Same stuff , different location, over a decade ago.
Maybe this can help someone else frame an issue or two.
(If you are not used to it, I warn you, this is written from a labor socialist viewpoint)
I think I’m diggin into Japan’s newsservice later on today….
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Via Workers World News Service
Reprinted from the Jan. 4/11, 1996
issue of Workers World newspaper
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Japan’s Bank Crisis
Guess who’s to bail out bad loans
By Rubin Kanowitz
As 1996 opens, crisis grips Japan’s banking system. Japanese banks are plagued by an enormous increase in non- performing real-estate loans that were made during the 1980s. According to a report in the Dec. 20 New York Times, these bad loans now amount to $400 billion. Other sources have estimated the figure to be as high as $750 billion to $1 trillion.
To get some perspective on these figures, recall that the savings-and-loan crisis in the United States was estimated to have resulted in unrecoverable loan losses of $150 billion before interest payments. The U.S. economy is about 50 percent larger than the Japanese economy as measured by the Gross National Product of each country in 1993.
As Karl Marx explained in his general analysis of capitalism, these bad loans are a result of credit expansion and overproduction during the peak of the boom phase of the business cycle.
The Japanese ruling class will undoubtedly attempt to solve this banking problem at the expense of the Japanese working class. This will be accompanied by an intensification of inter-imperialist rivalry, especially between United States and Japanese imperialism. Workers in the United States and Japan have nothing to gain by taking part in this rivalry.
Japanese Prime Minister Tomiichi Murayama said at a televised midnight news conference on Dec. 20 that “$6.85 billion in taxpayer’s money” was to be used “to rescue the nation’s troubled mortgage companies.” The Japanese government further announced that it would set up a special agency that will use loans and tax money to help dispose of all the bad loans.
These mortgage companies were originally set up by Japan’s major money-center banks to make real-estate loans in the 1980s–from which they garnered huge profits.
Seven of the eight mortgage companies set up by the banks to make these real-estate loans are to be liquidated. This liquidation will result in unrecoverable loans of $64 billion.
Beyond that there is an additional $12 billion that will probably be unrecoverable.
Furthermore, “these losses” of $76 billion are “only part of at least $182 billion of unrecoverable loans from more than $400 billion in bad debts,” according to a Dec. 20 New York Times report.
IMPACT ON WORKING CLASS
The $6.85-billion initial government allocation to cover these losses represents $55 for each of Japan’s 125 million people or $220 for a family of four. The Japanese ruling class will try to put the burden of these payments on the workers.
Furthermore, the banking system will be under even more than the usual pressure to increase profits. The bankers will make every effort to funnel any benefits from an economic upturn–should one occur–into higher bank profits and avoid using them to improve working-class conditions.
You need only recall the period here in the United States since the upturn from the 1990-1991 recession. At that time the money-center U.S. banks were suffering from huge real- estate loan losses and there were reports of near-bankruptcy conditions.
The business upturn since 1991 has increased bank profits and stockholder wealth handsomely, while workers here have suffered round after round of layoffs and wages stagnated over the past five years.
Also, the $6.85-billion initial government figure represents barely a drop in the bucket in total potential losses in Japan of at least $400 billion and possibly as much as $1 trillion.
At any time in the course of these developments the increased pressure on the Japanese working class in its struggle to maintain its standard of living can give rise to a resurgence of working-class struggle against the capitalists.
Workers in the United States should be on their guard to reject any attempt by capitalist politicians to misdirect their hostility against Japanese workers or Japanese people in general. Such Japan-bashing is a racist diversion of the workers’ struggle against their own bosses right here at home.
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(Copyright Workers World Service: Permission to reprint granted if source is cited. For more information contact Workers World, 55 W. 17 St., NY, NY 10011; via e-mail: ww@wwpublish.com. For subscription info send message to: ww-info@wwpublish.com.)
