ions and companies cannot invest because their net worth is sharply down; and households have not bought durables because people have less money.
The decline in spending has brought on a recession. Companies have excess capacity and too much labor on their payrolls. They are cutting costs and commitments. For example, investment in machinery has declined, and layoffs are expected to reach 1.5 million. The stronger yen, driven by a large trade surplus, is cutting into export opportunities at a time when breathing room in that area could offset the declining home economy. The confidence of the people and businesses has plunged, translating into less investment, lowered consumer spending, softened bank lending, and lowered asset prices. Political troubles distract the government's attention from economic priorities. The public, aware of this, has lost
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