Commentary
Last week, Japan saw its currency, the yen, rapidly depreciate against the U.S. dollar and other world currencies to record low levels. This drew the attention of financial markets and other observers, and—in some quarters—led to panic. There was concern that Japan, a formerly great nation now increasingly viewed as the “sick man of Asia,” was on the brink of a currency and financial markets crisis.
It wasn’t so long ago that Japan was the envy of the world. Japan’s postwar recovery and subsequent economic miracle produced by the 1980s the world’s second-largest economy after the United States. Numerous Japanese multinational corporations were admired by the business world as a result of their growth, efficiency, and managerial discipline. The state and big business were closely aligned in what appeared an unstoppable formula. Flush with cash and confidence, Japanese companies and investors were aggressively expansionist, acquiring market share, trophy properties, resources, and businesses in the United States and elsewhere. Much like concerns about China today, fears then abounded that Japan would overtake the United States as the global economic leader….
Japan’s Warning for America
