For the United States, politics and protectionism also played a key role in promoting Japan's policy of spending its way out of its macroeconomic problems, rather than exporting its way out. Trade unions are close allies of the Clinton administration. The unions pushed for fiscal stimulus primarily because they saw it as a disguised export subsidy for U.S. goods and workers, paid for by Japanese taxpayers. The stimulus was supposed to increase Japanese incomes, which, in turn, would increase U.S. exports to Japan. As things worked out, however, U.S. workers did not get the anticipated boost in exports because the Japanese did not get the anticipated boost in incomes.
Japanese investors have reason to be fearful of investing in the United States.
U.S. trade unions' knee-jerk reaction is always to want a weak dollar, not a strong one. And Vice President Al Gore badly needs the trade unions if he is to succeed President Clinton. An influx of Japanese savings into the United States would strengthen the dollar and weaken the yen, earning the Clinton administration the ire of the trade unions. One reason the Clinton Treasury does not want Japan to have export-led growth is because of trade union opposition. But they don't want a corresponding increase of Japanese exports to the United States to go along with the growth of Japanese imports.