JAPAN has fallen on tougher times. Its travelers find prices in Hawaii and the U.S. 50 percent higher than a few years ago. Their yen has dropped in value. Hawaii hotel rates are up.
Progress is slow
on reforming Japan
Stocks on the Nikkei market overall are worth only about half what they were a few years ago. Inflated land values that supported much borrowing and lending have belly-flopped. Bankruptcy is spreading.
But if you think Japan is adjusting rapidly, think again, says an American executive who yo-yos back and forth between the U.S. and Japan.
It's a lot of media hyperbole, says Glen Fukushima, a former U.S. trade representative. He now is vice president of the American Chamber of Commerce in Japan and a key executive there for AT&T.
Fukushima says news correspondents look eagerly for signs of change, then overplay them. Even the Wall Street Journal is guilty, he told a breakfast last month of the Japan-America Society of Hawaii.
News Report -- Government bureaucrats are being reined in. Prime Minister Hashimoto mentioned "reform" 26 times in a speech. Fact -- Government bureaus remain indispensable sources of information, analysis and interpretation of laws. Diet members rely on them more than ever now that the new electoral system requires the members to give more time to getting elected and less to policy-making.
News Report -- Lifetime employment is near death. Fact -- The transformation is very slow.
News Report -- Deregulation is progressing. Fact -- Rules are being relaxed, seldom removed.
News Report -- Japan is importing more. Fact -- A lot of it is from Japanese firms overseas. American companies are not doing much better in Japan.
News Report -- There is more business competition. Fact -- Competition is still managed to avoid negative consequences like unemployment.
News Report -- The U.S. has made considerable progress in new trade agreements with Japan. Fact -- Both sides have declared victory in about 200 negotiations. An American Chamber of Commerce survey asking Japanese and American businessmen to evaluate 45 of them rated 13 as successful, 18 as marginal and 14 as unsuccessful.
Yes, change is happening, Fukushima said, but the rate is exaggerated. The results will not always mean Japan is more like America. Japanese consumer interests still are subordinated to the goal of increased international competitiveness.
A Wall Street Journal commentator, Paul Gigot, recently declared the Japanese experience is one more evidence that regulators can't help publics as well as open markets do. He said socialism was the first god that failed. Then came the European welfare state. Now comes Asian mercantilism as represented by Japan.
FOREIGN admirers of Japan mistook its trade surpluses for economic strength. They were awed by a stock market propped up by unreal land values propped up by bad government policies, Gigot contends.
He says they failed to look at the high prices still paid by average Japanese consumers as evidence the system wasn't delivering for them. Now the prime minister is seriously trying to move to freer markets, but he is contending with a system that won't change easily despite its failures.
More than five years ago while Japan was still riding high, its forthcoming woes were accurately predicted to the Japan-America Society here by David McClain, professor of business at the University of Hawaii, who had come here from Japan to accept the endowed Henry Walker business chair.