Link Of Interest: When Japan Got Smart

Here's an article dating back to 2005 in the International Herald Tribune titled, "At Last, Japan is confronting corporate deadbeats."

An excerpt:

"Healthier lending practices would also give the Bank of Japan's zero-interest-rate policies a better chance of ending deflation. Japan's problem isn't so much the supply of money in the economy, but demand for it. If banks do not lend, Japan lacks the multiplier effect that can make monetary policy so potent.

Finally, a solvent banking system would indicate that Japan is abandoning financial socialism. Seeing companies like Isuzu Motors, Showa Denko KK, Takashimaya and Tomen restructuring and bolstering earnings might impress investors who remain skeptical about Japan's outlook.

Challenges remain, of course. In the cases of Kanebo and Daiei, the Japanese government obstructed market-based solutions. Instead, taxpayer-funded revitalization programs or outright bailouts were favored."

Hm. Sounds familiar. I still can't believe that some people think bailing out companies is a good idea. Moreover, such practices, which are done in the name of protecting jobs and avoiding economic catastrophe, are evidence of the lack of imagination, innovation and brass balls our leadership possesses.

What's wrong with taking the money and supporting the people who will be losing their jobs? For example, add to the "job infrastructure" by offering training and schooling to help people transfer their skills into different sectors of the economy. Why throw it at the hands of execs (and the unions) who will squander it?

We need less doofuses like John Thain and his ilk and more Lee Iacocca's.

Until this happens and America's realizes the error of its ways expect earnings growth and the general healthy business environment to be negligible.

Closer to home here in Canada, the Liberal party has old and typical ideas to deal with a slowing economy. The Conservatives were rightly using a "wait and see" approach before they advocated any spending. This led the Liberals and Frick and Frack to mobilize in a coalition. These parties want to do exactly what ailed Japan for over a decade.