How on earth did Japan get itself into such trouble? Iida Hideo, a finance lawyer, describes what he calls the Boiled Frog syndrome: “If you drop a frog into a pot of boiling water, he will jump out immediately and be saved. If you put him in warm water, he feels comfortable and does not notice when you slowly raise the temperature.” Before the frog knows what is happening, it’s cooked.

       The Boiled Frog syndrome is what comes of failing to change as the world changes. Techniques such as tobashi [“creative accounting”] keep the water lukewarm, hiding disastrous mistakes. The policy of shoring up insolvent firms and wasteful government agencies at public expense creates no incentive for those in charge to rethink their mistakes. Meanwhile, the government croons the public to sleep with reassuring lullabies about Japan’s unique form of government by bureaucracy, and its superiority over the degenerate West, exemplified by Sakakibara Eisuke’s book Japanese-Style Capitalism as a Civilization. ... Radical change will come only when conditions have grown completely intolerable, and in Japan’s case that day may never come. To put Japan’s financial troubles into context, we must remember that it remains one of the wealthiest countries in the world; the bankrupt banks and deflated stock market are not going to deprive most people of their television sets, refrigerators, and cars. From this point of view, Japan remains a reasonably comfortable place to live. (D&D, 370-1)

The best word to describe Japan’s modern plight is Chuto Hanpa, which means “neither this nor that” — in other words, mediocrity. (D&D, 371)

It’s a story of strengths inherited from the industries of the 1970s balanced against severe weaknesses in the industries of the new millennium.
Technology in Japan is good, but not nearly as good as was once thought; it’s “neither here nor there” — that is, Chuto Hanpa. Because of this mix of qualities, Japan will not crash. There is more than enough industrial power to support the population at roughly present standards. On the other hand, given its deep systemic weakness in finance and technology, Japan is not going to boom. The long-term prognosis is for more Chuto Hanpa, with GNP growth slow, unemployment edging upward, and the debt burden mounting year by year. (D&D, 374-5)
In asking ourselves at the deepest level what happened to Japan, it helps, oddly enough, to look again at ikebana flower arrangement. One day in the fall of 1999, I broached a question to the flower master Kawase Toshiro. It was something that had long been troubling me: What is the real difference between old-style ikebana and the monstrosities that pass under that name these days? One can regret the use of wire and vinyl cutouts, the way flowers and leaves are stapled and folded together, the way manuals diagram arrangements in terms of exact angles at such-and-such degree — but all of these things, however distorted, do have roots in the tradition. What is the crucial difference? Kawase’s answer was that modern flowers lack jitsu — that is, “reality.” Traditional flowers had a purpose, whether it was religious or ritual; people in those days had a mystical respect for the wonders of nature and used their arrangements as a way of seeking and responding to the creative breath of the cosmos. Nowadays, all this is lost. There is no purpose except decoration for its own sake, no inquiring after the nature of plants and flowers themselves. Instead, the flowers are just “material,” not much different from any other material such as vinyl and wire, used any which way to serve the whimsical needs of the arrangers. In short, there is no jitsu, no spiritual purpose, nothing that connects with the inherent forces of nature — just empty design.
Kawase’s comment was a profound one, for lack of jitsu carries over into every field in Japan today, and can be said to be at the very root of the country’s present cultural malaise. The construction frenzy (building without purpose), architecture (design without context), education (facts without independent thought), new cities (destroying the old), the stock market (paying no dividends), real estate (making no returns), universities (irrelevant to education), internationalization (keeping out the world), bureaucracy (spending without regard to real needs), finance (“virtual yen”), cinema (aimed mostly at children, not at adults), company balance sheets (“cosmetic accounting”), the Environmental Agency (unconcerned with the environment), medicine (copycat drugs improperly tested), information (fuzzy facts, secrets, and lies), airports (bad for people, good for radishes) — there is no other way to put it. It is this that leads me to call Japan a case of failed modernization. ...
The cultural troubles are long-term and chronic. There is a way out, of course, and it’s the way of jitsu — getting back in touch with reality. The reality that Japan needs to get back to, however, is not necessarily reality as it is seen in the West but Japan’s own moral and cultural roots. ... The manualized flower arrangements are a denial of everything that flower masters taught for centuries; the bombastic architecture a slap in the face to a long tradition of restraint and aesthetic sensitivity; the smiling baby faces an absurd end to the sophisticated adult culture that gave us Noh drama, Basho’s haiku, sand gardens, and so much more. Most tragic of all, the construction frenzy that is a core part of today’s distorted system is destroying the very land itself, the land that the Japanese have always considered to be sacred.
The result of Japan’s war with jitsu has been to tear apart and ravage most of what Japan holds most dear in its own culture, and this lies at the root of the nation’s modern cultural malaise: people are sick at heart because Japan has strayed so far from its true self. The challenge for the Japanese in the past two centuries was how to come out of isolation and assert themselves in the world, and in this they succeeded brilliantly, to the extent that Japan is now one of the world’s most powerful nations. Success came, however, at tremendous internal cost. The challenge of this century will be how to find a way home. (D&D, 382-5)