Mortgage and real estate sales professionals often lack clarity, aren’t easy to implement, and don’t really fit with the lives of the professionals themselves.
Would the East Asian economies have grown so quickly if they did not use real estate as a source of cheap capital for their early-stage growth?
1 Introduction Your question is based upon a mistaken assumption. The Tokyo Consensus economies (Japan 1945–73, South Korea 1960–1980, Taiwan 1960–85, and China 1975-now) did not use “real estate as a source of cheap capital for their early-stage growth” at all. From late 1945 Japanese banks provided loans to many SMEs that had no property assets in the bombed-out area of Tokyo based upon the previous skills and applicant capabilities – no real estate asset backing whatsoever.
2 The Shimomuran Key to The Rapid Economic Growth of the Tokyo Consensus economies
The Tokyo Consensus economies had (and China has) an economic understanding which is much better than any defective system of loans based on real estate. They had the second great investment credit creation economist, Dr Osamu Shimomura (1910–1989).
3 Brief Comments on the Three Significant Investment Credit Economists
3.1 All of the three investment credit economists realised that
- the state could create no-cost large flows of investment credit which could massively accelerate the rate of economic development
- these credits, if earmarked for transmission (on a financial “Convoy System”) to the Small and Medium sized enterprises (SMEs) of the nation could produce a locally based, highly inventive, high innovation economy of lasting widespread local prosperity, and
- a high growth economy rested upon the high living standards of the great mass of the people, while an economy based upon serving its monied elite cannot deliver high growth.
3.2 What Wang Anshi (1021–1086) did The first great investment credit economist was Wang Anshi, when he was the Prime Minister of China (1070–78), whose economic understanding produced the first industrial economy in the world in 11th century China. He introduced a long list of New Economic Policies which made China the greatest economic power in the world twice, first during the 11th century, and second during the 15th century rule of the Yongle Emperor (1402–1424) within the great Ming Dynasty. See
A short list of what Wang Anshi did, using no-cost state-created investment credit, was to provide
- the “seedtime to harvest” loans at 20% interest to hundreds of thousands of farmers, thus creating a massive agricultural surplus which was the food foundation of everything that followed
- the economic development loans to hundreds of thousands of merchants, thus supporting the massive Chinese invention-to-innovation system which was (and now is) the lasting foundation of China’s growth to industrial greatness
- the funds for the development of the first welfare state, providing basic incomes for the unemployed poor, the disabled, and the otherwise disadvantaged
- the funds required for the improvement of China’s roads, the great canal project connecting China’s two major rivers, and the other construction of new state buildings such as orphanages and hospitals and learning centres
- the alteration of the Imperial Chinese Examination system to include mathematics and the reform of Chinese learning centres to become the forerunner of today’s universities by placing genuinely knowledgeable professors above the previously less well educated teachers
- the abolition of the monopolies which oppressed the poor and their replacement with many firms which provided a much better service to the people.
See paras 2.1.3 and 2.2 ofwhich comments on Wang Anshi.
3.3 What Dr Osamu Shimomura did
This is one of my special subjects. See
Shimomura, as a recent “Springer” book about him has suggested, was a candidate for the Nobel Prize in economics during the 1970s but did not receive one, perhaps because none of his eight major works have been translated into English.
The great system of Shimomuran macroeconomics lies the root of the high growth of the four Tokyo Consensus economies. See
3.4 Professor Richard Andreas Werner (1967-?)
In my opinion Richard Andreas Werner is by far the greatest living Western economist, because he is the third investment credit economist in history, and is very likely ultimately to provide the sound intellectual basis for rapid economic growth outside the Tokyo Consensus nations. The previous two investment credit economists produced enormous economic miracles due to their improved economic understanding and I think that will inevitably become Richard’s fate.
A grudging and now out of date summary of Richard’s career is at
Professor Richard Werner resigned his post at the University of Southampton on 31 July 2018 and is now a Professor of Finance at Fanhai International School of Finance and the China Institute for Finance and Economics, Fudan University, Shanghai.
Richard is no longer a Professor at the University of Southampton and the Wikipedia entry should be updated to reflect that.
The Wikipedia entry states that
“According to Werner, he proposed the term, as well as the expression “QE2” to refer to the need to implement true quantitative easing as an expansion in credit creation.[ He has also proposed the “Quantity Theory of Credit”, which disaggregates credit creation used for GDP transactions on the one hand, and financial transactions on the other hand.”
This entry should begin “Werner proposed the term did in his articles about Japan in the early 1990s...” because there is no evidence that anybody else used that expression before Richard
Richard has used his detailed understanding of Granger Causation Analysis correlations in their Henry II updated forecasting format to derive the real world predictive equations which Granger Causatively link the nominal values of the leading indicator of BoJ productive credit creation to subsequent economic growth. He has also proven a Granger causative link between central bank credit creation of speculative financial credit and the Japanese asset bubble. He set out his findings most recently at The 2018 Central Banking Executive Programme which was held from Monday 3rd September 2018 to Friday 7th September 2018 at Linacre College Oxford. See
Central Banking Executive Programme ()
I am currently drafting a Quora-Answer summary of that programme which I hope to finish within a few days.
I predict that Werner’s equations form an alternative much more valid macroeconomics and provide the firm foundation for a system of Shimomuran-Wernerian Macroeconomics which will eventually accelerate the economic growth rate of many nations of the world.
None of the East Asian (Tokyo Consensus) Economies used real estate as a source of cheap loan capital to finance their economic growth.
The rapid growth of the Tokyo Consensus Economies was due to the economic understanding of the second investment credit economist Dr Osamu Shimomura (1910–89) whose economic system – of no-cost central bank credit creation within an inflation-limiting high invention-to-innovation financial convoy system – created the four China Sea economic miracles of Japan (1945–73) South Korea (1960–1980) Taiwan (1960–85) and China (1975-now) and also Singapore (1960-now).
Due to the US-sponsored predominance of Washington Consensus Macroeconomics, research based on the Germanic school of realistic economics is an academic backwater in Western universities. Hence Western economic decline. Neither of these circumstances should continue.