Bailing out GM and Chrysler seems to have been a win. Bailing out Goldman Sachs, not so much. The US had a lot of zombie investment banks in 2008, and only a few were allowed to fail.
Japan Must Let Zombie Companies Die
21–30 of 111 posts
Re: Japan Must Let Zombie Companies Die
#22Meanwhile, you manage to secure venture-capital funding and even a bank loan. The interest rate is high, but with your rapid growth, you should be able to pay it back. Meanwhile, in the Japan some of us actually live in: 1) Very few 26 year olds will be successfully able to convince their 26 year old co-workers to leave Sharp, because that is a once-in-a-lifetime mistake. I am literally related to a $ANONYMOUS_FOR_SA…
Given the overwhelmingly unfavorable business climate, why wouldn't this theoretical enterprising 26 year old just leave for SV? Immigrants have played a big role in the Valley for decades, but there haven't been many from Japan. Perhaps that drive is just destroyed/suppressed by the culture.
Visa restrictions or the preference to continue living in Japan.
Re: Japan Must Let Zombie Companies Die
#23Meanwhile, you manage to secure venture-capital funding and even a bank loan. The interest rate is high, but with your rapid growth, you should be able to pay it back. Meanwhile, in the Japan some of us actually live in: 1) Very few 26 year olds will be successfully able to convince their 26 year old co-workers to leave Sharp, because that is a once-in-a-lifetime mistake. I am literally related to a $ANONYMOUS_FOR_SA…
Given the overwhelmingly unfavorable business climate, why wouldn't this theoretical enterprising 26 year old just leave for SV? Immigrants have played a big role in the Valley for decades, but there haven't been many from Japan. Perhaps that drive is just destroyed/suppressed by the culture.
Whether there are zero or thousands of 26yos taking this option, they are irrelevant to the situation in Japan, because they aren't there anymore.
Re: Japan Must Let Zombie Companies Die
#24The above article is best understood as a political piece, rather than a business story. Every single sentence in this article can be picked apart, but doing a line-by-line critique would miss the larger problems with the article. The author assumes that more productivity is always good, even though Japan has been suffering a lack of economic demand for most of the last 26 years. Big gains in productivity would only…
I believe you are largely correct as to the aims. It is not so much a corporate welfare program as a social welfare program, with the money sluicing though corporate coffers rather than an extensive bureaucracy, with the added benefit of supporting the illusion that all is as it has ever been in Japan Inc.
But there are issues I think you would be foolish to ignore. First, the government largesse has to come from somewhere, taxing or borrowing. Taxing in the long term will become difficult, as the misallocation of capital contributes to shrinking that sector of the economy that can pay taxes. Borrowing kicks the can down the road, but with Japan's demographics a smaller less productive workforce will be saddled with that debt.
Re: Japan Must Let Zombie Companies Die
#25The above article is best understood as a political piece, rather than a business story. Every single sentence in this article can be picked apart, but doing a line-by-line critique would miss the larger problems with the article. The author assumes that more productivity is always good, even though Japan has been suffering a lack of economic demand for most of the last 26 years. Big gains in productivity would only…
China owns GM. http://qz.com/594984/the-secret-history-of-gms-chinese-bailo... ;
That's incorrect. Institutional money almost entirely controls GM. Along with the union.
China owns GM about as much as they own Apple. Guess what, America imports Chinese-made Apple phones. It's no different.
Re: Japan Must Let Zombie Companies Die
#26Meanwhile, you manage to secure venture-capital funding and even a bank loan. The interest rate is high, but with your rapid growth, you should be able to pay it back. Meanwhile, in the Japan some of us actually live in: 1) Very few 26 year olds will be successfully able to convince their 26 year old co-workers to leave Sharp, because that is a once-in-a-lifetime mistake. I am literally related to a $ANONYMOUS_FOR_SA…
Why is a business checking account so difficult? Seems like "I have $1000 (or 10k) to place in my shiny new account" would be enough to mollify them?
Re: Japan Must Let Zombie Companies Die
#27Meanwhile, you manage to secure venture-capital funding and even a bank loan. The interest rate is high, but with your rapid growth, you should be able to pay it back. Meanwhile, in the Japan some of us actually live in: 1) Very few 26 year olds will be successfully able to convince their 26 year old co-workers to leave Sharp, because that is a once-in-a-lifetime mistake. I am literally related to a $ANONYMOUS_FOR_SA…
Given the overwhelmingly unfavorable business climate, why wouldn't this theoretical enterprising 26 year old just leave for SV? Immigrants have played a big role in the Valley for decades, but there haven't been many from Japan. Perhaps that drive is just destroyed/suppressed by the culture.
or perhaps they don't want to live in SV? Tokyo's pretty nice
Re: Japan Must Let Zombie Companies Die
#28The above article is best understood as a political piece, rather than a business story. Every single sentence in this article can be picked apart, but doing a line-by-line critique would miss the larger problems with the article. The author assumes that more productivity is always good, even though Japan has been suffering a lack of economic demand for most of the last 26 years. Big gains in productivity would only…
If the goal of Japanese policy makers is to boost demand, and that does seem like a wise goal, then keeping 50,000 workers employed at Sharp seems like a smart bet, compared to keeping 100 people employed at some nimble, fast-moving startup. If you want to make sure people have money so that demand is increased then just give them money, don't keep useless jobs around. the USA was able to sell its stake in GM at a pr…
USA didn't sell at a profit. But the loss was $10.5B to save (according to the article) 1.2M jobs, and saved $34.5B in tax losses. Even if you ignore the saved tax income, thats less than $9,000 per job saved.
So the bailout was probably _still_ a net positive for the US.
Re: Japan Must Let Zombie Companies Die
#29Meanwhile, you manage to secure venture-capital funding and even a bank loan. The interest rate is high, but with your rapid growth, you should be able to pay it back. Meanwhile, in the Japan some of us actually live in: 1) Very few 26 year olds will be successfully able to convince their 26 year old co-workers to leave Sharp, because that is a once-in-a-lifetime mistake. I am literally related to a $ANONYMOUS_FOR_SA…
The story with Japanese Banks is also much more interesting that this journalist apparently knows.
Essentially there's a very close coupling between a bank, and it's corresponding major company. It's common knowledge which is which, f.ex. Bank of Tokyo-Mitsubishi, which extends to all the conglomerate's suppliers and the employees of those companies, who will all use the same bank. This gives the major conglomerates enormous economic information, through the bank, about the financial state of their suppliers, as well as a huge amount of power over the companies, through the bank lending system. And this is before you get to the problem of Bank's making very low interest loans to prevent companies going bankrupt - which in any case is common practice everywhere. Bank's are structurally not able to absorb very high amounts of losses, so the old saying about the bank having the problem applies to large loans.
The only viable way to compete with Sharp in this example (well, apart from leaving the country), would be to go to one of the other conglomerates and pitch to be taken under their wing.
Re: Japan Must Let Zombie Companies Die
#30Bailing out GM and Chrysler seems to have been a win. Bailing out Goldman Sachs, not so much. The US had a lot of zombie investment banks in 2008, and only a few were allowed to fail.
The critical difference is, all the zombies were actually dealt with in the US. Goldman Sachs is back to being fully functional and very profitable, it's entirely capable of standing alone today.
There are no big banking zombies wandering around the US landscape now. Most were consumed, forced into mergers. Their balance sheets were cleaned up, via the Fed (Citi and Bank of America for example).