U.S. Hears Echo of Japan’s Woes - NYTimes.com

Great article on what we should learn from Japan—Is there a Republican who read it?

The lesson is that there is a proper sequence for pulling a nation out of a financial crisis,” said Heizo Takenaka, an economist who was the architect of the successful cleanup of Japan’s banking system in the early 2000s. “First, you restore growth before worrying about deficits.”

feature of Japan’s experience that may already be visible in the United States: the paradox of a stagnant economy that is awash in cash

In a healthy economy, banks typically lend out more money than they have on deposit

velocity of money has dropped to about a third the level of the United States, according to figures from the Mizuho Research Institute in Tokyo.

American approach to economic adjustment is “shock treatment,” said Edward J. Lincoln, director of the Center for Japan-U.S. Business and Economic Studies at New York University, while “Japan favors stability and the corporate ocialization of the pain.” …“Deep down inside, as an American,” Mr. Lincoln said, “I tend to think that the United States’ approach makes for a healthier economy in the long run.”

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