What is Abenomics?

Abenomics is the nickname for the economic policies set out for Japan in 2012 when prime minister Shinzo Abe came into power for a second time. Abenomics involved increasing the nation’s money supply, boosting government spending, and enacting reforms to make the Japanese economy more competitive. The Economist outlined the program as a “mix of reflation, government spending, and a growth strategy designed to jolt the economy out of suspended animation that has gripped it for more than two decades.”

Understanding Abenomics

Abenomics refers to the economic policies of a particular politician, in the same way, that Reaganomics or Clintonomics does. Abenomics was promoted as a way to shake Japan’s economy out of a period of minimal growth and overall deflation. Japan’s economic troubles dated back to the 90s, also known as the Lost Decade. It was a period of marked economic stagnation in Japan, following a massive real estate bubble burst in the 1980s, and Japan’s asset price bubble burst in the early 90s.

The Japanese government responded to the economic fallout by running massive budget deficits to fund pubic works projects. In 1998, economist Paul Krugman argued in a paper titled “Japan’s Trap” that Japan could raise inflation expectations by committing to an irresponsible monetary policy for a period of time, thereby cutting long-term interest rates and promoting the spending needed to break out of economic stagnation. 

Japan adopted some of Krugman’s recommendations, expanding the money supply domestically and keeping interest rates remarkably low. This facilitated an economic recovery, beginning in 2005, but it ultimately did not stop deflation. 

In July 2006, Japan ended its zero-rate policy as Abe took power in his first term as prime minister. Abe would resign as prime minister suddenly in 2007, but continued to serve in the ruling party. Though still having the lowest interest rates in the world, Japan could not stop deflation. The country saw the Nikkei 225 drop more than 50% between the end of 2007 and the beginning of 2009. In part due to the economic malaise Japan seemed unable to shake, Abe’s party, the Liberal Democratic Party of Japan (LDP), lost power to the Democratic Party of Japan.

Abenomics and the Three Arrows

Abe began a second term in December 2012. Soon after resuming office, he launched his Abenomics plan to bolster Japan’s stagnant economy. In a speech following his election, Abe announced that he and his cabinet would “implement bold monetary policy, flexible fiscal policy and a growth strategy that encourages private investment, and with these three pillars, achieve results.”

Abe’s program consisted of three “arrows.” The first was printing additional currency – between 60 trillion yen to 70 trillion yen – to make Japanese exports more attractive and generate modest inflation—roughly 2%. The second arrow was new government spending programs to stimulate demand and consumption—to stimulate short-term growth, and to achieve a budget surplus over the long term. 

The third component of Abenomics was more complex—a reform of various regulations to make Japanese industries more competitive and to encourage investment in and from the private sector. This included corporate governance reform, easing of restrictions on hiring foreign staff in special economic zones, making it easier for companies to fire ineffective workers, liberalizing the health sector, and implementing measures the help domestic and foreign entrepreneurs. The proposed legislation also aimed to restructure the utility and pharmaceutical industries and modernize the agricultural sector. Most important, perhaps, was the Trans-Pacific Partnership (TPP), which was described by economist Yoshizaki Tatsuhiko as potentially the “linchpin of Abe’s economic revitalization strategy,” by making Japan more competitive through free trade.

Did Abenomics Work?

Like all Japanese economic policy since the bubble burst, Abenomics has worked well at times and stalled at others. Inflation targets have been met and Japan’s unemployment rate is more than 2% lower than when Abe came to power for the second time. Similarly, nominal GDP has increased and corporate pre-tax profit and tax revenues have both seen significant rises. However, Japan’s periods of success have been halted at times by global economic forces and the country’s most significant economic problem – a rapidly aging population – has increasingly taken the forefront.

What Is the Americans with Disabilities Act (ADA)?

The Americans with Disabilities Act (ADA) prohibits discrimination against people with disabilities and guarantees that they have equal opportunity to participate in mainstream American life. Passed in 1990, this federal law made it illegal to discriminate against a disabled person in terms of employment opportunities, access to transportation, public accommodations, communications, and government activities.

The ADA prohibits private employers, state and local governments, employment agencies, and labor unions from discriminating against those who have disabilities. Under the ADA, employers are also required to make reasonable accommodations for an employee with a disability to perform their job function.

Understanding the Americans with Disabilities Act

To be covered by the ADA, a person must have a physical or mental impairment that substantially limits one or more major life activities. Three major sections comprise the primary protections introduced by the ADA.

Title I of the law prohibits discrimination against qualified individuals with disabilities during job application procedures, hiring, firing, the pursuit of career advancement, compensation, job training, and other aspects of employment. It holds authority over employers who have 15 or more employees.

Title II applies to state and local government entities. This part of the law further extends the protection from discrimination to qualified individuals with disabilities. It requires that these individuals have reasonable access to services, programs, and activities provided by the government.

Title III prohibits discrimination against people with disabilities regarding access to activities at public venues. This includes businesses that are generally open to the public, such as restaurants, schools, day care facilities, movie theaters, recreation facilities, and doctors’ offices. The law also requires newly constructed, rebuilt, or refurbished places of public accommodation to comply with ADA standards. In addition, Title III applies to commercial facilities that include privately owned, nonresidential facilities such as factories, warehouses, or office buildings.

Different government agencies play a role in enforcing the ADA. For example, the Equal Employment Opportunity Commission (EEOC) enforces Title I. The Department of Labor enforces state and local government services under Title II and public accommodations under Title III.

How the Americans with Disabilities Act Increased Accessibility 

The ADA established standards for accessible design for public accommodations that include creating automatic doorways, ramps, and elevators to accommodate wheelchairs. Water fountains must be made available at heights that individuals with disabilities can reach.

Some examples of accommodations in the workplace include supplying a hearing-impaired applicant with a sign language interpreter during a job interview, modifying a work schedule to meet the needs of a person who needs treatment, or restructuring an existing facility to make it readily accessible to people with disabilities. An employer is not required by the ADA to make reasonable accommodations if doing so presents an undue hardship for the business and requires significant expenses compared with the size of the company.

Title IV of the ADA requires telephone companies to provide telephone relay services, or similar devices, for the hearing- and speech-impaired.