politics

Finance minister says financial crisis mainly U.S. fault

24 Comments

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24 Comments
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Not saying that what the US is doing to counter the debt deflation spiral and the resulting deep recession is right, but what exactly are the lessons to be drawn from Japan's lost decade that are supposedly useful other than what doesn't work? Let's see: 1) keep dead companies on life support; 2) build multiple bridges to small islands; 3) threaten consumption tax increases as soon as the economy shows even the slightest hint of life; 4) construct cultural halls in even the smallest village, then let the locals try to maintain them on a shrinking tax base; etc. etc. etc. As I said, can't claim the US government is looking tremendously astute (the Brits have done better), but we have enough politicians trying to make points in Washington, why do we need such tripe from a Japanese minister?

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“Japan has experience, ideas, funds and the personal charm of Prime Minister Aso,” Nakagawa said of his boss, Taro Aso.

I can see why Aso picked this one to be Finance Minister. Right wing, loudmouthed, deluded and thick. Obviously a shameless brown-noser as well. What's not to like?

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And the band America is channeled (As in 'I got no one for to cause me no pain') in:

lend $100 billion to the International Monetary Fund for to bail out

Kaminarihito, And 5) reinstate a 'temporary' 25 yen-a-gallon gas tax just as the economy gets going.

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Sad but true.

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It appears to me that the financial crisis is mainly the fault of US fiscal irresponsibility. However, the rest of the world must share some of this responsibility. The US received a lot of investment and support from other countries and their sovereign funds.

In fact, why don't we blame the Chinese as usual? After all, they did more than any other country to finance US debt.

Rather than support the old and failed by throwing money at the US, it might be better to invest more in the developing parts of the world for better returns.

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Decent defence of brothel fire in America where prostitutes were from advanced countries. America simply provided a place and honey-comb was created by rich countries and Japan was playing great role with 'Yen Carry Trade'. Finance minister offers no criticism for never growing Japan economy?

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It is the fault of the United States, and the US bailing out these multi billion dollar corporations is only going to make matters worse.

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"the personal charm of Prime Minister Aso"

Hee hee!

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This guy is about 2 months behind the curve.

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nobody forced Japanese banks and other greedy investors to buy filthy debt based on an asset bubble. Japan should have known better than to buy into a bubble. Its all Japans fault because despite their experience, they foolishly ignored the warning signs.

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It would be nice if "they" could stop tossing the ball of blame around and start creating measures to fix this economic crisis. In the end, does it really matter?

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Well it seems to me that if the cost of borrowing had been higher in the States then far few subprime borrowers would have been able to buy into a market they were, in fact, underqualified to enter. If interest rates had been higher fewer people with poor credit histories and mediocre jobs would have gotten in. So why were U.S. interest rates so low? Because of Japan and China’s willingness to lend to the U.S. Why were they such willing lenders (buyers of dollars)? Because they wanted to prop up the dollar. Why? In order to maintain the low currencies that underlay their export market shares. Japan’s (I think there are the main culprit, China just followed suit) currency manipulations and predatory mercantilism have been central to skewing the whole global financial system.
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I do not believe that Japan is that naive. I think they (US ,Japan...'s filthy riches) are just playing game with US is total in control. But the game these people are playing is just mind-boggling with its complexity. I mean an ordinary person like me, when I saw same things happened in Sydney property market , did feel something wrong,very wrong ..with the housing bubble. But around me nobody seemed to care from government ,to banks ,to media ,to buyers ,sellers...they were all busy to make money, a lots and lots of money. Now the system is colapsing(i mean REALLY?)and this finance minister say 99% Japan is blameless ,all US's fault blah blah...Which fool will believe him anyway?

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I don't remember anyone forcing Japan to make an export driven market whose financial health was dependent on the American consumer. Were they complaining when the money was rolling in? Will Toyota and Sony stop selling so many products in the US market so they can protect themselves from a future US downturn?

The US might be to blame for the mess we created for ourselves, but I don't think we owe Japan an apology. If they want protection from something like this in the future then simply pass on the profits from exports and you'll never have to worry about it again.

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Blame it on greedy investment bankers. They knew what they were doing. The US gov't has no choice but to bail some of them out otherwise things get worst. The CEO of Lehman raked in over $100m last year. It's a case where the 'haves' keep on having.

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On the bright side, now that speculative investment bankers/brokers are no longer able to play with their computers, the price of oil is going down.

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There is no excuse for S&P as well as Moody's which gave AAA ratings to those toxic assets and sold to the rest of the world. I hope those who lost big from this everywhere in the world will sue these rating agencies, so there may be some sense of basic morality and responsibilty restored.

While Japan was selling too many cars and China toxic milk and toys, the US was exporting things far worse. Is this the free trade the US has always been preaching about? Worse yet, those ignorant may blame China or Russia anyday but will never put the blame squarely on the US.

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I don't remember anyone forcing Japan to make an export driven market whose financial health was dependent on the American consumer. Were they complaining when the money was rolling in? Will Toyota and Sony stop selling so many products in the US market so they can protect themselves from a future US downturn?

Good points that seem to get forgotten.

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Finance Minister Nakagawa has a point in allocating most of the blame for the current global financial crisis on failed US banks and corporations. Because of inadequate regulation, firms like Lehman Brothers entered the high-risk sub-prime mortgage field, only to lose most, if not all, of their capitalization. Japan's experience of the "lost decade" of the 1990s is salutary and the Aso Government is demonstrating good will through its offer of $100 billion to the IMF. What is needed now is economic growth through properly-targeted investment. Japan can help to show the way.

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Well it seems to me that if the cost of borrowing had been higher in the >States then far few subprime borrowers would have been able to buy into >a market they were, in fact, underqualified to enter. If interest rates >had been higher fewer people with poor credit histories and mediocre >jobs would have gotten in. So why were U.S. interest rates so low?

Bang on, up to here. The low interest rates put into place by Alan Greenspan was an effort to prop up the domestic economy. It had nothing to do with the cost of borrowing from Asian countries or elsewhere. Those same low interest rates caused the US real estate boom which fueled the subprime lending problem.

Because of Japan and China’s willingness to lend to the U.S. Why were they such willing lenders (buyers of dollars)? Because they wanted to prop up the dollar. Why? In order to maintain the low currencies that underlay their export market shares. Japan’s (I think there are the main culprit, China just followed suit) currency manipulations and predatory mercantilism have been central to skewing the whole global financial system.

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money is greed, and vice versa. that's capitalism, and his achilles heal can be taken asunder from time to time.

unless a genuinely utopian system arises, probably not likely for another several thousand years, not with these human animals, i don't see how the boom/bust, wild roller coaster ride could end... just hang on, here's the next peak! aaaahhhhh-(SCREAM-HOLLER) <--- add your own shriek.

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It was clear to anyone with a common sense that this recent boom with over-production(China) and over-consumption(US) could not be sustained for long. If it weren't for the sub-prime mortgage mess, it would have been something else to pop so many bubbles which had formed everywhere.

While the whole world is pointing fingers at the US, not even a hint of apology will be coming from the US, not from the US politicians or those on the Wall St. who helped to create this mess. True, it's not the US custom to do so, but this apparent lack of responsibility/shame and hubris are more telling for the future of the US.

Unless they(including big 3s & UAW) are brave enough to face the painful truth, there will be no chance for a better future.

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Blame gaming aside, the bigger picture is that the economic system worked well when oil was only $26. You can only grow the economy with stable & predictable oil prices. You have to look at the hyper inflation over the last year caused by oil spiking at $147 in July & all the billion$ gone to the oil companies (like a tax) that sucked profitability out of the real economy & pushed growth into negative territory. ( I don't hear anyone blaming China or India for ratcheting up the global oil market ). If the US is to blame for anything, the FED way over compensated and dropped rates too much & too quickly after 911 to boost market confidence. It worked a little too well. Predictably, the economic train then came off the tracks (surprise!) when the FED jacked rates back up again. Now that oil is back down to $47, we can all start the inflationary boom/ deflationary bust cycle again. Yippie!

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Nakagawa was spot on, the whole sub-prime thing is an American invention, the product of a mind set of a clique thinking there is no limit to living on borrowed everything, to be reaped only by the vultures. Whatever else may have set off a crisis at a moment undetermined is not the point.

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