Reprinted from The Washington Times , 5am -- April 3, 1998
Sony chief slams Japanese premier; says economy is near collapse
By Willis Witter
THE WASHINGTON TIMES
TOKYOThe chairman of Sony Corp. sharply criticized Prime Minister Ryutaro Hashimoto Thursday as a modern-day Herbert Hoover leading his nation toward collapse and the world into recession.
"The Japanese economy is on the verge of collapsing," Sony Corp. Chairman Norio Ohga told reporters. If Japan's economy doesn't improve, he said, it could lead to a dangerous deflationary spiral that would damage the world economy.
He put the blame squarely on Mr. Hashimoto, an embattled leader with abysmal support in public opinion polls, and a few powerful cronies who keep him in power amid periodic calls for his resignation.
"What President Hoover was saying then, there are so many similarities with what Prime Minister Hashimoto has been saying recently," Mr. Ohga said.
Mr. Ohga's remarks came at the end of a day in which the stock market fell more than 3 percent in the biggest one-day drop of the year.
A monthly government report released earlier in the day led many analysts to conclude that the world's No. 2 economy had actually shrunk in the budget year that ended Monday.
Mr. Hashimoto has been under fire for months from the United States, Europe and the International Monetary Fund for allowing Japan's economy to wither at a time when, they say, it should be an engine of recovery for its crisis-torn neighbors.
In an attempt to balance the budget, Mr. Hashimoto's government raised the national sales tax last spring, a move that most analysts credit with turning a fledgling economic recovery into a full-fledged recession. At times, the rhetoric between Tokyo and Washington has been heated.
Mr. Ohga's remarks were not the first in which critics have likened Mr. Hashimoto to the late U.S. president, who is widely blamed for causing the Great Depression of the 1930s.
But when consumer-electronics giant Sony speaks, it tends to raise the volume a notch or two, especially outside Japan.
Mr. Hoover, who was president from 1929 to 1933, was reluctant to interfere with the economy and called the Depression "a temporary halt in the prosperity of a great people." He initially depended on businesses and industries to solve their own problems without government intervention.
Sony, a global company that makes everything from Walkmans to movies, has tangled in politics before.
Three years ago, Mr. Ohga replaced Akio Morita and co-wrote a book, "The Japan That Can Say No," that became a model in a debate over Asian vs. Western values. It argued that state-supported capitalism worked best in Asian cultures as opposed to the more freewheeling variety in the United States.
In Thursday's speech, Mr. Ohga apparently took a different line, accusing Mr. Hashimoto and other politicians of the ruling Liberal Democratic Party of being too insular for today's global economy.
"The problem is with Japan's politicians," Mr. Ohga said. "We are operating globally, and our prime minister should have such global thinking."
Deputy Treasury Secretary Lawrence Summers recently criticized Japan for staging a "virtual" economic recovery, presumably meaning it is as real as an image on a computer screen.
The Clinton administration has urged Japan to boost its economy by cutting taxes, a prescription that some analysts liken to a 1990s version of Reaganomics.
The idea is based on the belief that Japanese consumers, if given enough cash with tax reductions and rebates, would buy exports from the crippled tiger economies such as South Korea's. Instead of cutting taxes, Japan last week decided to try to spend its way to prosperity.
Tokyo announced a major public spending package to boost its economy. The plan, worth about $125 billion, would mark the government's biggest effort yet to revive the economy.
Sony, meanwhile, seems to be doing quite well despite the regional economic crisis that began with the collapse of the Thai baht in July and forced the IMF to put together $120 billion in emergency credits for Indonesia, South Korea and Thailand.
The company said it expects to report record earnings for its fiscal year that ended Monday.
Mr. Hashimoto flew to London Thursday for an Asian-European summit at which he is expected to explain Japan's prescription for healing Asia's economy.Copyright 1998 News World Communications, Inc.
Reprinted with permission of
The Washington Times.
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