Cold Pizza in New York
Japan, of late, has been having some problems. Equally clear is that Japan's new Prime Minister, Keizo Obuchi, is utterly powerless to solve them.
The man described by political opponents (and even some allies) as "cold pizza" arrived in New York this week for casual talks with President Clinton. The talks were originally slated to be a formal state visit, to replace the summit cancelled two months ago due the resignation of former Prime Minister Ryutaro Hashimoto. But the talks were downgraded to an informal series of discussions to be held in New York's Waldorf Astoria hotel, partially because of the swirling controversy over Clinton's romantic liaisons, and partially because Obuchi is nobody, with nothing of value to say.
For example, a key point in their discussion was the recent agreement between Japanese ruling party and opposition leaders on a plan for fixing the Japanese banking system. The system is facing debts of nearly a trillion dollars, and desperately needs to be bailed out quickly. However, the deal faces serious opposition in the Diet, mostly because it largely sidesteps the issue of how to solve the banking debt crisis, which in any nation other than Japan would be an important part of a bill designed to solve the banking debt crisis.
The bill, which isn't a great leap forward, may be a small step in the right direction. But it needs some strong leadership and vigorous advocacy from Obuchi to pass. This means the bill is in big trouble. When Obuchi was asked whether he could convince the Japanese Diet to pass the bill, he gave the halfhearted, meaningless answer, "I am neither optimistic or pessimistic on this."
With anchovies, please. Hold the pepperoni, though; this pizza is hard enough to digest.
The United States financial markets, jittery from recent instability on Wall Street, is finally realizing that the Asian financial crisis can affect American stocks. Clinton is using the talks to press Obuchi for three goals that would help ease investors' pain: bank reform, corporate tax cuts, and further fiscal stimulus packages. With the bank reform bill foundering in parliamentary committees, and corporate tax cuts promised for the not-too-distant future (which, in Japan, means "someday"), that leaves fiscal stimulus packages. These, however, have conspicuously and spectacularly failed before.
Since 1992, the Japanese government has spent about 100 trillion yen in attempts at spurring the economy, to no avail. A 16-trillion-yen package announced last April completely failed to impress the markets. Earlier this week, almost out of the blue, Obuchi told Japanese reporters that Japan has already done all it can to lift itself out of recession, short of a "wartime economy," something he would not launch due to Japan's constitutional restraints.
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