capital spending, nudging the country into its longest recession since 1993, official data showed on Friday. Gross domestic product contracted 1.2 per cent in real terms between October and December compared with the previous quarter, and 4.5 per cent on an annualised basis. A 12 per cent drop in business investment undermined the benefits of an increase in consumer spending. "

On to today's mystery theater: why don't Japan's numbers bug us?

Perhaps, and here I am flying blind, it has to do with our decades long failure to pierce the Japanese market. This long deplored situation, in which the Japanese craftily avoid our meaty, beaty American products, stimulates periodic choler among our politicos, and the news story about some fantastically expensive thing in Japan that is cheap as water in Omaha and that we could be providing them with if only they didn't protect their farmers, retailers, industry, whatever. And this is a continuing scandal and a stumbling block to free traders. What free traders don't say, however, is that when the global economy is inter-connected, economic contagion is necessarily provided with routes to spread faster than if the global economy is, well, less inter-connected. Clearly, if the US economy depended on exporting to Japan, we would be in deep trouble. And we might well be in trouble with this recovery anyway. And -- to continue backpedalling - if we simulate an economy in which trade barriers with Japan had fallen, and the US was happily trading away with the Japanese, perhaps this kind of activity would re-compose our economy in such a way that its present state would be so different from its current state as to be unpredictible. All clever hypotheses, Watson. But the fact remains, Japan's troubles, so far, have left the U.S. relatively untouched. Given the extent of Japanese investment in this country, and given the size of the Japanese economy, the fact that Japan is doing a Titanic without sucking us into its wake is a mystery. I don't see any of the free traders out there, or the globalists, explaining it.