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Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.

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Speaker 2: Hello and welcome to another episode of The Odd Laws podcast.

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Speaker 1: I'm joll Wisenthal, and.

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Speaker 3: I'm Tracy Alloway.

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Speaker 2: Tracy, here's something I've been thinking about with respect to

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Speaker 2: China and all of the tensions with China, which is

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Speaker 2: that it feels very elite, as in, people in DC

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Speaker 2: talk about it, people in obviously in finance and business.

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Speaker 1: Talk about it.

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Speaker 2: It does not strike me that in the broad and

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Speaker 2: I could be wrong, My judgment could be off, but

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Speaker 2: it does not strike me that in the broad public

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Speaker 2: that there are a lot of people that it's top

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Speaker 2: of mind for a lot of the public.

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Speaker 3: Weirdly, I think it was probably more top of mind

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Speaker 3: in the past. And the hollowing out of America's manufacturer sector.

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Speaker 3: I mean that argument is kind of what has given

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Speaker 3: rise to a lot of the populist politics that we

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Speaker 3: see nowadays. Right, Yeah, that's true.

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Speaker 2: Right during the China shock, Yeah, there were a lot

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Speaker 2: of people aware that their factories or the towns that

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Speaker 2: dependent on these factories were getting hollowed out, et cetera.

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Speaker 1: But you know, there's so much China, China, China.

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Speaker 2: It's not in the media right, it's not like it

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Speaker 2: or sorry, it's not in the movies. And I'm thinking

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Speaker 2: of like Back to the Future two. Was it where

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Speaker 2: the main character's dad lost his job and they had

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Speaker 2: the scene when he was getting laid off by his

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Speaker 2: Japanese boss.

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Speaker 3: Oh you know what. My favorite example of this is yeah,

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Speaker 3: die Hard of course, best Christmas movie ever, but also

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Speaker 3: the Nakatomi Corporation.

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Speaker 1: Yeah, right, this was like a whole thing in pop culture.

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Speaker 1: It's just not at all.

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Speaker 2: Maybe that has something to do with the fact that

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Speaker 2: studios still want to do they still distribute American movies

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Speaker 2: still getting wide distribution like for a while in China

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Speaker 2: because for a while this was.

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Speaker 1: Like a big story. Or are they not going to

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Speaker 1: talk about certain things?

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Speaker 3: Is partially why we have a bunch of superhero movies,

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Speaker 3: by the way, because they're just because they play in

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Speaker 3: international markets.

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Speaker 1: And they're not going to like offend anyone too much.

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Speaker 1: Probably it just doesn't feel to me for that from like.

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Speaker 2: A pop culture standpoint, that the threats from China, whatever

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Speaker 2: they are, are like getting that much play.

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Speaker 3: We need a good movie about China developing. An AI

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Speaker 3: chat bot goes rogue and tries to take over the world.

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Speaker 3: I think there was an AI plot in the Last

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Speaker 3: Mission Impossible or one of the recent ones. I haven't

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Speaker 3: seen it. I don't know who developed the technology.

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Speaker 1: Yeah it was China, it could have been.

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Speaker 2: But anyway, like you said, with die Hard, and there

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Speaker 2: were several others. I think Michael Crichton had a book

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Speaker 2: that talked about it. And certainly when I was younger,

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Speaker 2: when I was like eleven or twelve, it first became

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Speaker 2: aware of the existence of the world around me, you know.

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Speaker 1: I remember I had.

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Speaker 2: A teacher who was like really scoldy about people who

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Speaker 2: drove Japanese cars, for example, and she talked about.

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Speaker 3: How anti America.

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Speaker 2: Yeah, how awful it was that there were people coming

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Speaker 2: into our high school parking lot or whatever that drove

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Speaker 2: Japanese cars.

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Speaker 3: Destroying the fabric of America by purchasing at Toyota.

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Speaker 2: Yeah, of course, now you know by Toyota's are made

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Speaker 2: in the US, et cetera. No one talks like that

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Speaker 2: with respect to Japan. But it is interesting thinking about

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Speaker 2: like similarities and differences between our relationship with China today

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Speaker 2: in our relationship with Japan in the eighties late eighties,

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Speaker 2: et cetera. When it seemed like that was going to

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Speaker 2: be the economy that really sort of hollowed out with There's.

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Speaker 3: A clear parallel here, there are also some key differences.

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Speaker 3: I'm sure we'll get into all of that.

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Speaker 2: A land of contradictions similarities. Anyway, I'm very excited. I

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Speaker 2: have a guest I've wanted to talk to for a

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Speaker 2: long time, the perfect guest, because he recently wrote about this.

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Speaker 2: We're going to be speaking with John Gans. He has

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Speaker 2: an author and historian. He's publisher of the unpopular front Substeck,

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Speaker 2: which I am a paid subscriber to. I'm a big fan,

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Speaker 2: and he's also the author of the recent book When

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Speaker 2: the Clock Broke Common Conspiracists and How America Cracked Up

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Speaker 2: in the early nineteen nineties talk a little history.

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Speaker 1: So, John, thank you so much for coming on outlaws.

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Speaker 4: Thank you so much for having me. I'm a big fan.

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Speaker 4: It's very exciting for me.

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Speaker 1: Very nice of you to say.

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Speaker 2: Does that seem right to you that, like you probably

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Speaker 2: pay attention to pop culture just today with the China anxiety,

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Speaker 2: it feels like a DC kind of thing more than

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Speaker 2: a general public thing.

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Speaker 4: I think that's true. It does feel sort of an

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Speaker 4: Elite project. There's a lot of interest curiosity about what's

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Speaker 4: going on China and what they do well, both in

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Speaker 4: d C, among policymakers and I think also.

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Speaker 5: Obviously in the Silicon Valley.

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Speaker 4: Yeah, a lot of think tanks are studying China, thinking

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Speaker 4: about China. A lot of business people are very interested

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Speaker 4: in China. But yeah, I don't know. It's strange because

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Speaker 4: you would think in an age that you know has

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Speaker 4: a lot of one might argue paranoid thinking going on.

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Speaker 4: It doesn't factor that much into a lot of pop culture.

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Speaker 4: I think the movies thing might be a part of that.

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Speaker 4: That wasn't the case.

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Speaker 1: Just the sure box office the exposure.

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Speaker 4: The box office exposure, But I think in the eighties

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Speaker 4: and nineties there was definitely more cultural product which I'm

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Speaker 4: sure will discuss more cultural products that brought this kind

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Speaker 4: of fear, curiosity, interest, paranoia to the surface.

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Speaker 3: All right, well, why don't we get into the japan

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Speaker 3: panic of the nineteen eighties and where it actually started.

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Speaker 3: And by the way, I was reading the substack that

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Speaker 3: you wrote on this particular topic, and I fell into

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Speaker 3: a giant rabbit hole reading the emerging Japanese super state

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Speaker 3: and coverage of it. So I didn't know the author

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Speaker 3: of one of the first provocative japan Is Going to

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Speaker 3: take Over the World type books was a guy called

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Speaker 3: Herman Khan, I think. And he is the inspiration for

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Speaker 3: Stanley Kubrick's Doctor Strangelove.

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Speaker 1: I didn't know that.

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Speaker 3: Yeah, And if you read some of the coverage of

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Speaker 3: his book that came out in the nineteen seventies, it's

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Speaker 3: really funny because it's just stuff that you would never

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Speaker 3: get away with writing today. The New York Times New

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Speaker 3: York Times review actually starts out by saying a billion

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Speaker 3: to Herman Khan, who boasts that under all these three

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Speaker 3: hundred pounds of friendly fat there lies a lean and

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Speaker 3: sinewy intellect. I don't think. I don't think you could

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Speaker 3: start a book review by saying the author is author's way.

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Speaker 4: Yeah, yeah, no, that's true. Yeah, Herman kahnnon is a

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Speaker 4: really strange and interesting character. He is. He is one

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Speaker 4: of the models for Doctor Strange Love. He wrote a

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Speaker 4: book called on Thermonuclear War, which is probably one of

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Speaker 4: the strangest books you'll ever read. In it's extremely cheerful

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Speaker 4: book about thermonuclear war, basically kind of saying it wouldn't

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Speaker 4: be that bad and saying that, you know, yeah, And

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Speaker 4: I think this is where the term he may have originated,

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Speaker 4: the term mega deaths and saying, you know, yeah, we'll

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Speaker 4: get a little messed up, but actually, there's so many

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Speaker 4: people in this country were so productive. How bad would

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Speaker 4: it really be?

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Speaker 3: Well, have some mega deaths, still worry, We'll.

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Speaker 4: Have a few mega deaths, but I don't think And

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Speaker 4: he thought that the United States shouldn't be so fearful

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Speaker 4: about it. But there's another weird interpretation of the book

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Speaker 4: that this was kind of like some signaling strategy that

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Speaker 4: the United States, because in the book he said, you

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Speaker 4: can't show that you're afraid to actually pull the trigger,

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Speaker 4: because then the other side will push you around.

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Speaker 5: So in a way, the book.

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Speaker 4: Was some kind of signaling strategy in his game theory

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Speaker 4: mine to be like, hey man, we're not worried. Well,

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Speaker 4: we we're writing books that say thermonuclear war is not

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Speaker 4: that big of a deal. Very very bizarre figure, and

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Speaker 4: I think some people consider him very sinister obviously, but

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Speaker 4: real eccentric.

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Speaker 3: But he was actually worried about Japan.

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Speaker 4: Yeah, I think he was worried about Japan, and he

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Speaker 4: was a little ahead of the curve actually, because he

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Speaker 4: wrote his book in the I think it was in

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Speaker 4: the late nineteen sixties and came out in the early

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Speaker 4: nineteen seventies, and he was describing Japan and its institutions

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Speaker 4: and predicted that by the year two thousand that Japan

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Speaker 4: would be the first economy in the world and overtake

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Speaker 4: the United States. This is a little bit before now

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Speaker 4: that later books make a little more sense. This is

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Speaker 4: really before you start to see the economic problems in

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Speaker 4: the United States. It would make this kind of interest.

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Speaker 4: And also before the trade deficit with the United States

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Speaker 4: had really exploded. So he was a kind of not

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Speaker 4: and that he got it right, but he kind of

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Speaker 4: prefigured a genre of books that would only really hit

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Speaker 4: about a decade or so later.

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Speaker 3: Yeah, Joe, I clipped this, but reading some of the

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Speaker 3: book now, it's kind of quaint. But he says his

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Speaker 3: best estimate is his medium scenario, and the medium scenario

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Speaker 3: is that Japan probably passes the US in per capita

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Speaker 3: income around nineteen ninety huh okay, and probably equals the

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Speaker 3: US in a gross national product by about the year

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Speaker 3: two thousand. That's the media. The media, so he's being conservative,

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Speaker 3: but it sounds.

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Speaker 2: Interesting because it's very easy to say, oh, this is

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Speaker 2: going to be a big problem once the trade deficit

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Speaker 2: is gigantic, Right, it's like, oh, really dependent, we're you know,

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Speaker 2: Upper Creek, et cetera. But he seemed to have some

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Speaker 2: intuition that there was something there in Japan that was like, Okay,

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Speaker 2: there's going to be some great out competing in terms

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Speaker 2: of just based on their productivity.

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Speaker 4: Yeah. I think that he observed correctly that Japan had

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Speaker 4: made a miraculous comeback after the war. They had transformed

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Speaker 4: themselves from being totally destroyed in the world and from

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Speaker 4: being kind of a producer of goods that were considered

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Speaker 4: kind of cheap, just in the way we used to

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Speaker 4: think made in China or made and Taiwan weren't necessarily

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Speaker 4: signs of quality. And then Japan becomes, you know, a

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Speaker 4: place where manufacturer's items that are still not terribly expensive

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Speaker 4: but are known for engineering feats and are quite good.

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Speaker 4: And he also gets into some things we might today

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Speaker 4: call orientalists or essentralizing. But he had these what he

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Speaker 4: thought were sociological insights about the solidity of Japanese society

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Speaker 4: of their education system, of the relationships between the state

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Speaker 4: and businesses, and other writers kind of developed these themes

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Speaker 4: in different directions.

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Speaker 2: Maybe we'll get into this. Peter Navarro's book Death by

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Speaker 2: China came out in twenty eleven. He was pretty ahead

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Speaker 2: of the curve in terms of you know, twenty eleven.

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Speaker 2: Certainly not as much as people are talking about today, But.

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Speaker 4: In a way, it wasn't the real China shock in

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Speaker 4: the definitely, yeah, yeah.

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Speaker 3: Yeah, the whole wto I feel like that was really

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Speaker 3: when it kind of peaked. You mentioned the cultural aspects

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Speaker 3: of this, and it is funny reading again some of

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Speaker 3: the coverage where everyone's like, I read the Chrysanthemum and

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Speaker 3: the Sword, or I read Mishima and now I've cracked

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Speaker 3: the code of Japanese economic success. But so much of

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Speaker 3: the panic was actually trying to figure out how Japan

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Speaker 3: had done this before we get into all those different interpretations.

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Speaker 3: What's your story of the Japanese economic miracle in the

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Speaker 3: nineteen eighties.

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Speaker 4: You know, I think that there's obviously the actual economic

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Speaker 4: facts and the relationship of the United States with Japan,

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Speaker 4: and then there is the discourse about it. I think

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Speaker 4: what happened is you had a situation where you have

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Speaker 4: the beginnings of the industrialization in the United States. You

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Speaker 4: had a very strong dollar. You had a lot of

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Speaker 4: products that are coming in. They were extremely high quality

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Speaker 4: and attractive to American consumers. You also had some policy

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Speaker 4: that are very strange. Caterpillar was a big competitor with Komatsu.

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Speaker 4: They went to the Reagan administration. They brought this economic

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Speaker 4: study to the Reagan administration and they said, well, we

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Speaker 4: want to open up Japan's financial markets because the difference

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Speaker 4: in our currencies is causing this problem. Now, this doesn't

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Speaker 4: even make sense in economic theory. What actually happened is

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Speaker 4: Japan is the country with excess savings. So Japanese investments

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Speaker 4: began to flow into the United States. Caterpillar suddenly finds

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Speaker 4: Komatsu with a plant next door to it. So this

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Speaker 4: little scheme to undermine its competitors through currency wizardry didn't work.

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Speaker 4: The Reagan administration was open to it because they were

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Speaker 4: into free trade stuff, so it didn't really break with

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Speaker 4: their ideology. But it was a strange move that backfired.

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Speaker 4: And then also Japanese investors were used to very meager

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Speaker 4: returns and the United States had very attractive investment's going

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Speaker 4: on at that time, like treasuries because of the vulgar policies,

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Speaker 4: had very high returns, so Japanese savers were very interested

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Speaker 4: in them. And Japanese investors also started to look at

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Speaker 4: real assets, like they started to look at real estate,

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Speaker 4: and there returns on those things were so fantastic compared

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Speaker 4: to the way things were in Japan.

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Speaker 3: Yeah, Mitsubishi bought the Rockefeller Center.

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Speaker 4: They bought the Rockefeller Center. There was talk of Nintendo

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Speaker 4: buying the Seattle Mariners. There was a lot of purchasing

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Speaker 4: a lot of downtown La You mentioned that Nakatomi Tower. Like,

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Speaker 4: there was all this idea of Japan investing in American

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Speaker 4: real estate and buying quintessentially American properties, and this was

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Speaker 4: kind of upsetting to people. So the trade deficit was

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Speaker 4: obviously upsetting people who actually had a skin in the

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Speaker 4: game of the industries, workers, the businesses. Le Leyakoca was

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Speaker 4: not very happy about it. He wrote about it and

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Speaker 4: complained about it on TV. But the actual purchasing of

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Speaker 4: American like these kind of symbols of Americana made people

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Speaker 4: kind of get more tense about this nationalistic fervor. So, yeah,

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Speaker 4: the money was just flowing in and at that time

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Speaker 4: with the United States had a lot of deficit spending

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Speaker 4: and we were pumping out ships and military equipment, and

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Speaker 4: the interest in Japanese savers and American treasuries just came

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Speaker 4: along at the right time. Paul Songis who was I

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Speaker 4: don't know how many of your listeners are gonna remember him.

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Speaker 5: Okay, So he was.

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Speaker 4: Kind of like centrist, business friendly democratic politician who was

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Speaker 4: a candidate for president, not someone you would expect to

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Speaker 4: kind of like demagogue on populist terms. But he said

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Speaker 4: in a speech the uaw, the Cold War.

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Speaker 5: Is over in Japan won.

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Speaker 4: This is obviously a huge exaggeration, but it was more

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Speaker 4: like the Cold War ended in Japan kind of paid

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Speaker 4: for it. So I can understand from the perspective of

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Speaker 4: Japan when they're seeing these things bubble up in anger,

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Speaker 4: bubble up into America, They're like, we thought we were

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Speaker 4: competitors a little bit, but but yeah, mostly friendly, mostly friendly.

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Speaker 1: Yeah, what was Trump doing this time? Did he have? Well?

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Speaker 1: Where was Trump?

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Speaker 5: And all that?

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Speaker 4: It was extremely upset about both the trade deficits of

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Speaker 4: Japan and the investment in Japanese. He's he's been extremely consistent.

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Speaker 4: He published ads in the newspaper, he went on TV

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Speaker 4: and complained about it. He said, Japanese Japan was ripping

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Speaker 4: us off, and Japan was buying all these wonderful American

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Speaker 4: things that you belong to us. So that economic nationalism

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Speaker 4: goes way back when, and there might be an argument

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Speaker 4: that his protectious instincts were really shaped by that encounter

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Speaker 4: with Japan as a potential rival. So I think that,

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Speaker 4: you know, the japan panic and Trump kind of being

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Speaker 4: of another age in a certain way. Although again some

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Speaker 4: of these things apply well too.

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Speaker 2: But it's like left its fingerprints on American society, hasn't it.

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Speaker 5: Absolutely absolutely?

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Speaker 4: So I think that weirdly, those unconscious impressions or or

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Speaker 4: institutional knowledge or just hang ups that.

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Speaker 5: Stick with individuals.

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Speaker 4: Yeah, definitely, And you know, you may just still be

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Speaker 4: thinking of Japan.

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Speaker 2: It's interesting because with the China anxiety these days, like

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Speaker 2: the fear is right, some breakthrough is going to happen

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Speaker 2: with semiconductors or something in China, and the American companies

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Speaker 2: would just sort of go out of business, et cetera.

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Speaker 2: But in the anxiety with Japan was like your boss

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Speaker 2: is going to be Jeopanese, or the name of the

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Speaker 2: office building that you brought to will be renamed Jeopanese, etcetera.

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Speaker 2: That's very different because people don't really talk about they're

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Speaker 2: all gonna be working for Chinese international corporations in.

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Speaker 4: The future, right. And if you look at the image

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Speaker 4: of Dystopia in the eighties, like in cyberpunk literature or

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Speaker 4: in Blade, it's a lot of Japanese company signage and

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Speaker 4: a city of mixed ethnic makeup that looks very chaotic.

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Speaker 4: It looks a lot like cities in Japan. So yeah,

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Speaker 4: I think people were really thought and I think it

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Speaker 4: was just kind of common sense. If you got into

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Speaker 4: a if you took an airplane ride and you got

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Speaker 4: into a conversation with businessman next to you, guy who

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Speaker 4: owned a small business he had read in magazines, newspapers, books,

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Speaker 4: everyone kind of like the mid I'm sorry to use

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Speaker 4: this meme. The Midwind take at the time was sort

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Speaker 4: of like Japan is.

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Speaker 5: Going to take over the United States.

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Speaker 3: Yeah, okay, so clearly that did not happen. No, And

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Speaker 3: the per capita income of Japan is still a lot

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Speaker 3: lower than the US. Walk US through like, I guess

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Speaker 3: the bursting of the bubble and what exactly, like why

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Speaker 3: this vision of Japan as a super state or whatever

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Speaker 3: did not come to pass.

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Speaker 4: You know, what's really interesting is that the that the

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Speaker 4: panic coincided not with the peak of Japanese power, but

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Speaker 4: with about the asset bubble bursting. So you see in

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Speaker 4: nineteen ninety two, Rising Sun, the Michael Crichton book come out,

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Speaker 4: and then and that also.

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Speaker 3: To yeah, and has anyone read it?

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Speaker 4: I have seen the movie. I have read the book

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Speaker 4: partially when I was doing research for the book for

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Speaker 4: my book. And at the end of the book, in

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Speaker 4: case no one got the very subtle message of the book,

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Speaker 4: he included a bibliography of books he had written he

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Speaker 4: had read about Japan that that detailed the threat. The

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Speaker 4: book is not subtle. A group of Japanese businessmen are

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Speaker 4: involved in the murder of a very beautiful blonde woman,

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Speaker 4: and the detective is taskifying this out and he has

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Speaker 4: a meeting with the senator, and the senator they talk

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Speaker 4: about maybe the possibility of dropping another bomb on Japan.

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Speaker 4: That's another thing to remember is that Japan, the United States,

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Speaker 4: and Japan in living memory had fought a war, and

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Speaker 4: there was Pearl Harbor, which Americans felt very sensitive about.

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Speaker 4: So what happened was there was a credit fueled bubble

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Speaker 4: in Japan and it burst, and it was followed by

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Speaker 4: a banking crisis deflation, and then all of a sudden

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Speaker 4: everything that everyone believed was so wonderful about Japanese capitalism.

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Speaker 4: So in nineteen eighty two, Charles Johnson wrote a book

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Speaker 4: called Midi in the Japanese Miracle, and this said, okay, well,

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Speaker 4: the reason why they did it is because they had

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Speaker 4: this wonderful industrial policy which coordinated investment, protected industries, guided firms,

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Speaker 4: and it was kind of a mixture of state intervention

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Speaker 4: and private capitalism. That was one theory that was a

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Speaker 4: little different from the theories that said, oh, the Japanese

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Speaker 4: have some special cultural Confucianism or whatever shinto Buddhism that

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Speaker 4: was making them do this. And everyone said, oh, well,

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Speaker 4: Japanese firms are insulated from financial markets, right because they

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Speaker 4: have this close relationship with banks. They don't have to

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Speaker 4: do they don't have to raise funds on capital markets.

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Speaker 4: They have these long standing relationships, so they can do

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Speaker 4: these great long term development projects, research and development projects.

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Speaker 4: They're not exposed to the quarterly pressures of American company,

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Speaker 4: so on and so forth. Then after the bubble crashes,

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Speaker 4: everyone looks at all this stuff. It's like, oh, wait,

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Speaker 4: they say, oh, this was a horrible system of crony

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Speaker 4: capitalism where the government was protecting people and there were

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Speaker 4: bad loans on the books, and if there had been

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Speaker 4: functioning markets and a lot of these things wouldn't happen.

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Speaker 4: So suddenly all of the things that appeared, most of

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Speaker 4: the things, not all of them, but many of the

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Speaker 4: things that appeared really impressive.

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Speaker 5: About Japanese capitalism, all.

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Speaker 4: Of a sudden people discovered what.

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Speaker 5: The downsides were.

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Speaker 4: But this didn't set in in the United States. Japan

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Speaker 4: was there was an outflow. There was a sudden, huge

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Speaker 4: outflow of Japanese funds they had invested. Yeah, I mean,

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Speaker 4: between nineteen eighty eight to the end of nineteen ninety

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Speaker 4: the Japanese investors invested about fifty two billion dollars in

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Speaker 4: the United States from you know, that includes everything from

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Speaker 4: buying companies to real estate to new factories. And then

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Speaker 4: in the first few months of nineteen ninety two that

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Speaker 4: figure had dropped to two point three billion, and they

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Speaker 4: made a net investment of thirty almost thirty one billion

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Speaker 4: dollars in securities, and by nineteen ninety two they were

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Speaker 4: net sellers of government securities. They took some real baths,

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Speaker 4: like this financier, Minuro Issutani. He and this was one

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Speaker 4: of these things that upset Americans. He bought Pebble Beach.

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Speaker 4: He sold it for a loss of about three hundred

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Speaker 4: and fifty million dollars. Yeah, so by the early ninety nineties,

399
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Speaker 4: the tide was kind of going out, but the upset wasn't.

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Speaker 4: And part of why this happened was the United States

401
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Speaker 4: still had a close economic relationship. But there was a

402
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Speaker 4: election going on and a Japanese election in the United States,

403
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Speaker 4: and a Japanese politician made a very very intemperate remark

404
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Speaker 4: about the appearance and abilities of American workers. He said

405
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Speaker 4: that they were not able to read in many cases,

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Speaker 4: that they were overweight, and this caused a massive rage

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Speaker 4: in the United States and a lot of politicians going

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Speaker 4: into the election year obviously gin this up.

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Speaker 1: We talked about ninety two.

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Speaker 5: Here this is in nineteen ninety two.

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Speaker 3: Oh, is this the whole Atari Democrat thing?

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Speaker 4: The Atari Democrats are a little different.

413
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Speaker 5: They wanted.

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Speaker 4: They were among the people who were really curious about

415
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Speaker 4: I think state industrial policy in Japan.

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Speaker 3: I missed this whole era of American history, by the way,

417
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Speaker 3: firstly because I was like eight years old, but secondly

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Speaker 3: because I was in Japan right and we didn't hear

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Speaker 3: a lot about it.

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Speaker 4: So you were there as as the bubble pop.

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Speaker 3: Yeah, so I never I have no memories of experiencing

422
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Speaker 3: this feeling of Japanese supremacy. I have a lot of

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Speaker 3: memories of feeling like the economy was very downbeat.

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Speaker 5: Oh wow, in.

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Speaker 3: The sort of early two thousand when I came back

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Speaker 3: and when I was actually a teenager and sort of

427
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Speaker 3: aware of my surroundings.

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Speaker 4: Yeah, did you ever get the sense that they felt

429
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Speaker 4: like it was a miss? It was a lost Golden era,

430
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Speaker 4: a missed opportunity.

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Speaker 3: I mean, I think there was a little bit of nostalgia,

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Speaker 3: certainly in the finance community. You know, people could remember

433
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Speaker 3: what the deal making days were actually like. But beyond that,

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Speaker 3: I'm not entirely.

435
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Speaker 2: Sure got you This summer, all the bros read Ezra

436
00:22:26,200 --> 00:22:29,240
Speaker 2: Vogel's Dongshell Pang biography, but he also.

437
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Speaker 1: Wrote, and I think you talk about it.

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Speaker 2: He wrote a Japan book in nineteen seventy nine, Japan

439
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Speaker 2: is Number one Lessons for America, which I.

440
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Speaker 1: Think you yeah talk about is that Does that book

441
00:22:38,080 --> 00:22:38,960
Speaker 1: hold up? Was it good?

442
00:22:39,080 --> 00:22:41,640
Speaker 4: I think that that book is one of the more

443
00:22:41,680 --> 00:22:44,480
Speaker 4: serious books. I mean, you know, yeah, he's a real scholar. Yeah,

444
00:22:44,480 --> 00:22:48,199
Speaker 4: and it was more a real analysis of institutions. It

445
00:22:48,240 --> 00:22:50,399
Speaker 4: doesn't get into the kind of there may be a

446
00:22:50,400 --> 00:22:53,720
Speaker 4: little armchair sociology in there about Japanese cultural mores, but

447
00:22:53,720 --> 00:22:58,320
Speaker 4: there's definitely much more hard analysis of the relationship between

448
00:22:58,359 --> 00:22:59,639
Speaker 4: government and business in Japan.

449
00:23:00,240 --> 00:23:02,720
Speaker 2: Let's talk a little bit more about actually nineteen ninety

450
00:23:02,720 --> 00:23:06,200
Speaker 2: two in the politics of that time, you mentioned Paul's songis. Yeah,

451
00:23:06,240 --> 00:23:08,080
Speaker 2: he did win a primary somewhere, didn't he look win

452
00:23:08,119 --> 00:23:12,359
Speaker 2: New Hampshire something anyway? But more importantly that was also

453
00:23:12,440 --> 00:23:16,200
Speaker 2: the year that Ross Parrot ran as an independent and

454
00:23:16,240 --> 00:23:17,639
Speaker 2: then he dropped out, and then he got back in

455
00:23:17,680 --> 00:23:19,080
Speaker 2: the race and he had a pretty good showing. He

456
00:23:19,080 --> 00:23:21,400
Speaker 2: may have took the election to Clinton. I think there's

457
00:23:21,520 --> 00:23:24,600
Speaker 2: some debate about that. I know his main focus was NAFTA,

458
00:23:25,280 --> 00:23:29,240
Speaker 2: but was there a japan element to his populism.

459
00:23:29,280 --> 00:23:32,840
Speaker 4: There was no one in politics at that time, who

460
00:23:32,960 --> 00:23:38,400
Speaker 4: was worried about the future of American economy, industry, even

461
00:23:38,440 --> 00:23:41,679
Speaker 4: our political supremacy in the world, that was not fixated

462
00:23:41,760 --> 00:23:43,840
Speaker 4: or focused or had a comment to say about Japan.

463
00:23:43,880 --> 00:23:47,359
Speaker 4: And Ross Pero was not an exception. He was both

464
00:23:47,520 --> 00:23:51,280
Speaker 4: a protectionist, so he thought that the United States has

465
00:23:51,320 --> 00:23:54,600
Speaker 4: trade policies were giving us or leaving us in a

466
00:23:54,640 --> 00:23:57,399
Speaker 4: bad place with regards to not only Japan, but also

467
00:23:57,680 --> 00:24:01,000
Speaker 4: at that time West Germany German unification, it just happened

468
00:24:01,240 --> 00:24:02,200
Speaker 4: in South Korea.

469
00:24:02,600 --> 00:24:03,520
Speaker 5: But he also.

470
00:24:05,040 --> 00:24:09,120
Speaker 4: Was very curious about the way he believed he wasn't

471
00:24:09,160 --> 00:24:11,520
Speaker 4: really much. He was a big capitalist, not much of

472
00:24:11,560 --> 00:24:14,639
Speaker 4: a free trader. So he was really attracted to the

473
00:24:14,640 --> 00:24:19,280
Speaker 4: close relationship between business and government in Japan. And he

474
00:24:19,440 --> 00:24:23,879
Speaker 4: also was very proud of the close knit nature of

475
00:24:23,920 --> 00:24:27,080
Speaker 4: his companies. A delegation of Japanese businessman I think from

476
00:24:27,119 --> 00:24:31,159
Speaker 4: Toyota came to visit Electronic Data Systems his firm, and

477
00:24:31,200 --> 00:24:33,040
Speaker 4: they praised him and they said, you're of all the

478
00:24:33,040 --> 00:24:37,320
Speaker 4: companies in the United States, you're the most Japanese.

479
00:24:37,760 --> 00:24:38,240
Speaker 5: But he was.

480
00:24:38,200 --> 00:24:41,320
Speaker 4: Extremely he was like he said, every worker as a brother.

481
00:24:41,440 --> 00:24:44,359
Speaker 4: That's that's the way Japanese companies run, and that's the

482
00:24:44,359 --> 00:24:48,200
Speaker 4: way I run. So he thought we needed to adopt

483
00:24:48,720 --> 00:24:53,600
Speaker 4: policies more like Japan between cooperation of business and government.

484
00:24:53,760 --> 00:24:56,720
Speaker 3: This is something I find so interesting because in the

485
00:24:56,840 --> 00:25:01,520
Speaker 3: Japan panic at that time, like one of thoughts was, well,

486
00:25:02,080 --> 00:25:04,800
Speaker 3: Japan is very bureaucratic, but in a good way. It's

487
00:25:04,920 --> 00:25:07,680
Speaker 3: very like consensus driven, and we have big groups of

488
00:25:07,720 --> 00:25:10,520
Speaker 3: people who get together and make a decision that's good

489
00:25:10,520 --> 00:25:13,200
Speaker 3: for everyone. And then when you fast forward to today

490
00:25:13,720 --> 00:25:16,920
Speaker 3: and all the angst about China, it's very much like, well,

491
00:25:17,040 --> 00:25:20,320
Speaker 3: China has an authoritarian system of government, and China can

492
00:25:20,680 --> 00:25:23,960
Speaker 3: decide by a single person what it's going to do.

493
00:25:24,000 --> 00:25:26,080
Speaker 3: It's going to build like a huge high speed rail,

494
00:25:26,200 --> 00:25:28,720
Speaker 3: and that's not consensus driven. It's funny how it kind

495
00:25:28,720 --> 00:25:29,240
Speaker 3: of flipped.

496
00:25:29,840 --> 00:25:32,160
Speaker 4: Yeah, that is interesting. There wasn't the sense that there

497
00:25:32,200 --> 00:25:34,359
Speaker 4: was direction or command and there was like a really

498
00:25:34,400 --> 00:25:37,960
Speaker 4: strong political system behind all this. It was a series of,

499
00:25:38,240 --> 00:25:41,600
Speaker 4: you know, on the smarter end, really good institutions and

500
00:25:41,600 --> 00:25:46,240
Speaker 4: great education. On the more pulpy, poppy end of cultural

501
00:25:46,320 --> 00:25:48,800
Speaker 4: essential features that made them extremely good at this. The

502
00:25:48,840 --> 00:25:51,800
Speaker 4: way that they presented Japan was like, there's no center

503
00:25:51,840 --> 00:25:56,720
Speaker 4: of power. This is an interlocking borglike corporations and businesses

504
00:25:56,800 --> 00:25:59,560
Speaker 4: are all cooperating in different ways. It wasn't like, oh,

505
00:25:59,560 --> 00:26:03,360
Speaker 4: there's in a miraitarian state and the leader this leaderless authoritarianism,

506
00:26:03,359 --> 00:26:06,600
Speaker 4: and there was some kind of fears that were reminiscent.

507
00:26:06,720 --> 00:26:09,160
Speaker 4: Maybe you got to also remember that the Cold War

508
00:26:09,240 --> 00:26:12,600
Speaker 4: is winding up. The Soviet Union is no longer the

509
00:26:12,600 --> 00:26:16,760
Speaker 4: primary opponent or rivally United States. So the collectivism of

510
00:26:16,880 --> 00:26:21,399
Speaker 4: Japan becomes the thing that's set against American free enterprise

511
00:26:21,800 --> 00:26:25,640
Speaker 4: and rugged individualism. Some people view that in a it's

512
00:26:25,640 --> 00:26:30,160
Speaker 4: an interesting mix of admiration and envy and also kind

513
00:26:30,160 --> 00:26:33,640
Speaker 4: of fear and saying, oh, we're not like that as Americans.

514
00:26:33,680 --> 00:26:36,880
Speaker 4: So it's a little bit different. I mean, it's also

515
00:26:37,000 --> 00:26:42,360
Speaker 4: different because the United States and Japan were ostensibly military allies.

516
00:26:42,920 --> 00:26:44,879
Speaker 4: They were in the same kind of block in the

517
00:26:44,880 --> 00:26:48,880
Speaker 4: Cold War. They were arguably part of our empire, kind

518
00:26:48,880 --> 00:26:53,119
Speaker 4: of under our protection. The discourse was that Japan was

519
00:26:53,200 --> 00:26:57,960
Speaker 4: sneakily kind of getting out from under American hegemony to

520
00:26:57,960 --> 00:27:00,840
Speaker 4: set up their own and that does make a whole

521
00:27:00,880 --> 00:27:04,160
Speaker 4: lot of sense in historical retrospect or even was a possibility.

522
00:27:04,280 --> 00:27:08,640
Speaker 4: Now China was obviously never had that kind of relationship

523
00:27:08,680 --> 00:27:10,640
Speaker 4: with the United States. They were always I mean they

524
00:27:10,640 --> 00:27:13,840
Speaker 4: were we organized a approachment with them, but they were

525
00:27:13,880 --> 00:27:17,479
Speaker 4: never an ally or even One might say, I think

526
00:27:17,600 --> 00:27:20,760
Speaker 4: vassal State is putting it far too strongly. But part

527
00:27:20,800 --> 00:27:22,240
Speaker 4: of the Western blackca.

528
00:27:22,119 --> 00:27:23,800
Speaker 2: This is I want this is exactly where I want

529
00:27:23,840 --> 00:27:26,160
Speaker 2: to go do because one obvious difference besides the pop

530
00:27:26,200 --> 00:27:30,000
Speaker 2: culture and everything else with US China is that today

531
00:27:30,320 --> 00:27:33,240
Speaker 2: in twenty twenty five, there are people who are very

532
00:27:33,240 --> 00:27:37,440
Speaker 2: worried about war with China. If China were too forcibly

533
00:27:37,600 --> 00:27:42,840
Speaker 2: were too blockade Taiwan, would DC feel impelled to enter

534
00:27:42,920 --> 00:27:48,080
Speaker 2: a war. Is the Chinese industrial might going to sort

535
00:27:48,080 --> 00:27:50,920
Speaker 2: of hollow out our capacity to even like build weapons

536
00:27:51,000 --> 00:27:53,879
Speaker 2: at some point because we don't have any efficient factories

537
00:27:53,920 --> 00:27:54,639
Speaker 2: in the United States.

538
00:27:54,640 --> 00:27:57,080
Speaker 1: I think that is a very that's very different, right

539
00:27:57,440 --> 00:27:58,399
Speaker 1: or shade.

540
00:27:58,720 --> 00:28:01,359
Speaker 4: There were some very all shades of it. The more

541
00:28:01,440 --> 00:28:05,040
Speaker 4: hysterical books imagined a shooting war between the United States

542
00:28:05,040 --> 00:28:10,400
Speaker 4: and Japan and Japanese total reindustrialization that included remilitarization. This

543
00:28:10,440 --> 00:28:13,080
Speaker 4: doesn't make a lot of sense because Japan is very

544
00:28:13,080 --> 00:28:16,080
Speaker 4: insistent on his pacifism. I mean that might be changing now,

545
00:28:16,640 --> 00:28:20,920
Speaker 4: but that fear was really not one of the more

546
00:28:21,080 --> 00:28:24,800
Speaker 4: realistic ones projections, so there was a little bit of

547
00:28:24,800 --> 00:28:27,480
Speaker 4: worry about that. I think people were fantasizing and imagining

548
00:28:27,560 --> 00:28:29,520
Speaker 4: Japan as a rival to the United States that would

549
00:28:29,520 --> 00:28:32,200
Speaker 4: eventually be a military rival. It could be a military rival,

550
00:28:32,640 --> 00:28:36,080
Speaker 4: but no, as so far as I know. There was

551
00:28:36,200 --> 00:28:39,000
Speaker 4: one book, the Coming War with Japan. Most of the

552
00:28:39,040 --> 00:28:43,120
Speaker 4: others viewed it as a economic war and a cultural war,

553
00:28:43,560 --> 00:28:46,400
Speaker 4: with the fantasy of like they were going to do.

554
00:28:47,440 --> 00:28:48,480
Speaker 5: Pat Buchanan had.

555
00:28:48,360 --> 00:28:50,960
Speaker 4: An essay and a book about trade policy where he

556
00:28:51,000 --> 00:28:54,520
Speaker 4: talked about They've decided, after losing World War Two, they're

557
00:28:54,520 --> 00:28:57,200
Speaker 4: going to take the economic road to build their empire.

558
00:28:57,280 --> 00:29:00,000
Speaker 4: So it was more like using war as a metafold,

559
00:29:00,640 --> 00:29:04,240
Speaker 4: but there was I think fewer worries about the actual

560
00:29:04,240 --> 00:29:05,800
Speaker 4: military might, which makes sense.

561
00:29:21,760 --> 00:29:24,360
Speaker 3: Can I push back on one thing, which is the

562
00:29:24,400 --> 00:29:27,640
Speaker 3: premise of this entire conversation at least? No, But the

563
00:29:27,640 --> 00:29:29,360
Speaker 3: way we started out, we were talking about like the

564
00:29:29,480 --> 00:29:32,760
Speaker 3: Japan panic really resonated with America, And I guess my

565
00:29:32,880 --> 00:29:35,800
Speaker 3: question is, like, yes, there were books, Yes there were

566
00:29:35,840 --> 00:29:38,880
Speaker 3: some characters and movies and things like that, but did

567
00:29:38,920 --> 00:29:43,160
Speaker 3: it actually resonate in the political or social sense, because

568
00:29:43,200 --> 00:29:45,480
Speaker 3: you know, I'm looking at a headline right now from

569
00:29:45,880 --> 00:29:49,400
Speaker 3: nineteen ninety two and it says harsh views on Japan

570
00:29:49,520 --> 00:29:55,600
Speaker 3: may help fuel Pero campaign. Well, Perro ran unsuccessfully for presidents,

571
00:29:55,600 --> 00:29:58,480
Speaker 3: so I would argue they did not in fact help him.

572
00:29:58,880 --> 00:30:03,280
Speaker 4: Well, I would say that he had the most successful

573
00:30:03,320 --> 00:30:07,640
Speaker 4: third party candidate. That is true about twenty percent of

574
00:30:07,640 --> 00:30:12,280
Speaker 4: the vote, which is significant. I think about two thirds

575
00:30:12,320 --> 00:30:16,480
Speaker 4: of Americans by nineteen eighty nine believed. I mean, there's

576
00:30:16,600 --> 00:30:18,720
Speaker 4: reason for this because the Sovietian looked like it was

577
00:30:18,720 --> 00:30:20,680
Speaker 4: on its last legs, but believe that Japan was a

578
00:30:20,720 --> 00:30:23,400
Speaker 4: bigger threat than the Soviet Union, and a lot of

579
00:30:23,440 --> 00:30:26,640
Speaker 4: politicians went on the stump songists tried to Japan bash,

580
00:30:26,720 --> 00:30:29,800
Speaker 4: as they called it. Papy Cannon went Japan bashing Clinton

581
00:30:29,920 --> 00:30:32,760
Speaker 4: less So, but I would say there was a side

582
00:30:32,760 --> 00:30:35,960
Speaker 4: of Clinton's campaign and the side of his eventual staffing

583
00:30:36,120 --> 00:30:40,520
Speaker 4: of his administration that was definitely a lot closer in

584
00:30:40,640 --> 00:30:43,240
Speaker 4: thinking to the people who were both worried about and

585
00:30:43,840 --> 00:30:47,320
Speaker 4: admiring of Japan. They went in with the intention of

586
00:30:47,400 --> 00:30:50,760
Speaker 4: being really hard nosed about certain trade negotiations, and they

587
00:30:50,840 --> 00:30:53,320
Speaker 4: also and this is not We talk a lot about

588
00:30:53,320 --> 00:30:56,400
Speaker 4: industrial policy. There was a discussion of industrial policy back then.

589
00:30:56,960 --> 00:30:59,160
Speaker 4: There was a side of the Clinton administration that looked

590
00:30:59,200 --> 00:31:03,280
Speaker 4: at Japanese industrial policy and protectionism and said, this looked

591
00:31:03,360 --> 00:31:07,320
Speaker 4: very interesting. We may be living in a very different

592
00:31:07,360 --> 00:31:10,840
Speaker 4: world if the bubble doesn't pop in Japan and those

593
00:31:10,840 --> 00:31:13,800
Speaker 4: policies start to make more sense. So the side of

594
00:31:13,800 --> 00:31:18,280
Speaker 4: the Clinton administration, I mean that is both interested and

595
00:31:18,280 --> 00:31:20,960
Speaker 4: wants to take a tougher line in Japan. It kind

596
00:31:20,960 --> 00:31:23,800
Speaker 4: of becomes a moot point as Japanese economy kind of

597
00:31:24,440 --> 00:31:28,120
Speaker 4: collapses and fades away. So it was a really pivotal moment.

598
00:31:28,160 --> 00:31:31,040
Speaker 4: And yeah, I think that it's such a strange thing

599
00:31:31,040 --> 00:31:34,040
Speaker 4: that everybody was fixated on it with such common sense.

600
00:31:34,520 --> 00:31:38,360
Speaker 4: Politicians ran on it, arguably demagogued on it. And then

601
00:31:38,680 --> 00:31:40,960
Speaker 4: it's kind of a historical curiosity.

602
00:31:41,640 --> 00:31:43,960
Speaker 3: Can I ask one more question, of course, which I

603
00:31:43,960 --> 00:31:45,640
Speaker 3: don't know if you'll have the answer to this, but

604
00:31:45,680 --> 00:31:49,120
Speaker 3: I've always wondered about it. Why was there not as

605
00:31:49,240 --> 00:31:53,880
Speaker 3: much handbringing over Korea, say, because on the face of it,

606
00:31:54,040 --> 00:31:58,480
Speaker 3: this is a country that also very rapidly developed economically,

607
00:31:58,840 --> 00:32:03,480
Speaker 3: also had similar relationships with the US. US military presence

608
00:32:03,520 --> 00:32:07,800
Speaker 3: and some US investment and things like that, but it

609
00:32:07,880 --> 00:32:11,200
Speaker 3: all seemed to be directed at Japan rather than Korea.

610
00:32:11,280 --> 00:32:14,560
Speaker 4: I think that that is because of the United States'

611
00:32:14,800 --> 00:32:19,040
Speaker 4: history with Japan and the war, which had in our imagination.

612
00:32:19,240 --> 00:32:22,200
Speaker 4: I think also Japan at that time was a kind

613
00:32:22,240 --> 00:32:24,760
Speaker 4: of cultural hedgemon in East Asia, and the way that

614
00:32:24,840 --> 00:32:27,400
Speaker 4: maybe South Korea is now in terms of their exports

615
00:32:27,400 --> 00:32:30,640
Speaker 4: of pop culture and video games and art and music

616
00:32:30,680 --> 00:32:32,560
Speaker 4: and so on and so forth. I think that's a

617
00:32:32,600 --> 00:32:34,720
Speaker 4: big part of it. I think also there's a great

618
00:32:34,720 --> 00:32:38,400
Speaker 4: book by an author, Drew mckivot called Consuming Japan. I

619
00:32:38,400 --> 00:32:41,680
Speaker 4: think Japan in a way was a lot of Americans

620
00:32:41,760 --> 00:32:44,479
Speaker 4: for and he argues that Japan away was a lot

621
00:32:44,520 --> 00:32:49,600
Speaker 4: of Americans first contact with globalization, and it was both

622
00:32:49,800 --> 00:32:53,280
Speaker 4: very interesting but also a little scary and alien. And

623
00:32:53,320 --> 00:32:57,200
Speaker 4: I think perhaps China is the rise of China, the

624
00:32:57,240 --> 00:33:01,080
Speaker 4: rise of South Korea. It doesn't look so weird anymore

625
00:33:01,160 --> 00:33:03,880
Speaker 4: because we went through the experience of Japan, and also

626
00:33:03,920 --> 00:33:06,400
Speaker 4: because the experience of Japan kind of turned into nothing.

627
00:33:06,560 --> 00:33:09,920
Speaker 4: So perhaps some of the cultural memory of that or

628
00:33:09,960 --> 00:33:13,440
Speaker 4: the familiarity we have with other cultures from Japan. I

629
00:33:13,440 --> 00:33:16,360
Speaker 4: don't think we we Americans are so used to are

630
00:33:16,360 --> 00:33:18,560
Speaker 4: more cosmopolitan than I would say that we are at

631
00:33:18,600 --> 00:33:19,640
Speaker 4: the beginning of the eighties.

632
00:33:19,920 --> 00:33:24,000
Speaker 2: Yeah, Japan throughout all of this, I mean it was cool, right,

633
00:33:24,080 --> 00:33:27,160
Speaker 2: Like Sony Walkman were always cool in the United States.

634
00:33:27,240 --> 00:33:31,280
Speaker 2: People look at this the Chinese evs, and they're very impressive, right,

635
00:33:31,360 --> 00:33:33,640
Speaker 2: I don't know if any of them are like cool, Like,

636
00:33:33,760 --> 00:33:36,440
Speaker 2: we don't really have Chinese branded other than Labuo.

637
00:33:36,120 --> 00:33:37,680
Speaker 1: Boo's actually, yeah, which I think.

638
00:33:37,600 --> 00:33:40,600
Speaker 2: Is like the first time there was a specific Chinese

639
00:33:40,840 --> 00:33:44,560
Speaker 2: made capital B brand that sort of I was gonna.

640
00:33:44,400 --> 00:33:48,840
Speaker 3: Say, like we joked about doing a La Bubu episode before,

641
00:33:48,920 --> 00:33:50,720
Speaker 3: but like I think we actually should because this is

642
00:33:50,760 --> 00:33:53,880
Speaker 3: probably China's biggest cultural expert rand thing.

643
00:33:53,920 --> 00:33:55,760
Speaker 1: But like, Japan is just so cool.

644
00:33:55,880 --> 00:34:01,360
Speaker 4: They created a lot of really inexpensive but extremely interesting

645
00:34:01,400 --> 00:34:02,440
Speaker 4: and fun devices.

646
00:34:02,560 --> 00:34:04,400
Speaker 3: I mean, and I missed my game Boy.

647
00:34:04,520 --> 00:34:06,520
Speaker 4: I gotta say, I missed my Many displayer And it

648
00:34:06,560 --> 00:34:09,120
Speaker 4: wasn't even that useful. It was just really it was

649
00:34:09,200 --> 00:34:13,640
Speaker 4: just really neat. Yeah, Nintendo Sega, the design was terrific.

650
00:34:14,280 --> 00:34:16,800
Speaker 4: I think one thing that Japan and this was also

651
00:34:17,000 --> 00:34:20,480
Speaker 4: American businesses were really curious about how japan Is they say, oh,

652
00:34:20,520 --> 00:34:23,160
Speaker 4: they have all these wonderful craft traditions, and all these

653
00:34:23,160 --> 00:34:27,840
Speaker 4: wonderful craft traditions are not left behind. They're incorporated into industrial.

654
00:34:27,360 --> 00:34:29,239
Speaker 3: Production, detail orient.

655
00:34:29,080 --> 00:34:33,160
Speaker 4: Detail oriented engineering, a lot of paid attention to design

656
00:34:33,280 --> 00:34:36,640
Speaker 4: and aesthetics, so that I think was a big reason

657
00:34:36,640 --> 00:34:39,600
Speaker 4: why a lot of those products were really nicely designed.

658
00:34:39,760 --> 00:34:41,120
Speaker 4: I think it's a sad thing in a way. I

659
00:34:41,160 --> 00:34:44,120
Speaker 4: think there's a little bit of China of people think

660
00:34:44,200 --> 00:34:48,160
Speaker 4: starting to think Chinese cars are cool. Japanese cars were

661
00:34:48,200 --> 00:34:53,160
Speaker 4: always like that's reliable and well built, but they weren't

662
00:34:53,320 --> 00:34:55,360
Speaker 4: like they were kind of like, it's a little boring,

663
00:34:55,600 --> 00:34:58,839
Speaker 4: okay to own a Japanese car. Japanese electronics. I think

664
00:34:58,840 --> 00:35:00,960
Speaker 4: we're always like this. Really, I think it was not

665
00:35:01,320 --> 00:35:05,520
Speaker 4: necessarily maybe Lexus was the exception, right, but Toyota Honda,

666
00:35:05,719 --> 00:35:08,560
Speaker 4: I think these were It's very practical, practical choice. I

667
00:35:08,600 --> 00:35:11,719
Speaker 4: think there's a little bit of Chinese car culture starting

668
00:35:12,280 --> 00:35:15,040
Speaker 4: that's like, oh, yeah, they're really making some cool looking

669
00:35:15,440 --> 00:35:18,000
Speaker 4: stuff over there now. And also there is a beginning,

670
00:35:18,200 --> 00:35:20,719
Speaker 4: you know, you see lots of tiktoks and reels and

671
00:35:20,719 --> 00:35:24,000
Speaker 4: so on and so forth of Japanese I'm sorry, Chinese city.

672
00:35:24,120 --> 00:35:25,920
Speaker 4: So I think there's a beginning of I don't know

673
00:35:26,000 --> 00:35:28,720
Speaker 4: what to call it, China chic, but definitely like wow,

674
00:35:28,920 --> 00:35:31,879
Speaker 4: the amazing things are happening in China. So I think

675
00:35:31,880 --> 00:35:35,080
Speaker 4: there's a little bit of that. I'm not a young

676
00:35:35,120 --> 00:35:38,319
Speaker 4: person anymore so, and I think there's also just like

677
00:35:40,120 --> 00:35:45,200
Speaker 4: you know, Apple is so dominant in consumer electronics, and

678
00:35:45,239 --> 00:35:48,719
Speaker 4: you don't need that many devices anymore. So the fact

679
00:35:48,800 --> 00:35:51,160
Speaker 4: is we don't need CD players, we don't need walkmen,

680
00:35:51,280 --> 00:35:53,000
Speaker 4: we don't need many discs, we don't need all these

681
00:35:53,040 --> 00:35:57,120
Speaker 4: different things. So there was this kind of wonderful market

682
00:35:57,600 --> 00:36:00,520
Speaker 4: that had all these different interesting gadget it's in it,

683
00:36:00,600 --> 00:36:02,800
Speaker 4: and I think that that fascinated people.

684
00:36:03,320 --> 00:36:05,239
Speaker 5: And your phone or your computer.

685
00:36:05,000 --> 00:36:08,399
Speaker 4: Does all of that. I find that to be I mean,

686
00:36:08,560 --> 00:36:11,160
Speaker 4: this is just a factor totally of aging and nostalgia.

687
00:36:11,320 --> 00:36:12,840
Speaker 4: But as we were just saying, I find that to

688
00:36:12,840 --> 00:36:14,799
Speaker 4: be a little sad, and I thought those devices were

689
00:36:14,840 --> 00:36:16,520
Speaker 4: actually better in certain ways.

690
00:36:16,560 --> 00:36:19,600
Speaker 3: Yeah, Joe, I just remember the car my mom had

691
00:36:19,760 --> 00:36:22,960
Speaker 3: in Tokyo in the early nineteen nineties, was it It

692
00:36:23,000 --> 00:36:27,200
Speaker 3: was called my Fair Lady what it was manufactured by Nissan,

693
00:36:27,320 --> 00:36:29,920
Speaker 3: and it was actually a really cool looking car, but

694
00:36:29,960 --> 00:36:32,319
Speaker 3: it had a terrible name, so I don't know if

695
00:36:32,560 --> 00:36:34,640
Speaker 3: it would be considered cool or not.

696
00:36:35,080 --> 00:36:37,200
Speaker 4: They often switched names. I think when they came to

697
00:36:37,239 --> 00:36:40,600
Speaker 4: the United States they would have consultants tell them that branded.

698
00:36:42,200 --> 00:36:45,560
Speaker 1: Fair lady z. I think, so have to like, look

699
00:36:45,600 --> 00:36:47,200
Speaker 1: a really nice looking car.

700
00:36:48,440 --> 00:36:49,879
Speaker 3: It was some sort of sports car.

701
00:36:51,560 --> 00:36:54,600
Speaker 1: Yeah, yeah, cooler than would assume a typical Yeah.

702
00:36:54,600 --> 00:36:55,920
Speaker 4: I thought it was going to be some kind of

703
00:36:55,960 --> 00:36:59,280
Speaker 4: like mini van or suburban yeaheah.

704
00:36:59,760 --> 00:37:01,959
Speaker 1: Very could extremely cool looking car.

705
00:37:02,080 --> 00:37:04,879
Speaker 3: Yeah yeah it was. It just had a very strange name.

706
00:37:05,360 --> 00:37:07,440
Speaker 3: I always remember that. I remember like staring at the

707
00:37:07,480 --> 00:37:10,480
Speaker 3: steering wheel because I think it was like printed on it. Anyway,

708
00:37:10,680 --> 00:37:14,440
Speaker 3: back to the topic at hand, So there are clearly

709
00:37:14,480 --> 00:37:18,440
Speaker 3: parallels between the japan Panic and a lot of the

710
00:37:18,480 --> 00:37:21,080
Speaker 3: fear around China at the moment. On the other hand,

711
00:37:21,160 --> 00:37:23,520
Speaker 3: there do seem to be a lot of big differences.

712
00:37:23,960 --> 00:37:27,040
Speaker 3: Number one, China is not a tiny island with a

713
00:37:27,120 --> 00:37:30,799
Speaker 3: lack of natural resources and farmable land and things like that.

714
00:37:30,840 --> 00:37:34,520
Speaker 3: It has a much bigger population. Walk us through where

715
00:37:34,520 --> 00:37:38,640
Speaker 3: you see the biggest areas I guess of similarity and difference.

716
00:37:39,120 --> 00:37:41,360
Speaker 4: I mean, exports were a big part of the growth

717
00:37:41,360 --> 00:37:44,359
Speaker 4: of both. There's obviously a strong state in both. In

718
00:37:44,360 --> 00:37:47,680
Speaker 4: one case it's more this vaunted Japanese bureaucracy, which then

719
00:37:47,719 --> 00:37:49,600
Speaker 4: turned out not to be so great, and the other

720
00:37:49,640 --> 00:37:52,840
Speaker 4: side it's the communist party and state banks. Big trade

721
00:37:52,840 --> 00:37:55,840
Speaker 4: surplus is a big part of it. But they're a

722
00:37:55,840 --> 00:37:59,200
Speaker 4: big difference. I mean, China's a lot bigger, has a

723
00:37:59,200 --> 00:38:03,720
Speaker 4: way bigger popua. I think it's political system, as you're saying,

724
00:38:04,160 --> 00:38:06,799
Speaker 4: it can kind of make things happen and prevent things

725
00:38:06,800 --> 00:38:10,840
Speaker 4: from happening, make really radical intrusions in the financial system.

726
00:38:11,360 --> 00:38:13,719
Speaker 4: It doesn't have infinite power in that regard. I think

727
00:38:13,719 --> 00:38:15,759
Speaker 4: I've heard you guys discuss that on them on but

728
00:38:15,840 --> 00:38:19,040
Speaker 4: I think they have definitely a little more political economic

729
00:38:19,200 --> 00:38:22,759
Speaker 4: firepower than Japan has. And I think part of that is,

730
00:38:23,120 --> 00:38:25,360
Speaker 4: you know, the strength of the communist parties and institution

731
00:38:25,800 --> 00:38:27,080
Speaker 4: and the size of the population.

732
00:38:27,719 --> 00:38:31,480
Speaker 2: It is interesting to think, like here in twenty twenty five,

733
00:38:32,400 --> 00:38:35,279
Speaker 2: we could have a conversation and you know what, China

734
00:38:35,360 --> 00:38:40,160
Speaker 2: is really successful because it coordinates its banks with its manufacturers.

735
00:38:40,480 --> 00:38:44,719
Speaker 2: They have this very intense ideological grooming such that executives

736
00:38:44,760 --> 00:38:48,960
Speaker 2: are major They believe in the Chinese Communist National Project and.

737
00:38:48,960 --> 00:38:51,480
Speaker 3: Right willing to sacrifice returns.

738
00:38:51,160 --> 00:38:54,560
Speaker 2: Really to sacrifice returns, and all these things. And in theory,

739
00:38:55,000 --> 00:38:56,760
Speaker 2: and I don't know what's going to happen, but in theory,

740
00:38:56,960 --> 00:38:59,560
Speaker 2: in two years we could go back and say, oh,

741
00:38:59,600 --> 00:39:02,440
Speaker 2: they had all these corrupt relationships between the companies and

742
00:39:02,480 --> 00:39:06,439
Speaker 2: the banks. It was all this crony capitalism, et cetera.

743
00:39:06,560 --> 00:39:10,440
Speaker 2: It is hard to know in real time what factors

744
00:39:10,480 --> 00:39:13,359
Speaker 2: are real in success, because I do find when I

745
00:39:13,400 --> 00:39:16,360
Speaker 2: read stories about the degree to which the CEO of

746
00:39:16,440 --> 00:39:21,120
Speaker 2: Huawe League deeply believes in the CCP and the sort

747
00:39:21,120 --> 00:39:24,279
Speaker 2: of nationalist agenda, like, yeah, oh, that's very compelling. I

748
00:39:24,280 --> 00:39:26,480
Speaker 2: could see how there's this alignment. But then you know,

749
00:39:26,560 --> 00:39:28,520
Speaker 2: something could happen in a few years later you're like, oh,

750
00:39:28,520 --> 00:39:29,240
Speaker 2: that was really silly.

751
00:39:29,320 --> 00:39:31,200
Speaker 1: How they like you? Right, it's hard to know in

752
00:39:31,239 --> 00:39:31,640
Speaker 1: real time.

753
00:39:32,040 --> 00:39:34,040
Speaker 4: Yeah, I think that's absolutely true. I don't think, you know,

754
00:39:34,080 --> 00:39:37,080
Speaker 4: we should be complacent or sure, but I think it's

755
00:39:37,120 --> 00:39:40,440
Speaker 4: an interesting lesson of the history here. It's just things

756
00:39:40,480 --> 00:39:44,920
Speaker 4: can go from being common sensical. The biggest threat everybody

757
00:39:44,960 --> 00:39:47,880
Speaker 4: knows that they're gonna they're gonna win. Everybody knows that

758
00:39:47,920 --> 00:39:50,399
Speaker 4: they have a better system, and then a few years

759
00:39:50,440 --> 00:39:52,280
Speaker 4: later everyone is like, what were we thinking?

760
00:39:52,480 --> 00:39:53,440
Speaker 5: Why did we think that?

761
00:39:53,640 --> 00:39:56,040
Speaker 4: And we could they had so many internal problems that

762
00:39:56,080 --> 00:39:57,880
Speaker 4: were just out of this And that's kind of the

763
00:39:57,920 --> 00:40:01,080
Speaker 4: same way with financial bubbles. I guess you could talk

764
00:40:01,120 --> 00:40:03,839
Speaker 4: about these is also it's like political bubbles. Is that

765
00:40:03,920 --> 00:40:06,480
Speaker 4: everyone's like, oh, wow, look at this big combine, this

766
00:40:06,560 --> 00:40:09,600
Speaker 4: big system that's kind of humming along, and then things

767
00:40:09,600 --> 00:40:12,080
Speaker 4: are going on behind the behind the scenes that are like, oh,

768
00:40:12,080 --> 00:40:15,600
Speaker 4: there's an intrinsic flaw that's making its way to the surface,

769
00:40:15,640 --> 00:40:17,840
Speaker 4: and then it kind of manifests itself.

770
00:40:17,920 --> 00:40:21,360
Speaker 2: So George Soros gave a great speech one time making

771
00:40:21,360 --> 00:40:24,160
Speaker 2: this exact point that there is a similarity between what

772
00:40:24,280 --> 00:40:27,120
Speaker 2: you he would financial bubbles and like political bubbles, where

773
00:40:27,120 --> 00:40:30,719
Speaker 2: you believe in a system and then something emerges that

774
00:40:30,920 --> 00:40:35,520
Speaker 2: sort of irrevocably shakes your confidence in the system. So

775
00:40:35,600 --> 00:40:37,480
Speaker 2: I think I find that analogy very compelling.

776
00:40:37,719 --> 00:40:42,520
Speaker 4: Yeah, but dependence cease to exist. It's still the richest,

777
00:40:44,120 --> 00:40:46,480
Speaker 4: it's not a terrible place to live. Yeah, it's not

778
00:40:46,520 --> 00:40:48,200
Speaker 4: like it went back to the stony. So I think

779
00:40:48,239 --> 00:40:50,799
Speaker 4: that that's also just a very growth mindset but it's

780
00:40:50,800 --> 00:40:54,160
Speaker 4: still I think, has an extremely low rate of unemployment, healthy,

781
00:40:54,400 --> 00:40:57,839
Speaker 4: relatively healthy population, good education, not a terrible place to live.

782
00:40:58,239 --> 00:41:00,960
Speaker 3: Just on this point, though, why didn't you get into

783
00:41:01,040 --> 00:41:04,359
Speaker 3: the sort of software side of technology as much as

784
00:41:04,360 --> 00:41:06,239
Speaker 3: it did on the sort of hardware side in the

785
00:41:06,280 --> 00:41:07,920
Speaker 3: eighties and nineties.

786
00:41:07,520 --> 00:41:10,040
Speaker 4: You know, I think that that is a question I

787
00:41:10,080 --> 00:41:12,800
Speaker 4: don't exactly know the answer for, but that's often given

788
00:41:13,000 --> 00:41:16,800
Speaker 4: as the big mistake that they made. Right, So, Japanese

789
00:41:16,800 --> 00:41:20,120
Speaker 4: companies made an investment decision at just the wrong time

790
00:41:20,560 --> 00:41:23,080
Speaker 4: that hardware, and I think it was partially because they

791
00:41:23,120 --> 00:41:25,680
Speaker 4: were always just really good at developing hardware, and they

792
00:41:25,680 --> 00:41:30,440
Speaker 4: had developed a lot of institutional knowledge about making devices

793
00:41:30,440 --> 00:41:33,279
Speaker 4: and improving devices, improving hardware, and they were like, look,

794
00:41:33,360 --> 00:41:35,920
Speaker 4: this is what we're good at. I also think that

795
00:41:36,000 --> 00:41:38,839
Speaker 4: there is a certain not to get into too many

796
00:41:38,840 --> 00:41:43,320
Speaker 4: cultural explanation, but there is a certain conservatism in Japan

797
00:41:43,480 --> 00:41:49,040
Speaker 4: about tools, about devices, and things that are seen to

798
00:41:49,160 --> 00:41:53,440
Speaker 4: work aren't quickly gotten rid of. The Japanese government just

799
00:41:53,480 --> 00:41:56,440
Speaker 4: had to kind of wage an internal jihad to get

800
00:41:56,440 --> 00:41:59,880
Speaker 4: people to get its own bureaucracy to stop using floppy disks.

801
00:42:00,560 --> 00:42:03,600
Speaker 4: Japanese companies still often use fax machines.

802
00:42:03,719 --> 00:42:05,400
Speaker 1: Yes, it's enough. I know.

803
00:42:05,600 --> 00:42:07,279
Speaker 3: I used to. Part of my job used to be

804
00:42:07,480 --> 00:42:10,640
Speaker 3: monitoring a fax machine for press releases and most of

805
00:42:10,640 --> 00:42:13,520
Speaker 3: them that came in were from Japan. And this was

806
00:42:13,600 --> 00:42:14,880
Speaker 3: like the mid two thousands.

807
00:42:15,280 --> 00:42:19,880
Speaker 4: Yeah, and I think that there's that sense that some things,

808
00:42:20,080 --> 00:42:24,440
Speaker 4: some ways of doing things, some processes, some technologies are

809
00:42:24,520 --> 00:42:28,160
Speaker 4: good and there's not any real reason to replace them.

810
00:42:28,360 --> 00:42:33,160
Speaker 4: And obviously, like when productivity is your number one goal,

811
00:42:33,560 --> 00:42:39,080
Speaker 4: that's not necessarily Again, it may make us in some way.

812
00:42:39,160 --> 00:42:41,520
Speaker 4: I find it very charming and I find it also.

813
00:42:42,000 --> 00:42:45,000
Speaker 4: One theory I've read is that the reason why unemployment

814
00:42:45,040 --> 00:42:47,480
Speaker 4: is very low is because somebody has to be there

815
00:42:47,520 --> 00:42:50,920
Speaker 4: to get those factxes, and they're not that. Japanese companies

816
00:42:51,160 --> 00:42:54,000
Speaker 4: are not that keen to adopt software that might replace

817
00:42:54,040 --> 00:42:56,640
Speaker 4: a worker. So there's a certain kind of pro social

818
00:42:56,640 --> 00:43:01,040
Speaker 4: attitude and not doing these upgrades. But yeah, the transition

819
00:43:01,440 --> 00:43:05,800
Speaker 4: to the software the age was one of those places

820
00:43:05,800 --> 00:43:08,400
Speaker 4: where Japan is thought to have made a wrong term.

821
00:43:08,640 --> 00:43:10,440
Speaker 2: Yeah, New Jersey, they still don't like you pump your

822
00:43:10,440 --> 00:43:15,480
Speaker 2: own guess right, we have our own cultural cultural dimensions.

823
00:43:15,480 --> 00:43:18,200
Speaker 3: New Jersey famously socially oriented that's right.

824
00:43:18,360 --> 00:43:21,880
Speaker 2: John Gann's author of the unpopular front subjac and the

825
00:43:21,960 --> 00:43:24,239
Speaker 2: recent book When the Clock Broke. Thank you so much

826
00:43:24,239 --> 00:43:25,920
Speaker 2: for coming on Odd Laws World.

827
00:43:25,640 --> 00:43:26,359
Speaker 1: That we made this happen.

828
00:43:26,480 --> 00:43:27,680
Speaker 5: Yeah, thank you, say so.

829
00:43:27,719 --> 00:43:41,160
Speaker 1: Much, Tracy.

830
00:43:41,280 --> 00:43:43,279
Speaker 2: That was a lot of fun. I do think that

831
00:43:43,440 --> 00:43:46,480
Speaker 2: Japanese stuff seemed really cool back then in a way again,

832
00:43:46,560 --> 00:43:49,280
Speaker 2: and maybe we should talk more soon about the rise

833
00:43:49,520 --> 00:43:52,600
Speaker 2: of China the brand and whether there's whether it.

834
00:43:52,600 --> 00:43:53,759
Speaker 1: Will break labooboos.

835
00:43:53,960 --> 00:43:55,960
Speaker 3: Yeah, just do the Yeah, we'll do it.

836
00:43:56,000 --> 00:43:56,520
Speaker 1: We'll do it.

837
00:43:56,760 --> 00:43:58,200
Speaker 3: Just give in. It's inevitable.

838
00:43:58,440 --> 00:44:00,440
Speaker 2: Someone told me that if you go to the the

839
00:44:00,520 --> 00:44:04,839
Speaker 2: Running Shoe subreddit, there's a lot more mentioned of there's

840
00:44:04,920 --> 00:44:07,239
Speaker 2: I think there's an anta is like the Nike of

841
00:44:07,280 --> 00:44:10,239
Speaker 2: Japan that you see more mentions of them on. Like

842
00:44:10,640 --> 00:44:13,960
Speaker 2: I tried to build a scraper of brand mentions over

843
00:44:13,960 --> 00:44:16,040
Speaker 2: the time. I couldn't get it done on reddit. So

844
00:44:16,080 --> 00:44:17,640
Speaker 2: I do think we should talk about that. But you know,

845
00:44:17,719 --> 00:44:20,879
Speaker 2: there was this a whole aspect of Walkman, Nintendo, those

846
00:44:20,880 --> 00:44:22,440
Speaker 2: were cool brands the whole time.

847
00:44:22,760 --> 00:44:26,440
Speaker 3: You know what's interesting about Nike and China, yeah, is

848
00:44:26,440 --> 00:44:30,520
Speaker 3: that there was a big pushback domestically against Nike products

849
00:44:30,680 --> 00:44:35,680
Speaker 3: because of rising nationalism in China and the idea that

850
00:44:35,800 --> 00:44:39,520
Speaker 3: maybe Nike had made some missteps that like offended policy

851
00:44:39,560 --> 00:44:41,239
Speaker 3: makers or people there, but.

852
00:44:41,280 --> 00:44:44,600
Speaker 2: No overall, like having this conversation from twenty twenty five,

853
00:44:45,000 --> 00:44:48,960
Speaker 2: given what we know about Japan today, the whole thing,

854
00:44:49,080 --> 00:44:51,920
Speaker 2: she was like, Wow, that's you know, it seems very surreal.

855
00:44:51,960 --> 00:44:52,800
Speaker 3: It was very quaint.

856
00:44:52,960 --> 00:44:54,560
Speaker 1: It feels very like.

857
00:44:54,560 --> 00:44:57,080
Speaker 3: This idea that we were really worried that a relatively

858
00:44:57,120 --> 00:44:59,920
Speaker 3: small island was going to take were the military that

859
00:45:00,080 --> 00:45:03,000
Speaker 3: we hit a base on right there more than one basis, just.

860
00:45:02,960 --> 00:45:07,520
Speaker 2: Multi multiple bases on that we were as military related,

861
00:45:07,600 --> 00:45:11,440
Speaker 2: that there was that much anxiety. It's sort of interesting

862
00:45:11,520 --> 00:45:12,520
Speaker 2: chapter in our history.

863
00:45:12,680 --> 00:45:15,360
Speaker 3: I do think it's also interesting again to think about,

864
00:45:15,400 --> 00:45:17,799
Speaker 3: like how much a lot of the strengths and weaknesses

865
00:45:18,080 --> 00:45:23,080
Speaker 3: have flipped in perception. The idea that bureaucracy and consensus

866
00:45:23,120 --> 00:45:26,839
Speaker 3: decision making was once seen as this competitive advantage and

867
00:45:26,880 --> 00:45:28,720
Speaker 3: now it's totally the opposite.

868
00:45:28,800 --> 00:45:30,839
Speaker 2: I mean in every context, right, you say, oh, one

869
00:45:30,840 --> 00:45:33,279
Speaker 2: of the great things about the US we have all

870
00:45:33,280 --> 00:45:35,600
Speaker 2: these great checks and balances, et cetera, and then suddenly

871
00:45:35,600 --> 00:45:37,759
Speaker 2: we can't build anything or get any laws passed out

872
00:45:37,880 --> 00:45:39,560
Speaker 2: One of the big problems with the US is there's

873
00:45:39,560 --> 00:45:42,040
Speaker 2: so many veto points and you can't get anything done.

874
00:45:42,080 --> 00:45:44,960
Speaker 2: It's just whatever the mood is at the time, the

875
00:45:45,040 --> 00:45:48,240
Speaker 2: same set of conditions will either be get the blame

876
00:45:48,400 --> 00:45:48,920
Speaker 2: or the credit.

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00:45:49,080 --> 00:45:50,719
Speaker 3: It's just a giant pendulum swing.

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00:45:50,760 --> 00:45:51,279
Speaker 1: Yeah, that's right.

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00:45:51,320 --> 00:45:53,120
Speaker 3: Fourth Markets and politics.

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00:45:53,239 --> 00:45:53,640
Speaker 1: That's right.

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00:45:53,640 --> 00:45:53,920
Speaker 4: All right.

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00:45:53,960 --> 00:45:54,560
Speaker 3: Shall we leave it there.

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00:45:54,680 --> 00:45:55,359
Speaker 1: Let's leave it there.

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00:45:55,560 --> 00:45:58,160
Speaker 3: This has been another episode of the Authoughts podcast. I'm

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00:45:58,200 --> 00:46:00,880
Speaker 3: Tracy Allaway. You can follow me at Tracy Alloway.

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00:46:01,120 --> 00:46:03,880
Speaker 2: And I'm joll Wisenthal. You can follow me at the Stalwart.

887
00:46:04,120 --> 00:46:08,040
Speaker 2: Follow John Gans He's at Lionel Underscore Trolling. Follow our

888
00:46:08,080 --> 00:46:11,279
Speaker 2: producers Carmen Rodriguez at carman Erman dash, Ol Bennett at

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Speaker 2: dashbod and Kelbrooks at Kelbrooks. For more Odd Laws content,

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Speaker 3: Apple Podcasts and follow the instructions there. Thanks for listening

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Speaker 3: in