Reportedly, the redoubtable and straightforward Bill Seidman,
erstwhile FDIC chairman, is offering the Japanese advice in
solving their financial woes. Given the inference that Japan's
economic woes may reflect, in some wise, the Japanese character
itself, it is to be wondered whether Seidman's counsel will be
heeded. I am hardly a student of Japan. However, it is apparent,
even to the casual observer, that the Japanese have been lacking
of the mettle sufficient to deal with a secretive and, perhaps,
corrupted banking system, now staggering under the onus of an
immense raft of bad loans based on recklessly speculative real
estate and stock market bubbles whose excesses were worthy
of the financial grotesqueries of the South Sea Company of the
1720's or Dutch tulip trading practises of the 1630's.
Which factors have contributed most to the current Japanese
economic crisis are a matter of debate. A worthy list might include
onerous and misguided taxation policies, an "export or die" philo-
sophy based on the island nation's scant resources, the Japanese
propensity to save rather than consume, uneconomic lifetime employ-
ment practices, stagnant population growth, a disenchanted, if not
wayward, younger generation, a proportionally large and growing
elderly segment, anti-competitive and stifling high tariffs, interlock-
ing business alliances dating to Samurai warrior days, kieretsu,
and a cozy, if not corrupt, dovetailing of the private and public
sectors, et cetera.
To be sure, the Japanese have, of late, announced their willingness
to deal, at the eleventh hour, with punitive taxation policies and
have softened their stance with respect to lifetime employment.
Howsoever, a tiger, Asian or otherwise, can not readily change its
stripes. "East is East, and West is West," quoth Kipling. How much
true economic reform of the Western variety, advocated publicly by
Messrs. Seidman and Rubin, will be implemented in Japan remains to
be seen. My guess is that, first and foremost, the well-known Jap-
anese traits of "saving face" and denial, then, the entrenched power
structure, and, finally, certain other factors alluded heretofore
will, in their turn, severely attenuate the economic house cleaning
necessary for Japanese financial viability. It took two atomic bombs
in August of 1945 to penetrate the denial hardened, "save-face" Jap-
anese mind and convince the power elite that they had already lost
the war. Short of a full implosion of the Japanese economy into the
vortex of a powerful depression, it is to be wondered whether the
Japanese response to their present crisis will be "too little, too
late."
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