Znet: Today's World Crisis & Japan's Example

Good article from Andrew DeWit from Znet. Looks at the example of Japan's economic crisis in the 1990s (and mistakes made by Japanese authorities) and today's world crisis, created by reckless, self-absorbed, greedy Wall Street criminals:

So perhaps another negative lesson for America from Japan is that injecting even massive public funds is not in itself sufficient. The proper assessment of toxic assets via a close scrutiny of their value is clearly required, as is proposed by the FDIC (and appears about to become law). But perhaps more important even than that, there must be serious inquiry into management wrongdoing. Systemic failures require systemic solutions, lest the symptoms continue to fester and manifest themselves in periodic and perhaps increasingly large crises. In other words, if one is going to use the state, then its pecuniary as well as punitary arms need to be used with a comprehensiveness and intelligence that not only deals with the technical aspects of the crisis but also the natural political resistance to bailing out rich and irresponsible people whose actions contributed to the crisis. The latter clearly have to be made to pay, in the fiscal and legal senses of the term, lest the path to recovery be constricted by political fallout.

But to date, the American bailout and related policies are spectacular for their lack of transparency, accountability and consistency. As a result of various missteps and volte-faces, Treasury Secretary Henry Paulson's credibility is perhaps as low as that of the current President. At a September 23 Senate Banking Committee hearing, Paulson declared that "we need oversight...we need transparency," but he appears to have shifted his position considerably. ... Paulson's serial reversals of earlier positions are certainly rooted in the incredible flux of events. But his job is to craft pro-active policy and seek to stabilize markets rather than further roil the latter.