DIRE STRAITS: Whither Japan?

Friday, August 31, 2001

Following World War II, Japan reinvented itself both politically, as it adopted the institutions of democratic government, and economically, as it became a dominant producer and exporter of consumer goods. These reforms were so successful that, ten years ago, experts were predicting that Japan would overtake the United States as an economic superpower. Instead, Japan experienced a decade of recession and economic stagnation that continues still. What happened? Is this a sign of serious structural problems in Japan's political and economic institutions? In other words, is it time for Japan to reinvent itself once again? If so, how should the United States alter its relationship with a new Japan?

Recorded on Friday, August 31, 2001

Peter Robinson: Today on Uncommon Knowledge, experts used to predict that Japan would one day overtake us. Today, where's Japan?

Announcer: Funding for this program is provided by The John M. Olin Foundation and the Starr Foundation.

[Music]

Peter Robinson: Welcome to Uncommon Knowledge, I'm Peter Robinson. Our show today, Whatever Happened to Japan?

The year 2001 marks the fiftieth anniversary of the signing of two important treaties, the San Francisco Peace Treaty between Japan and the allies marked the formal end of the Second World War. The Japan United States Security Treaty established the basis for our relationship with Japan during the Cold War. For the first four decades after signing those treaties, Japan engaged in a remarkably successful transformation, reinventing itself politically as it adopted the institutions of democratic government and economically, first as an exporter of cheap consumer goods. Here's an old transistor radio stamped, Made in Japan. Then as a technological powerhouse, exporting the highest quality consumer goods, also computers, automobiles. Then at the beginning of the fifth decade since signing those treaties, that would be at the beginning of the 1990's, Japan encountered trouble. Its economy went into a deep recession and today more than ten years later, the economy of Japan is still in a deep recession. Is this a sign of serious structural weaknesses in Japan's institutions? In other words, is it time once again for Japan to reinvent itself? If so, how should we in the United States reinvent our relationship with Japan?

Joining us today, three guests. Steven Clemons is Executive Vice President of the New America Foundation. Steven Vogel is an Associate Professor of Political Science at the University of California at Berkeley and T.J. Pempel is Executive Director of the Institute for East Asian Studies also at the University of California at Berkeley.

Title: Dire Straits

Peter Robinson: The noted observer of Japan, James Fallows, I quote, "Through the century and a half in which America has been dealing with Japan, fundamental change has always been right around the corner but change has only come when the country has faced dire emergencies such as the need to catch up with the industrialized west in the Meiji era and the devastation at the end of the Second World War," closed quote. Is Japan now facing so dire an emergency that it will actually engage in fundamental change? T.J.?

T.J. Pempel: It's facing the crisis, the problem will really be whether they can meet the challenge and make the kinds of changes that were made in Meiji or at the occupation or whether they're going to be stalled and go through an ever longer process of trying to make those changes.

Peter Robinson: Steve?

Steven Clemons: I think there's a theatre about the notion of crisis in Japan today but neither they think they're really in crisis nor do we because we're still trying to work incrementally in our relationship and in our sense of (?). I don't think we will know when the crisis hits but I do think it's close and I think that means we will see terrific problems, tremendous difficulties in Japan and we will have difficulty responding at that time but it's not something we can calculate.

Steven Vogel: I think you're going to see fundamental change in Japan but the crisis is not as dire or as immediate as it was in the Meiji period or in World War II. And so the process of change is going to be much more slow and protracted than it was in those days.

Peter Robinson: But fundamental changes will take place?

Steven Vogel: Yes.

Peter Robinson: Ten years ago, even more so, twenty years ago, Americans feared Japan's economic strength. Pundits were talking about this century, the twenty-first century as the Asian century led by Japan. Since 1991, Japan has experienced a rate of growth of a dismal one percent a year on average. Deficit spending has taken place at such a clip that Japan now has a public debt of 130% of GDP exceeding even that of Italy. We read in the New York Times as we tape this show that they're laying people off in large numbers in their manufacturing plants in Japan itself. All but unheard of. That the unemployment rate for men between eighteen and twenty-five percent is about ten percent. What happened? T.J.?

T.J. Pempel: Basically the old system couldn't adjust to the changing economic conditions. I think you had two things going on, a real globalization and the introduction of production networks across Asia, the movement of capital across borders. And I think simultaneously, Asia's become a lot more regionally integrated than it was in the past in ways that allowed Japanese manufacturing to move easily into setting up operations abroad. But essentially Japan went through an economic bubble, '85 to '90 and when that bubble burst, the people inside began to realize that an awful lot of the old system had been rusty and never really adjusted and I think that...

Peter Robinson: So just how and why did Japan's current economic system first arise?

Title: The Grasshopper and the Ant

Peter Robinson: Let me quote the provocative James Fallows again. This is a relatively old quotation so this is before the crash but would still apply. "The same country that has the biggest cash surpluses, trading surpluses in the world also has by far, the highest consumer prices and across the board, the least material--materially bountiful life. The economy is broken up into tribes. The significance of the system is not that it is collusive but that it is stifling." Why did that system arise and why have they not been able to open up the system more to ordinary forces of competition so that firms get founded, firms fail and the whole economy adjusts more smoothly than it has? Let--let's take the first--first question first. Why, for so many years, did Japan favor producers over consumers?

Steven Vogel: Well I think there you've got to go to politics but also the decisions after the World War II that they really wanted to focus on industrial growth and that meant focusing on producers and they felt that the free market was not going to help them to rebuild the economy, that they needed a strong state led pattern of growth. But the one thing I would add on the producers and the consumers is that the irony of the Japanese story is that the consumers have been perfectly happy with the situation. There has not been any consumer (?) in that the consumers themselves, the Japanese people have accepted many of the policies, the very policies that have favored producers.

Peter Robinson: If they had this strong state led growth, then from the point of view of a free market economist, the question is, why did it work so well for so long?

Steven Clemons: I think it worked so well for so long because Japan--as far as the political--political reason and a geo-strategic reason to explain this. Japan was a satellite of the United States. It was set up to become largely a producer to satisfy the consumption needs of America and Europe. They became an export engine for the rest of the world and used lots of government policies to stifle consumption. I disagree with Steve that--that consumers were just nat--naturally happy with the circumstance. They accepted it, yes. But you had a--you had a mission where--where the population in Japan was compelled and sort of asked to sacrifice for country and company for a long period of time.

Peter Robinson: In the back of my mind I have a thought which is, in some ways, actually not a very attractive thought which is that this system which did indeed succeed so beautifully, rapid growth, wonderful industrialization of the country for several decades, was actually built on the back of the Japanese worker who was so dutiful that he worked efficiently, showed up for work on time, accepted low wages, accepted tiny amounts of living space and so forth. And so you have this notion of these kind of--I've said it's not an attractive one but we have this western notion of--of Japanese going to work and doing what they're told and behaving essentially like ants. Fair?

T.J. Pempel: Fair perhaps from and American standpoint but I think if you put it in the context of what the economy looked like in 1945, and the changes…

Peter Robinson: It's quite sensible for them to…

T.J. Pempel: …the changes that took place by the sixties were--were basically quite positive for the country as a whole.

Peter Robinson: All right.

T.J. Pempel: One of the great benefits I think that we fail to attribute when we talk about market economics and the failure to provide individual choices and so forth is that if Japan adopted American-style market economics in 1945, Japanese electronics industry would be run by GE or Motorola, etc., not by Toshiba or Hitachi, etc. I mean, for the Japanese economy to develop substantial Japanese-owned corporations, required an element of--of insulation. And I think they benefited from that. And then Japanese got…

Peter Robinson: Japan may have benefited from that economic system for many years but what about the United States?

Title: Rocking the Boat

Peter Robinson: Return to James Fallows one--once again. He views the Japanese favoring producers, holding down consumption, building up these huge trading surpluses as an abuse of the international trading system. And Fallows was, at one point at least, quite firm in his notion that we should imply trading sanctions to get them to stop behaving this way. On the other hand, you could say well, if they're all willing to accept a lower standard of living to produce wonderful cars and electronics for us, what's the problem? My question is, to what extent should America be concerned by Japanese trading policy? Steve?

Steven Vogel: Today they shouldn't be concerned at all…

Peter Robinson: No sweat.

Steven Vogel: …because the American economy is doing relatively well, the Japanese economy is--is not doing very well and on balance, the trading relations that exist benefits both sides.

Peter Robinson: You'd all agree with that?

Steven Clemons: I would disagree.

Peter Robinson: You would?

Steven Clemons: I would disagree because I think that we--if you can imagine Japan and the United States being two big elephants in a boat that is okay, it's floating, both elephants are keeping their balance. If one becomes sick or becomes reckless or dies, the boat will sink, the--will tip over. That's the situation we're in today. So while the trading relationship today and tomorrow may be relatively benign and okay and you don't have the same kinds of trade disputes that you might have seen in the eighties and early nineties, nonetheless, you have an economic behavior in Japan that's threatening the global trading system and the United States. And that's the failure to reform…

Peter Robinson: What's the threat?

Steven Clemons: The threat is the failure to really move beyond the kind of structural corruption and the relationship-based decisions and mistakes that Japan has made a long time. There's been no fundamental reform in that area as--as far as I can see.

Peter Robinson: They're both champing at the bit to join us…

T.J. Pempel: Where I--where I disagree with the whole premise is the assumption that the bilateral trade balance is a significant number. You know, Japanese trade with the U.S. is up or down two percent or whatever. I think that's an irrelevant number. I mean, the reality now is that production has become so internationalized that the United States auto manufacturers, for example, will manufacture many of their best machines…

Peter Robinson: Ford is as likely to be in Mexico or Brazil…

[Talking at the same time]

T.J. Pempel: …Europe or wherever. I mean, if you look at the bilateral trade balance, one of the ironies is that a Honda made in Marysville, Ohio that is shipped to Japan is a plus for U.S. trade but clearly it's a Japanese owned company that has done well and it's American workers who have done well.

Peter Robinson: Okay, so let me…

T.J. Pempel: And the integration…

Peter Robinson: Let's take a look at Japanese Prime Minister, Koizumi and his proposed reforms.

Title: Iron Chef or Hello Kitty

Peter Robinson: The Economist magazine, I quote, "The LDP," that's the Liberal Democratic Party of which Koizumi is the leader, "remains a loose assembly of factions dedicated to a wide range of special interests. Mr. Koizumi's proposed reforms challenge these interests. The real battle has yet to be joined," closed quote. In the face of opposition from his own party, can Prime Minister Koiz--Koizumi reform the economy? T.J.?

T.J. Pempel: It's going to be a very tough battle and I think what you're going to see is a very interestingly different kind of politics in Japan because I think Koizumi's real strength is that he, unlike virtually every previous Prime Minister, has mastered media. He can go on television and bypass an awful lot of the deep-rooted established interests and, in effect, do what Ronald Reagan was so good at in the United States or even Bill Clinton was good at in the United States, namely, circumventing the injury of politics…

Peter Robinson: Changing the entire political landscape and…

T.J. Pempel: …and putting a new…

Peter Robinson: …by appealing directly to the electorate.

T.J. Pempel: …putting a new issue on the table.

Peter Robinson: What reforms does he need to take?

T.J. Pempel: Well I--I think he's got to reform financial…

Peter Robinson: Give me let's say, two so that we can--for the purposes of television.

T.J. Pempel: He's got to--he's got to drastically deal with the banking crisis and get those bad loans off the books so that Japanese banking can get back to being a serious…

Peter Robinson: How does he do that? The way we handle the Savings and Loan problem…

T.J. Pempel: Yeah.

Peter Robinson: …which is effectively bail them out, in effect?

T.J. Pempel: We--they've been bailing them out for, you know, for almost ten years on an ad hoc basic and they've not allowed enough banks to fail and now allowed enough financial institutions to fail.

Peter Robinson: And that would be the first step in your view?

T.J. Pempel: I think it's--I think it's a combination of failure and…

[Talking at same time]

Peter Robinson: Does everyone…

Steven Vogel: I agree--yeah, I agree with T.J. on what needs to be done but they--what--what I would add is that I think Koizumi is going to deliver in terms of some major reform because--because, in a sense, he has to. The anti-LDP sentiment is so strong and he's such a--a ma--you know, he's--he's made his career running against his own party and I think he's going to continue to do that. The question is not whether he's going to reform or not but whether he's going to make the right reforms. I mean, he's talking about banking reform which I think is…

Peter Robinson: So he actually has an opportunity to put in place reforms and you don't doubt that he'll be able to do that. You wonder--you question his judgment as to which reforms…

Steven Vogel: Yes because, for example, he's talking about the banking reform, if he starts to take on his deficit which is huge, if you do that too soon, you ruin any chance of recovery.

[Talking at same time]

Peter Robinson: When you said you thought Koizumi will certainly deliver, I saw the smile of a skeptic appear on this Steve's face.

Steven Clemons: I--I am--I have been trained after watching so many Prime Ministers come in with good ideas and fail. Koizumi is tapping into something that is phenomenal in Japan which is a--he's been flirting with a sense of--of--of national purpose, of national interest and of nationalism that many other Prime Ministers haven't been able to do. So it's not the reform talk per se that's getting them--him these eighty percent popularity ratings. It's--it's this populist nationalism, visiting Yasukuni shrine where war dead are honored…

Peter Robinson: So…

Steven Clemons: …but let me--let me finish this one point.

Peter Robinson: Sure.

Steven Clemons: The--the interesting thing about him is that yes, he's been running against his own parties and the single benchmark I'd like to see beyond the most--beyond the loan issue is this guy has to put out of business ninety percent of Japanese construction firms. That's the problem. If he delivers on that but if he does deliver that--on that, the LDP is dead and I see no evidence, no factual evidence that he's Japan's Gorbachev.

[Talking at same time]

Peter Robinson: The constructions firms is, in effect, a gigantic public good racquet…

Steven Clemons: Absolutely.

Peter Robinson: …whereby the government overbuilds and there are powerful interests who get the--it's just the way that two-bit cities get run in this country…

[Talking at same time]

T.J. Pempel: And a lot of the money that--and a lot of the money from the construction firms goes back to the LDP for its election campaigns and for the maintenance of politics.

Peter Robinson: So you agree that's the litmus test for Koizumi? If he's serious, he has to start putting them out of business? And give me--give me a sort of percentage chance. What do you thi--within the next five years that he can make fundamental reforms, 50/50?

T.J. Pempel: I think it's 50/50--I think it's 50/50.

Peter Robinson: And you think 80--80/20?

Steven Vogel: 80/20 although I would add that that doesn't necessarily mean that he's going to dismantle the whole system but that there are going to be real changes.

Steven Clemons: I--I think he's got a ten percent chance. I think that the kind of reforms that I'm talking about are impossible in Japan's political system without a crisis. That's why I do believe that a crisis…

Peter Robinson: And this is not a bad enough crisis…

Steven Clemons: …an uncontrollable crisis. No, it's not because it…

[Talking at same time]

Steven Clemons: It--it would--it would--we would create a political realignment. You--you would basically…

Peter Robinson: What kind of crisis would it have to be?

Steven Clemons: I think it has to be something where the population--you have to remember, I'm not a great fan of Koizumi. I'm not--I don't want to be seduced by the charisma of this one person. If you look at the fact that the Japanese have had nearly ten Prime Ministers in a decade, they've had a lot of lousy weather in terms of political leadership. A guy comes in, says a few things, looks pretty good, but yet I worry about that expectation level plummeting in Japan after his inability to deliver. So…

Peter Robinson: Okay.

Steven Clemons: …at that point, the question is, what will the public do? It's a function of what the public's ability to do what Steve had mentioned earlier is to--whether they'll continue to sacrifice or whether they say, you know, we've really had it and they go to the streets…

[Talking at same time]

T.J. Pempel: I just want to quickly…

Peter Robinson: Sure.

T.J. Pempel: …disagree with one aspect to this and I think what you're seeing now being built into the system is a growing recognition on the part of an awful lot of Japanese businesses, particularly the export competitive industries that change has to take place. The Toshiba's, the Hitachi's, the…

Peter Robinson: So you…

T.J. Pempel: …Honda's are not going to sit still…

Peter Robinson: You've got a business class, they travel the world, they're familiar with business practices in Europe and the United States…

T.J. Pempel: Right.

Peter Robinson: …and they're a pressure point for change.

T.J. Pempel: They're a pressure point for change and they're not going to tolerate, it seems to me, continued funding for the LDP if the LDP does not begin the kinds of economic reforms that will allow them to do business in a truly international…

Peter Robinson: Now from economics, let's turn to geo-politics.

Title: Political Tectonics on the Pacific Rim

Peter Robinson: Half a century ago, President Harry Truman and Prime Minister Yoshida, did I pronounce that more or less correctly?

Steven Clemons: Yes, perfect.

Peter Robinson: …signed the Japan United States Security Treaty. For this last half century, we have guaranteed the security of Japan. Japan ha--I think currently they're paying us some six billion dollars to defray the costs of keeping troops over there but there's no question that it's been an expensive endeavor on net to the American taxpayer. Has it been a good deal for the United States? Steve Clemons?

Steven Clemons: Until 1991, it was a good deal.

Peter Robinson: What happened then?

Steven Clemons: The Cold War ended.

Peter Robinson: Ah, okay.

Steven Clemons: This--the--the terms of our engagement with the world changed and we decided to elect not to change at that point. The Soviet Union collapsed. The way in which they managed their satellites around the world collapsed. We didn't collapse…

Peter Robinson: So the entire rationale…

Steven Clemons: …and we had a very hard time changing direction.

Peter Robinson: …for that security arrangement simply disappeared?

Steven Clemons: In my view, yes, with the exception of North Korea and I'm a realist when it comes to the fact that you don't want to leave a power vacuum. There's no place…

Peter Robinson: But you do need a huge space in Okinawa?

Steven Clemons: You do not need manned troops in Okinawa. You might need an air base in Okinawa but the local costs of those air bases in terms of the resentment of the population about the marines, undermines the support for the kind of assets that you want in the future. And that's what we've been very stupid about.

Peter Robinson: What about the notion of Japan rewriting the constitution to permit it to use a--to establish a military--a--a force--well the self defense forces are pretty considerable--but permit the Japanese to use their military the way other countries use their military to support their interests abroad?

Steven Clemons: I think Japan has to go through a process where it struggles with what its interests are without the United States meddling…

Peter Robinson: But should Bush let it be known that he would oppose that? Should he let it be known that it's up to the Japanese? What's your view on that quickly?

Steven Clemons: I think Bush--I think Bush should remove himself from the Japanese domestic debate. We shouldn't have any role in it at all. We--we…

Peter Robinson: (?) comment?

Steven Clemons: …corrupt the process.

Peter Robinson: Okay. T.J.?

T.J. Pempel: I think we'd be--I think it would be a big mistake on the part of the Japanese to revise the constitution. There's no need for it. They're already got one of the mo--world's most sophisticated military forces even though they call it a self defense force. I don't think there's any need to open up the entire issue of the constitution. It's served the Japanese public pretty well. It's kept domestic politics calm. You could expand…

Peter Robinson: But doesn't it introduce a note…

T.J. Pempel: …and have expanded…

Peter Robinson: Doesn't it just introduce a note of corruption may be too strong a word, but of dissembling at the highest level when everybody in Japan…

T.J. Pempel: That's what politics is about.

Peter Robinson: Oh, oh, oh thou cynic.

Steven Vogel: I'm going to disagree with--with T.J. on that because I think that…

Peter Robinson: They have a military, shouldn't they revise the constitution to accept that they do?

Steven Vogel: The--the constitution as written is--is as you suggest, a farce in the sense that Japan has a military that already defies the letter of that constitution. So I think that, in the long run, Japan has to revise that constitution first just because to recognize to current reality, second, to allow them to really engage in peacekeeping operations. And I think the constitution has served Japan very well as a kind of a lid on Japanese militarism. So I would suggest that if they were going to revise the constitution, they should revise it with new limitations set on Japanese military capacity perhaps even written into the constitution.

Peter Robinson: Now…

T.J. Pempel: I think this would be--I think this would be a big mistake because I think the--the implications of a revised constitution across Asia would be very, very serious. I mean, it would clearly be a signal, whether directly implied or not, to both China and South Korea as well as to Southeast Asia that something fundamental had changed in Japan and would require…

Peter Robinson: Last question, why hasn't Japan ever been able to come to terms with its actions during the Second World War?

Title: Tokyo Rose-Colored Glasses

Peter Robinson: Contrast Japan with Germany. Germany, for fifty years has stoutly castigated the--the Nazis and its past. It has been forthright about facing its war past. We know that today that textbooks approved by the Japanese Ministry of Education fudge all kinds of questions about what actually took place during the war. And then we have Prime Minister Koizumi visiting the--name the shrine for me…

Steven Clemons: Yosi Kuni…

Peter Robinson: Yosi Kuni. Thank you very much. Shrine, which is a shrine to the Japanese war dead. Basic question…

T.J. Pempel: …much as…

Peter Robinson: …why haven't they faced their war past the way the Germans did?

T.J. Pempel: Because they have a very ambig--Japan generally, has a very ambiguous and conflicted notion of the causes of World War II. There's a very strong belief within Japan and there's a lot of historical evidence to back it up, that much of Asia's troubles in the late nineteenth and twentieth centuries were the result of Western Imperial countries, Dutch colonies in Indo--Indonesia, the British in Southeast Asia, the French in Southeast Asia, everybody carving up China, etc. Japan was the one country in Asia that stood up to the West. Now that's not in any way to justify the aggression in China or the takeover of Korea as a colony or to justify World War II but, within Japan, there's a tremendous difficulty in dealing with the history of the nineteenth and early twentieth century and Western imperialism. And, at the same time, dealing with the way in which Japan's military behaved during World War II.

Peter Robinson: What about this notion of the old-fashioned nationalism reappearing?

Steven Vogel: Well there's always been a very strong strand of nationalism in Japan. But I think that the overwhelming majority of the populous believes that Japan should be much more forthright about its past. So, in a sense, it's a domestic political problem where you have factions that, you know, are strongly nationalist. They believe that somehow that if they recognize their own crimes, that this is somehow denigrating the nation.

Peter Robinson: What do you make of this problem of nationalism in Japan?

Steven Clemons: Well I think we have to remember that America, the--the United States was largely complicit in this issue of the Japanese not looking back and--and dealing with these questions of its World War II involvement, of the emperor's potential liability with--with war crimes. And there are lots of other issues…

Peter Robinson: Because MacArthur during the occupation simply said…

Steven Clemons: …it was MacArthur, it was John Foster Dulles. It became a session after sort of 1947, '48, after the real concern about communist expansion. And the next challenge, we wanted Japan to be turned from being our public enemy number one into our best friend in Asia. And we basically set up the mechanisms to force Japan forward, to restore the conservatives and we shut down public debate in Japan. That--we are dealing with the inertia of that historical legacy today. And I--I do think the Japanese need to take responsibility for their history but we can't deny--we can't sit back and criticize without dealing with the fact that we were the architects of this historical amnesia in Japan.

Peter Robinson: Okay. Television, so final question. I'm going to ask you all two questions and it ha--we have to move fast because it's television. Throughout the decade of the 1980's, Japan averaged close to five percent a year economic growth. In the decade since then, 1991, 2001, about a percent a year annual growth. A decade from now, where will they be? Closer to one or closer to five?

Steven Vogel: They'll be at two percent which is healthy for a mature economy.

Peter Robinson: T.J.?

T.J. Pempel: I'd have to agree.

Steven Clemons: Two percent.

Peter Robinson: So no dramatic change, no…

[Talking at same time]

Steven Vogel: …the normalcy will be dramatic.

[Talking at same time]

T.J. Pempel: Yes.

Peter Robinson: Will be dramatic?

T.J. Pempel: And the--and the important issue that I think we need to suggest is I think the two percent implies, in one way or another, that many of the reforms that Koizumi is claiming will take place, will in somehow or another…

Peter Robinson: Will take place.

T.J. Pempel: …will somehow or another take place.

Peter Robinson: And let's say a decade from now, will relations between the United States and Japan be better, worse, what do you think?

Steven Clemons: I--I--I think that they'll be healthier…

Peter Robinson: Japan will have a greater sense of itself…

Steven Clemons: Yeah. Japan will have a greater sense of itself…

Peter Robinson: Feel free to disagree with us?

Steven Clemons: It will be disagreement. I think the marines will be out of…

Peter Robinson: Will we make the Chinese more nervous?

Steven Clemons: I--I think that we will probably begin to have the--the great states in Asia begin to sort of deal more responsibility with security issues. The United States will be involved but we're not--United States isn't going to be wedged in as the critical power in every deal.

T.J. Pempel: When you ask about how the relationship will evolve over the next ten years, I think all of us probably feel a lot more comfortable predicting where Japan might be in ten years than we feel--I feel at least, predicting where the U.S. will be in ten years.

Peter Robinson: Steve?

Steven Vogel: I think overall, relations are going to be better but I think that they're going to be considerably better on the economic side and considerably worse on the security side.

Peter Robinson: Steve, T.J. and Steve, thank you very much.

Steven Clemons: Thank you.

Steven Vogel: Thank you.

Peter Robinson: Without substantial reforms, our guests agree, Japan could find its economic woes lingering for years to come yet even then, Japan will remain one of the most powerful nations on earth. So the eyes of the world will remain upon it. I'm Peter Robinson, thanks for joining us.