As New York Times columnist Paul Krugman recently reminded readers, the dirtiest word an economist can call you is “Japanese.” Swedes must be stewing with regret for giving Krugman that Nobel Prize after one of his columns likened the trajectory of Scandinavia’s economy to Tokyo’s battle with deflation: “The rock star of the recovery has turned itself into Japan,” declared Krugman. Sweden’s deputy central bank governor, Per Jansson, called the analysis “rather crude.”

Regardless, Krugman hurled his zinger at an ideal moment, just as Shinzo Abe and Barack Obama are in danger of ignoring the same lessons that Sweden is.

When the two leaders met in Tokyo last week, much of the talk focused on security, including North Korea’s nuclear program and territorial disputes with China. Far more important is the challenge of returning the Japanese and U.S. economies to health. Like their Scandinavian counterpart, neither Japan nor the United States is doing enough to restore growth.

We are 16 months into Abe’s premiership and there’s still no sign of the structural reforms he’s promised. The prime minister pledged to deploy three “arrows” to reach his target of ending deflation: monetary stimulus, fiscal spending and massive deregulation. This last phase is themost important, involving greater entrepreneurship, lower trade barriers, looser labor markets and empowering women.

Yet Abe continues to treat the symptoms of Japan’s funk with ultraloose monetary policy rather than addressing the rigidities and dearth of competitiveness prolonging the economy’s malaise.

For all the excitement over Abenomics, its architect still doesn’t seem to have internalized the teachings from Japan’s lost decade. Take Abe’s revamp of Japan’s $1.25-trillion Government Pension Investment Fund. It really boils down to prodding the fund to cut its bond holdings and buy more stocks. Wouldn’t it be better to tighten corporate governance, tweak taxes to encourage start-ups, and get icons such as Sony Corp. to come up with game-changing products?

Abe claims that joining the U.S.-led Trans-Pacific Partnership will be a down payment on the deregulation at the heart of his program. But this is also a political ploy. Unless Republicans suddenly give Obama fast-track negotiating authority, the pact is a non-starter. Even if it did happen, the final deal is sure to be less than Japan’s economy needs. Abe is loath to cross the farm lobby and automakers.

If the trade deal dies, Abe can still claim he’s Japan’s Margaret Thatcher. It’s smart politics, but ultimately hollow. You don’t have to have a Nobel Prize to see that.

Editorial, Pages 12 on 04/28/2014