Nipponification?

To pick up on a theme, is American going to go the way of Japan? By this I don't mean xenophobic and robot-obsessed. Rather, will we see continued economic stagnation, zero interest rates, employment only held together through wasteful and purposeless government spending, and long term declines in asset values (i.e., Dow 1000, home values declining another 50-70%, etc.)?

The answer hinges on the following question: what can we do to differentiate our path from Japan's? If you go back to Bernanke's deflation speech (2002), it becomes clear that we have done nearly the exact same things that Japan did to combat their asset catastrophe. As of today, we are in the same liquidity trap that has mired Japan for a decade. To be honest, I do not know what exactly would accelerate economic growth to the point where we could reach escape velocity. We need four things simultaneously: better employment figures, confidence in the market, assets to be priced attractively, and inflation. These four cannot be had at the same time -- or at least, they cannot be engineered by the Federal Reserve to occur in simultaneity.

For now, I would be content if policy makers would just pursue job growth.