Dating japan chinese affairs
Its main policies were (i) fiscal activism with an emphasis on public investment in rural and industrial infrastructure; (ii) acceptance of military buildup and expansion; and (iii) pleasing a narrow voter base (rural landlords and urban rich).
It was a party supportive of a big government allocating public money and subsidies.
This policy caused severe depression but he never relented or regretted. Finally, the government (second Wakatsuki Cabinet) was removed and succeeded by a Seiyukai government (Inukai Cabinet) in December 13, 1931.
As soon as the new Seiyukai government was sworn in, finance minister Korekiyo Takahashi completely reversed Inoue's policies: --On the very first day of the new government, Takahashi ended the gold standard and the fixed exchange rate, and floated the yen. --Fiscal expansion financed by government bond issues (called "Spending Policy").
But this view is sometimes challenged and continues to be debated. Junji Banno (Chiba University) wrote that Inoue's deflation policy was pre-requisite for economic expansion of the mid 1930s, because without it efficiency improvement could not have been achieved.
His article indirectly criticizes the current Koizumi government's policy of supporting weak firms and banks without painful restructuring (see the box at the end of lecture 8).
Another aim of the military and right-wing groups was active military expansion.
--As before, macroeconomic downturn was felt primarily in falling prices and not so much in output contraction (estimated real growth was positive during this period).
Smaller "proletariat parties" also emerged with farmers and workers as the support base.
As noted earlier, Junnosuke Inoue of Minsei Party (finance minister 1929-31) was deeply committed to the policy of deflation and returning to gold.
Even ordinary people, who normally hated militarism, were disappointed with the performance of party governments and became more sympathetic to the military and nationalists.
In the 1930s, political and intellectual thinking gradually shifted from economic liberalism toward more economic control under state management.