By Roger McKinney
Globe Staff Writer
September 20, 2001

Japan's economy and society rose from the devastation of World War II.

Whether it can rise from its current economic crisis remains to be seen. That was the topic of a talk Tuesday at Missouri Southern State College by William Farrell; author of the book Crisis and Opportunity in a Changing Japan. He is the former executive director of the American Chamber of Commerce in Japan and currently is chief executive officer of Dynamic Strategies Asia.

The morning address was the first of the college's Harry and Berniece Gockel International Symposium. The symposium is part of the Japan semester at MSSC.

Speaking Tuesday night during the symposium were William Tsutsui, professor of history at the University of Kansas, Lawrence, and acting director of KU's Center for East Asian Studies; and Mark Tilton, associate professor of political science and chairman of the Asian Studies Program at Purdue University, Lafayette, Ind.

Farrell likened Japan's response to its economic situation to someone with a toothache delaying a visit to the dentist with painkillers.

"Japan has been putting off the trip to the dentist for a long, long time, " he said. "Politicians have not been motivated to take drastic steps."

Farrell said the perception of Japan in the 1980s was that of an economic carnivore, gobbling up companies. Japanese concerns bought Columbia Pictures, Rockefeller Center and even Pebble Beach golf course.

Japanese cars proliferated on America's highways. Then, the bubble burst.

"What I see in Japan right now is a systemic failure in the financial system," Farrell said "...... It's a system-wide failure. The Japanese brought a lot of this on themselves."

He said unlike the-savings and loan failures in the United States, all aspects of Japan's financial system are failing.

How it came about, Farrell said, relates to the close relationship between companies and banks in Japan. He said while many U. S. companies sell stocks to finance their companies, Japanese companies rely primarily on banks.

"That relationship can become very chummy," Farrell said. "Banks wanted to lend more money so they could make more money."

He said there was much speculation in stocks and land purchases, sometimes involving Japanese organized crime.

"The government is running out of money, and this is very, very serious," Farrell said.

He said the main aspect propping up the Japanese economy now is that the Japanese consumer continues to save money.

Farrell said Japan is undergoing a political and economic reform simultaneously. The Japanese people are relying on Prime Minister Junichiro Koizumi to turn things around.

"In Japan, the prime minister is not that prime," Farrell said, adding that the Liberal Democratic Party dominates politics in Japan. He said the LDP is divided into factions about the necessary actions.

"The bureaucracy is very, very strong in Japan," Farrell said, because they have all the information and most politicians have staffs of only three or four people. "The bureaucrats have extensive power in Japan."

Japan has many things working in its favor, he said.

"Japan has a well-educated, stable, democratic society," said Farrell.

A problem, Farrell said, is the Japanese are apolitical.

"You need a population in Japan that recognizes the danger they're in," he said.

He predicted the economic situation in Japan will get much worse before it gets better.