The story of Japan's puzzling lower inflation rate, compared to that of the U.S., deposits a fly in the middle of an otherwise well-oiled U.S. corporate and mass media narrative to insist that fighting inflation, like every other issue facing our country, is solved by increasing immigration.
But Japan seems so far uninterested in loosening its immigration policies to manipulate demand with additional consumers. This is in spite of the country's declining birth rate, the number one contributor to its slightly declining population as well. Is this perhaps a model that takes into account the value of achieving a state of population stabilization perhaps? It is worth contemplating.
Fund manager Robert Cook writing for Bloomberg admits he is baffled over Japan's lower inflation rate relative to other developed economies:
...you’d be hard-pressed to describe domestic inflation as anything other than quiescent. Consumer prices rose just 2.5% in May from a year earlier. Although rising, the numbers are nothing like the US, the euro zone and the UK — nor Japan’s own experience in the early 1970s, when inflation was almost 25%. Most people ignore what’s going on in Japan. But how can you be certain about what is happening elsewhere unless you can explain why it is not happening in an awkward counterexample? I'd be lying if I said I had a complete explanation for the lack of inflationary oomph in Japan…
Cook makes a couple of educated guesses on the cause of this phenomenon. He points to the usual economic issue of loosening monetary policy and a speculation that Japan's rapidly aging population may simply have fewer consumption needs.
Possibly, but is that the whole story? Again one has to wonder if Japan, an island archipelago whose land mass isn't growing larger, and that relies heavily on imports from other countries, must keep its population numbers within a stable range as a factor in calculating the balance between growth in GDP and maintaining quality of life for its current citizens.
As Cook reports, Japan's inflation is still rising slightly, but more slowly.
By contrast, here in the U.S. there is a deliberate effort to continue growing the population with mass immigration, even with inflation at 9.1%.
As of April 2022, there were 47 million foreign-born residents (illegal and legal). And on average the foreign-born population has grown by 132,000 a month (illegal immigration) just since Pres. Biden took office. (cis.org 2022)
The persistent war on the rule of law at the southern border, and the President's congressional allies' repeated attempts to add legal increases in nearly every spending bill (the latest is the House passage of dependents' visas extensions beyond the age of maturity in the NDAA) is making an existing unsustainable population growth crisis unconscionably worse.
Inflation isn't difficult to understand for the average American watching their purchasing power erode and good-paying jobs lost to newcomers who are actively being recruited to supplant them in the labor force by our own government. With the rate of influx in consumer demand and competition for every resource rising so quickly, and almost exclusively now from immigration, even the basics of water and land here in the U.S. are disappearing at alarming rates. (see NumbersUSA's National Sprawl Study).
It is likely that we'll continue to experience rising costs at the same time that Americans' purchasing power continues to decline. Our population growth in total numbers is simply unsustainable and is a significant contributor to at least a partial undermining of the Fed's and central banks' efforts to wrestle inflation under control with additional interest rate hikes.
Scarcity is a scary word, but we must not bury our heads in the sand and pretend it will just go away, or worse that it is an illusion. The solution to a problem cannot be the problem itself. It seems the United States could take a lesson from Japan on finding the balance between safeguarding quality of life and restoring quality and security for its own citizens by reducing immigration. This will go a long way toward alleviating pressures on the renewability and availability of our vital natural resources, and it could also temper the rate of inflation with an additional tool and alternative to what is predicted to become a Fed-driven layoff of American workers already struggling to compete with immigrants for jobs.
CHRISTY SHAW is the Member Services Manager for NumbersUSA