Triumph of Japan's 'Abenomics': the proof is in the lingerie

Old-school analysts will point to boring economic and stock market data to claim that monetary and fiscal stimulus programmes work: after all, evidence from Japan indicates that GDP for the first quarter of this year grew at an annualised 3.5 percent, and the Nikkei index is up 36 percent since January.

But for the real low-down on just how phenomenally successful “Abenomics” - Japanese Prime Minister Shinzo Abe’s aggressively expansionist policies - has been, it helps to look in other, unconventional places.

Such as, for instance, the length of the miniskirts of peppy Japanese all-girl bands, and the undewired undergarments of Japanese fashion models.

[caption id=“attachment_789069” align=“alignleft” width=“380”] The higher stocks rise, the shorter their dresses get.[/caption]

Japan has been in thrall in recent months ever since the newest all-girl band, calling itself Machikado Keiki (meaning “Streetcorner Economy”), went bullish on Abenomics and held out the tantalising offer of shorter and shorter skirts for every 1,000 point rise in the Nikkei index. The lyrics of their songs are a celebration of monetary easing, and the inflation of what they call “Abe bubble”.

All their near-term goals for the Nikkei index have been breached, which puts the girls at risk of having to perform skirtless. That’s not going to happen, of course, even in Japan, where the happy embrace of the sexy-cute culture has pushed the envelope for impropriety. But it just goes to show how even gritty matters of macroeconomics find resonance in the popular culture and help propel the economy.

Japan has, in the past, used all-girl bands to, for instance, sell government bonds - and even taken out government ads suggesting that men who buy government bonds will get the girls .

But it’s been particularly aggressive in invoking cultural icons to hard-sell the Abenomics targets of higher GDP growth, and an end to the cycle of deflation that has bogged down the economy for nearly two decades.

For instance, the Japanese division of international lingerie brand Triumph has unveiled a special edition bra with additional padding, which it is pitching as symbolizing the kind of “growth strategy” that Abenomics aims to deliver. “As the Japanese economy grows, we hope we can help bust sizes to get bigger,” a spokeswoman claimed, with no hint of irony.

As of now, Abenomics hasn’t yet achieved one of the objectives it set for itself - to reverse the deflationary trend - but it’s been widely hailed as having succeeded in spades.

As Matthew Yglesias points out in Slate , “the data from household spending and home construction shows clearly that while a falling yen may be goosing Japanese exports, the stimulus program is having a broader effect on domestic demand as well. Everything, in other words, is going according to plan.”

At a broader level, the argument in favour of fiscal and monetary stimulus to work an economy out of a downturn too appears to be winning against the shrill calls for austerity, which has dragged down the eurozone economy into a “triple-dip” recession.

“The case for austerity has crumbled,” thunders Nobel Prize-winning economist and commentator Paul Krugman , who has long battled on behalf of greater stimulus in the face of a shrinking economy.

Citing the spectacular collapse of the case for austerity, propounded most forcefully by Kenneth Rogoff and Carmen Reinhart, Krugman notes, “austerity economics is in a very bad way. Its predictions have proved utterly wrong; its founding academic documents haven’t just lost their canonized status, they’ve become the objects of much ridicule.”

Rogoff and Reinhart’s working paper, which had become something of a totem cited by “austerians” in many countries to decry expansionary policies", was recently shown to have elementary Excel sheet errors that discredited it wholesale. The two economists had not made the data - which formed the backbone of their hypothesis that a country’s economic growth declines beyond a threshold of debt - publicly available. But last month, when a graduate student at the University of Massachusetts tried to replicate their results, he noticed a coding error, and several other failings in the data set that effectively debunked the Rogoff-Reinhart theory - and left everyone around the world who had been shaking their pom-poms for austerity red-faced with embarrassment.

These weren’t just parlour games or armchair exercises in intellectual masturbation. These austerity policies had real-world consequences for many. As Krugman points out, the consequences are deeply worrying for anyone who believes that knowledge can make a positive difference in the world. But then, “papers and economists who told the elite what it wanted to hear were celebrated, despite plenty of evidence that they were wrong; critics were ignored, no matter how often they got it right.”

For proof of the failure of austerity economics, one had to wade into the geek world of Excel sheets. On the other hand, the short-term success of expansionary policies in a time of economic downturn has been recorded in far more exciting places. In Japan’s case, one only needs to measure the length of the miniskirts of girl bands - and peep into the inner vestments of lingerie models…