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Aerospace execs sell their industry to Japan­—one part at a time.
At a welcoming banquet in Japan in the 1980s, Ford Motor chairman Philip Caldwell received a memorably double-edged compliment. “There is no secret about how we learned to do what we do, Mr. Caldwell,” said the head of Toyota Motor, Eiji Toyoda. “We learned it at the Rouge.” Toyoda was referring to Ford’s fabled River... Read More
DUBLIN --CONGRESS might be at loggerheads, the unemployment rate might be too high and America's infrastructure might be crumbling -- but Americans of all political viewpoints comfort themselves with the notion that at least they lead the world in high technology and always will. It's a pleasing, convenient idea. China can't outrun the United States,... Read More
Why won’t anyone talk about Tokyo’s auto protectionism?
Mitt Romney was in his element a few years ago as the Obama administration struggled to rescue the Detroit auto industry. In an eat-your-spinach tone, he ticked off his recommendations for reform. Top management should go, executive dining rooms should be shut, and factory wages slashed. Then there were the industry’s “legacy costs”: given how... Read More
Tokyo--DESPITE some small signs of optimism about the United States economy, unemployment is still high, and the country seems stalled. Time and again, Americans are told to look to Japan as a warning of what the country might become if the right path is not followed, although there is intense disagreement about what that path... Read More
How currency manipulation destroyed American manufacturing
TOKYO—In the mid 1990s, I published a book entitled Blindside: Why Japan Is Still on Track to Overtake the U.S. By the Year 2000. The prediction in the subtitle did not, as they say, pan out. But it was more soundly based than casual readers of the U.S. financial press might imagine. The book offered... Read More
Meet the heterodox economists challenging globalism.
“I don’t care who writes a nation’s laws, or crafts its advanced treatises, if I can write its economics textbooks.” So said one of the greatest textbook writers of them all, Paul Samuelson. But even Samuelson didn’t live forever—he died in 2009 aged 94—and now others decide what the rising generation is reading. It is... Read More
The Pentagon sells out American manufacturing for Japanese bases.
TOKYO—When German executives visit Tokyo, they are often treated to a session at Bernd’s Bar, a notably authentic German pub. A bit too authentic, perhaps, given its Axis-era accoutrements. The last time I was there, one of the walls still featured a huge photograph of Willy Messerschmitt in conversation with Charles Lindbergh. It had evidently... Read More
The Betrayal of American Prosperity: Free Market Delusions, America’s Decline, and How We Must Compete in the Post-Dollar Era, Clyde Prestowitz, Free Press, 340 pages How the Economy Was Lost: The War of the Worlds, Paul Craig Roberts, CounterPunch, 264 pages George W. Bush’s under secretary of commerce for international trade, Frank Lavin, was once... Read More
America goes Ottoman shopping.
Here’s an economic history test: 1. Which Great Power pioneered the secular trend towards freer international trade? 2. Which Great Power first resorted to spiraling foreign indebtedness to pay for its wars? 3. Which Great Power first permitted large-scale foreign direct investment in its domestic industries and infrastructure? If you guessed such latter-day globalizers as... Read More
Before there was Beatlemania, there was Reischauermania. Admittedly, the latter was more localized and, of course, it is not much remembered these days. But it was huge at the time, and in the end it may prove to have left a bigger mark on history. The object of adoration, a dapper, middle-aged Harvard East Asian... Read More
Libertarians plan to build floating islands to house casinos, hospitals, hotels, offices—and even new societies. Will...
The year is 2020 and I have just turned 72. Not far off the California coast, I and several other wobbly-looking people are on a boat, chugging towards a bizarre floating structure. From a distance, it looks like a luxury hotel, or something from a James Bond movie—but it’s an orthopaedic hospital. Beside fond memories... Read More
For years, economists said Germany was doing everything wrong. But today it's thriving, even in the wake of the global...
American and British commentators have told three stories about the German economy over the past decade, all of them derogatory. Articulating a standard conservative view, Adam Posen of the Peterson Institute for International Economics in 2006 characterized Germany's performance as "lastingly poor." In a similar vein, Jude Blanchette, blogging for the libertarian Mises Institute, predicted... Read More
Getting the American economy back on solid ground will require new financial regulations. Goldman Sachs alums aren’t...
As bewildered Americans survey the wreckage of their nation’s once vaunted financial system, they could do worse than reacquaint themselves with one of Wall Street’s oldest and most revealing parables. The story goes that an out-of-town customer dropped by to talk to his broker and afterwards was ushered around Lower Manhattan’s yacht-filled docks. “Here is... Read More
The U.S. is betting that a rich PRC will be democratic. Beijing disagrees.
Two bets are on the table. One has been placed by the Washington establishment, the other by the Chinese Communist Party. Analyzing China’s prospects in terms of fashionable globalist ideology, Washington is betting that a rich China will be a free one. The theory is that the only way China can continue to grow is... Read More
America will always be number one, won’t it?
TOKYO—Almost everything the Apple computer company sells these days comes with this memorable statement of origin: “Designed by Apple in California, Assembled in China.” The implication is obvious: a few brilliantly creative, latte-quaffing, hybrid-driving Americans did the real work, while low-skilled Chinese assembly workers, laboring in serf-like conditions and earning a few dollars a day,... Read More
After the economist Nicholas Lardy visited China in the mid-1980s, he came away distinctly skeptical. While Chinese leaders were gearing up for a huge export drive, Lardy predicted “a marked slowing in China's trade expansion in the years ahead.” In particular he questioned Beijing's reported plan to boost total Chinese trade (imports plus exports) to... Read More
The size of the trade deficit with China is one of the hottest potatoes in American economic policy these days. It is about to get a little hotter, thanks to Beijing's highly provocative, if hitherto largely overlooked, controls on outbound tourism. In theory the United States should be a major beneficiary -- perhaps the major... Read More
n all the public bickering recently between Japan and China, one fact has received remarkably little attention: Japan's continuing refusal to pay compensation to victims of its militarist-era brutality. Ever since Japan surrendered in August 1945, one of the Japanese government's key policy objectives has been to slough off all such compensation claims. Japanese officials... Read More
For those who claim to understand the global economy, here's a pertinent question: Which East Asian economic powerhouse recently announced the largest current-account surplus in world history? The answer is Japan, although very few readers of the American press are likely to have noticed. Given the continuing media obsession with China, little news about East... Read More
When the 1970 Nobel laureate Paul Samuelson was asked what it takes to win a Nobel Prize, he volunteered, "It doesn't hurt to have good students." But even Samuelson's overachieving students -- he has taught economics at MIT for six decades -- sometimes need to be put in their place. At least that seems to... Read More
While it is still unclear how large the trade problem will loom in the presidential election, there is surely plenty to be worried about. On several occasions under George W. Bush, the monthly trade deficit has exceeded the total annual deficit -- $41 billion -- in the entire last year of his father's administration. Of... Read More
China is now widely seen as the coming superpower. But few even among the west's China-watchers understand quite how fast this geopolitical freight train is approaching. Moreover, most western observers assume that China's ambitions are being opposed by its east Asian rival, Japan. In the words of the Economist, Japan is "standing in the way"... Read More
America’s burgeoning trade deficits threaten Greenspan’s legacy.
For those who watch the American economy, the Internet boasts few more useful resources than the Web site of the Federal Reserve. In a few clicks you can mine data on everything from the level of interest rates on Black Monday to the growth of steel production under Eisenhower. Whether the topic is the trend... Read More
For a decade now, the western consensus has been that Japan is an economic basket case. But this is a dramatic misreading of a perennially secretive society. Indeed, it may come to be seen as one of the most significant misreadings in economic history. The geopolitical implications of this misunderstanding go far beyond Japan or... Read More
If ever there were a time for top-to-bottom reassessment of the U.S. transportation system, now is that time. James Fallows's Free Flight, published last summer, and Jim Motavalli's just-released Breaking Gridlock provide stimulating insights into the ways better technology and sensible planning might come together to improve methods of travel. Fallows offers a forward-looking account... Read More
By recent standards, the dismal U.S. trade figures for April 2000 counted as a relief. After all, imports fell slightly, and this helped narrow the trade deficit for the first time since August 1999. So much for the good news. Now for the bad: At $30.4 billion, the April deficit was just fractionally below the... Read More
Given recent concerns for the future of jobs at places such as Longbridge, Dagenham and now Nissan in Sunderland, it is past time Britain diagnosed the real reasons for the erosion of its manufacturing base. One is the notion that in the digital age manufacturing no longer matters. Almost everyone who influences policy-making has come... Read More
Given recent concerns for the future of jobs at places such as Longbridge, Dagenham and now Nissan in Sunderland, it is past time Britain diagnosed the real reasons for the erosion of its manufacturing base. One is the notion that in the digital age manufacturing no longer matters. Almost everyone who influences policy-making has come... Read More
A prominent economic commentator tells why manufacturing, not the information economy, is the key to the future...
YOU CAN HARDLY PICK UP A NEWSPAPER THESE DAYS WITHOUT reading yet another glowing account of the golden prospects supposedly in store for the United States in the so-called postindustrial era. If media comment is any guide, almost everyone these days is convinced that new information-based businesses and other postindustrial activities have superseded manufacturing as... Read More
Trade: Information Industries Cannot Match the Export Strength of the Manufacturing Ones That Fueled America's Rise
For anyone who imagines that the new information-based economy is a panacea for America's economic ills, the U.S. trade figures released Sept. 21 are a startling wake-up call. Not only do they show that the United States' chronic trade problems have not gone away, but they raise fundamental questions about the wisdom of America's New... Read More
The Information Age's booming industry is busting our nation's long-term economy
CONVENTIONAL WISDOM has it that Silicon Valley is triumphantly leading the United States toward ever greater prosperity as the American economy shifts out of manufacturing into new information-based businesses. So far the euphoria about the New Economy has come in for remarkably little reality checking -- but there are reasons to believe that the economic... Read More
Reports of Japan's death as the world's leading economy were premature
IT WAS hardly surprising Tony Blair, putative future UK prime minister, was to be found in Tokyo last week. After six years of financial winter Japan is back in the global economic driving seat. The consensus is that 1996 will be Japan's most prosperous year since the financial bubble burst in early 1990. The stock... Read More
Reports of Tokyo's Economic Decline Are Greatly Exaggerated
Although the 50th anniversary of V-J Day finds Japan at a low ebb, recent financial difficulties in Tokyo should not be allowed to obscure the extent of Japan's extraordinary economic achievements in the postwar era. For one thing, many of Japan's recent problems have been exaggerated abroad. In many ways, Japan today is actually a... Read More
The Ministry of Finance Perceptive Westerners may be forgiven a touch of cognitive dissonance in looking at the Japanese economy. They read daily that Japan has been badly damaged by a terrible economic slump, yet the evidence tells a different story. What are they to make, for instance, of the yen's conspicuous strength? In the... Read More
Housing: With High-Rise Building Limited to Restrict Consumption, Residents Were Crammed in Unsafe Dwellings
The confirmed death toll from the Kobe earthquake, now close to 5,100, is more than 80 times that of the Los Angeles earthquake a year ago. Why did Kobe suffer so badly? Some of the reasons have already been publicized. Kobe took a stronger jolt than Los Angeles. And the Kobe authorities seem to have... Read More
Against the tide of opinion that Japan's decline is irreversible, Eamonn Fingleton argues that exports will fuel recovery. IS THE Japanese economy on the verge of collapse? With the Nikkei down more than 25% since the beginning of the year, the question is back in the news. But the panic is overblown. The evidence is... Read More
Japanese high-tech financing operations
It looks like a typical Tokyo watering hole. Large paper lanterns hang from the ceiling-, kimono-clad women glide between the tables delivering beer and witticisms, and a sound system belts out enka songs - Japan's answer to country and western. But after the last salaryman leaves each night, cleaners strip the place of its gaudy... Read More
When an earthquake struck Tokyo in 1923, it took a week for the full impact of the tragedy to percolate through to the west. If disaster struck today, the west's reflexes would be measured in seconds rather than days, sending shock waves through the entire world financial system. As the Japanese insurance industry dumped scores... Read More
What do Japanese corporate finance officers think of the foreign bankers competing for their business? If praise could pay the rent, the foreigners would have no need to worry. At Toshiba, where they make a point of seeing almost every banker who telephones, the general manager in the international finance division, Nobuyuki Horiuchi, said: "My... Read More
Profitable operations of foreign banks in Seoul, South Korea depend on the policies of the Bank of Korea
"Our problem is how to turn away financing officers from our good friends the foreign bankers without hurting their feelings," said In-Young Chung, the Minister of Finance for the Republic of Korea. His point was that the country's foreign borrowing requirements this year will fall well below earlier forecasts. A year ago, the Bank of... Read More
At the new Tokyo Stock Exchange building, an English-language sign in the visitors' gallery reads: "Please be seated when eating." Asked the significance of it, the tour guide had a ready answer. In the seated position, tourists are out of the floor traders' line of sight. "The traders complained that being watched by people eating... Read More
What will amount to a minor piece of history will be acted out early this month in a Tokyo conference room when 60 Japanese industrial executives sit down for an investment seminar. Top of the agenda: investment performance measurement. Nothing unusual about that--until you look at the dichotomy between the agenda and the executives' credentials.... Read More
Japanese banks would not help a foreigner to take over Minebea. But mergers may happen. within Japan
Hostile takeovers are almost unknown in Japan. Even friendly ones are rare. Many of those takeovers which have been done are the work of Takami Takahashi. His Minebea ball bearing company has long been regarded in Tokyo as a maverick. It has shunned affiliations with the powerful zaibatsus. Takahashi has used his freedom from ties... Read More
A.C. (Mike) Markkula, president and chief executive of Apple Computer, has his work cut out for him. Apple makes its first appearance in the Forbes Annual Report of American Industry in this issue. Its sales fell short of the minimum $400 million for inclusion last year, and its debut is spectacular indeed. With an average... Read More
More than half of software maker Comserv's net worth is in a pile of tapes and ring-bound books. That raises some...
TWO YEARS AGO Comserv, a $23 million (sales) Minneapolis-based maker of software systems for manufacturing companies, invested $735,000 to design a program for purchasing procedures. When it launched the product a year ago, Comserv already had 35 firm orders at $40,000 each -- a total of $1.4 million. And by the end of October it... Read More
Not everyone is going to make it to the banquet table. But those S&Ls and savings banks that are far-seeing or fortunate...
WHAT A DIFFERENCE a year can make. The thrifts, orphans a year ago, have made quite a splash on Wall Street lately.For many, prices have doubled since the gridlock of high interest rates broke in the summer, and a few wonder stocks, like H. F. Ahmanson and First Charter Financial, trebled in little more than... Read More
How the 1,002 largest U.S. public companies compare in profitability, growth and market performance on the Forbes...
DEPENDING ON HOW COSMIC the view of the observer, 1983 could be everything from a tough year for the banks to the collapse of Western civilization as we know it. Which will it be? Take a look at the tables below. The Penn Square disaster may have shattered Wall Street's love affair with Sunbelt Banks,... Read More
Banc One, from slump-ridden Ohio, is Wall Street's favorite -- but not just because of its technological lead.
JOHN G. McCOY, whose bustling showmanship as chief executive of Banc One Corp. has taken the bank's assets from $140 million to $6 billion in less than 25 years, once discovered that a close relative, a left-leaning student, was voting against his reelection as a board director. McCoy got on the phone right away. "It... Read More
How Heinz' Tony O'Reilly kept competitors at bay with a mix of firm prices, reduced costs and increased advertising.
NEXT TIME YOU'RE HAVING A hamburger, take a look at that bottle of Heinz Tomato Ketchup in front of you. See any difference? Same old burger-splattering stuff you have always used, right? Well, not quite. H.J. Heinz Co. President Anthony J. F. O'Reilly has made a few changes in his company's best-known product. Oh, you... Read More
In the valley of the fallen agricultural equipment producers, little Steiger Tractor fights on -- with a new $135,000 model.
THE HOUSE LIGHTS WENT DOWN. Circling laser beams pierced the gloom as if heraliding the arrival of an extraterrestrial spaceship. Then, on flashed a bank of floodlights as the auditorium curtain parted to reveal the Panther Automatic -- a 15-ton, 400-Horsepower, chartreuse-colored supertractor that retails for $120,000 to $135,000. Thunderous applause greeted this latest offering... Read More
The major media overlooked Communist spies and Madoff’s fraud. What are they missing today?
The “war hero” candidate buried information about POWs left behind in Vietnam.
The evidence is clear — but often ignored
The unspoken statistical reality of urban crime over the last quarter century.
What Was John McCain's True Wartime Record in Vietnam?