Ahhhh….it’s so refreshing to hear soundbites like this from people who know Japan mostly through movies and 2 week vacations. For those of us who reside her (18 years and counting), you’d hear a different story. Yes, the trains run on time. But that’s about the end of efficiency and all-things-beautiful in Japan.

First, the education system here is abysmal. They have a great reputation for science here in Japan — and well deserved — but beyond the few elite schools, the majority of schools churn out worker bees designed not to think. Aso is a product of this system, and look where we’re at now.

The service sector is also a joke, including the banking branch. I just came back from a trip in Bali and I could access my money, 24 hours a day, anywhere using my credit card or my Citibank card. Ditto on even the most remote islands in Thailand. My friends who visit me in Japan from abroad, however, are refused service at the VERY few ATMs that actually will allow you to withdraw cash from a credit card. And most do not recognize Cirrus or Plus. Japan needs to bring it’s banking to an international standard. But don’t hold your breath.

In addition to having their banking butts kicked by poor developing nations, they are also the slow-kids when it comes to language. The only country that scores worse than Japan on standardized English test scores is North Korea. Go Kim Jeong Il! Yes, they ALL study English. It’s one of the largest training markets in Japan. But the average Japanese looks at English as a game. And they’re losing that game badly. Once again, they need to bring their population to an international standard. But don’t hold your breath.

And speaking of the service sector, which The Economist has repeatedly blasted for being pretty much the most inefficient of any developed nation, here’s an example of how they deal with the worsening economy. A real life example, from my sports club down the road. Times are tough and there are fewer customers so they…..a) Tried new ideas to get new customers or b) they cut back the hours that people can use the gym, closing every Monday starting next week. Yes, the answer is b). Instead of going out and trying new ideas, trying to promote new membership by having people on the street handing out fliers, by giving discounts on new memberships — hell, just by getting rid of the useless people who are there to bow at you when you walk in the gym, etc etc etc, instead of all this, they just close down to save money on labor expenses. This is Japan of 2009. It’s a country where the internal consumption engine is outdated and needs a complete overhaul. But they just are unwilling and incapable of doing so. And people wonder why they are not pulling out of this slump.

So for anybody trying to compare Japan with the rest of the world, don’t bother. Japan is truly an island. And it definitely doesn’t work as well as you’d like to think. Furthermore, as long as the rest of SE Asia continues to grow and innovate, Japan will continue to contract. All of that money the author speaks about — the cash savings of individuals hidden in sock drawers around Japan — it exists. In droves. And right now, the older generation is paying out that money to the younger generation to try to maintain the status quo and the lifestyle of a nation that is just trying to keep its head above water until the bubble economy returns (they mostly believe that Japan will dominate again). But once that money runs out, Japan will either sink or swim. I hope they swim, but I have a life raft ready in case they don’t. You should, too.