Japanese-American Relations in the 1990s
In the fall of 1998, a front-page article in the Los Angeles Times called attention to Japan's failure to act seriously on promises to reform its financial system, reforms that would bring greater openness to the system. A time traveler from 1988 or from 1978 would hardly have been surprised to see an American newspaper article criticizing Japanese economic policy; such criticisms have long been a staple both of American news reportage about Japan and of American official statements. The time traveler might have been surprised only that the criticism involved Japan's banks rather than its industrial firms and export-import policy, and indeed might have jumped to the conclusion that Japan's banks were taking over the US financial sector, and that their encroachment was drawing the same futile protests as Japanese auto imports and drawn.
On closer examination, however, this time traveler would have encountered something far more startling. At one point in the article, the reporter observes that "many doubt Tokyo's willingness to clean house, a painful exercise in genuine reform that would lead to bankruptcies and layoffs" (Peterson, 1998). To the time traveler from 1988 or 1978, it was American economic pain -- American bankruptcies and layoffs -- that were at issue whenever Americans criticized Japanese economic policy and practices. As the time traveler continued to read, it would gradually dawn on him or her that a remarkable turnabout has taken place in the underlying dynamic of Japanese-American relations. While American criticisms of Japan have a similar flavor to those of the last two decades -- still accusing Japan of having an ingrown system that is resistant to reform and impervious to its effects on the rest of the world -- the concern now is not Japanese dominance but Japanese drift.
The chief immediate cause of Japanese-American tension is the East Asian economic c...