The Weight of the Yen: How Denial Imperils America's Future and Ruins an Alliance

An American investment banker who has lived in Japan for the past 15 years, Murphy brings a rare bicultural perspective to his enlightening and disturbing saga of how Japan became the world's largest creditor country while the U.S. became the world's biggest debtor. In his analysis, Ronald Reagan takes the blame for leading the U.S. into an unacknowledged program of borrowing some half a trillion dollars from Japan to finance our federal deficit. Starting in 1981, Japanese investors gobbled up U.S. Treasury securities and propped up American buying power for a decade and a half, allowing successive presidents to avoid the mounting national debt while Americans indulged in an orgy of consumption. Japan found a ready channel for its excess cash, thus helping to perpetuate its ruling hierarchy presiding over a cartelized, government-controlled, mercantilist Japanese economy. Murphy suggests that the mutual dependency harms both countries and observes that our ""furtive dependence"" on Japan continues through an influx of short-term, unstable Japanese money. He urges U.S. leaders to develop a cohesive, realistic Japan policy in place of hectoring and rhetoric. (Mar.)