Small, entrepreneurial companies have a hard time of it. Nippon Steel came unstuck making laptop computers. Komatsu, which makes dumper trucks, and Minebea, a ball-bearings company, tried and failed in semiconductors. Some of the big consumer-electronics companies now say they want to get into providing nursing care. The system has seized up.
Resources fail to flow to the most promising, fastest-growing, most productive bits of the economy.
The Japanese call the disease kochoku, or rigidity. But now Mr Ohara is helping to mastermind Mr Obuchi's new reformist economic policy. On his wall hangs a photograph of Margaret Thatcher, whose leadership and radical reforming spirit were much admired in Japan. Mr Ohara talks of his country's supply-side revolution which, like its model in America and Britain in the 1980s, will expose sectors with low productivity to privatisation, deregulation, competition and restructuring. Barely a year later, his flames had been doused by LDP reactionaries who forced him to abandon the privatisation of the post office.