U.S. Outpacing Japan's 1990s Economic Response
Avoiding Japan’s 1990s-era macroeconomic mistakes is job one for U.S. policymakers. So far, so good. Japan’s poky, unimaginative response to bursting credit and real-estate bubbles turned what should have been a recession into a decadelong malaise. Most economists predict the U.S. will be growing again within the next 12 months. While there is a “remarkable resemblance…between the U.S. crisis and Japan’s ‘lost decade,’ ” Kiyohiko Nishimura, deputy governor of the Bank of -Japan, tells NEWSWEEK, the good news is that the tape of Japan’s financial swoon that we’re watching is running on triple-fast forward. Over the past year, “one month in the U.S. is equal to six or seven months in Japan,” Nishimura says. America’s central bank and political system are wired to act more rapidly than Japan’s calcified bureaucracy. But U.S. policymakers clearly learned from Japan’s example. Japan’s central bank didn’t adopt a zero-percent interest-rate policy until February 1999, more than eight years after the troubles began; the Federal Reserve did so within 20 months. Japan delayed injecting public funds into banks until 1998; America’s controversial TARP was passed in October 2008, about 16 months into the crisis. In 30 months, the U.S. has dealt with as much financial trauma as Japan did in nearly 12 years. Now, if only Amtrak officials would spend some time learning from Japan’s bullet trains.
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Daniel Gross is one of the most widely read financial and economic writers working today. He is a senior editor at Newsweek, where he writes the "Contrary Indicator" column. He writes the twice-weekly "Moneybox" column for Slate, which also appears on Newsweek.com.
Before joining Newsweek in the spring of 2007, Mr. Gross wrote the "Economic View" column in the New York Times, was a contributing writer to New York, and contributed regularly to magazines such as Fortune and Wired. From 1998-2007, Gross served as the editor of STERNBusiness, a semi-annual academic magazine on economics and management published by the New York University Stern School of Business.
A native of East Lansing, Michigan, Mr. Gross graduated from Cornell University in 1989, with degrees in government and history, and holds an A.M. in American history from Harvard University (1991). He worked as a reporter at The New Republic and Bloomberg News, and has contributed hundreds of features, news articles, book reviews and opinion pieces to over 60 magazines and newspapers. Areas of expertise include: economic and tax policy, the links between business and politics, the rise of the investor class, the culture of Wall Street, and business history.
He is the author of four books: "Forbes Greatest Business Stories of All Time" (Wiley, 1996), which was a New York Times Business bestseller and a finalist for the Financial Times "Lex" award, given to the best business history book of 1996. Translations have been published in Spanish, German, Czech, Polish, Portuguese, Bulgarian, Chinese, Turkish, and Japanese; "Bull Run: Wall Street, the Democrats, and the New Politics of Personal Finance" (PublicAffairs, 2000); "The Generations of Corning: The Life and Times of an American Company," co-authored with Davis Dyer, (Oxford University Press, 20010; and "Pop! Why Bubbles Are Great for the Economy," (HarperCollins, May 2007).
Mr. Gross appears frequently in the media. A regular guest on CNBC, MSNBC, and National Public Radio, he has also appeared on CNN, Fox News Channel, The Newshour with Jim Lehrer, Bloomberg Television, C-SPAN, BBC, and Reuters TV, and on more than 50 radio programs and talk shows.
Mr. Gross lives in Westport, Conn., with his wife and two children.
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