Lessons we should have learned
Nancy Bauder
Leavenworth
To the editor:
A good friend of mine lived in Hawaii for many years, and was able to pick up some great property from a Japanese company in the mid-90s and sell it for a profit a few years later. At that time, the Japanese economy was in a devastating crisis and depression.
From approximately 1992-2002, Japan faced a severe economic crisis, commonly called the “Lost Decade.” They had a real estate “bubble” that burst, which was the major contributor to the crisis. Sound familiar? Like our current situation, Japanese banks had extended loans on over-valued properties during the boom, and when interest rates rose, sell-offs and bank defaults followed.
Their initial recovery plan focused on bank and business bailouts, which did not work. Over the course of the downturn, they implemented financial incentives for economic development, which helped somewhat. But turnaround finally occurred when they “hunkered down,” selling off-shore holdings (such as large amounts of property in Hawaii and other locations), and bringing in and keeping more money locally until the crisis passed.
They began to allocate public money much more efficiently than in the past. Japan could no longer afford to spend public money wastefully, as it had. They cut back public investment, distributing as a priority to only where it yielded “value added” for the society, for regions, for the corporate sector and for competitiveness of the country as a whole. Just another road or bridge, in order to meet the self-interest of some regional special interest groups, could not be the answer for Japan’s future. They implemented an efficient and much more transparent screening process about where and when to spend scarce public funds.
My son and his new wife are on their way back to America after several years living and working in Japan. Japan has its issues, especially in regard to attitudes toward women, but my son’s job prospects at this time are better over there than they are here. It looks to me like our own government would have learned something from Japan’s example before we got into this mess, and as we are trying to turn it around.
