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To: Jim Willie CB who wrote (6385)	7/27/1998 3:51:00 PM
From: Katherine Derbyshire	Read Replies (3) \| Respond to of 10921

>>the above average in talent & skill would say "let me compete with possibility of layoffs and cycles"<< Until very recently, the above average Japanese haven't been forced to make that choice. They've been offered lifetime security in an export-driven economy that succeeded in inflicting layoffs on the rest of the world. The price, which is now coming due, has been a closed, inefficient market at home and the need to support less robust domestic companies via high taxes. >>a wise European once said "Capitalism results in the unequal distribution of wealth... Socialism results in the equal distribution of misery" ... Japan is a closed socialist nation masquerading as a capitalist economy<< I'd describe it as feudal, not socialist. The lord of the manor (the government or the corporation) watches over the vassals in return for loyalty, labor, and (in times of war) blood. >>debatable whether their culture has served them well for 1000 years... << Japan has the oldest royal dynasty in the world, dating back to centuries before Julius Caesar was a twinkle in his father's eye. In that context, what right do we upstart barbarians have to tell them how to run their country or society? >>they toss out their deformed children... fathers are never home...<< How does America treat its poor and elderly? How many hours does the average mid-upper level American manager work? >> treat Korean and other minorities worse than Americans do blacks or English do Irish...<< Poor treatment of outsiders does not mean that a culture does not serve the interests of citizens. White citizens of the pre-1860 southern US liked their culture well enough to fight a war to preserve it. >> allying with Axis and Hitler brought total devastation in WW2... << No argument there, but that's a recent aberration in the context of a long history. Japanese conservatives might even argue that the devastation of WW2 resulted because Japan involved herself in foreign adventures. WW2 also indicates that the Japanese have an incredible ability to withstand hardship in the service of perceived national interests. >>treated prisoners of war worse than any major nation in recent history... << German POWs in the USSR, and Soviet POWs in Germany might argue with that. Certainly concentration camp survivors would. Please understand, I'm not an apologist for Japan. I'm very happy with the risks and opportunities of the American system. My point is simply that the view from inside the Japanese system is radically different from the outsider's view. Western assumptions about what is and is not politically feasible simply don't apply. I would argue that it is easier for a Japanese politician to let the whole country suffer while building consensus one slow step at a time than to break the social contract with radical restructuring. Katherine

To: Jim Willie CB who wrote (6385)	7/28/1998 4:27:00 AM
From: Herschel Rubin	Read Replies (1) \| Respond to of 10921

Jim, Superb post. Two other huge negative factors to consider in the economy of the "Setting Sun" nation are: 1) The greying of Japan (the old guard that made Japan invincible in the 80's are fading). 2) Japan's "X-generation" (those in their 20's now) are remarkably different from their workaholic, corporate patriot parents. They entertain thoughts of working at a company for a couple of years and saving money to travel for a few months/years and then working somewhere else -- something unthinkable just a generation ago. Sounds like they want to adapt the self-enrichment lifestyle of the American university student (which means we won't see much empire building from this generation). Instead we'll see self-absorbed consumption which is good for the spirit, but bad for the economy. BTW, my girlfriend is from Japan. It is interesting to see how her accounts of the country are wholly incompatible with our outdated American perspective on Japan. In my view, the country's economy isn't going anywhere for quite some time.

To: Jim Willie CB who wrote (6385)	7/28/1998 1:11:00 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 10921

Jim, the one scenario that I have not been able to resolve is one of liquidity. I think Japan is going down. Major surgery to their entire system, though it will help the patient recover in the end, will be very painful. The big bang reform that Hashimoto enacted last year may come back to haunt them. By providing a more direct conduit for the Japanese to invest in foreign markets, what do you think the average Japanese will do with their savings if it becomes obvious that Japan and the yen are heading down? Our markets don't have any room to absorb this potential massive inflow of cash without creating the same type of bubble here. A prudent investor may be trapped in a catch 22 situation, not wanting to invest in a ponzi scheme but end up watching the market take off without them. Ramsey