Thoughts on Japan

When people ask about my favorite tourist destination, I almost always say “Japan, because although it isn’t poor, everything is different from the U.S.” (my photos). Japan was Albert Einstein’s favorite country to visit (pre-WWII) and he admired the people and appreciated their hospitality. My last visit to Sendai was August 2004 (snapshots), part of a road trip from Narita airport to Hokkaido (Weblog entries: driving; trip report).

I’ve been saddened by the news about the earthquake in Japan, but I have no doubt that the world’s most competent people will recover quickly. There is such a depth of skill among the Japanese people that we should continue to expect great things from them.

I’ve spent the last couple of months complaining about the weather here in Massachusetts, with snow hanging around like an unwanted in-law and making it impossible to walk the dog without donning snowshoes. Now that Nature’s power has been made evident in Japan, I feel ashamed for having whined.

One thing that does concern me, however, is Japan’s indebtedness. The government borrowed so much money (up to more than 200 percent of GDP) dealing with a minor problem (economic growth not as strong as politicians would have liked) and engaging in “stimulus” spending that failed to stimulate (though it did cover the landscape with concrete). I wonder if they now have the capacity to borrow whatever it will take to dig the country out of a serious problem. I find it hard to believe that an incompetent government and crony capitalism can permanently hold back the world’s most skilled people, but this belief is based on faith rather than data.

[And perhaps there is a cautionary tale in here for the U.S. Don't spend all of your capital trying to fight a man-made problem, e.g., the subprime and asset-bubble collapse, because you might need it to fight a much larger problem.]

[Separately, does anyone have good ideas for how to contribute to disaster relief in Japan? I can't donate to the Red Cross because I have an agreement not to donate money to organizations whose employees make more than I do (the Form 990 for the American Red Cross (available from guidestar.org) reveals that James Hrouda collected $648,000 in 2009; Mary Elcano took $538,000 off the top; Brian Rhoa raked off $400,000; Mary-Alice Frank took home $541,000; Theresa Bischoff, Elizabeth O'Neill, Gail McGovern, and William Moore all earned $400,000 or more).]

21 Comments

  1. Josh Volchko

    March 14, 2011 @ 1:45 pm

    1

    I always here good things about Doctors Without Borders. And though I’ve never personally donated (cause I’m a jerk?), the few reportable incomes still probably make less than you. Although, granted, unlike the less developed countries’ disaster cleanups you hear this group take part of, Japan may not have as much need for critical medical services from outside groups, but who knows.

    http://www.guidestar.org/FinDocuments//2008/133/433/2008-133433452-0548cb16-9.pdf

  2. philg

    March 14, 2011 @ 1:52 pm

    2

    Thanks, Josh. $149,000 per year for the highest-paid employee in an organization with $160 million per year in revenue does seem to be lower than typical and the MSF Web site indicates that they are trying to do something in Japan.

  3. Jae

    March 14, 2011 @ 1:58 pm

    3

    I haven’t confirm this but on NPR, a pundit was saying that 95% of the japanese national debt was held internally, ie by its own citizens, banks and corporations. This gave the country unusual economic control, effective or not, by adjusting interest rates and taxes. If accurate, that would be a big difference compared with the US debt.

  4. Patrick

    March 14, 2011 @ 2:53 pm

    4

    Why do you think the world’s most skilled people ended up with an incompetent government (at least with regards to fiscal policy)?

  5. philg

    March 14, 2011 @ 3:18 pm

    5

    Patrick: Excellent question! But maybe democracy simply can’t handle any economic situation other than robust growth. Look at the United Kingdom, whose government expanded, borrowed, and spent heavily during her 65 years of post-WWII stagnation (so that her citizens ended up with only 61 percent of the purchasing power of an average citizen of Singapore, a situation that would have been unimaginable in 1945). Or the U.S., where some bad economic times have led to ridiculous government interventions, e.g., Nixon’s wage and price control system to contain the inflation caused by the massive expansion of government in the 1960s (Vietnam War, Medicare, Medicaid, etc.). Or Greece, Spain, and Portugal, where the politicians built a government sized for vastly wealthier citizens (who, unfortunately, have not materialized thus far).

  6. Peter T.

    March 14, 2011 @ 3:39 pm

    6

    You might want to consider the Salvation Army’s Japan Earthquake and Tsunami Relief fund. The Salvation Army in Japan is a locally administered non-profit that has operated in Japan since 1895. According to their website, they have 80 centers, four children homes, and two hospitals operating in Japan already serving the disadvantaged residents of Japan who are probably in greater need of help than most other citizens of Japan affected by this disaster.

    Guidestar doesn’t appear to have any information on the Salvation Army’s Japan organization, but their U.S. operations have historically been well managed, with their executives not receiving an excessive amount of compensation.

  7. philg

    March 14, 2011 @ 3:46 pm

    7

    Peter: How do you know what Salvation Army executives get paid? http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=484#1 says that they are exempt from filing a Form 990 (since they are a church).

    http://philanthropy.com/premium/stats/salary/index.php?orgid=321092 has some limited info, but it looks as though the Salvation Army’s Director of Investor relations may be pulling in $215,000 in cash, $27,000 in benefits and an unspecified amount in pension benefits/obligation. So he or she is doing about the same as a Massachusetts State Trooper (to whose salary I already am making hefty contributions!).

    [This philanthropy.com database page is a good quick survey of non-profit wages (these are from just a handful of the nation's non-profit orgs, but are presumably typical of what employees earn at the larger ones).]

  8. Peter T.

    March 14, 2011 @ 4:53 pm

    8

    One of Salvation Army’s organizations does need to file a Form 990 (Salvation Army World Service Office), and of the eight officers and trustees listed on their 990, only one was compensated (the executive director, at $57,403).

    But I think the relevant question is: how well is the Salvation Army of Japan managed?

    Don’t know if there’s a similar website to Guidestar that covers Japan-based non-profits (especially one that might be translated in English).

    The Salvation of Army of Japan does have a rudimentary English language website that gives basic information as how they serve the Japan (though it hasn’t been updated with any information about the Earthquake and Tsunami): http://www.salvationarmy.or.jp/index_english.html . But no financial information listed there in English.

  9. Mike Linksvayer

    March 14, 2011 @ 7:25 pm

    9

    The philanthropy.com database is pretty interesting. The record for the Center for Effective Philantropy (Cambridge, Mass) http://philanthropy.com/premium/stats/salary/index.php?orgid=356868 is either a case in point and ironic (org presumably devoted to making effective use of donations without a very significant budget highly compensates top exec) or a study of an effective and appropriately compensated exec — the top exec’s salary grew tremendously, but not nearly as fast as the org’s revenue, which the top exec was presumably largely responsible for raising.

  10. pellucid

    March 14, 2011 @ 9:55 pm

    10

    Philip, I recommend http://www.mercycorps.org/ for donation – I found them to have small operational cost ratios compared to Red Cross / other big names.

    (thanks to the person who posted philanthropy.com database link!)

  11. Jim

    March 14, 2011 @ 10:50 pm

    11

    Google has a page here:

    http://www.google.com/crisisresponse/japanquake2011.html

    It’s suppose to go to the Japanese Red Cross.

  12. Friedrich

    March 15, 2011 @ 2:14 am

    12

    In Germany I’ve spend quite some money on the THW.
    http://www.thw.de/EN/Homepage/homepage_node.html

    I probably will do someday again.

  13. mtX

    March 15, 2011 @ 4:51 am

    13

    Apparently, direct relief  www.directrelief.org) has a good record of spending the least of its money on promotion or administration – I haven’t actually checked up on it, I just read about it on another site and went ahead and donated.

  14. Tom

    March 15, 2011 @ 8:14 am

    14

    You might consider http://www.ldsphilanthropies.org/humanitarian-services

    From their about page at http://www.ldsphilanthropies.org/ldsp/about/ they state:
    “100 percent of all donations go to help those in need. No administrative costs are deducted by LDS Philanthropies or our affiliated charities.”

  15. Ethan

    March 15, 2011 @ 10:49 am

    15

    Direct Relief’s CEO makes $247,000/annually, according to Charity Navigator and they use 98.8% of revenue for programs, with the remaining going to administrative and fundraising. I’m not registered on guidestar.org so I can’t view the financials there.

  16. Ethan

    March 15, 2011 @ 11:00 am

    16

    And, wow. From Reuters: http://blogs.reuters.com/felix-salmon/2011/03/14/dont-donate-money-to-japan/

    Felix Salmon makes a good point about unrestricted vs. restricted donations. The Red Cross has millions of dollars from the Tsunami relief in 2009 that it is trying to spend, but can’t – no projects that meet it’s requirements, corruption, etc. MSF (Doctors without Borders) doesn’t solicit restricted donations for that reason, but then he drops this bombshell,

    “In the specific case of Japan, there’s all the more reason not to donate money. Japan is a wealthy country which is responding to the disaster, among other things, by printing hundreds of billions of dollars’ worth of new money.”

    I am totally astounded at the depth of ignorance here, from the increase in their debt to rampant inflation/devaluation. “Daddy, I want that toy.” “Sorry, we don’t have the money.” “Well then, just write a check!”

  17. philg

    March 15, 2011 @ 11:17 am

    17

    Ethan: Thanks for the link. Certainly in an advanced country such as Japan it is hard to know how an outside organization is going to be able to accomplish anything that the Japanese themselves can’t accomplish. Maybe the answer is that we need to stick with Japan for the next five years by buying their exports while they rebuild. The yuppie could buy a Lexus, Infiniti, or Acura instead of a BMW or Mercedes. A family could buy a made-in-Japan TV (Panasonic V-series plasma? larger Sharp LCDs?) instead of a Korean- or Chinese-made LCD TV. Everyone can buy Japanese rice crackers (http://www.asianfoodgrocer.com/ seems to be a source).

  18. Owen Byrne

    March 15, 2011 @ 2:20 pm

    18

    The best comment I have read recently related to your last comment was from Patrick McKenzie, an American living in Japan.

    “By the way, wondering what you can do for Japan? Take whatever you’re saying currently about “We’re all Japanese”, hold onto it for a few years, and copy it into a strongly worded letter to your local Congresscritter the next time nativism runs rampant.”

    http://www.kalzumeus.com/2011/03/13/some-perspective-on-the-japan-earthquake/

  19. Dan Weber

    March 15, 2011 @ 6:45 pm

    19

    Givewell says to not bother with Japan. Well, not that callously.

    http://blog.givewell.org/2011/03/11/japan-earthquaketsunami-disaster-relief-donations/

    There’s a lot to read there.

  20. Glenn

    March 16, 2011 @ 3:17 pm

    20

    I usually give to Mennonite Disaster Services or other branches of the Mennonite Central Committee. They rate quite highly in terms of money collected to money spent on actual good deeds. They are usually focused on the US and Canada, but have connections to organizations throughout the world.

    In this situation, I do feel as though it is best that we contribute to organizations that will assist in Japan, but not to insist that the money is only spent in Japan.

  21. Mike Woods

    March 20, 2011 @ 11:16 pm

    21

    I’m a bit disturbed at the ‘Japan is rich, do not donate to Japan’ attitudes that I’ve heard in conversations around me. Even though Japan is a ‘rich country’ there are still many individuals in dire straits that need assistance – far beyond what is feasible or desireable for government to do.

    Even thought the US the wealthiest country on earth, I felt the need to give after Katrina devastated New Orleans and the surrounding areas.

    @Phil – I do appreciate your view of the major charities. I, too, have issues giving to organizations that pay their employees far more than what I earn. But that is why I donate to local churches with boots-on-the-ground. This article mentions several churches active in Japan – there are easy ways to find the local branch and donate directly to them:
    http://newsok.com/article/3549299

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