A year and a half into Japanese Prime Minister Shinzo Abe’s tenure, results about his bold attempt to revive Japan’s moribund economy remain inconclusive. Last week the FT literally asked whether Abenomics was failing? While Japan’s labour market has strengthened, firms have mostly been creating lower-wage jobs, and economic growth has begun to tail off.
It’s thus almost inconceivable that a wave of Japanese conglomerates would be able to snap up American corporate assets as investments.
But in the 1980s, it was a fact of life.
Starting with a relative trickle at the beginning of that decade, Japanese corporations went on an epic buying spree in America during the latter half of the decade after both countries agreed to revalue their currencies.
The trend became so widespread that the “Japanese takeover” theme began seeping into American culture.
Via Google News, we now take you on a tour of this singular moment in the life of both countries…
It started out innocently enough, with a handful of Japanese automakers looking to buyout American parts makers.
Before long, Japan's influence was being felt across the country -- not just in America's cosmopolitan corners, as this article noted, but in places Texas, Arkansas and Mississippi, whose museums were suddenly featuring Japanese exhibitions.
In the early eighties, the value of the U.S. dollar began soaring as Fed chair Paul Volcker's interest rate 'shock therapy' took effect.
So in September 1985, the G-5 countries signed the Plaza Accord. The non-American ones pledged more liberal trade policies to try to close it.
But it may have worked too well, because Japan commenced a 'buying spree' that would last through the end of the decade.
Suddenly, Hollywood started introducing Japanese bosses. Here's a scene from 'Back To The Future 2' showing how in the future American workers would be subservient to their Japanese masters.
Much of 'Die Hard' starring Bruce Willis took place in Nakatomi Tower, home of Nakatomi Trading, in Los Angeles.
American children got used to seeing Japanese names during the closing credits of their favourite cartoons...
Even the Japanese themselves started getting freaked out about their prosperity. 'The amount of money spent for pet food now exceeds the defence budget,' wrote Georgie Geyer.
Others were more sanguine. 'By American super-power standards, Japan is still a minor-league player,' wrote Ben Wattenberg.
The U.S. had aggressively sought liberalization of Japanese markets, and a lower value of the U.S. dollar. This was what it got in return. 'Sony chairman Akio Morita might be excused for asking bluntly, 'What was it you said you wanted?' one econ professor wrote.
The era reached its apex in November 1989, when the Mitsubishi company bought Rockefeller Center for $US846 million.
Mieno's legacy is decidedly mixed at best. '...The economy has gone into the deepest recession since the second world war,' The Guardian wrote in 1994. 'Yasuhi Mieno, governor of the Bank of Japan, in 1992 was looking for economic recovery somewhere between spring and summer; today he is still searching in vain for green shoots.'
...Though we still occasionally break out in hysterics when a rising East Asian power comes knocking.
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