Abe's Turn on Wall Street Is Lost in Translation
Something was definitely lost in translation yesterday when Shinzo Abe spoke in New York yesterday. First, Japan's self-described reformist prime minister raised the specter of Gordon Gekko, the greed-is-good villain of Oliver Stone's 1987 film "Wall Street." Speaking at the New York Stock Exchange no less, a place that's been trying to weed out insider traders since the 1980s, Abe declared without irony: "Today, I have come to tell you that Japan will once again be a country where there is money to be made, and that just as Gordon Gekko made a comeback in the financial world ... so too can we now say that Japan is back."
Abe's pained simile prompted a rapid, rather awkward clarification from Japan's government: The Prime Minister, of course, was referring not to the original "Wall Street" but to Stone's 2010 sequel subtitled "Money Never Sleeps," in which Gekko emerges from prison driven by revenge and lust to rehabilitate his reputation.
The second awkward moment came when Abe used the heavy metal band Metallica as a plot device to talk up Japan's prospects and excitement over the 2020 Tokyo Olympics. "Japan is once again in the midst of great elation as we prepare for the Games seven years from now,” Abe said. "It is almost as if Metallica’s 'Enter Sandman' is resounding throughout Yankee Stadium -- you know how this is going to end.”
Perhaps Abe missed the fact that Mariano Rivera, the Yankees' closer who enters games to Metallica's 1991 hit, is retiring and won't be around anymore to guarantee a winning end. (The Yankees have missed making the playoffs for only the second time in 19 years.) Abe may also want to check out the less-than-optimistic lyrics to "Enter Sandman."
It's tempting to look for Freudian angles to these rather strained pop culture references. For me, at least two come to mind.
One is the level of Abe's delusions of grandeur when he implored the crowd to "buy my Abenomics." Referring to yourself, or a phenomenon you unleash, in the third person is often an ominous sign. When Abe says his nation is "in the midst of great elation," I'm thinking he needs to stop believing is own press and get out more. Confidence in Abenomics is still an overseas phenomenon, not a domestic one. Is Sony using its sudden return to profit to up wages? No. Are Japanese households releasing a couple of decades' worth of pent-up demand? Hardly. Are expansion-minded companies like Honda and Mazda opening new factories in Japan? Try Thailand. Isn't radiation still leaking 135 miles away from Tokyo's own equity bourse?
What looked suspiciously like an Abe victory tour of America is wildly premature. Yes, Abe deserves credit for two things. One, hiring Haruhiko Kuroda to run the Bank of Japan, where the governor engineered a huge change in international perceptions about a nation that seemed left for dead just months ago. Two, pledging an ambitious deregulation program that aims to raise competitiveness, create new jobs and raise living standards.
So far so good on the first phase. But the second remains stuck in neutral. Nine months into Abe's tenure, nothing has been done to better utilize the female workforce, reduce trade barriers, cultivate entrepreneurship, prepare for an aging workforce, internationalize corporate tax rates, find an alternative to nuclear reactors, wrestle government power away from a vast, unproductive and sometime corrupt bureaucracy and improve relations with Asian neighbors. It's great Abe is putting these issues on the table for discussion, but it's far too early to be telling Wall Street that Japan is back and better than ever. That day is years off, at best.
Abe's clumsy sales job is emblematic of Japanese governments, past and present. Japan has long had trouble capitalizing on its soft power around the globe. Abe certainly tried in New York, with references to baseball star Ichiro Suzuki, sushi, bullet trains and advances in maglev rail technology that Japan is itching to export to America's Northeast corridor. Yet nothing would sell Japan Inc. globally like success. Revive the economy, reinvigorate the biggest corporate names, unleash a wave of innovation among young Japanese, and the international clout Japan craves will follow.
Stone's Gekko character, remember, was never meant to be a hero, but the personification of the hubris of a particularly delusional moment in time. It's too soon for Abe to be indulging his own delusions so early in a multi-year battle against vested interests that are determined to halt Abenomics in its tracks.
(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)