If the metropolitan government passes Ishihara's proposal as expected next month, the tax goes into effect on Apr. 1. Whether they deserve it or not, Japanese banks need some slack to restore themselves to health. Push back the banks' recovery and you push back the day when healthy lenders can start recycling Japan's vast savings pool into new loans for the kind of promising companies that can create jobs and tax revenues for Tokyo's regional economy, the nation's biggest and most important. The U.S. and Sweden encountered banking crises during the early 1990s and turned instead to taxpayers to fix things. It wasn't much fun, but those moves restored the circulatory flow of capital, crucial for any industrialized economy.
Government needs to step in quickly and restore liquidity to the banking system.
And it doesn't come cheap. Ishihara is obviously gaining votes by turning banker-bashing into a national blood sport. But if he really wants to pull Tokyo back from the abyss, he ought to be focused on creating jobs, not demons. Bremner is Business Week's Tokyo bureau chief. The McGraw-Hill Companies Inc. All rights reserved.