I have long been writing and speaking about what the world should learn from Japan about the long term costs of reckless leverage, speculation, complicit regulators and government bail outs of criminal actors behind financial institutions. Astute folks could see exactly how harmful these policies are by observing Japan over the past 26 years.
Japan’s property and stock bubbles burst in 1989 and the Bank of Japan has been rolling out a succession of ‘extend and pretend’ efforts, spreading compound capital losses (the Nikkei still -60% from its 1989 peak) and a stagnant economy stifled by bad debt and relentless recession ever since (presently in 7th recession in just the past decade alone.) But now Japan offers us yet another vivid example of how to self-destruct via a new study examining the causes of the Fukushima nuclear disaster. See Japanese parliament report finds Fukushima nuclear crisis was ‘man made’:
The nuclear crisis at the Fukushima Daiichi power plant in Japan was a “man-made disaster” that unfolded as a result of collusion between the facility’s operator, regulators and the government, an independent panel said in an unusually frank report Thursday.
Watch this CNN video report explaining the findings.
While you listen to the video report, substitute the word financial crisis for nuclear crisis and we have a near perfect allegory that we must learn from.
The case for restoring Glass Steagall divisions between commercial deposit taking banks and investment underwriting/marketing firms and for jamming the revolving door between banks and regulators is absolutely essential to the stabilization and continued progress of a productive civilization. The Fukushima nuclear disaster reminds vividly of why we humans need hard divisions between sales and advising functions in our society. We just do. We literally cannot afford to have it any other way.