Is Japan Good for the U.S. Economy?

Wall Street is moving towards globalization as more foreign companies invest in our market. With the existing turmoil, our financial market is in need of cash. Japan’s economic system has suffered minimal exposures from the U.S. subprime mortgage related losses and therefore, is rich in cash. With 20% acquisition of its holding, Mitsubishi UFJ's $9 billion investment is now the largest shareholder of Morgan Stanley. Additionally, Nomura Holdings has also acquired Lehman Brother's Asian, Middle Eastern and European portions.

Unfortunately, many foreign banks have experienced massive financial losses from investments tied to the U.S. subprime debacle with United Kingdom suffering the hardest hit. Our current economic problems have discouraged potential investors/lenders, which will adversely affect the future of Wall Street. At this time, only handful institutions can afford to take advantage of the recent market’s downturn - buy low, sell high. Almost 300 financial institutions have failed since 2006.

How strong is Japan's financial system? The Global Financial Centres Index has identified Tokyo as major international financial center. The ranking from June 2008 was listed as such:

1. London
2. New York
3. Tokyo
4. Singapore
5. Chicago
6. Hong Kong
7. Paris
8. Frankfurt
9. Seoul
10. Amsterdam

The ranking was based on five key categories: People, business environment, market access, infrastructure and general competitiveness. Additionally, the Tokyo Stock Exchange is the second largest market capitalization in the world. I predict Japan will continue to be a leader as it proceeds to make sound investments. Considering Asia's financial crisis in 1997, Japan has been overtly cautious; thus, suffering minor losses in the current subprime calamity.

Foreign investments at this time will certainly assist with Wall Street's recovery. Top economists such as Jeffrey Minor from Harvard University has promoted free market and suggested that bankruptcy is the answer and not bailout. With bankruptcy, the company still exists, but transfers ownership from shareholders to creditors. For instance, many airlines filed for bankruptcies with the dramatic increase in oil prices; nonetheless, these companies continue to conduct business (i.e., United Airlines, Delta, Northwest Airlines). Additionally, other economists I've researched are also against the bailout plan.

Personally, I oppose in rescuing investors on the expense of tax payers' money. These bond holders have invested in mortgage securities in the hopes of higher returns. Well, high returns come with risks. It is not the responsibility of tax payers to rescue these investors. Let this be lessons learned for Wall Street, other financial markets world wide and the U.S. government who passed regulations to considerably lessen standards for mortgage loans and encouraged home ownerships; thereby, increasing risky loans and defaults. I understand why others provide their support - to lessen the impact of our crisis by injecting the much needed cash flow - but I believe this is a short-term fix and only worsens our national debt. Furthermore, it might take several years for the market to correct itself.

By the way, in extending the heated bailout package subject, the 451 page proposal ($700 billion bailout and $112 billion tax package) are filled with earmarks and tax extenders such as the following:

-Film and Television Productions (Sec. 502) ($48 million a year savings)
- Wooden Arrows designed for use by children (Sec. 503) ($2 million in savings)
- 6 page package of earmarks for litigants in the 1989 Exxon Valdez incident, Alaska (Sec. 504) ($49 million in savings)
- Virgin Island and Puerto Rican Rum (Section 308) ($192 million in savings)
- American Samoa (Sec. 309)- Mine Rescue Teams (Sec. 310)
- Mine Safety Equipment (Sec. 311)
- Domestic Production Activities in Puerto Rico (Sec. 312)
- Indian Tribes (Sec. 314, 315)
- Railroads (Sec. 316)
- Auto Racing Tracks (317) ($100 million in savings)
- District of Columbia (Sec. 322)
- Wool Fabric Producers ($148 million in savings)

How are these exactly relevant to our financial crisis? Do these constitute emergencies?