Japan Lacks Political Will to Save Ailing Economy

Henry C.K. Liu hliu at SPAMmindspring.com
Thu Dec 14 21:41:35 MST 2000

Yoshie Furuhashi wrote:


This article is standard Washington Concensus stuff.  It is both righ and
wrong, both for the wrong reasons.
It is wrong to say that Japan lack political will to save its ailing
economy.  If anything, Japan has shown heroic political will to save the
Japanese system.  Japan is tolerating a decade of negative growth in its
own way to resist Us globalization.  Despite a decade of negative growth,
the Japanese public has relatively little pain.  all the pain has been
absorbed by the government and business - Japan Inc.  The Japanese cannot
retructure their banks because they banks are not separate institutions
in the economy.  The banks are major share owners of theri borrowers.
The Bank of Japan, under US pressure pretends to be "independent".
Theidea of an independent central bank is a very peculiar US notion.  In
Japan, when things go wrong, the top suffer first and most. It is part of
the culture. It is the opposit of the US ehere the bottom suffers first
and most. If Japan were to take Larry Summers advaice, it will end up an
a US financial colony.  The US ewant Japan to open its market.  The
trouble is that Japan does not have a market to open.  The Japanese
economy is a vertically integrated dsitribution system.  There is no
market operating. Japan is out to protect Japan Inc to emerge after the
coming collpase of the US economy which will marke the end of market
fundamentalism.  In that sense, Japan shows great political will.

Henry C.K. Liu

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