Policy Is Everything In Destroying And Effecting The American Economy
Mike Biras
The man who put together the post war economy for Japan best described the intentions and the attitude toward the U.S. According to his memoirs Saburo Okita originally believed that Japan was lacking the natural resources for a prolonged conflict but "it must shape its future around precision engineering. All of his economic planning for a postwar Japan was with this idea. His statement about Khakis losing to the business suits reflects his attitude and the way the policy was built for the economy.
"Saburo Okita, later Foreign Minister of Japan, declared in January, 1942, that "an army in uniform is not the only sort of army, scientific technology and fighting spirit under a business suit will be our underground army. This Japanese American war can be taken as the khaki losing to the business suits." Later in 1985 when reporting on his memoirs in the Wall Street Journal the quote was altered a bit to adding after "business suits" and win the war in science and technology."
This philosophy developed in 1942 has not gone away. A more modern statement was made in an article in May, 1989 "Japan's Secret Weapon: The Shadow Warriors “How the Japanese are Buying Up New York and the U.S." Quoted in the article was Yoshio Terasawa, the ranking Japanese member of the World Bank Group.
Terasawa stated, "I have heard the argument that the Japanese won't succeed here in America because of the peculiarity of our culture and its homogeneity. But I don't agree with this argument at all. We are not a religious people, so we have no transcendent precepts or principles that bar us from taking whatever action is necessary. We can be terribly immoral, if necessary."
He continued, "In order to make more money and be more competitive, Japanese businessmen will do anything they have to. There are no limits. They may talk about Americanizing their companies to please their American employees, but that is not what they will really do. Big Japanese corporations are going to acquire big American corporations and let them run things so that the Japanese owners will not be visible. They will become the ultimate Shadow Warrior."
Whatever the expression it was definitely declaring an economic war between the two economies. In reviewing the companies and industries lost to Japan i.e., television, machine tools, destroying our steel industry, tire industry, automobile industry, polymers, etc. and many other industries have been moved out of the U.S. accurately reflect Okita's beliefs about science and technology.
These quotes one from WWII and one in 1989 from someone with an important position at the World Bank put in perspective the difference in how the U.S. business competes and the Japanese compete. We should keep those quotes in mind as a framework a philosophy that was expressed earlier by the Japanese for doing business between the Japan and the U.S.
Japan has proclaimed itself a "friend of the United States" and in 1975 the U.S. Congress passed the funding for a "Friendship Commission" which has 300 members who are presidents of Universities, presidents of prominent organizations or are prestigious individuals in the private sector or in industry. Their mission is to reflect the friendship between the two countries and to spread the word that Japan is our friend.
The statement made earlier that Japan was willing to encourage companies to invest in potential growth industries and disinvest in declining ones. That sounds like good logic but not if you use this logic as a weapon against one countries industry through their banks which is what happened in the United States.
This method was applied to Youngstown Sheet and Tool Co. in Ohio. This was in a time of restructuring the American Steel industry in the 1970's. The company was being sold and three of the principal bankers began withdrawing support for the company which was purchasing Youngstown Steel.
At the same time of withdrawing financial support for the American company those same three banks were "according to Bluestein & Harrison (authors of Deindustrializing America) significantly increasing their investments in the Japanese steel industry. Those banks were Citibank which increased in 2 years their loans to the Japanese Steel by $230 million, Chase Manhattan Bank by $204 million and Chemical Bank of New York by $82 million.
During this time the Japanese Steel industry was also dumping excess steel in the U.S. market so was severely impacting Youngstown and destroying the American market while American banks (which Japanese companies had invested in) were helping to destroy the American industry which was so vital to the U.S.
Our American steel companies had invested and were trying to work with steel and iron in South Africa but surprise both Chase and Citicorp were also financing the South African industry while denying loans to the American industry to upgrade their facilities. This was the way that the United States began losing heavy industries in the 1970's.
Combined with the dictates of the Clean Air Act amendments which Nixon signed our heavy industry and auto industry was in trouble. The analysis done by Wall Street in a report for the White House Council On Environmental Quality showed shutting down one fourth of industries in canning, paper mills, hot asphalt companies, and taxing our refineries and moving our mineral refining capacity off shore in addition to trying to remove one third of all U.S. automobiles off American roads by 1975.
It was a severe economic and job loss hit which favored the Japanese auto industry. It was during this time that the Japanese car industry led by Nissan (which came into the U.S. in 1958 as Datsun, which it owned and possessed a subcompact car.) The amendments had mandate a subcompact car that the U.S. industry did not have. In the 1980's the Japanese worked to establish their auto market in the U.S. and in 1985 expanded into Mexico.
At the same time in the 1970's the American banks with Japanese investments were working against American industry, particularly steel which was important to the auto industry. The industry was at a critical juncture and trying to upgrade but was losing its ability to borrow funds. The American companies became interdependent with their competitors because the banks were withdrawing financing and instead helping the Japanese.
It was not difficult to target a company, set up a relationship with their bank and change the rules of the game. There was a chemical company which was the sole source of the insensitive munitions program which had a secrecy agreement on its patents at the Department of Defense. The company had many other critical polymer patents which were collateral at the American bank. Suddenly the President of the company received a phone call from the Bank telling him to go bankrupt or get a partner. The world's largest bank which was Japanese had just purchased CIT along with an American bank to gain access to the company's patents. This was not an unusual happening in the U.S. in the late 1980's and the early 1990's.
This policy of the Japanese and the lack of American protection for U.S. companies was the beginning of stripping the U.S. of industry so that we are now down to 11 percent of our manufacturing base.
You must ask the question was it bad management or by design from competitors or a bit of both? Whatever happened the U.S. is paying a heavy price and so are the young people looking for an education and developing their future. What we have now in the White House is a continuation of the policy and the story I just mentioned on stripping our business from the U.S.
We have set up jointly an organization "recognizing the growing interdependence of the economies of the United States and Japan". By the 90's with the assistance of the Clinton Administration, it was time for the Japanese to push setting up the U.S.-Japan Economic Partnership for Growth.
This difference of the Friendship Commission has given Japan an edge in the U.S. with business but more importantly with the American people. Its influence is very important for the U.S.-Japan Economic Partnership For Growth which was begun by President Bill Clinton and expanded by President Bush and Prime Minister Koziumi of Japan in June 2001.
According to the "Annex to the U.S.-Japan Joint Statement" the "Private Sector/Government Commission is designed to integrate the U.S. and Japanese private sectors more fully into the economic work of the two governments.
Essentially, this partnership sets up a continuing working relationship chaired by the National Security Council (NSC) and the National Economic Council (NEC) in the White House. In Japan it is chaired by the Ministry of Foreign Affairs and by METI the trade and commerce organization for the Japanese government.
Both Councils are the highest level advisors to the President of the United States. In Japan the Commission is chaired by the Ministry of Foreign Affairs (MFA) and MEITI (the government agency on trade and commerce). A report of the Partnerships work from their committees is given to both the Prime Minister of Japan and the President of the United States.
This organization also has private sector appointments to it, and it operates at a sub cabinet level with the United States Trade Representative (USTR) and Departments of State, Justice, Treasury, Commerce and Energy and any other agency it needs to reach."The Sub Cabinet Economic Dialogue ("Subcabinet") will set the direction of the Partnership.
The Annex states, "informal and flexible in style, the subcabinet with meet at least once a year to address the full range of bilateral, regional and multilateral issues. The subcabinet could, for example exchange views on global and regional issues; enhance cooperation in multilateral and regional bodies; review developments in the two economies, such as macroeconomic issues, structural and regulatory reform, and financial and corporate restructuring; and advance the bilateral economic relationship, including as necessary, discussing issues raised in other bilateral fora, keeping in mind meetings between the President and Prime Minister."
The Partnership operates committees deregulating financials, and on medical devices and pharmaceuticals. It also includes exclusion to the Sarbanes Oxley Act which affects accounting firms and internal control over financial reporting. In this are aspects of defense reporting and any other issues which affect government as well as forms of higher education.
There are areas of concern with Japan and Asia and our interest in maintaining peace. But what this Partnership means is we have a former enemy who attacked us, who is now called our friend, but attacked and destroyed the American patent system in the 1990's. The patent system is the well known secret of protecting our innovation and job creation in the U.S.
It, along with the auto industry which 7 out of every 10 jobs is related to the auto industry is essential for the economy of the U.S. Now we have that country operating out of the White House which attacked the U.S. auto industry (and still is today), stole our TV industry, machine tools, polymers, etc. with the full protection of the U.S. White House. They now have access to all the Cabinet Department at a policy level which cannot be ignored. The story about Youngstown Steel and how it was taken down with American banks with Japanese investment is just the tip of the iceberg.
We will regret housing this organization in the White House instead of making it work out of the State Department where it belongs. The American people should have a better government decision. How about "throwing the Bums out of State?" They have proven by their actions on so many industries that they are not "our" friends.
After all, it was the banks with big Japanese investments who brought in the derivatives and the hedge funds which have created one economic mess for the country. We are down to 11 percent of our manufacturing base and we were the most powerful manufacturing country. Now, we are not and cannot survive as a service based economy. Remember, it was Akio Morita (former Chairman of Sony) who told his friend "Sullivan San, we knew we could not beat the U.S. militarily but we could economically."
Remember, it was Sony which bought Columbia Records which had all the records of our American music. It was told it could not change the name of the company nor take it off shore. Sony agreed and two weeks later it was in Germany with a German president and renamed Sony Music.
Let this be a lesson to us. This type of organization is short changing our Congress, our courts and the American people. No wonder the Japanese brag about the number of Congressional seats they control because of business and now they are in the White House. It is time to wise up and take back our country. The American people and our children deserve it. This is not just about the "mighty buck" but about the freedom and the spirit which has driven this country since it was settled. We must stand up for America and contain "the bums'.
We have learned from Toyota and its careless attitude about American life by not taking care of their technology. We have learned from Nissan with its burning minivans which killed people while driving. We have learned from Nissan which thumbs its nose at American law by retitling cars and putting them back into commerce as new.
It is time to stand up for American law and for Americans to be safe on the roads. In America at a baseball game if we do not like the players’ behavior we yell, "Throw the bum out". It is time for us to clean out our agencies and make the Japanese operate in this country as foreign countries are expected to do. It is time to take back our generous American tax abatements and clean up the banks with Japanese money. We need to take back the country and our White House.
Mike Biras
March 2, 2010