Japan launches massive stimulus package

Shinzo Abe: Bad guy done good?

The Japanese government has approved a massive emergency stimulus package, worth ¥10.3trn (£71.5bn), aimed at restoring growth in the long-stagnant economy.

The package will be used to fund infrastructure investment, disaster mitigation projects, subsidies for companies which invest heavily in research and development, and financial aid to small businesses. The government hopes to raise growth by 2 percentage points, as well as add over half a million jobs to the economy.

The prime minister, Shinzo Abe, also made clear again that he is planning to exercise far more direct control over Japanese monetary policy than is conventional. Before Abe was elected, he announced that the BoJ should embrace "unlimited easing" and cut interest rates below even the 0.1 per cent paid on deposits "to strengthen pressure to lend".

Today, Abe reiterated that pressure, telling a press conference:

We will put an end to this shrinking, and aim to build a stronger economy where earnings and incomes can grow. For that, the government must first take the initiative to create demand, and boost the entire economy.

Abe has no qualms with wild policy. Last week, he "nationalised" industrial stock in Japan, buying private infrastructure with public funds in order to force the pace of investment in the country.

It seems quite clear that Abe is prepared to use every possible channel available to him to push for a return to growth in Japan. The results have been positive so far; bond yields have stayed low, while the yen has finally dropped (which might be bad for the country's elderly, but is very good for its economy overall).

Paul Krugman argues that all of this success isn't exactly on purpose. It bears more hallmarks of Abe –  "a nationalist, a denier of World War II atrocities, a man with little obvious interest in economic policy" – doing exactly the opposite of what he's told to do based purely on his contempt for learned opinion:

It will be a bitter irony if a pretty bad guy, with all the wrong motives, ends up doing the right thing economically, while all the good guys fail because they’re too determined to be, well, good guys. But that’s what happened in the 1930s, too…

On the 22nd, the Bank of Japan will meet, and we'll see how much it listened to Abe. If it does follow his requests/demands for aggressive monetary policy, the country will solidify its reputation as one to watch in the immediate future.

Shinzo Abe. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty
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Amber Rudd's ignorance isn't just a problem for the laws she writes

Politicians' lack of understanding leads to the wrong laws - and leaves real problems unchecked. 

Amber Rudd’s interview with Andrew Marr yesterday is not going to feature in her highlights reel, that is for certain. Her headline-grabbing howler was her suggesting was that to fight terror “the best people…who understand the necessary hashtags” would stop extremist material “ever being put up, not just taken down”, but the entire performance was riddled with poorly-briefed errors.

During one particularly mystifying exchange, Rudd claimed that she wasn’t asking for permission to “go into the Cloud”, when she is, in fact, asking for permission to go into the Cloud.

That lack of understanding makes itself felt in the misguided attempt to force tech companies to install a backdoor in encrypted communications. I outline some of the problems with that approach here, and Paul Goodman puts it well over at ConservativeHome, the problem with creating a backdoor is that “the security services would indeed be able to travel down it.  So, however, might others – the agencies serving the Chinese and Russian governments, for example, not to mention non-state hackers and criminals”.

But it’s not just in what the government does that makes ministers’ lack of understanding of tech issues a problem. As I’ve written before, there is a problem where hate speech is allowed to flourish freely on new media platforms. After-the-fact enforcement means that jihadist terrorism and white supremacist content can attract a large audience on YouTube and Facebook before it is taken down, while Twitter is notoriously sluggish about removing abuse and hosts a large number of extremists on its site. At time of writing, David Duke, the former head of the Ku Klux Klan, has free use of YouTube to post videos with titles such as “CNN interview on Bannon exposes Jewish bias”, “Will the white race survive?” and “Stop the genocide of European mankind”. It’s somewhat odd, to put it mildly, that WhatsApp is facing more heat for a service that is enjoyed by and protects millions of honest consumers while new media is allowed to be intensely relaxed about hosting hate speech.

Outside of the field of anti-terror, technological illiteracy means that old-fashioned exploitation becomes innovative “disruption” provided it is facilitated by an app. Government and opposition politicians simultaneously decry old businesses’ use of zero-hours contracts and abuse of self-employment status to secure the benefits of a full-time employee without having to bear the costs, while hailing and facilitating the same behaviour provided the company in question was founded after 2007.

As funny as Rudd’s ill-briefed turn on the BBC was, the consequences are anything but funny. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.