Conventional views of Western economists on Japan are dominated by US Treasury/IMF attitudes that essentially carry a creditor's bias: that solutions lie in various degrees of putting fundamentals in place so that banks can lend again without excessive risk (the so-called confidence game, as Krugman puts it). If "good fundamentals" should wreck economies and political structures in the short or medium term along the way, that is the price of good finance. The paradox is that the proponents of this approach, American economists personified by Summers and Fischer, come from a net debtor nation, but this condition is generally disguised by decades of American dominance in international banking. Asians, including the Japanese, may have different views. Behind the apparent Japanese reluctance to follow US/IMF advice on how to cure the Japanese/Asian financial/economic problems, is a seldom mentioned (at time surfacing quietly in unreported Diet debates) search for a strategy for jockeying for independent and equal positions in the pending restructuring toward a new global financial architecture and economic order. Tokyo has no desire to become another London after the Big Bang and Asia does not want to become like Latin America. The sooner American policy makers accept and deal with this serious communication and conceptual gap, the sooner the dialogue will be on track for real solutions.
Henry C.K. Liu