Japan Declares Depression - Is US Far Behind

Japanese Economists agree that Japan is officially in an economic Depression. Japan's problems started in the early 1990's with the collapse of their banking system. Although warned by the IMF and the Clinton Economic Advisers that the way to fix the banking crisis was to Nationalize the banks, strip away the bad assets and sell off the good assets to new private concerns, Japan opted to continue feeding bailout money to the troubled banks thus keeping them on life support through the entire decade. These banks became know in financial circles as Zombie banks and were not effectively able to continue funding the growth of the private sector.

What is interesting about the Japan Crisis is that the Clinton Financial advisers who were counseling the Japanese Government to Nationalize the Banking System have again resurfaced as the Obama Financial Advisers, yet the same recommendations that they gave to Japan are not being followed in the current US crisis. The sane solution that was recommended to Japan is the same solution which should be followed to correct the problems of the 5 major Multi-National Banks in the US who are feeding off of Government Bailout Money. These banks should have been forced into bankruptcy just as these banks have forced millions of homeowners into bankruptcy. To continue propping up these banks and leave in the Board of Directors who caused the problems will result in the same problem that plagues Japan. Japan is now considered to have lost a decade of economic growth and stability because of the continued existence of the "Zombie" banks, and have now spiralled in to an admitted economic Depression.

If the US continues on the current path of propping up what are basically Zombie Banks that are bleeding money on a daily basis, the same result as Japan is to be expected. The Obama Administration must see the danger in the continued propping up of large multi-national corporations including the Auto Companies and the Banking Industry. This Bailout Money would be much more effectively spent by Bailing out the Middle Class enabling them to catch up on individual debt and thus creating a ripple effect throughout the economy which will filter money to the corporations, those that can maintain a profit margin will survive, those that can't won't.

The current philosophy is obviously flawed as certain banks continue to need more and more money while there is a whole industry of Regional Banks that are healthy and making a profit. These healthy Regional Banks will fill the void created by the bankruptcy of the failed Multi-National Banks and the local economies which they serve will become healthy as a result. The American People do not benefit by pouring money into Multi-National Banks who continue to engage in risky stock, bond and commodity speculative trading with the money provided by the US Government. If we add up all the money that has been handed out to these banks and divided it among the American People this economy would already be on the road to recovery from the ground up, which is after all the strongest way to build and economy.