Not that this generosity would be anything but a stop gap for the ailing American economy, thanks to a dwindling industrial base and our need to tack our economy to production of real goods.
TOKYOKotaro Tamura, an investment banker turned Japanese lawmaker, has an immodest proposal for healing the sick global economy, making all Japanese richer and compelling the United States to be more deferential toward Japan.
"We are in a special position because we have huge money," Tamura said, referring to about $950 billion in government foreign reserves, $1.5 trillion in public pension funds and $15 trillion in personal financial assets, about $8 trillion of which is on deposit at shockingly low interest rates in Japanese banks. "We should send the signal that we are ready to save the world with this money," he said in an interview.
Tamura leads a group of 65 lawmakers from the ruling Liberal Democratic Party who have proposed to Prime Minister Taro Aso that Japan treat the global financial meltdown "as a huge opportunity for us." They are urging the government to inject some of its abundant cash into troubled U.S. and European banks, in return for equity, and to purchase distressed corporate assets at fire-sale prices.
"The economy of every major power has crashed, and Japan has the least tainted market in the world," Tamura said. The chronically risk-averse habits of Japanese savers, who keep most of their trillions in accounts that pay less than 0.5 percent interest a year, suggest that Tamura's plan to save the world and make Japan richer is unlikely to generate much popular support.
"We are a bank-centered nation that avoids risk, even good risk," said Akira Kojima, chairman of the Japan Center for Economic Research.
Kojima called the idea of investing some of Japan's cash in the midst of the financial crisis a good one, if done prudently. "It could be a catalyst for changing Japanese investment management strategy," he said. At the same time, he said, it would be all but impossible to carry out, given the conservative bent of the government and the public.