Asia, as a whole, is in an economic depression. Japan is now officially in a Recession. Every American has a stake in what happens next. Taxpayer dollars from the pockets of Americans went today into a big new effort to support Japan's faltering currency.
In exchange, President Clinton wants action from Japan. Now. Beginning with stopping the hemorrhaging in Japanese banks.
As with U.S. Savings and Loan institutions in the early l980s, Japanese banks have loaned too much to too many who turn out to be incapable of paying back their loans. And, as with the U.S. savings and loan debacle, there's been too much corruption, too much backroom sleazy deal making between politicians and greedy bankers.
What happened in this country is that many Savings and Loan outfits -- the worst of them -- were forced to close. Others were forced to make drastic changes. There was real reform, brought about through real pain.
This is what the United States wants more than any other thing from Japan.
President Clinton today talked by telephone with the Japanese Prime Minister. In effect, he said: 'We're going to help you. We are going to bet a lot of our national treasury on you. In return, we want, we must have a pledge of strong medicine, administered by you, for Japan's many economic ills.'
'Your banks mountains of bad loans must be cut, drastically reduced. Your rising unemployment must be attacked , brought under control and brought down with -- among other things -- domestic demand-for-products led growth.'
Deputy Treasury Secretary Larry Sommers was dispatched from Washington to Tokyo, charged with trying to seal the deal. Sommers, along with Treasury Secretary Bob Rubin, is the heart of President Clinton's team to get this country through the perilous chaos of world markets.
And he was a key contributor to the decision to move this day in strong support of Japan.
The move was less an option than a necessity.
Understand this: China is teetering on the brink of having to devalue its currency. Such a move would be disastrous to efforts to stabilize the Asian economy as a whole. Japan's dire straits are having deep, serious ripple effects all over Asian, but especially in China.
To help shore up China, the U.S. had to move to shore up Japan.
Do not kid yourself. This is all extremely important on Main Street, USA. Among other things, it is extremely important to your mutual funds, to your pension fund, to the future of your children, and your children's children.
Reported by Dan Rather
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