March 3, 2009 Current news: Japan has lost 46% of its export level, China lost 44% level, personal saving from 2005- 2008, household saving was 3% most recently, the tax cut was not used on consumption, more on paying mortgage, bills. Issues between Japan and US will surface between china and US -Economic disaster allow industries to return in a stronger position -US needs a new industrial policy, govt working with industry, changing some of the anti-trust rules, govt supported R&D -In 2 years, there will be demand for new cars, the cars currently have better life than before Thurow-Similar to Pretowitz, the US economic system is vastly diff. from Japanese system, the individual capitalism, that maximized consumer satisfaction and firm profits, In japan, the Industry was more important, produced a bigger share of world market was primary goal of Japan. -US should develop a new strategy, govt should be involved, should help rather than just watch -the difference between communitarian and individualistic capitalism is profit maximization, strategic conquest(economic power), gain additional market share in the world -the importance of low wage bills for industry in Japan-keep labor cost down, concerned with employee, management works with employee in Japan -no union power in Japan, according to Thurow, household saving in Japan is about 3 times more than the states, reason for high saving rate is high prices for housing -Japanese make a lower rate of profit on the product market, do anything to gain market share, cut costs to gain market penetration, this would not happen in US, US has impatient attitude for returns, need to make money in 3-5 years -US firms often leave the market rather than fight, radios, stereos, color t.v., US firms back off from Japan -most important thing for US senior executive needs to secure their promised rate of return, stock in trouble, upset shareholders, management can get thrown out, management has to maintain profits, could be reason that firms were moving away from pure research, and moving more towards product and process improvement -Computer contract to operate a water distribution system in Hiroshima, IBM vs Fujitsu, Fujitsu won the contract with 1 Yen -financial keiretsu is a big part of the lower rate of profit acceptable to Jap. Industry - }KLZ]}L} K[Z]LD^ K[Z}K }L]Lg, their average compensation was 119 times Z2}l[Z }KLZ]}L7]L:L7Z K[Z K}KZ,KLZ} KL7 }LoL}]KZZ2}l[ZZo -US govt provides very little R&D to private sector, social rate of return on R&D can be high, MITI provides powerful financing for R&D -Profit maximize should win in the long run against empire builder, but SR, Japan and Germany will win Ch. 5-Thurow READ www.notesolution.com
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