From: ar12@quads.uchicago.edu (Richard Nixon)
Newsgroups: rec.autos,rec.audio,rec.video
Subject: Interesting article about Japanese trade policy in auto/electronics industry (2/2)
Date: 14 Oct 92 17:36:12 GMT
Article-I.D.: midway.1992Oct14.173612.29478
Reply-To: ar12@midway.uchicago.edu
Distribution: na
Organization: University of Chicago Computing Organizations

Part 2/2; JAPANYES (monu6.cc.monash.edu.au)
 
JAPANESE PEOPLE AND THE MARKET:
 
     The Japanese people are extremely kind and polite, don't go stealing
things out of each other's houses nor do they go shooting each other as
much as Americans do. They are however naive about the forces in their
world around them (a point which probably can also be made about America's
own citizens). There is little individual thought nor questioning of the
government and companies, which is very dangerous. This is compounded by
the fact that 1 political party (the LDP) has ruled the country ever since
it has had a democratic constitution. Results of this include the fact
that many cartels operate in the country yet no one seems to notice this
occurs. Many Japanese aren't even aware that foreign countries make the
same products that Japanese companies make. Formally, Japan has laws
against cartels, but they are not enforced. Only one major cartel group
has been prosecuted in the last 15 years (plastic wrap companies), and
this was only after a lot of pressure from the United States. As America's
power in the world diminishes, so will its ability to exert such pressure.
 
     Ordinary Japanese don't have much idea of why they can't buy foreign
goods at reasonable prices in their stores. When I asked Japanese people
why they don't buy American (or other foreign goods), they often say
because they can't find them, or they are much too expensive. This is
true.
 
     Foreign goods are often impossible to buy at any price and are
usually very expensive when found. For example, I looked for, but found no
Korean products at all in Japan even though this country is very close to
Japan on the map (1000 miles max distance). Because Korea has little
political influence, it cannot pressure Japan to allow their products in.
As a consequence Korea cannot sell their products in Japan even though
they make many of the same types of high quality electronics and
automotive goods the Japanese make, but at a lower price. U.S. (and other
foreign products) which must face a Japanese domestic maker are also
extremely hard to find in Japan. Ironically, the American flags in the
Tokyo-Shinjuku Mitsukoshi department store were also made in Japan.
 
    I realized that Japanese people would buy American goods if they could
when I told them the prices of US and Japanese goods in America. I used
some of the examples in this paper to try to explain why there was 'Japan
bashing' in America. I also happened to have a US newspaper, so I showed
them product prices of US and Japanese goods in America. I took them out
into their shops and proved the differences to them.  When I finished,
they were shocked at what I had just shown them. Japanese goods are
sometimes cheaper in America than in Japan and non Japanese goods are much
more expensive in Japan than they should be, especially if the good is in
an industry targeted by the Japanese companies and government.
 
     For example, the major Japanese appliance manufacturers are planning
to enter the US market for appliances (refrigerators, stoves, vacuums) in
the 1990's. In a major Hiroshima appliance store (the only store I could
find any foreign appliances), I saw a GE refrigerator selling for $3000
(US). This was a very low end model you could buy here in America for
about $600. The Toshiba right next to it was a high end model and sold for
$2500. A comparable refrigerator in America would sell for about $1000.
This didn't seem right to me. The government and more elite business
people I spoke with already knew about these points and acknowledged that
they could see it was a 'problem' for America.
 
ESCALATOR DOLLS AND OFFICE LADIES:
 
     An escalator doll is a young women in her 20's who stands by the
escalator all day and welcomes you to the floor of the store or office
building. She says goodbye and thank you when you leave. You find these at
Mitsukoshi (the classiest department store I've ever walked into), the
Toyota main showroom in Tokyo, the government offices and the corporation
offices (Sony, Toshiba, Nissan..). Other women serve as temporary labor to
bear the bumps generated by the economic cycle. It is these people (and
foreigners) who get laid off in order to permit a system of lifetime
employment for the Japanese males. Escalator dolls (and their counterpart
within corporate offices, 'Office Ladies') must often sign a contract with
the employer stating that they will quit when they reach the age of 25.
The true purpose of these girls (besides serve tea and welcome guests) is
to become mates for the men, who are at work for such long hours that they
have difficulty to find women on their own.
 
     Young women in Japan are expected to marry by 25 year old. A well
known quote in Japan makes the point bluntly: "Single women are like
Christmas cake, after the 25th, useless, so they go for 1/2 price."
Marrying by 25 is very important. If a women is nearing 25 and can't find
a mate, chances are she will have a pre-arranged wedding to an eligible
bachelor set up by the parents.
     
     I sometimes wonder how much of a willingness to change the system
exists in Japan, even among the women themselves. While there, I met one
of Mutsumi's friends, Hanako. Hanako went to university in America and
studied in Political Science. I asked her what she thought of the way
Japan treated their women. She didn't see a problem. In her opinion, the
women should stay at home as it leads to family stability and enables the
husband to concentrate on his work and not family affairs. I asked Hanako
where she was working. She works at a Japanese company as a tea server
(office lady). 'What would you like to do at your job in the future', I
asked. She replied 'they told me that if I did a good job now, I could be
a secretary in a few years and file things'. Hanako has a university
degree.
 
     In Japan, the percentage of women who are managers of men is much
lower than in America. Furthermore, women typically don't hold any
positions of importance. They are more like office decoration or marriage
material for the men. It may also surprise you, but almost all women in
Japanese companies, regardless of professional status or level in the
organization are required to prepare and serve tea daily for the men as
part of their daily chores.
 
"BUSINESS IS WAR":
 
     This is a well known quote in Japan. It may be surprising, but this
has more meaning to the Japanese than you may first think. The word
'business man' in Japanese translates literally into English as 'Company
Soldier'. Japanese businessmen do not have pictures of their family or
loved ones at the office because they 'do not want to mix family with
battle'. When a Japanese man joins a company, he usually does so for life.
Loyalty is extremely high. For this, and other reasons, job hopping is
very rare in Japan. This has some advantages, as well as some
disadvantages. The man (and his family if he has one) will be housed in
the company residence, use the company health center, and make all of his
friends among those within the company. He will likely find his mate
through the company if he doesn't have one already. His first allegiance
is to this company and his team. The family is secondary in its
importance.
 
     There are important drawbacks to be considered though. A man once
hired, cannot without extreme difficulty and shame, change companies.
Companies know that to hire away workers from other companies means to
risk losing their own to the other companies. This would disturb the male
employment stability which is important in Japan. The smaller companies
are kept in line by the larger ones via the power they hold via the loans,
terms of sale etc...over the smaller companies. This helps ensure
stability in the work force at times of economic growth and contractions.
 
WHERE IT ALL BEGINS:
 
     While I was in Japan, I went to Mutsumi's elementary school to see
her younger cousin participate in a kind of 'Olympic Sports Day'. This
event though was quite unusual. There were no individual activities, and
the theme of the day was extremely militaristic in nature. There were two
main teams, the red and white teams symbolizing the country's national
colors. They had big banners, taiko (battle) drums which the team leader
beat on while chanting the team slogan. If one person made an error in the
competition, the whole team would suffer. Rewards, and failure were shared
among all members of the team. Stress and peer pressure were very high, as
they are for most Japanese throughout their lifetimes. Before the
competition, everyone on the teams sang the school anthem louder and more
clearly than I ever heard a school anthem sung here in America. Their
diligence and effort was quite remarkable.
 
     What we call individuality in America is called deviation (be it in
school, or at work) in Japan. It is not tolerated nor tried very much. (In
fact, kids who's hair is not black enough get it dyed so as not to get in
trouble at school by the teacher). Anyone with an 'outsider's' mind is
rejected by the others, even by the teacher. 
 
     A consequence resulting from this fact appears when families who have
lived outside Japan for a few years return to the country. These people
(especially the kids) have a lot of trouble being accepted and integrating
back into the Japanese society. 
 
     'Peer stresses' in Japan lead to what could be considered 2 major
problems. #1 is stress. Many kids can't take it and commit suicide before
reaching university age. Mutsumi's best friend in high school did this.
Many others suffer from a wide variety of stress related nervous ticks and
twitches (if you ride the subway in Tokyo and look at the other riders,
you will notice this very readily). The second problem, is shame:
 
     Other 'strategic markets' the Japanese have entered (or are doing so
now) include: 
 
>machine tools (the world is now dependant on Japan for much of the most
modern machine making equipment (imagine the importance of this if a real
war broke out somewhere in the world where the US and Japan each supported
the opposing parties). Japan has also made a strong effort in the area of
power tools (Makita, Hitachi), again with some dumping (Hitachi...). 
 
>computer memory chips and semiconductors (Akio Morita (SONY CEO) and
Ishihara, in their famous book "Japan that can say no! (to America)"
stated that Japan was powerful because could alter the balance of power by
selling its critical Japanese-made-only microchips to the Russians instead
of the USA). They also claim that we dropped the A-bomb on Japan because
we are racists. 
 
>high performance telecommunications equipment (see the final example)
 
>automotive (US auto plants were used in WWII to make bombers...today many
of these plants don't exist anymore).
 
>automotive parts (Japanese cars made in USA are really assembled from
parts which are all MADE in Japan). These are the cars' critical
components. The high precision equipment and technology to make these
parts reside in Japan, not here. That's why high precision machining and
advanced manufacturing is usually done in Japan, and assembly here.
 
EXAMPLE, HOW ALL THIS WORKS TOGETHER:
 
     Buying a Japanese product, even in an industry unrelated to yours can
cause you to lose your job! This is much more likely than one may think.
Many otherwise smart people do not understand this so I will explain it
with the following true example:
 
     AT&T is a large US telecommunications manufacturer that is well
placed in the world market and hence pays its employees very well. Many of
them like to buy Hondas, Acuras, Mitsubishis and Toyotas. Most of these
Japanese companies are in one of the 6 or so keiretsus in Japan. 
 
     MITI and Japanese industry have made it a public national priority to
enter and become the major player (today, they are a very minor force) in
the telecommunications industry during the 1990s. In fact, they have a
plan to wire every house in Japan with fiber optic cable within the next
10-15 years in order to get good at making fiber and its associated
communications hardware. 
 
     Japan will have to spend money to research and develop their new
telecommunications equipment. This will be very expensive and they will
need the help of the keiretsu banks to do it. Where do the banks get this
money? From their biggest export of course, automobile sales. This means
that although AT&T managers and engineers only bought cars, they are
helping fund Toshiba's, NEC's, Hitachi's and Matsushita's effort to put
them out of a job.
 
     Imagine one of AT&T's engineers recently bought a new Acura
automobile. One day, that AT&T engineer will lose his job due to fierce
Japanese competition in the telecommunications industry, get into his
Acura, go home, yet never ever equate the two events!
 
     Let's continue this example a little further to summarize this paper
so far. The Japanese want to enter a new industry, telecommunications.
Based on previous experience, this is how they are likely to do it.
 
     Firstly, telecommunications in the future will be based on something
called digital technology. This will enable those picture-phones you used
to see on Star-Trek to be a reality. Fiber optic cable and data
transmission are very important to do this too. This is why they want to
put fiber cable all over their entire country.
 
    Today, the Japanese are lousy at making high quality major
telecommunications equipment that your telephone company would buy. In the
world market though, there is lots of money to be made in this, which
right now AT&T mostly gets. Because Japan doesn't know how to make good
telecom equipment, they will need to do three things:
 
>1) get some good telecom equipment so they can copy it and improve it.
 
>2) pick a very strategic but simple niche market in the industry and take
it over completely (ie. dumping) to get a foothold so they can use it as
an anchor to increase the market share in telecommunications (like the LCD
screens)
 
>3) start small.
 
     It turns out they have already started to do these things. For (1),
they promised some US big name telecom makers that they might get a piece
of the Japanese telecommunications market in return for a small sale of
their best equipment to the Japanese national telephone company. AT&T and
other North American firms fell for this scheme (maybe the laid off TV
maker executives went to work for AT&T). AT&T sold them one copy of their
most advanced equipment for a promise to 'possibly' buy many more. This is
pretty foolish as AT&T has just given their best equipment to a country
which has made a public declaration to be the world leader in that
industry. This equipment will get copied and show up as Japanese brands a
few years from now.
 
     For (2), Japan already has acquired two main strategic industries.
Firstly, as you know they have 100% market share in the small LCD screens
that the new picture phones and tele-computers/tele-bank machines will
use. If AT&T wants to make a picturephone, they have to get the screen
from their competition who also makes these phones (which I saw when I was
Japan). Imagine the laptop computer example above all over again. This is
an other reason why these small LCD screens are so strategic. Secondly,
Japan has made an effort to be the best and cheapest (via dumping) at
making a highly specialized component of fiber optic transmission systems
which America uses in its network. Now Japan's salesmen talk to every
phone company in the world to sell them this part. Now on his future
visits, he can use his existing contacts to sell them other things Japan
will soon be making.
 
     For (3), you probably have already seen what's going on when you go
shopping. Panasonic, Murata, Fujitsu and others all make very fancy
electronic phones. They also make small telephone switching equipment
(like AT&T's smaller products). Eventually, these will get bigger and
bigger till they make the bread and butter items of AT&T. This is the same
strategy they used to enter the car market too. They started with
motorcycles, moved to cheap cars, then to trucks, then to sports cars,
then to luxury cars. Today we know the results. Again, this is also true
with TVs, first they made black and whites, then color TVs. Today the TV
in your house is most likely Japanese (even if its a store brand). This
was an industry which America had 100% market share about 25 years ago. 
This is what is likely to happen to telecommunications too.
 
ITS NOT ALL JAPAN'S FAULT:
 
     American's behavior when trying to do business in Japan is not what
it should be. After seeing how some American firms operate there, it is
little wonder our success rate is often so poor. For example, something of
annoyance (and also advantage) to the Japanese is American business people
working in Japan who don't speak Japanese, or know nothing about the
country they are dealing with. These included some people from Boeing whom
I met at a Nissan factory, some from the Govt. of Wisconsin at a machine
tools fair trying to attract Japanese industry to their state and some
representatives from an Oregon company.
 
     The group of businessmen I met from the Oregon company I met in
Roppongi (an entertainment/love-hotel district in Tokyo). These people
were a disgrace to American industry and opened my eyes to why the
Japanese are able to take such advantage of us in business. Firstly, these
men spoke no Japanese at all (so they couldn't understand what their
opponents at the negotiating table were saying) and knew nothing about the
culture. They asked me what it was like to be a 'gringo' in Japan. It
seemed that they thought the business adversaries they were negotiating
against in Japan were running some 2 peso Mexican hot dog factory. My
conversation with them was a real eye opener to many of America's problems
when dealing with the Japanese in business.
 
     At least their company didn't send a women to do their negotiating
though. This would have been a mistake of huge proportions. Japanese
corporations and businessmen typically treat any company who sends a woman
with ridicule. Its one of the best ways to lose a contract. Although
Americans may dislike Japanese sexism, Japan is fast becoming the world
economic power which means they get to make the rules, not us. This is
part of the price Americans pay for buying all those Toyotas and Sonys for
so many years. As Japanese industrial influence spreads throughout the
world, expect to see more of this type of treatment of women by Japanese
companies (as any women working in a Japanese transplant company in the US
can attest). 
 
MILITARISM:
 
     In the book 'Japan that can say no! (to America)', by Akio Morita
(CEO of SONY) and Shintaro Ishihara (an influential parliament member),
the authors state that Japan has under development the world's most
advanced military jet because American made planes are not suitable for
Japanese terrain, which is 'different' because it has mountains. Mutsumi
told me about one of her friends who quit the Fujitsu company partially
because they were required to work on a nuclear weapons research project
and didn't feel a Japanese company should be involved in such work. 
 
     In Japan, Fujitsu has built at least 2 nuclear breeder reactors (such
reactors usually are used to enrich plutonium for nuclear weapons). The
Japanese claim however, that they are for peaceful purposes.
 
     There is also a well funded extremist nationalistic movement of sorts
in Japan which posts large posters at most major intersections and subway
stations in Tokyo calling for restoration of the emperor as ruler and re-
militarization of the country. Every day in the business and shopping
areas of the city, vans drive around with huge loudspeakers blaring
nationalistic music and making the above demands. Apparently, the older
Japanese ignore this, aware of the west's generosity after the war, but
feelings of the younger people who don't have the memories of Japan's dark
past are more uncertain. What is happening today in Germany may be a
foreshadowing of things to come.
 
     This may seem implausible at first, but not after one looks at
Japanese elementary students' textbooks. In the texts, the sections about
World War II are extremely distorted. In these books, Japan is played out
as the victim to world aggression and the atrocities of the Japanese
Imperial army are not mentioned anywhere. The massive US aid to rebuild
Japan after the war is mentioned on only one line which went "America
provided Japan with some help". Japan's postwar success is attributed only
to the hardworking values of its people (partially true), and not to U.S.
aid for reconstruction of its industries (paid for by American tax
payers), free access to the U.S. market, and U.S. tolerance of Japan's
closed market. Furthermore, after reading these books, one almost thinks
that WWII was America's fault. It is hoped that the younger Japanese learn
what really happened before their parents grow old and die, or America and
Japan may face new misunderstanding and confrontation in the future.
 
EFFICIENCY:
 
     Japan is perceived by the outside world to be an efficient country.
In actuality, Japan is a very inefficient country. The subway people count
change out of tin plates. The valuable intellectual resource of women is
wasted by giving them only the most menial jobs such as 'escalator dolls'
and tea servers. The farming system is one of the most inefficient you
will find in the modern world. Because of this inefficiency, there are a
lot of people employed on the farms who otherwise may not have a job.
Although this is an inefficient use of people and resources, it helps
maintain a low unemployment rate. The protected domestic market keeps all
this from collapsing. As a result Japan can be inefficient, yet still
rich. It is now per-capita, the richest industrialized country in the
world (and is expected to be the richest absolutely by the year 2000,
surpassing America). It may surprise many people, but the most efficient
country in the world is the United States, not Japan. Japan ranks a bit of
the way down. In manufacturing though, they are best in the world.
 
     Inefficiency is also apparent in city planning. Tokyo seems to have
the design of a 'rich' third world city. It is very crowded, chaotic and
streets are extremely narrow and go every which way. Streets in Tokyo have
no names in order to 'confuse the enemy' in the event Japan was ever to be
invaded again. (The U.S. Army named some of the streets during the
occupation, but these were removed shortly after occupying forces left the
country). 
 
CONCLUSION:
 
     America's citizens have failed to realize that Japan practices a
different kind of trade than America does. Japan practices adversarial
trade, where the goal is to wipe out the foreign countries' industries in
order to dominate them entirely. For the Japanese, business is in every
sense of the word, like war. Americans who buy Japanese goods, unknowingly
help them reach this goal. The Japanese are not our economic allies, they
are our competitors.
 
     America often complains that Japan must change its ways to become
more like us. This is not true as America is not number one anymore. It is
not a request we can make. Today, the tables are turned. This time,
America will have to change its ways to become more like the Japanese.
Japan will likely surpass the United States to become the world's leading
economic, technological and manufacturing nation by the end of this
decade, even though they have only 1/2 the population of America. They
will not have to change their ways to become like us, as tomorrow they
will wield the power, not us.
 
 
---------------------------------------
List of companies:
This is a list of some Japanese (or Japanese owned and controlled)
companies. Some of the names that make this list may surprise you,
depicted by '*':
 
  Acura (Honda Motor Company, cars)
  Aiwa (consumer electronics, stereos)
* B.F. Goodrich Tire (owned by Toyo Rubber)
* Brother (electronic typewriters)
* Bridgestone Tire Company (tires)
  C. Itoh (computer printers)
  Canon (laser printers, cameras, photocopiers, consumer electronics)
* CBS Records/Columbia House Records (owned by SONY)
  Citizen (watch company)
* Columbia Pictures (owned by SONY)
  Denon (cassette tapes, consumer electronics, stereos)
* Dunlop Tire and Rubber
  Epson (computer company)
* Firestone Tire and Rubber (Bridgestone Tire Company, Japan)
  Fisher Electronics (Stereo Maker)
  Fuji Film (film and chemical products)
  Fujitsu (nuclear and breeder reactors, consumer electronics, heavy
           industry)
  Geisha Foods (tuna and canned food products in the USA)
  Hino (heavy truck maker)
  Hitachi Industries (heavy industry, railroad, appliance and  
  electronics)
  Honda (autos, motorcycles, small trucks)
  Infiniti (Nissan Motor)
  Isuzu (autos)
* JVC (Japan Victor Company; owned by Matsushita Industrial Electric)
  Kawasaki Heavy Industries (Motorcycles, trains, industrial steel)
  Kikkomann Foods 
  Kenwood Electronics (Stereo Maker)
  Komatsu (A heavy Equipment maker)
  Konica (photocopiers, cameras)
  Kubota (heavy equipment, backhoes, tractors, bulldozers)
  Kyocera (computer and electronics maker)
  Lexus Automobile (Toyota Motor Company)
  Makita (power tools)
  Maxell (cassette tapes)
  Mazda (autos)
* MCA Home Entertainment (tv show company;ie. Dragnet..etc)  (SONY)
  Memorex (cassette tapes)
  Michael Jackson (rock star, he works for SONY)
  Minolta (copiers, fax machines, electronics)
  Mita (photocopiers)
  Mitsubishi (a huge keiretsu...banking, steel, autos, trucks, lead
            pencils, electronics, bicycles...and on and on)
  Mitsui (an other huge keiretsu)
  Murata (fax machines and electronics)
  NEC  (Nippon Electric Company; computers, cash registers, TV's,   
        electronics)
  Nikko (consumer electronics, stereos)
  Nintendo Electronics (video games)
  Nissan (autos, power boats, trucking and heavy transport vehicles)
* Nomura Securities (financial firm)
  Okidata (computer printers and accessories)
  Olympus (cameras)
  Onkyo (electronics and stereo maker)
  Panasonic (Matsushita Industrial Electric Company)
  Pentax (cameras)
* Pentel (lead pencil company...Japanese have a huge share of the lead
          pencil market, look at your lead pencil, its probably
          Japanese)
* Pilot (lead pencil company)
  Pioneer (Stereo and electronics maker)
* Quasar (Matsushita Industrial Electric Company) (Televisions, VCR's) 
* Raven (computer printers, faxes and accessories) (Matsushita Industrial)
  Ricoh (they make computer printers)
* Roland (musical instruments)
* Rockafeller Center (a Japanese holding company)
  Sanyo (electronics)
* Seattle Mariners Pro Baseball Team (Owned by Nintendo)
  Sega (video games)
  Seiko (Watches)
  Sharp (copiers, faxes, TV's, electronics)
* Shiseido (perfumes, cosmetics)
  Sony (electronics, movie production)
  Star Electronics (they make computer printers)
  Subaru (autos)
  Sumitomo (banks, heavy industry, ships, steel, electronics)
  Suzuki (autos, motor bikes)
  TDK (cassette tapes)
  Taito (video arcade games)
  Tomy (toy company)
  Toshiba (electronics, eletrical, home appliances, heavy industry,
           nuclear reactors)
  Toyota (autos, heavy transport trucks)
* Universal Pictures (Matsushita Industrial Electric Company)
  Yamaha (motorcycles, musical instruments)Yokohama (Tires and Rubber
  products)
  Yokohama Tire and Rubber (tire and rubber goods)
  YKK (zipper company (look at the zipper on your clothes, its
       probably YKK as this company has an over 50% market share 
       in the world))
 
---------------------------------------------
Some U.S. products which are really Japanese (or other)
 
   Chevy Nova car (Toyota)
   Chevy Sprint/Pontiac Firefly cars (Suzuki)
   Dodge Colt car (Mitsubishi)
   Dodge Stealth car (Mitsubishi)
   Eagle Talon car (Mitsubishi)
   Ford Mercury Villager Minivan (Nissan) 
   GM's Geo cars (mostly Korean)
   HP printers (some of them are Canon's)
   Macintosh Powerbook Computer (SONY)
   Sears Televisions and other electronics (Matsushita and others)
 
 
*****Some articles referred to here are available 
     via the Internet Computer Network at FTP Site:
 
monu6.cc.monash.edu.au   
 
in directory:  pub/nihongo
 
matsushita.pbs (Transcript of a PBS-TV special on the Japanese
                television cartel)
 
japanno (The US. Department of Defense version of the text of Akio
         Morita's and Shintaro Ishihara's book, "A Japan that Can Say
         No! (to America)". Note the version of this book sold in stores
         is a phony. 1/2 of the original version is missing (Akio Morita
         removed his part fearing it would hurt SONY's sales in the
         U.S.) and there is a new appendix specifically written for
         American consumption, much of which is blantantly false). 
 
 
Here are a few good books to read on the topic:
 
-->"Trading Places, How we are giving our future to the Japanese and how
to reclaim it", Clyde Prestowitz, New York: Basic Books 1989
 
-->"The Enigma of Japanese Power"; by Karl Wolferen, 1989, Alfred A. Knopf
Press (this book used to be given away when ever your bought a
subscription to Forture Magazine. I'm not sure if it still is.)
 
-->"Unequal Equities, Power and Risk in Japan's Stock Market"; Zielinski,
Kodansha International, 1991
 
-->"The Japanese Company", Rodney Clark, Charles E. Tuttle Company 1979
(Yale University)
 
 
-------------------------------------------------------------------
DEBT, AMERICA'S SUPERWEAPON OF SELF DESTRUCTION:
 
First, some definitions:
 
National Deficit: The amount of new money America borrows this year only
                  ($400,000,000 this year)
 
National Debt: The total amount of money the government owes (a result
               national deficits adding onto each other year after year
               + interest)
                  (The government has now borrowed a total of
                   $4,000,000,000,000. Each American's share is $16,000) 
             
 
     It should be noted that a lot of America's problems today are its own
fault; a poor educational system, poor corporate management, lack of
loyalty to our own country and its products and politicians who do exactly
what we want them to in the short term. Perhaps America though it was so
rich it could afford to be careless about its future. This all lead to the
big issue, the national debt.
 
     For the last 10 years, our standard of living has been maintained by
borrowing when it should have declined drastically as our imports shot up
and our exports plummeted (eroding our national industries).
Unfortunately, because of the massive borrowing, the cracks forming in
America's national economy were not so visible. 
 
     Today, America is now a much weaker player in automobiles (the motor
capital of the world is now in Toyota City, Japan, not Detroit), machine
tools, motorcycles, consumer electronics, display technology, banking (in
1970, 9 of the 10 largest banks in the world were American, today 9 of the
10 largest banks in the world are Japanese) and materials. All of these
industries today are dominated by the Japanese. All were dominated by
America only a short time ago. Americans could not see the effects of
losing industry after industry on their national strength and standard of
living marketshare because of the borrowing... until now. 
 
     Today 1/3 of every American's taxes go to pay interest on the
national debt. If the US didn't have this debt, everyone in America would
be working 4 days instead of 5 and still have the same living standards,
as this is the part of each person's taxes which go to the debt.
Conversely, Every American's standard of living would be higher by 20%
with 5 day workweeks but no debt. At the current rate, in 10 years, all
Federal taxes collected will go to the debt. This all points to extremely
bad things which will happen to the US economy in a few years. Already,
America is in the longest recession since the depression with no sign of
an end. If America tries to balance the budget now, it will likely trigger
a much more severe recession or a depression as the US economy is
extremely dependant on this borrowed money flowing in (1/3 of this year's
federal spending was borrowed) to keep everything going. 
 
     Balancing the budget now isn't so bad though, because depressions are
temporary and things would get better about 10 years later. After that,
several decades of lower standard of living would take place as Americans
pay down the debt back to a reasonable level (every American's debt share
right now is $16,000). Balancing the budget is of course political
suicide. Many of the politicians today prefer to commit national economic
suicide as it lets them save their jobs for now.
 
Sadly, the (more likely) alternative is much worse:
 
     If America doesn't balance the budget now, but waits, then the debt
and interest costs will get much higher than they are today. The
government will start raising taxes and cutting services more rapidly than
ever before, but will be unable to raise taxes so high to pay such
interest. They will then resort to printing more money to pay the
interest. This will lead to hyper inflation rates and rapid decline of the
standard of living in the country. This results in a depression that won't
go away. If it sounds unbelievable, one may read one of the many books on
Latin American economic history in the 20th century. You'll see a play by
play description of what is happening now in America. This is what
happened to all those latin American countries who right now are wondering
why America is so foolishly making the same mistakes they did in the 60s
and 70s. This is compounded by the fact that alot of this debt is owed to
the Japanese. Once America is in hock, Japan can tell America what to do
as then, they literally own it. This is why the debt has people like Paul
Tsongas and Ross Perot so afraid right now.
 
     Fixing the debt problem will require (for a short time) lots of pain
that American's haven't experienced since the depression and tax hikes
with the likes that have never been seen before. Americans will have to
expect this and be tolerant. Gas will sell for $2.50, social security will
be taxed and many loopholes will have to dissappear. For a time,
American's living standards will plummet drastically. 
 
     On the other hand, not taking these measures will yield the same
consequences a little later, but they will be permanent instead. America
will be a very different place in 25 years should this happen. Its the
choice of every American about what happens. We will have to face our
future grandkids about it one day if we decide to do nothing about it now.
There is still time, it would be wise for us not to waste it.
 
-----------------------------------------------------------------------
THE END
 
The above file is available from FTP site: monu6.cc.monash.edu.au in
directory: pub/nihongo, as JAPANYES.
 
"A Japan that Can say No" by Akio Morita (SONY CEO) is there as JAPANYES
 
The PBS FRONTLINE transcript about the Matsushita TV Company is there as:
MATSUSHITA.PBS
 
     I'd welcome any comments you have about the article. It looked
relevant to some of our problems today and seemed worthwhile to post.
 
     You see, Japan's government and companies have organized to fight an
economic war against us which we are losing badly. What the ordinary
Japanese people allow their government and companies to do is not
acceptable. Outright discrimination against foreigners and treating women
as 'non-people' is also not tolerable in the modern world. The Japanese
government and industries have treated the America that helped them so
much after World War II with utter contempt and insolence. We had accepted
their closed market and opened ours to them so they could rebuild their
country and become full members of the peaceful world. Instead, their
government and their industries chose to use this generosity as weapons
against us in order to destroy our companies, our jobs, and our national
strength.
 
     I used to buy lots of Japanese products, probably for the same
reasons you might now. Not everyone can go to Japan, so others may not
know the full consequences of their decisions like you do now. Telling
them is important. It just takes understanding and thoughtful explanation
for others to understand. If you know an effective way to get this message
out to people, then it would be wise to do so, don't wait for someone else
to do it for you as by then, it may be too late. 
 
     America belongs to you and you have to do something for it once in a
while. This is one of those times. If you have questions, please ask. Use
this network and fax machines to organize yourselves to get this message
out. Hang up copies of this article and others in lounges, or on the
windshields of Japanese cars. Try to start an awareness newsgroup on the
internet. These are all things which can be done.
 
     If you are a student, you probably realize much more than your
parents do that your standard of living is likely to be a considerably
lower than theirs. You are much more likely to have trouble finding a good
job upon graduation than they ever had. That is how this problem affects
you directly. As a result, you may wish to tell your friends and organize
student groups to get the word out about this problem. If you don't act,
its you (and your kids someday) who will suffer the most as a result of
all this, so its up to you.
 
     In the meantime, one very good way to get people aware of the topic
is to get them a copy of Rising Sun (by Michael Crichton) as a birthday or
Christmas present. This is a very good factually based fiction book on the
subject. All parts about Japanese business in the book are true and are
backed up with a bibliography at the end. This book is a #1 best seller
and is by the same author who wrote "Andromeda Strain", "Great Train
Robbery" and other very famous and very good books/movies. I'm not sure of
the publisher. It is a very good fiction/murder mystery book and is loaded
with lots and lots of facts about this issue which are not exaggerated. It
will convert the most ardent 'America Basher'. A movie version of this
book is being made and should be out next year though it may not be as
complete and factual as the book.
 
     If what you read in the articles above really disturbs you, you may
wish to tell or fax your friends about this article or others you which
find at the above FTP site or elsewhere. You could avoid Japanese products
and expect the same from your friends and associates. If a salesman drives
up to you in a Japanese car, you may wish to tell him you expect him not
to visit you next time in one. Plenty of other countries who aren't out to
destroy us make fine automobiles.
 
     Remember that a problem like this can be fought, one American at a
time. Remember to be thoughtful and loyal to your fellow Americans and
treat them as you would like to be treated. Exclusive self-centered
thinking will only make problems in America worse than they are. That is
the true lesson of the 1980's. Self centeredness doesn't work in the long
run. If we were as loyal to each other as the Japanese are to each other,
we wouldn't be in the economic and social mess we are now. Remember that,
and expect it from your family, friends and associates. If you don't get
what you expect, say so.
 
     Hopefully in the future, the economic war will be called off and our
two countries will live peacefully and with co-operation. I look forward
to that day.
 
-Andre
ar12@midway.uchicago.edu