This week, as school is just starting at UC San Diego, Prospect is revisiting some of our most popular pieces from the previous academic year. We will begin posting new material soon; until then, enjoy our look back!

By Nolan Weber
Senior Editor

Work-a-day meth addicts can keep it together for a time—and they may even get a lot of stuff done. Hey, look at Christopher Walken. He managed to earn a small fortune staying alive for countless rounds of Russian Roulette in The Deer Hunter. Granted he wasn’t a speed addict, but the fact is, no matter what, unsustainable situations always crash—hard.

That might as well be the case with Japan. The confluence of factors impending over its eventual demise retain such a serious tone, it is hard not to fear for the nation’s long-term governmental stability. From energy to fiscal to monetary policy, Japan finds itself between a rock and a hard place on every front.

In the wake of the Fukishima Nuclear Disaster, Japan has halted the production of all nuclear power—reducing domestic energy production by 30 percent of pre-Fukishima levels. Japan now has to import fossil fuels to make up the difference. With national debt at 230 percent of GDP and a budget deficit of 56 percent of GDP, Japan currently has to grapple with negative economic expansion while producing domestic energy at heavy loss. Indeed, Japan has entered a deep recession given its economy is contracting at an annualized rate of 2.3 percent.

Furthering disconcerting sentiment, Japan currently allocates 25 percent of its budget to simply service the interest on its debt.To keep itself afloat, the industrial titan is seeking to devalue the yen to maintain its manufacturing-based, export-driven economy. Yet, by debasing its currency Japan is destroying its citizens’ wealth. The people of Japan, more than any other developed nation, buy their own government bonds—Japanese debt. Consequently, citizens are primed to see negative returns on their investment and realize a dystopian retirement if the Bank of Japan tries to print its way out of this predicament.

The Bank of Japan certainly cannot deflate. If policy is set to strengthen the yen, their economy will shrivel in the face of Japan’s need to export. It is a resource poor nation. It imports 90 percent of raw goods, yet, historically, it has done an excellent job in generating wealth by creating usable products out of raw materials. However, if the Bank of Japan decides to let the yen appreciate in value, the manufacturing upon which the country depends will be priced out of the market.

We don’t have a place in history to reference where a decades-long, recession-stricken country has suddenly lost 30 percent of its energy output and forced to survive. Will Japan collapse? I don’t know. But what I do know is the Bank of Japan has clearly adopted a policy of currency debasement-printing. To that end, there has been no nation that has been able to print its way to prosperity. Indeed, people orders of magnitude smarter than myself are trembling at what will happen next.

Photo by Matteo Mazzoni


By Joe Armenta
Senior Editor

Like a good American, I spent this Memorial Day weekend shamelessly streaming the entire fourth season of “Arrested Development.” Alongside disturbing hilarity, I found that the new episodes provide insight into post-recession America and shed light on some of the hardships brought about by the crisis.

“Arrested Development” revolves around the wealthy Bluth family whose lives are put on hold after the head of the household, George Bluth Sr., is convicted of violating federal financial laws including conducting business with Saddam Hussein. The show focuses on his son, Michael, as he attempts to rebuild his father’s real-estate development enterprise while trying to hold the family together. The initial three seasons aired from 2003 to 2006 and returned last week after a 7-year hiatus.

Much has changed since the show’s abrupt cancellation. When the Bluth family was last seen on television, George W. Bush was still president, razr flip phones were in high demand and Myspace was the hottest means of social networking. Moreover, the housing bubble was at its peak with the national home prices increasing by 10.5 percent. In May 2006, the median cost for single-family housing in San Diego hit $574,000. By March 2012, the same index was priced at $336,250.

It is within this timespan that the new season of “Arrested Development” spends the first few episodes reviewing. Many of the characters are found victims of the crisis. Michael discovers himself living in his son’s dormitory after the housing market crash leaves his prized real-estate project worthless. His sister Lindsay and her husband Tobias buy an upscale house in Orange County mansion despite having no source of income and bad credit. It is quickly subject to foreclosure.

These subtleties add to the comedic rhythm of the show and also play off of the greater economic catastrophe of the mid- to late-2000s. While it is funny to see all members of the Bluth family essentially becoming homeless and taking refuge in the leftover remnants of their family’s empire, the conditions that they face, while hyperbolic, are not unique.

Since September 2008, 4.2 million households have filed for foreclosure. A report by the Urban Institute finds that the process of foreclosure can have an impact on a family’s level of stress, its relationship with one another and its overall feeling of stability. Foreclosure also affects the greater community by adding financial stress to local governments and by decreasing property values.

Those affected by foreclosure are not the only victims of the crisis. According to the National Alliance to End Homelessness’ annual “State of Homelessness” report, over 6.8 million poor families are living “doubled-up” in the United States—defined by two or more families residing in a single-resident household. The report also showcases how median income is declining while housing and rent prices are increasing. In March, San Diego saw its cost of housing increase by 12 percent. While people are earning less money, the cost of living is getting higher.

All of this lies in the backdrop of “Arrested Development.” The new season is about hitting rock bottom and finding yourself handcuffed in a storage unit after a failed Christian-themed magic show, or coming home only to be arrested for soliciting a minor who happens to be your daughter. Yet, the show is also about recovery, both economically and personally. The Bluth suffers endless hardship, but remains at the same dysfunctional level of as they were during the first three seasons.

In short, the new season is about persevering through America’s arrested development.

Photo by Ammon Beckstorm