Helping Japan go bankrupt

[Chris Burford <cburford@xxxxxxxxxx>]

Interesting article, which Ian Murray has already got to before me, but
what struck me was something a bit different. The journalist nods
courteously and in a studiously non-partisan way to Bush's
non-interventionist financial tendencies (alleged that is - ignoring his
sudden conversion to fiscal Keynesianism) and tactfully suggests that he
and his supporters might regard Japan as a component part of the Empire,
and needing a little help with civilised bankruptcy procedures.


It is not quite clear to me whether there is a difference between the idea
of countries going bankrupt or their financial sectors going bankrupt.
Either way it is consistent with the marxist theory that the way out of a
crisis usually has to include the destruction of old capital.

This extract from the IHT/Washington Post is the first time I have seen the
term bankruptcy used in connection with Japan, of course in a deliberately
light infomal manner. But the argument is clear enough.


From

http://www.iht.com/articles/44651.htm


Ignoring Financial Crises Could Become a Dangerous Habit
David Ignatius International Herald Tribune Monday, January 14, 2002


> The real black hole in global finance right now is Japan. Despite hopes
> for reform and revival under Prime Minister Junichiro Koizumi, things in
> Japan have gone from bad to worse to disastrous. That is why the Japanese
> Finance Ministry halted its yen devaluation last week - things were
> beginning to spin out of control.
>
> In Japan as elsewhere, the Bush Treasury has tended to show disdain for
> the sort of aggressive financial intervention the Clinton team favored.
> But that is beginning to look misguided. Japan needs help now, badly. Most
> of all, it needs an orderly way for its financial sector to, in effect,
> declare bankruptcy - a process something like the savings-and-loan cleanup
> in the United States a decade ago. The Japanese could use U.S. help in
> restructuring, but the Bush administration is mostly sitting on its hands.
>
> The administration is wildly interventionist in its foreign military
> policy but almost passive in international economic policy. That imbalance
> is a mistake. One lesson of the war against terrorism is that the United
> States needs to be involved in the welfare of ordinary people around the
> world, sharing the fruits of the global economy so that more people have a
> stake in its success.
>
> Nonintervention was the right choice with Enron and Argentina, but the
> administration shouldn't make a fetish of it.


Chris Burford

London