JCP Shii on 'structural reform' and its model, corrupt U.S. capitalism

In an interview by Asahi Newstar satellite broadcast on July 4, Japanese Communist Party Chair Shii Kazuo related his views on corruption-plagued U.S. capitalism, which the Japanese government is taking as a model for its "structural reform" policy. The following are excerpts from the interview:

Q: Fourteen months have passed under the Koizumi government which started with the call for "structural reform." What is your opinion of the government?

From the outset, the JCP pointed out that the "structural reform" policy would incur sufferings on the people and that it is so contradictory that it will be useless for rehabilitating the economy and only create vicious circles in various aspects. In my opinion, things are taking just such a course.

For example, the government put a special emphasis on the need to immediately write off bad loans held by major banks. A year later, major banks' bad loans increased by 1.5 times. This means that these banks recklessly collected their loans for small- and medium-sized businesses, which caused business failures and unemployment followed by decreased demand and the emergence of further bad loans. This is a vicious circle with no way out.

The only way out may be found in a change of economic policy from one favoring major banks and multinational corporations to one caring for job security and social services which have a close bearing on the living conditions of ordinary people.

Q: The government announced that Japan's economy has bottomed out. Given that the U.S. economy is going wrong, bottoming-out seems to be far away.

That's right. The government "bottom-out" announcement was based mainly on a statistical increase in exports. Personal consumption, the mainstay of domestic demand, and corporate investment in equipment were showing no signs of increase. We pointed out that domestic demand was stagnant and that there is the weakness of the economic recovery dependent on external demand, particularly U.S. demand. Later, the U.S. economy took a downturn.

As to the U.S. economy, the failure of Enron last year and the windowdressing settlement by Worldcom this year are obvious symptoms of serious corruption.

Takenaka Heizo, state minister in charge of economic, fiscal, and IT policy, extolled the U.S. economy many times for being very fair, free, and transparent for Japan to take as a model. With Takenaka at the center, the government wanted to take what was taking place in the United States as global standards for Japan to apply, under which the profit of corporate shareholders claim top priority and stock prices soar. They said that prosperity will come out of such a deregulation policy.

We now see that the U.S. paradigm is tainted by corruption, disorder, and window dressing settlements. Andersen, the auditing company overseeing major corporations, has also found been to be corrupt. In a word, auditors themselves need to be audited.

Now that the U.S. type of capitalism, which the Japanese government has been taking as a model, is revealed to be structurally corrupt, I want to say that it is necessary to rethink the "structural reform" policy in earnest. (end)