Bush soft on Koizumi because U.S. needs capital: Times
Tuesday, February 19, 2002 at 18:00 JST
LONDON — U.S. President George W Bush did not press Japanese Prime Minister Junichiro Koizumi on Monday to revive the Japanese economy because the United States needs a steady flow of Japanese capital to finance its economy, the Times newspaper reported Tuesday.
"As long as the Japanese economy remains paralyzed and has no alternative but to export its excessive savings, President Bush will not have to worry about the inflationary consequences of his guns-and-butter budgets," the Times said in an article written by economic columnist Anatole Kaletsky.
"Given the universal disappointment with Mr. Koizumi, the unadulterated praise lavished upon him by President Bush seemed out of place," he wrote.
The U.S., which has for 20 years financed its rapid consumption growth and booming investment with Japan's huge savings, is about to become more dependent on Japanese capital than ever before.
"If Japanese consumption and investment started growing strongly, the flow of excessive savings across the Pacific would decline," which could result in an upsurge in U.S. inflation and a sharp fall in the dollar, the column said.
During talks Monday with Koizumi in Tokyo, Bush pledged all-out support for Koizumi's economic reform policies without making any specific requests or prescribing cures for Japan's economic ills.
"But if Japan ever does get its economy in order, all the ingredients will be in place for a dollar crisis. Before the end of his presidency, it may be Mr Bush who is hoping for kind words from Mr Koizumi," the newspaper said. (Compiled from wire reports) |
