Editorials
Tuesday, October 13, 1998

Dealing with Japan’s
ailing banking system

JAPAN appears to be finally coming to grips with the key factor in fixing its ailing economy -- its banking system, burdened with billions of dollars in bad loans.

The ruling Liberal Democratic Party secured opposition party support for a package of bank legislation, assuring approval of laws setting conditions under which the government can recapitalize weak lenders and nationalize failed banks.

The legislation creates a $573 billion bank rescue fund, more than double earlier proposals and about 13 percent of gross domestic product. The U.S. government spent $150 billion -- considerably less -- in dealing with the savings-and-loan problem of the 1980s.

In another step toward solving the bank crisis, the upper house of parliament approved legislation empowering the government to seize insolvent lenders and to help dispose of bad debts. The legislation establishes an agency to buy banks' bad loans and clear the way for private companies to enter the loan collection business, much like the Resolution Trust Corp. set up in the United States to deal with the savings and loans.

With the world's second largest economy, Japan is considered essential to the effort to reverse the economic collapse in many Asian countries, which threatens to affect much of the world. But the Japanese economy has been stagnant for years and the government has been slow to institute effective stimulatory policies.

Because of the huge amounts of bad loans left over from the end of the "bubble economy" period -- said to total nearly $1 trillion -- the banking system has been unable to provide credit for expansion, leaving the economy paralyzed. Many of the biggest banks are suspected of being insolvent. A collapse could have far-reaching repercussions.

Failure to take effective action forced the resignation of Prime Minister Ryutaro Hashimoto. His successor, Keizo Obuchi, was widely written off as an ineffectual party hack. But the latest developments suggest that the prime minister and the rest of the political establishment have finally recognized the need for decisive action. The financial world is waiting nervously to learn whether this program will produce the needed results.

Anti-gay violence

AS gays have come out of the closet in increasing numbers, violence against them has risen sharply. Celebrations of National Coming Out Day on Sunday turned into candlelight vigils following a brutal murder of a gay college student in Wyoming and a lenient verdict in the death of a gay man in Honolulu. Homosexuals understandably feel vulnerable to attack. Stronger legal protection is warranted.

Matthew Shepard, a 21-year-old University of Wyoming student, was found severely beaten and strapped to a fence outside Laramie, Wyo., on Wednesday. He died yesterday, never having regained consciousness. His alleged assailants are two Laramie men who reportedly lured Shepard from a college hangout by telling him they were gay. They face first-degree murder charges; two women were charged with being accessories after the fact.

Stephen Bright was charged with murder for the beating death a year ago of Kenneth Brewer, a gay man, at Brewer's Hawaii Kai apartment. A Circuit Court jury last week convicted him of third-degree assault, a misdemeanor with maximum punishment of one year in prison.

Bright admitted beating Brewer but maintained he acted in self-defense to ward off Brewer's sexual advances. Friends and relatives of Brewer noted that the two men had met at Hula's Bar, a popular nightclub for gays, and contend Brewer would not have forced himself on a heterosexual man.

Hawaii and Wyoming are among only 10 states in the nation with no hate crime laws. Such laws generally involve enhanced sentencing for acts that already were considered crimes. However, a somewhat lengthier sentence for Bright under a hate-crime law probably would not have diminished the outrage in the gay and lesbian community over his misdemeanor conviction.

Hawaii is the only state that doesn't collect statistics on hate crimes to forward to the FBI for analysis. State legislation is needed not only to fill that void but to focus on hate crimes for special treatment in a state that prides itself on tolerance of a variety of lifestyles.

Spending limits

THE idea of providing public funding for election campaigns is to provide an inducement for candidates to abide voluntarily by campaign spending limits. The return of $136,299 to the state Campaign Spending Commission by the Linda Lingle campaign is another indication that the law isn't working.

The money was returned because Lingle exceeded the limit of $1,362,290 for the primary election -- by about $150,000. She was able to exceed the limit because she raised more money than expected.

Neither Ben Cayetano, Lingle's opponent in the general election, nor Frank Fasi, her primary opponent, agreed to abide by the spending limits. Clearly, Cayetano thought he would be able to spend more -- and that he would have to in order to win.The governor has raised more than $4 million in the last four years. Fasi spent more than half a million dollars on his campaign, almost all of it his own money.

What this seems to show is that candidates accept the spending limits only if they think they can't afford to spend more anyway. For the Hawaii governor's race, candidates have to spend several million dollars to be competitive, so the public funding available isn't enough to be a significant inducement.

If it isn't, there is no point in providing such funding.

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Published by Liberty Newspapers Limited Partnership

Rupert E. Phillips, CEO

John M. Flanagan, Editor & Publisher

David Shapiro, Managing Editor

Diane Yukihiro Chang, Senior Editor & Editorial Page Editor

Frank Bridgewater & Michael Rovner, Assistant Managing Editors

A.A. Smyser, Contributing Editor