Japan and U.S. Should Say 'No' To Obtuse Taxes and Demagogues
		    NYC Tribune  SEPTEMBER 7 1990
	 "The United States should be thankful that Japan has
	  done amazingly much to correct trade imbalances."
        When you avoid conflict, as is common in Confucian societies,
you have a lot of small pent-up disagreements that may explode into a
dangerous situation -- so you should release conflict in small
portions by saying no; this is the best moral to extract from the
not-so-outrageous Morita-Ishihara Japan_That_Can_Say_ No book.
Ishihara even admonishes Japan to say no even to its own
subsidy-greedy farmers and accuses Japanese of having an inferiority
complex, leading to submissiveness before the United States; yet he
fails to notice that one of the primary manifestations of an
inferiority complex is paranoia! Moreover one must considerably
discount Ishihara's occasional rantings as one would suspect that a
potential Ishihara assension would do to the Nikkei what a potential
Gephardt assension helped do to the October, 1987 Dow.
        The book coorrectly notes the hypocrisy of Japan-bashers who
beg for local Japanese investmient and demand that governments open
markets (Morita's Sony did it alone) while hesitating to issue
U.S. yen-bonds (it claims the Japanese Finance Ministry stopped the
1987 crash) and ignoring Japanese contributions to FSX ceramics and
military Al chips. But the book also nitpicks on well-intended
American cultural blindnesses in a way that betrays the authors'
paranoid arrogance and xenophobia.
        The authors condemn U.S. tort and deficit crises while
ignoring that many Japanese economic and labor attitudes (e.g.,
lifetime employment, industrial policy) were set, not by Japanese
tradition, but by prevailing socialism of MacArthur's time --
unchanged because of postwar "guilt".  While criticizing the
pluralistic, adversarial relationships between U.S. firms and
government (as well as between U.S. agencies) Ishihara correctly
attacks that many Japanese wrongly see their own negotiators as being
unnecessarily polemic with us; in so contradicting himself he
inadvertantly betrays how unmodern he is in terms of understanding
democratic, pluralistic checks.
	Indeed, many of Japan's most enlightened critics precisely
attack, like Commodore Perry, the Japanese paranoid resistance to
modernize. And rather than praise the system as this book has, most
Japanese are demanding bigger homes and offices and more American,
modern ways and indeed beg the United States to pressure their firms,
government, rice farmers, and distributors to be more like the U.S.
Sakoh's Heritage work shows that the most successful Japanese firms
were not those planned by MITI but those lucky enough to escape its
purview; As Fred Smith has reminded us that if we know centrally
planned economies fail, Japan cannot be an MITI conspiracy.  Moreover,
Kazenstein's Funny_Business show's just how mythical Japanese
boss-employe equality really is. And we are seeing another myth of low
Japanese innovation, and hence patents and software, rapidly
evaporating, again because of our obtuse disincentive short-termist
tax structure exacerbated by the elimination of
capital-gains-preferrence that also helped cause the 1987 crash
        So, the book's correct complaint about American shorttermism
can best be addressed by entirely eliminating: dividend taxation,
mortgage deductibility, corporate debt deductibility and long term
capital gains taxes.  Moreover, the United States should be thankful
that Japan, more than any ally, has done amazingly much to correct
trade imbalances -- and we should continue to press for fair,
free-market-oriented concessions.
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        Vasos Panagiotopoulos is a businessman and conservative
activist in New York City