Thanks to Richard Katz and Mike Smitka for their replies. I am reminded of PBS's Paul Solomon, who loves to say that it is no surprise that economists disagree with each other. As such, I will try to stay out of much of this disagreement among economists.

Again, the thing about Stiglitz's article that really caught my attention was the claim that labor productivity has been growing faster in Japan than the US. Richard Katz has his own calculation for 2001 to
2011 (this might not be the best period to measure for Japan, but it does have the virtue of being the most recent decade for which data is available), and his results are not as striking, but even they show Japan is quite close to the US in terms of labor productivity growth, and well ahead of Europe (the recent austerity in some of the Mediterrean countries probably doesn't account for all of Europe's slump in labor productivity during 2001-2011). On the other hand, although Rick understandably thinks his calculation is better, we are now simply left with two competing estimates and no real means for evaluating which is better or even how they are different (e.g. different PPP models?).

RK:
"From January 2008 through Dec. 2012, the total number of jobs in Japan fell by 1.9% but the total number of hours worked by all workers combined fell by 5.4%. A low unemployment rate is not a sign of macroeconomic health, but merely the difference between how Japan deals with macroeconomic problems."

Considering the shrinkage of Japan's labor force the job numbers don't look too bad. Nonetheless, I would not disagree with anything in this paragraph except for the word "merely." As macroeconomic problems are like street cars, how an economy deals with them is no trivial matter, and this should be one way for an economy to qualify as a "model." Spreading the pain among still employed workers is arguably, in some crucial respects, a far superior response, since it can help avoid creating a class of long-term unemployed, a problem that now plagues the US. Workers who remain employed do not loose their skills as the long-term unemployed do, or are perceived to.

RK:

Any high-income OECD country would
look good compared to the US, which is an outlier in terms of both inequality and poverty. Its Gini coefficient is the worst among high-income OECD countries. Japan's once-vaunted income equality has been eroding over the past two decades. And its poverty rate is now the worst among high-income OECD countries, except, of course, for the US.

Yes, obviously inequality has been worsening in Japan over the past two decades. On the other hand, Stiglitz is talking about Japan as a model for the US, not for Europe, and is arguing that growth in labor productivity need not require US levels of inequality.
Of course, given the way European economies are perceived in the US as uniformly bad, pointing to Europe as a model of equality doesn't get one very far in a US debate.

Paul Midford