Burning down the house in Japan

If you’ve ever hosted a party — not, like, a dinner party with a few friends, an actual party — you know that it’s always one step from disaster. 

If anything goes wrong, then what was a good time for all can turn into a chaotic disaster with the cat drunk, a strange girl crying in the bathroom, the microwave on fire and the police knocking at your door.  

Maybe that’s worth it to you. It might even be part of the fun. But, you go into things with your eyes wide open. If you’re smart, you’ll maybe even take the cat to your parents for the day just to keep things safe. 

You prepare for what you expect and accept that a few unexpected things might happen. 

What you don’t prepare for is for someone to set the house on fire, destroying everything and causing damages that will take years to repair. If you knew that was going to happen, you’re going to let someone else host the party. That’s not what you signed up for. 

Japan is about to host the biggest disaster of a party that you can ever imagine. It’s not just going to burn down your house, but probably the entire neighborhood with it. 

The Summer Games of the XXXII Olympiad open a week from the time of this writing. What is always an economic disaster waiting to happen, is massively more so this time. Tokyo is in a State of Emergency over the COVID-19 pandemic. After previously banning all tourists from the country for the Games, they have now also forbidden their own citizens from even going to watch. 

So not only is your house going to burn down at the party, you can’t even be there to at least enjoy the ride. 

It is estimated that Tokyo will lose at least $800-million by not having fans. The real number is likely in the billions. 

But, what’s more worrisome is what the long-term psychological impact will be on the economy of the Asian giant. Countries have personalities and Japan’s is cautious. If this was happening in the United States or in the United Kingdom it would still be a mess, but I wouldn’t have had the same concerns. First off, those countries would have allowed fans. Japan’s COVID numbers aren’t any worse than they are in the US and UK. They are just more conservative. 

But, also those countries would have rallied to boost the economy. Citizens would get out and spend as a civic duty and drive an economic recovery. Japan is more conservative. They are already in a long-lasting flat economic period (inflation is basically zero and has been for years) and the reaction to this loss — this very visible mess — is just going to make them even more cautious. 

I wrote last week that people spend money when they are happy. The opposite is true as well. They retreat and save when they are sad or scared. 

So, let’s cheer for Japanese athletes to at least win a lot of medals because the party is going to be very depressing.  And, very, very expensive.