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Subject: Japanese economy and Asian financial crisis (FAQ)

This article was archived around: 26 Jun 1999 21:32:17 GMT

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Maintained-by: TANAKA Tomoyuki <tanaka@cs.indiana.edu> Archive-name: japan/economy Version: 0.4 (about 700 lines) Posting-Frequency: at most once every two or three months Last-modified: 1999 6/26 URL: http://www.cs.indiana.edu/hyplan/tanaka/econ-faq.html
Written/edited-by: TANAKA Tomoyuki <tanaka@cs.indiana.edu> <soc.culture.japan> FAQ files are at http://welcome.to/SCJ http://welcome.to/soc.culture.japan this is not quite Version 1 yet. new in this version: http://www.twnside.org.sg/souths/twn/crisis.htm Chalmers Johnson ... =-------------------------------------------------------------------- contents -= Japanese economy -- world's largest creditor nation -- what caused the stock/land bubble of the 1980s? ---- 1. low interest rate to help US economy ---- 2. BIS 8% requirement -- what caused the bubble to burst around 1990? -- why is the Yen becoming stronger against the US Dollar? ---- 1. natural result of trade surplus/deficit. ---- 2. USA wants to make Jp products less competitive in the USA. ---- 3. USA wants to swindle from Jp investment in US T-bills -- Scott Latham on US trade pressures on Japan (and Irabu) -- epithets: "Japan, Inc", "Deformed", "cronyism", etc. -= Asian financial crisis -- http://www.geocities.com/Eureka/Concourse/8751/index.html -- http://www.twnside.org.sg/souths/twn/crisis.htm ---- (0) Asian economies had high-growth and sound fundamentals. ---- (1) USA pushes money into SE Asia. ---- (2) USA speculates on the currencies of Thailand, Malaysia, etc. ---- (3) USA suddenly pulls all the money out, making banks go bankrupt. ---- (4) USA prevents Jp and SE Asian efforts to save the crisis. ---- (5) USA crucially destroys the Asian economies using IMF. ---- (6) USA buys up all the local resources cheaply, expanding control. -- why did the USA cause the Asian financial crisis? -- USA's economic war in Iraq: killing 200 children every day -- USA's economic war in Chile: killing democracy, backing Pinochet -- the economic reasons why USA (NATO) is bombing Yugoslavia -- Chossudovsky on USA/IMF's financial warfare, globalization of poverty -- future of the U.S. "free market" dogmatism vs. Japan+Europe -- submissions to this FAQ -- about the author -------------------------------------------------------------------- -= Japanese economy -- world's largest creditor nation http://www.the-privateer.com/usdebt/usdebt.html i have this book that says that Japan first became the world's largest creditor nation in late 1985. this doesn't mesh with AFP's statement "for eighth year". why the discrepancy? |-------------------------------------------------------------------- | Japan remains world's largest creditor for eighth year | | From: C-afp@clari.net (AFP) Agence France-Presse | Date: Tue, 25 May 1999 5:32:16 PDT | Newsgroups: clari.world.asia.japan, clari.world.asia+oceania | | Japan's net external assets stood at 133.3 trillion yen (1.1 | trillion dollars) at the end of December, [...] | | Germany was the world's second largest creditor with the | equivalent of 8.4 trillion yen in net overseas assets, [...] =-------------------------------------------------------------------- -- what caused the stock/land bubble of the 1980s? ---- 1. low interest rate to help US economy Japan/MOF set low(er) interest rate to encourage Jp investment in the USA (T-bills, bonds, ...). since 1977 or so, Jp interest rates have been consistently lower than the US rates (except for temporary spikes and glitches). Jp efforts to shore up US economy was most dramatic after the US stock market crash of 1987 (Black Monday). MOF immediately ordered major Jp securities firms and other financial companies to buy huge amounts of US stocks, to shore up prices (see the book "The house of Nomura"). it was largely these Japanese efforts that saved the US economy. [to be filled in -- how this led to the bubble] ---- 2. BIS 8% requirement the book "Governing the Global Economy : International Finance and the State" by Ethan B. Kapstein (Harvard Univ. Press, 1994) describes how the USA succeeded in destroying Jp banks' global dominance by using the BIS's arbitrary 8% requirement. [to be filled in -- how this led to the bubble] -- what caused the bubble to burst around 1990? [to be filled in] =-------------------------------------------------------------------- -- why is the Yen becoming stronger against the US Dollar? ---- 1. natural result of trade surplus/deficit. ---- 2. USA wants to make Jp products less competitive in the USA. ---- 3. USA wants to swindle from Jp investment in US T-bills Japan wasted away billions in T-bills to support US economy. Jp govt and companies bought T-bills (dollar-denominated US Treasury bills) to support Reagan's massive spending. such investment in the steadily declining dollar was equivalent to giving hundreds of millions of dollars to the USA every day. at 120 yen=$1, the loss to Japan (and gain to the USA) is about $100 billion, which is about 2% of Japan's GDP. =-------------------------------------------------------------------- -- Scott Latham on US trade pressures on Japan (and Irabu) also by Scott Latham "Irabu: The Nail That Sticks Up Baseball, Cultural Stereotyping, I-Rob-You" on American conformism and American prejudice toward the Japanese. http://www.jetro.org/inside/io9709.html =-------------------------------------------------------------------- http://www.cato.org/pubs/pas/pa-252.html Policy Analysis No. 252 April 15, 1996 Market Opening or Corporate Welfare? "Results-Oriented" Trade Policy toward Japan by Scott Latham Scott Latham is a Philadelphia-based international trade consultant. Executive Summary For decades the U.S. government has singled out Japan as a country guilty of particularly grievous protectionist policies and has forced on it special trade arrangements. But trade disputes are often simply the result of American firms' enlisting government help to make up for their earlier neglect of Japan's market. They seek managed trade, not free trade. Three cases are examined: * U.S. claims that the Japanese government unfairly limits American auto and auto parts imports are based on phony statistics that purport to define America's "correct" share of Japan's market. But U.S. automakers offer only four right-hand steering wheel models in Japan, compared to more than 100 from European manufacturers who have managed to crack that supposedly closed market. * With the 1986 semiconductor agreement, up for renewal this summer, U.S. officials tried to guarantee a share of Japan's market for American manufacturers and to restrict exports of Japanese-made chips to the United States and third markets. But Japan's "closed" market was an illusion created by America's selective use of trade and production numbers. With 1995 global sales of some $150 billion, American producers hardly need protection. * Kodak's current complaint that Fuji Photo Film unfairly blocks its access to Japanese retail outlets is particularly ironic since Kodak repeatedly ignored advise to establish major offices in Japan, which it finally did only in the mid-1980s. Results-based trade policy is not about opening markets at all; it is about granting special favors to prominent and politically powerful U.S. industries. =-------------------------------------------------------------------- -- epithets: "Japan, Inc", "Deformed", "cronyism", etc. | === MIDTERM EXAM ECON 201 East Asian Economies === | | white Americans often ridicule the Japanese (economy) using | epithets such as "Japan, Inc", "Deformed", "cronyism", etc. | | what valid basis could there be for implying that the Japanese | economy is more collusive than those of the USA or European | nations? write clearly and concisely. | | if you fail to come up with a valid basis but still insist on | using those epithets, you will have the words | "Politically-Correct Racist (TM)" tattooed on your forehead. | | in writing your answer, be sure to *THOROUGHLY* consider *ALL* | of the following factors. answers that fail to consider | these factors will automatically receive a failing grade. | | 1. USA's LTCM bailout. | | 2. concentration of wealth is much higher in the USA. | (the most uneven of the industrial nations) | | 3. Japan's personal flow goes one way (amakudari), whereas | Washington's "revolving door" flows both ways. | | for example, see: Revolving Door between Monsanto and | FDA/USDA and its effect on Monsanto's | "Frankenfood" (genetically-engineered food). | | http://www.purefood.org/revolv.html | http://www.holisticmed.com/ge/ | | Story: MONSANTO'S SEEDS OF DISCORD | http://www.deja.com/=dnc/getdoc.xp?AN=477943447 | http://www.webactive.com/webactive/pacifica/demnow/dn990513.html | | 4. from NY Times, (Feb 16, 1999) | "How U.S. Wooed Asia to Let Cash Flow In" | http://www.deja.com/=dnc/getdoc.xp?AN=446595869 | > | > His [Clinton's] Cabinet approved a "big emerging | > markets" plan to identify 10 rising economic powers and | > push relentlessly to win business for American companies | > there. Under Brown, the Commerce Department even built | > what it called a war room, where computers tracked big | > contracts, and everyone from the C.I.A. to ambassadors | > to the President himself was called upon to help land | > deals. | | 5. the following article. | |-------------------------------------------------------------------- | URL: http://www.deja.com/=dnc/getdoc.xp?AN=448570544 | | Title: FINANCE-POLITICS: Portrait of Uncle Sam: Crony Capitalist | | Analysis - By Abid Aslam | | WASHINGTON, Feb 21 (IPS) - The United States has taken the lead | in wreaking global economic crisis in the past 20 months and | continues to sacrifice Third World children to save First World | financiers. | | That conclusion could be drawn by a series of lengthy articles | published this past week in the U.S. daily newspaper, the New | York Times - widely considered America's newspaper of record. | | The Times account suggests that the United States is as | deserving of an epithet U.S. officials and financiers used to | malign Asian nations in the economic upheavals that began in | mid- 1997. The epithet is ''crony capitalism.'' | | Key U.S. crony capitalists include: | | - Treasury Secretary Robert Rubin, who has served as a staunch | advocate of the U.S. financial services community since leaving | the helm of Wall Street giant Goldman Sachs and Co. in 1995, after | three decades as an investment banker. | | - Rubin's deputy, former Harvard and World Bank economist | Lawrence Summers who, with his boss, formed ''the dynamic duo of | free capital''. The pair's offices, on the third floor of the | U.S. Treasury here, has become ''the command centre for free | markets.'' | | - President Bill Clinton, whose desire to make a mark on the | world has been driven by an uncritical acceptance of Wall | Street's wishes. These were introduced to Clinton in 1991, when | as a presidential candidate he was wined, dined and grilled by | Wall Street Democrats. That was when the young governor from | Arkansas first met Rubin, the man he would later anoint as | Treasury secretary, the U.S. equivalent of finance minister. | | [...] | | That apparent hypocrisy has rankled many, adding to what the | newspaper called ''a growing backlash against what some nations | regard as an American model of laissez-faire capitalism, which | rescues Connecticut hedge funds but sacrifices Indonesian | children.'' -------------------------------------------------------------------- -= Asian financial crisis good general sites on the Asian Financial Crisis the best, biggest, and searchable: -- http://www.geocities.com/Eureka/Concourse/8751/index.html -- http://www.twnside.org.sg/souths/twn/crisis.htm http://www.twnside.org.sg http://www.twnside.org.sg/souths/twn/ http://www.mtholyoke.edu/acad/intrel/asiacris.htm http://www.matsusaka-u.ac.jp/~nakamura/asiacrisis.htm http://search.go2net.com/crawler?general=Chossudovsky http://search.go2net.com/crawler?general=Chossudovsky+Asia http://search.go2net.com/crawler?general=Chossudovsky+Asian http://search.go2net.com/crawler?general=Jeffrey+Sachs+Asia http://search.go2net.com/crawler?general=Jeffrey+Sachs+Asian =-------------------------------------------------------------------- http://www.geocities.com/Eureka/Concourse/8751/riwa/aw101001.htm Asiaweek October 16, 1998 BEHIND THE ASIAN CRISIS Japan must help the region resist American control by ISHIHARA Shintaro [....] LOOKING BACK ON THE panic triggered by the currency crisis in Thailand and the inroads made by the International Monetary Fund (IMF), we can see the subtle strategy America is employing to dominate the world. And we can discern the pathetic role that Japan is made to play. If things continue as they are, Japan and the other nations of East Asia will be nothing more than financial slaves to the U.S. [...] =-------------------------------------------------------------------- (LA Times) Chalmers Johnson on how USA caused Asian financial crisis URL: http://www.latimes.com (search for, say, "chalmers") http://marmot.jab.org/fukuzawa%40ucsd.edu/msg07439.html > Los Angeles Times Friday, June 25, 1999 > > Let's Revisit Asia's 'Crony Capitalism' > > Economy: America's free-trade proselytizing is the true root > of what is now a global crisis. > > by Chalmers Johnson after i read the article once, i wondered, "is he just saying that Asians are claiming USA's conspiracy?" so i read it again, and realized that Prof Johson's main point is that USA really caused Asian financial crisis using the 2-stop process described. i didn't realize APEC was losing credibility in SE Asia. it's only natural and logical that that should happen. =-------------------------------------------------------------------- the USA succeeded in ravaging the economies of Thailand, Malaysia, Indonesia, Korea, ... (and Japan), basically by the following steps. ---- (0) Asian economies had high-growth and sound fundamentals. as praised by IMF/USA. [to be filled in] ---- (1) USA pushes money into SE Asia. | 4. from NY Times, (Feb 16, 1999) | "How U.S. Wooed Asia to Let Cash Flow In" | http://www.deja.com/=dnc/getdoc.xp?AN=446595869 | > | > His [Clinton's] Cabinet approved a "big emerging | > markets" plan to identify 10 rising economic powers and | > push relentlessly to win business for American companies | > there. Under Brown, the Commerce Department even built | > what it called a war room, where computers tracked big | > contracts, and everyone from the C.I.A. to ambassadors | > to the President himself was called upon to help land | > deals. ---- (2) USA speculates on the currencies of Thailand, Malaysia, etc. 1997, George Soros and other hedge funds [to be filled in] ---- (3) USA suddenly pulls all the money out, making banks go bankrupt. [to be filled in] ---- (4) USA prevents Jp and SE Asian efforts to save the crisis. when Japan and SE Asian nations proposed... Rubin stepped in to ... [to be filled in] ---- (5) USA crucially destroys the Asian economies using IMF. the following article can be found (also) at: http://www.mtholyoke.edu/acad/intrel/usimf.htm http://www.reagan.com/HotTopics.main/HotMike/document-12.3.1998.5.html >-------------------------------------------------------------------- >from http://nytimes.com/ December 3, 1998 > > U.S. and I.M.F. Made Asia Crisis Worse, World Bank Finds > > By DAVID E. SANGER > > W ASHINGTON -- The decision by the International Monetary > Fund and the United States Treasury last year to push Asian > nations to send their interest rates soaring was a crucial > blunder that worsened the world financial crisis, the World > Bank concluded Wednesday in a report of how the trouble > started. > > The 200-page document [...] > > The World Bank's blow-by-blow account of a series of > cascading misjudgments places much of the blame on global > investors who lent money with abandon to developing > nations, and on Asian officials who were eager to > accumulate the cash. But it left little doubt that in the > bank's judgment the IMF and the Clinton administration > shared responsibility for mishandling the initial response > to the crisis. [...] ---- (6) USA buys up all the local resources cheaply, expanding control. examples. Merryll-Lynch buying Yamaichi. [to be filled in] =-------------------------------------------------------------------- -- why did the USA cause the Asian financial crisis? 1. USA directly profited from currency speculation, etc. 2. to make sure the US market is a more attractive place for investment. 3. to expand and invest into SE Asia. 4. dampened Asian economy --> cheap imports from Asia --> inflation in the USA is avoided --> longest sustained economic growth in postwar US history. -------------------------------------------------------------------- -- USA's economic war in Iraq: killing 200 children every day US economic sanctions on Iraq are devastatingly effective: WHO attributes at least 5,000 deaths each month (which is about 200 daily) of Iraqi children under five to sanctions-related malnutrition and disease. Elise DeGooyer, "Sanctions amount to genocide, activists say. (organization attributes thousands of deaths US sanctions against Iraq)". National Catholic Reporter, v35, n18 (March 5, 1999). http://www.deja.com/=dnc/getdoc.xp?AN=473018720 U.S. bombing in 1991 killed 71,807 Iraqi women and children see <http://www.deja.com/=dnc/getdoc.xp?AN=423641184> <http://www.cs.indiana.edu/hyplan/tanaka/ot/ms/USA/iraq1991> =-------------------------------------------------------------------- -- USA's economic war in Chile: killing democracy, backing Pinochet After the socialist Salvador Allende was elected president of Chile in 1970, the USA began its economic warfare against Chile (which included cutting loans from IMF, World Bank and US banks; speculating against Chilean currency; and subsidizing dissident Chilean groups and newspapers). USA's efforts produced swift success: Allende was overthrown and assassinated in 1973, and the brutal reign of US-backed dictator Augusto Pinochet began. Edward S. Greenberg, "The American political system" (Harper Collins 1989). http://www.cs.indiana.edu/hyplan/tanaka/ot/Ed.Greenberg.html =-------------------------------------------------------------------- -- the economic reasons why USA (NATO) is bombing Yugoslavia US bombing in Yugoslavia is causing a huge refugee crisis. the main reasons for the US bombing seem to be economic/geopolitical, and understanding these reasons can help understand what USA did to SE Asian economies. some of the main reasons: (1) gold, silver, uranium, ... mines in Kosovo (2) increase US influence in Europe (3) bombing means profit for US weapon makers (4) strengthen NATO, diminish UN (5) Balkan pipeline for Caspian oil (6) justify US military spending (7) infilteration; destroy socialism see http://www.deja.com/=dnc/getdoc.xp?AN=480683395 (1-3) http://www.flora.org/flora.mai-not/11131 (4-7) http://www.thewinds.org/arc_features/government/facts_myths.html http://www.zmag.org/ZMag/kosovoqa.htm http://www.zmag.org/current_bombings.htm http://www.softmakers.com/fry/docs/chomintyug.htm http://www.webactive.com/webactive/pacifica/demnow/dn990514.html i've looking at Chossudovsky's book (see below). the Yugoslavia chapter tells how USA/IMF has been doing this (invasion/infiltration) since the early 1980s. USA (and NATO) indicted before UN War Crimes Tribunal (May 7, 1999) http://www.iacenter.org "NATO's war of aggression against Yugoslavia: an overview" by Michel Chossudovsky http://www.deja.com/=dnc/getdoc.xp?AN=486233142 "The other war criminal: Bill Clinton" by Alexander Cockburn "The San Jose Mercury News", June 3, 1999 http://www.deja.com/=dnc/getdoc.xp?AN=486934704 =-------------------------------------------------------------------- -- Chossudovsky on USA/IMF's financial warfare, globalization of poverty http://www.geocities.com/Eureka/Concourse/8751/edisi03/chossu01.htm "Financial Warfare" By Michel Chossudovsky Professor of Economics, University of Ottawa, author of "The Globalisation of Poverty: Impacts of IMF and World Bank Reforms", Zed Books, London, 1997. $25.00 (paperback), 256 pages http://www.zedbooks.demon.co.uk/politics.htm [The author] shows the consequences of a new financial order which 'feeds on human poverty and destruction of the environment, generates social apartheid, encourages racism and ethnic strife and undermines the rights of women.' The result, as his detailed examples from all parts of the world show so convincingly, is a globalisation of poverty. Contents of the book | | Part I: Global poverty and macro-economic reform | | 1. The Globalisation of Poverty | 2. Policing Countries through Loan'Conditionalities' | 3. The Global Cheap Labour Economy | | Part II: Africa | | 4. Somalia: The Real Causes of Famine | 5. Economic Genocide in Rwanda | | Part III: Asia | | 6. India: The IMF's 'Indirect Rule' | 7. Bangladesh: Under the Tutelage ofthe 'Aid' Consortium | 8. The Post-War Economic Destruction of Vietnam | | Part IV: Latin America | | 9. Debt and 'Democracy' in Brazil | 10. IMF Shock Treatment in Peru | 11. Debt and the Illegal Drug Economy: The Case of Bolivia | | Part V: Eastern Europe | | 12. The Thirdworldisation of the Russian Federation | 13. Dismantling former Yugoslavia, Recolonising Bosnia-Herzegovina =-------------------------------------------------------------------- -- future of the U.S. "free market" dogmatism vs. Japan+Europe | Maechling, Charles, Jr. | "The next century - can the free market panacea survive?". | Virginia Quarterly Review v71, n1 (Winter, 1995):1 (18 pages). | | Abstract: | A comparison of the free market economy model of the US | and the mixed economy models of Japan and Western Europe | shows that there are striking differences between the | two which are not only economic but historical and cultural. | | Free market economy model dogmatically adheres to the | orthodoxy of free market while the mixed economy model | gives more prominence to society than to the individual | and at the same time provide opportunities for the free | market economy. The free market economy model threatens | national welfare by neglecting the role of the state and | this policy will have political repercussions as well. from Page 2 the paper: The result is that instead of growing closer to its principal trading partners, the United States is now in the state of continental drift away from them. If it persists in this course, it will eventually be the only major economic power dogmatically committed to free market economics with the rest of the world [...]. [to be filled in -- the rest of the sentence] The United States will then find itself in recurring confrontations with these trading partners, including a unified Europe of even greater economic power. MAI: Multilateral Agreement on Investment http://mai.flora.org/ -------------------------------------------------------------------- -- submissions to this FAQ email submissions to <tanaka@cs.indiana.edu>. it'd be better if you could also post the submission to <soc.culture.japan> and <alt.tanaka-tomoyuki>. =-------------------------------------------------------------------- -- about the author in Aug 1996 i (Tanaka) moved to Davis, CA (from Bloomington, IN.). Davis is near San Francisco (90 miles away). i'm a 3rd year law student at U.C. Davis (J.D. program). i plan to elaborate these two FAQ files (American misconceptions about Japan, and Asian/white dating disparity) and publish them in a book form. i hope to publish the book within 1 year or so. =-------------------------------------------------------------------- my Usenet FAQ files: 1. American misconceptions about Japan FAQ 2. disparity in Asian/white interracial dating FAQ 3. <alt.fan.hofstadter> and "GEB" FAQ 4. ITAMI Juzo, OZU Yasujiro, and the Japanese Cinema (FAQ) 5. NAKAJIMA Miyuki, Sakamotos, and Japanese music abroad (FAQ) 6. sci.lang.japan (TT topics) FAQ 7. Japanese economy and Asian financial crisis (FAQ) my FAQ files are stored in FAQ repositories around the world, including at: http://welcome.to/SCJ http://welcome.to/soc.culture.japan http://www.jmas.co.jp/FAQs/japan/ http://www.cs.indiana.edu/hyplan/tanaka/SCJ.html http://www.cs.indiana.edu/hyplan/tanaka/FAQs.html http://www.cs.uu.nl/wais/html/na-bng/alt.tanaka-tomoyuki.html http://www.lib.ox.ac.uk/internet/news/faq/alt.tanaka-tomoyuki.html =-------------------------------------------------------------------- if i become unable to update/maintain this FAQ no person may change its content. ;;; TANAKA Tomoyuki ("Mr. Tanaka" or "Tomoyuki".) ;;; ;;; For <soc.culture.japan> and <soc.culture.asian.american> FAQ ;;; files, see <http://www.cs.indiana.edu/hyplan/tanaka.html>. ;;; ;;; e-mail: tanaka@cs.indiana.edu