By Eammon Singleton, The American Conservative
In April 1998, Sony Corporation chairman Norio Ohga made world headlines with his comment, “The Japanese economy is on the verge of collapsing.” In reality, nothing in Sony’s experience supported such an assessment. On the contrary, its business boomed right through the 1990s. More generally, Japanese industrial corporations continued to gain share from American rivals. Yet they all talked as if Japan was a hopeless basket case.
Even the president of Toyota Motor, Hiroshi Okuda, joined in, suggesting Japan could cause a “world-wide financial crash.” This despite the fact that Toyota’s sales soared fully 95 percent in the 1990s. Between 1989 and 2019, Toyota went from little more than one-quarter of General Motors’ revenues to nearly twice G.M.’s.
As for Ohga, in the quarterly accounting period when his remark was made, Sony’s sales in the Japanese market increased by 14.7 percent. Measured against 1989, the last year of Japan’s 1980s boom, Sony’s profits in 1998 were up fully 131 percent. As if that weren’t enough, the 1990s was the decade when Sony finally buried once-formidable American rivals such as Motorola, RCA, and Zenith.
This is cognitive dissonance on a vast scale. What was really going on? In truth, Japan’s alleged economic disaster of the 1990s was a fake funk. Japanese leaders just pretended their economy was collapsing. There was method in their madness: They desperately wanted Washington to cut Tokyo some slack in trade negotiations. This was a time when Americans had never been more incandescent about Japan’s closed markets. The gambit worked—in spades. Not only did Washington back off trying to open Japan, it has never subsequently really tried.