The Japanese advantage -- Is it simply Japan's currency policy

Here is an opinion on how this works:

What I mean is that Japan has a long, long history of manipulating the value of the yen to keep the prices of its vehicles artificially low in the U.S., while also erecting equally artificial barriers to keep U.S. automakers out of Japan.

Even now, just the same way Congress is (supposed to be) working to help out GM, Ford and Chrysler, the Japanese government is considering a $22 billion proposal that would greatly benefit its own automakers. Except that in Japan, the money would go to support all the temporary/contract workers thrown out of their jobs and homes by companies like Toyota. Yes, their homes, too, because many of these workers are forced to live in company dormitories as a condition of their employment.

According to a recent story on Bloomberg.com by Keiko Ujikane, “A panel from the ruling Liberal Democratic Party and New Komeito last week said the government should subsidize companies that hire temporary employees and make more people eligible for unemployment benefits. Companies should receive 1 million yen for each contract employee they hire, the panel said."

The fact of the matter is that one of the major reasons Detroit is in this mess is, as I’ve mentioned before, our country’s somewhat naïve approach to doing business. While the U.S. makes some sort of attempt to have its economy run on something that looks a little bit like a free-market system (if you squint when you look at it), the rest of the world, “Western democracies” or not, barely even gives the idea lip service.

. . . .

http://www.autotropolis.com/wiki/index.php?title=Government_Assistance%3F_Works_for_Toyota_and_Honda.

We send our military to foreign countries and successfully fight wars. (Sure, we don't always "win," but we make a big show that intimidates upstarts.) Other countries fight on the economic battlefield. Americans take national pride in the might of its military. Japan takes national pride in the products it sells around the world.

The Democrats proved themselves to be the true American patriots today. The Republicans -- not so much. The Republicans like to send other people's kids to war. That's how they define their patriotism. But when it comes to backing American products -- not so much.

You mean, like when Nixon forced the yen to float in 1971, and it suddenly became worth 260 to the dollar instead of the post-war assigned value of 360 to dollar that was maintained by the United States from 1947 through 1971?

Or when Reagan pushed through the Plaza Accord in 1985 to artificially raise the yen price from 260/dollar to 160/dollar, because "Mr. Market" just wasn't doing his job?

Or when the market deemed it fit to value the yen at 80 per dollar in 1994, but four years later found it necesary to value the yen at 143 per dollar?

So now the yen is almost exactly 4 times more valuable against the dollar than it was before Nixon's actions in 1971. How many other non-wartime currencies have had to go through this kind of upheaval? How many other countries, especially export-driven countries, would have been able to survive that? So, if the Japanese government intervenes in such tumultuous markets, wouldn't that be looking out for the interests of the country? With such wild swings in the value of its currency, why wouldn't Japan want to maintain some sort of stability in the yen?

Seems we would need both nationalized health care AND more (direct) government involvement with industry to compete on this constantly tipping playing field and the Chinese have gone Japan one better - they OWN U.S..

We're being gamed both at home and abroad.