For a while now, I've been wondering what exactly is wrong with the Japanese economy. Actually, as I write this blog, I'm watching a parliamentary debate regarding the state of the Japanese economy and the proposed reforms. After talking to people and reading newspaper articles, all I got was that the big problem lies in the huge bad loans Japanese banks hold. But how were those bad loans created? What were the steps that led to the current situation of perpetual recession?
Searching around the web, I came across this article. It's a bit long, but it's relatively easy to understand. The light bulbs were going off in my head as I read the article. If the article is correct in its analysis of the situation, Japan will be in this recessions for quite a bit longer. The problems are deeply cultural and thus, very hard to change.