Japan Inc.'s pot of gold may finally be unearthed
■"Japan's Post Offices: Full Service Political Battlefields; A mail service, bank, insurance company and rural welfare system, all in one," by Norimitsu Onishi, New York Times, 30 August 2005, p. A3.
I remember first being told about Japan's amazing post office financial system back when I did the economic security exercise on foreign direction investment in Asia (part of my Naval War College NewRuleSets.Project collaboration with the legendary broker-dealer firm Cantor Fitzgerald). Many of the execs I spoke with on Wall Street called it the equivalent of a "Ma Bell," not in terms of hindering postal service but in monopolizing the financial market for the bulk of Japan's personal savings. They described it's death-like grip on all that cash (roughly $3 trillion dollars-and I said "trillion") as being one of the main reasons why Japan's cozy financial system was having a hard time getting the economy to snap out of the lengthy recession that has dominated and defined the country's post-Cold War pathway-in effect, rendering Japan far less the global leader than it could be (and certainly was expected to become at the Cold War's end).
But it's not just the postal system's ability to fence off all that cash in relatively poorly performing investments that truly hampers Japan, the far worse aspect is political: Japan's effective single-party state of the last half century, the Liberal Democratic Party, has used it as it's main power base. Imagine if the U.S. Postal Service was also America's biggest insurance company and bank. Then imagine if one of our political parties had a lock on how it was run and used that immense power as a slush fund to basically stay in power virtually non-stop, decade after decade. That would be pretty bad, wouldn't it?
It's something worth remembering when politicians paint China as "communist" and argue that such high state ownership in the economy gives it an unfair advantage. Point being, that single-party domination of the economic landscape is exactly how every other Asian economic power has risen in the past half century. Japan is often described as the only socialist state that ever worked, and the postal system was a big reason why (allowing massive, state-directed investments in the private sector to be planned like clockwork),
But that system has long been broken in Japan, and so PM Koziumi (Esquire's best-dressed politician, I am duty-bound to remind you), in a truly bold and brave move, is seeking to privatize this "Ma Bell" and break it up into constituent companies. Do you think we'd all have cellphones today if Ma Bell still existed? Well, that's how important and positive a change Koziumi's quest could end up providing for Japan.
Combined with his push to get Japan more open to playing a bigger role in global security affairs, Koziumi is easily the best thing that has happened to Japan since the Cold War ended.