Is Japan 'the mysterious East' or just a confused industrial society?

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See the Sol Sanders Archive By Sol Sanders SPECIAL TO WORLD TRIBUNE.COM

Japan: Mysterious East or a ÒNormalÓ, Confused Industrial Society? Japanese TV had a little allegory for what is happening in Òthe Mysterious EastÓ Japan is to so many people in the West. A young man climbed to roof of a Tokyo building intent on suiciding. He first took off his clothes ø always an important part of Japanese protocol.He jumped. But instead of a splash, there was a plunk. For he unknowingly dived into a trampoline rescuers placed below the building.

Japanese buildings are now required to keep an inflatable ÒbagÓ to catch suicides. The device is available within minutes of a warning. The narrator remarked on the shame the youngster felt for not having completed his ÒmissionÓ. No one seemed to appreciate that Japanese technology and ingenuity had found a way to prevent a useless loss of life.

There seems general agreement among businessmen and academic economists Japan is emerging from its decade-long stagnation. Everything is still tentative. Although thereÕs speculation the Bank of Japan might raise rates, for the foreseeable future real interest rates will hover around 0 percent. This hasnÕt escaped more intrepid U.S. and European investors. For example, real estate may have bottomed out ø having lost a third in the collapse of The Bubble Economy. That means you can finance properties at about 1 percent and, at least for the moment, get a 3-5 percent return. And the long-term outlook for housing, even office space, in a crowded little country obviously favors a speculator.

One thing that bothers pessimists is that the economic turnaround ø if it is really there ø is, as always in the traditional Japanese economy, export-led. And a big part of those exports are China-bound, where this year Communist leadership has made a silk purse out of a sowÕs ear by ÒorderingÓ a slowdown. Truth is logjams in some sectors, growing auto and consumer goods inventories, rising world commodity prices which have almost leveled off ChinaÕs once hefty trade balance [although it still runs an enormous trade surplus with the U.S.], is reining in the Mainland economy.

Then there is the old game of the Bank of Japan supporting the dollar-yen exchange, that is, keeping the yen lower for the benefit of the exporter. The BOJ dumps billions into the foreign exchange markets from its record trade surpluses to keep the bicycle running fast enoughnot to fall over. ItÕs worked before and seems to be working again.

Some Japanese ø like their American counterparts ø worry about being Òhollowed outÓ by manufacturing going offshore ø mostly to China now, as it did earlier to Taiwan and South Korea. But, again, the Japanese who once scammed their R&D at bargain prices from the U.S. are now going full blast into research. As super-automation takes over, new microchip factories and plasma screen plants build in Japan instead of China because labor is not the critical factor. There are exceptions, of course, Japanese pharmaceutical companies, emerging reluctantly from their once Ònon tariff barrierÓ government protection, are plunking down huge sums in U.S. research facilities. For Japan, again like the U.S., is aging rapidly ø more rapidly than any other industrial country ø and health issues are at the forefront as they have not been in the countryÕs history of relatively poor health facilities.

Politically, too, change is coming. But it is hard to know where that change is taking the country. Prime Minister Junichiro Koizumi, a Young Turk in 2001, has lost a good deal of his flash ø if not his artificially curled locks. He keeps talking about major reforms: privatizing some of JapanÕs holy of holies such as postal saving, long the pacesetter in what was not a real capital market; reforming the banking system by letting them fend for themselves [there has been one major bankruptcy permitted], building a national ÒArlington cemeteryÓ shrine to commemorate JapanÕs Great Pacific War [World War II to everyone else] dead, but continuing to pray at the Yasukuni Shrine, a relic of state Shinto which ushered Japan into the catastrophe; doing something about education, left, unfortunately, through the tender mercies of the U.S. Occupation in the hands of Communist teachersÕ unions that do not recognize ÒpatriotismÓ, bracing the U.S.-Japan mutual defense alliance [in the face of North Korean missiles] by risking public outcry against sending peacekeeping troops to Iraq, a first for JapanÕs non-military military he said would rename as a proper army but hasnÕt, defying the U.S. and signing a huge oil deal with Iran just as Washington was trying to seduce its European allies into halting TehranÕs nuclear weapons program, etc., etc.

What does it all mean? Maybe it is just as confusing as our young suicide acolyte. Living with his failure to perform the ultimate crime against the individual [some 37 million Japanese abortions in the last 50 years has a great deal to do with the present near demographic catastrophe] wonÕt be easy. And it may or may not help that the rescue was hi tech.