On another list (Labor-L) Sam Lanfranco observed, >As one who has not specialized in the ups and downs of the Asian >economies, these are the observations of an economist who has not >specialized in the region, but one who has watched the region for a good >30 years. In my view there are two overlapping economic messes in Asia . > >It is important to seperate them out since the have slightly different >roots and quite different consequences for future stability in the region. >One mess involves virtually all of the region except Japan. The other mess >involves mainly Japan. I want to focus on Japan so let me say a word or >two about the rest of the region. > >The rest of the countries in trouble consists of economies that have >undergone dramatic, rapid and uncontrolled growth. (i.e., no thought of >mechanism for worrying about overall consistency and sustainability of >strategies). > .. . . > >The Japanese financial system has long thrived on capital-to-capital >bailouts. In very simple terms, institutions simply held each others debt >and large 'bailout' transfers took place within the financial system - >with the explicit blessing and participation of the state. On the surface >they looked like "business as usual' and made the Tokyo stock market a >darling of foreign mutual fund investors since it seemed like a failsafe >investment. > .. . . > >When international capital forced the Japanese state to step back in its >support for Japanese capital, long standing problems began to surface. >Bad debt 'rot' had been there for a long time. It had just been papered >over by (a) state policy, and (b) successes in export markets. With both >of these less supportive the depth of the financial cracks became apparent >and the consequences less avoidable. Lanfranco's observations offer a useful corrective to the domino or "contagion" (contAsian?) view of global financial crisis. To paraphrase Tolstoy, "All happy financial markets are alike; each unhappy financial market is unique in its unhappiness." Mainstream -- and much radical -- commentary favours hydraulic images of finance. Starting with the "liquidity" of investments, we slosh through a vast reservoir of "waves", "tides", "trickles", "taps", "pipelines", "bailouts(!)" etc. etc. etc. What substance is there to that watery world? If, as Marx says, "all that is solid melts into air", what happens to "all that is liquid"? Plumbers of the world, unite; you have nothing to lose but your galoshes! The uniqueness of each unhappy family doesn't mean that it remains unaffected by the unhappiness of each *other* unhappy family. The unhappiness spreads, not as a fluid contagion but as a cumulation of discrete, discontinuous actions. More often than not, the unhappy link between unhappy families is violence. Canadian Prime Minister Jean Chretien would have us believe there is no direct connection between trade and human rights. This is like saying there is no direct connection between mind and body. The riddle's not in the level of the water, mates, it's in the albatross. Regards, Tom Walker ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ knoW Ware Communications Vancouver, B.C., CANADA [EMAIL PROTECTED] (604) 688-8296 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ The TimeWork Web: http://www.vcn.bc.ca/timework/
