Rescue Japan, Help World
Japan's leaders are getting more advice than a slow driver on a Montana interstate.Skip to next paragraph
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Not within memory has a government been so peppered with candid admonitions from home and abroad. And with good reason.
The governor of Japan's central bank bluntly told his nation's leadership to cut taxes further, improve efficiency, and stimulate economic growth. The CEO of giant Sony, exaggerating for effect, warned that collapse might be at hand. The heads of virtually every major nation in the industrialized world threw in their two billion cents worth, urging tax cuts and speeded up banking, trade, and financial reform.
Japan's Finance Ministry capped all this free advice with a comic-strip ad campaign imploring Japanese consumers to start spending, not saving, their tax-cut cash. As one cartoon citizen says, unsubtly: "Hooray! Let's spend some money!"
That, in a land noted for some of the world's most exemplary savers, is indeed a command to revolution.
But will all the advice work? Will Japan's economy start to grow again? Will Japanese consumers buy products their Asian neighbors are anxiously trying to sell in order to revive their own economies? Will global financial and manufacturing firms be allowed a wide-open chance to compete, and bring more efficiency and lower prices to Japan's consumers?
In short, will Japan, the world's second-largest economy, again become a growth engine to help pull other economies out of the doldrums?
Answer: a cautious 'yes.' The long period of too-little-too-late government action appears to be ending. Prime Minister Hashimoto indicated as much when he admitted self-critically that his economy is in "the worst shape" since World War II. He is, he said, determined to "kick start" it.
That means growth policies. It means a nation that lives by trade must be more open to trade competition at home.
The US and Europe should help, not bully. America forced 19th-century Japan to open itself to world trade with gunboat threats. European pressure followed. This is not a time to for new threats, such as those former US trade negotiator Mickey Kantor often used. One major way to help is to keep calm about the trade deficit. It will shrink as Tokyo opens its economy further to the world.