Not so long ago, David Lazarus was writing a regular column for The Japan Times in which he examined the many thigh-slappingly kooky ways the Japanese manifested their quirky uniqueness, like believing in UFOs, for example. Boy, you can’t get much more quirkily unique than that!
Today, Mr. Lazarus hangs his eyeshade over at the San Francisco Chronicle where he recently offered an explanation why the world’s second-largest economy has fallen down and can’t get up. Presumably, he was chosen to do this because of his first-hand knowledge of this quirkily unique country, though you certainly could have fooled me.
In a column written on the occasion of George W. Bush’s recent visit here, Mr. Lazarus opined that Japan was prevented from getting its economic act together by the “nation’s innate dislike of confrontation.” To be fair, though, it’s this same innate dislike of confrontation that accounts for Japan’s history being so free of the civil wars, court intrigues and clan rivalries that bedeviled the mythical Asian island kingdom of Yamato for centuries.
Mr. Lazarus further complains that the current Prime Minister, Junichiro Koizumi, no doubt immobilized by the same innate dislike of confrontation that enabled the Minamoto and Taira families to get along so famously, has “accomplished precious little in terms of cleaning his country’s economic house since taking office.” While there’s no gainsaying the lack of accomplishments, isn’t the blame being misplaced here?
As The Economist observed in its issue of Feb. 16-22, Koizumi “could not reform much since he does not really run Japan.” It appears that the efforts of an entire battalion of revisionist scholars to conclusively prove the essential powerlessness of the office of prime minister have left the Chronicle’s resident Japan expert unconvinced.
The current President Bush, a man determined to erase all memories of his father having barfed on one of Mr. Koizumi’s predecessors, is excoriated by Mr. Lazarus for making nice and refusing to “bring up (the subject of) cut-rate Japanese steel flooding the U.S. market.” Presumably, what Mr. Lazarus wanted Mr. Bush to say to Mr. Koizumi was something along the lines of: “If you don’t shape up, Junichiro, I’m going to slap on tariffs that will be widely seen as a complete capitulation to the U.S. steel industry, will violate international trade treaties, will be roundly criticized by America’s allies, including Britain, and will be characterized by Paul Krugman in The New York Times as demonstrating a “cravenness that surprises even my critics.”
All of which happened, by the way, but I digress. Mr. Lazarus complains further that the Bush administration has “depart(ed) from the relatively tough talk of the Clinton administration and adopt(ed) a more accommodating” tone on trade. Presumably, this is the same Clinton administration that, when Japanese manufacturers complained they couldn’t possibly compete overseas with the yen trading at 85-90 to the dollar, organized a concerted, multinational intervention in ’95 in order to drive the value of the Japanese currency down.
Presumably, this is also the same Clinton administration that, when a yen trading at nearly 150 yen to the dollar was doing the Japanese economy no more good than had a yen trading at 85-90 to the dollar, intervened in ’98 in order to drive the value of the Japanese currency up.
Yep, if there’s one thing that’s going to enable Democrats to recapture the White House in 2004, it’s their record of trying to slap some sense into the Japanese.
As would seem to be indicated by the two aforementioned interventions, Japan needs help in pushing its currency to a Goldilocks-like level of comfort, neither too hot nor too cold. According to Mr. Lazarus, however, Japan, all by its lonesome, is now “deliberately weakening its currency to give its own automakers a competitive advantage.” If Japan is indeed engaged in a nefarious scheme to devaluate itself into prosperity, it certainly does not lack for copy-catting co-conspirators.
As it happens, it is not the yen which has gone down but the dollar which has gone up, and not just against the yen, but against all major currencies, as The Conference Board noted in a report issued in February. It also noted that this advance has been going on for six years.
And what do the Bushies think of the competitive advantages being reaped by Japan and, presumably, other nations with declining currencies? All indications point to the current administration being quite happy to pursue the same strong-dollar policy advocated by Clinton’s Treasury Secretary, Robert Rubin.
The yen, The Conference Board noted, has not appreciated on average since 1995, or back when the Clinton administration was talking tough on trade to whatever power-wielding prime minister was then in office. Mr. Lazarus faults Mr. Bush for not taking Japan to task for its “deliberate” devaluation on behalf of Toyota and Honda, but it’s difficult to imagine what the feckless Mr. Koizumi can do to set things right. “Since both the euro and the yen are tending to cushion each others’ weakness as they decline,” observes The Conference Board, “neither currency has the power to dislodge the dollar from its dominant position.”
One can only hope that the quirkily unique bloviations of Mr. Lazarus are dislodged from the Chronicle with rather more dispatch.
