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Give The Japanese An "A" for Effort

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Tags Global EconomyCapital and Interest TheoryMonetary Theory

02/07/2007

Historically, you know, we have a couple of grievances with the Japanese. First, healed over like an old wound, are the events of December 7, 1941. In the usual American tradition, we won that war but we lost the peace — said the experts. (I'll tell you why later.) Next, was the Great Scare of the eighties when armies of U.S. economists, with teary eyes and downcast faces, predicted the mortal wounding of the U.S. economy. The Japanese system — a partnership of government and business, would flourish. They'd steal our jobs. It was the eighties version of the skull and bones visage of outsourcing. You'd need a wheelbarrow of US Greenbacks to buy ten Yen. Japanese conglomerates, partnering with banks, would eat us up like tuna sushi; the Tokyo Stock Exchange backed by big Government was the golden brick road to wealth. These economic undertakers, leaning on their shovels, predicted our demise. Thankfully, we stuck with our half-way capitalistic system — we rejected the Japanese model.

But last year when that the Liberal Democratic Party, led by Junichiro Koizumi, scored a landslide victory, they too are rejecting old models. They began their reign with an innovation that should challenge American politicians. THE JAPANESE INTEND TO PRIVATIZE THEIR POST OFFICE! IF they can make this move why can't we? The evolution of ownership from the Japenese government to shareholders will take about twelve years. The JPS (Japanese Postal Service) is more than a vanilla Post Office. It's a bank. A huge one with 3 trillion — in U.S. bucks — assets: and 270,000 employees. The bill to accomplish this immaculate transmorgification passed the lower house of the Diet months ago and appeared headed for legality, but was rejected by the Upper House pols — provoking new elections by Koizumi.

The objective of the new government is to downsize itself; take those 3 trillion dollars, which govt can now whimsically dispense, and invest them for consumers. Hmmm, sounds like our Social Security System, does it not?

A rocky political road for sure but clearly stated within the charter of the Koizumi administration. Give 'em an "A" for effort. And in the meantime our postal system rumbles on monopolistically.

Mark Thornton is a Senior Fellow at the Mises Institute and the book review editor of the Quarterly Journal of Austrian Economics. He has authored seven books and is a frequent guest on national radio shows.

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