Poor, Helpless, Weak Japan

Dennis R Redmond dredmond at OREGON.UOREGON.EDU
Mon Feb 8 12:32:40 PST 1999

On Mon, 8 Feb 1999, Doug Henwood wrote:

> But Dennis, those cash reserves are as much a sign of (present) weakness as
> of (past) strength - they can't invest the damn money profitably. And I'm
> not talking U.S. profit rates, but something even in the mid-single digits.

When you're a global creditor, profitability becomes someone else's problem -- namely, the problem of competitors trying to earn enough of a surplus to pay down their debts to the metropole. I'm not arguing that Japan is going to boom overnight -- one-third of their economy is owned by the keiretsu, and is therefore insured against any systemic risk short of an asteroid hitting the planet, but the remaining two-thirds (including the most heavily protected and subsidized sectors, like agriculture and whatnot) is being propped up by Government bailouts of various kinds. The point is that the keiretsu have the collective liquidity to finance the mother of all consumer spending sprees, which would restore profit rates in a jiffy.

That's the minimalist position. It'd be nice to see the East Asian proletariat rising up and seizing those $5 trillion of net claims, and redistributing them to farflung Chinese and Indonesian peasants, a la the EU's subsidies to the European semiperipheries. But Marx always warned us not to put the superstructural steam engine ahead of the infrastructural rolling stock, so I'd settle for massive forgiveness on SE Asia's loans.

-- Dennis

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