Richard Katz

Richard Katz is senior editor of the Oriental Economist Report and author of Japan: The System That Soured -- The Rise and Fall of the Japanese Economic Miracle.

Recent Articles

What Japan Teaches Us Now

Japan's economic crisis is a case study in the long-term costs of protecting inefficient industries. Yet it also shows how the pressures for protectionism become irresistible without a strong safety net and policies to aid displaced workers.

Twenty years ago, when Ezra Vogel published Japan as Number One: Lessons for Americans , the lessons seemed all too clear. Today, as Japan falls into a severe recession, it's a different story. The Japanese economy hasn't just stopped growing; it's hurting the very workers it claimed to protect. Wages are falling, pensions are being chiseled away, two million manufacturing jobs have already been lost, and the unemployment rate -- already at a postwar record -- continues to rise. Ironically, despite Japan's export-driven economic formula, it is the only major industrial nation that trades no more today relative to gross domestic product (GDP) than it did four decades ago. While Japan's current problems have been worsened by East Asia's general economic crisis, their roots lie in the country's long-standing policy of protecting its domestic markets. Exactly why protectionism should have had these delayed effects is not widely understood. The lessons of Japan's current predicament,...