Push for Japan

Stimulus may not be enough

To speed the lagging world recovery, the Carter Administration has consistently urged Japan and Germany to stimulate their economies so that they would buy more from other nations. The Germans have so far balked, but at the London economic summit in May, Japanese Premier Takeo Fukuda pledged to do what he could. His early measures were mild and ineffective; for example, unemployment has risen to 2.1% of the work force--low by U.S. standards, but the second highest rate in Japan since World War II.

Last week Fukuda announced a much bigger, $7.6 billion program of spending and loans, mostly for housing, superhighways, express trains, local transportation and sewer systems. To lower unemployment, Fukuda proposes retraining laid-off workers and granting as yet unspecified hiring incentives to employers. In addition, the nation's central bank would lower interest rates slightly to encourage business spending. All that, said Fukuda, should boost the annual growth rate to 6.7% by next spring, from 5.9% forecast currently, ease unemployment and stem the tide of bankruptcies, now running at 1,500 a month.

Japanese businessmen generally viewed the program as still too little, too late. Noting that the plan must be approved by the Japanese Diet, Hirokichi Yoshiyama, president of Hitachi Ltd., said, "Its effect will not be visible" until the end of the fiscal year next March. Washington policymakers were more generous. One Treasury official described the plan as a "kick in the back" that will propel the non-Communist world's second largest economy forward. Said he with a sigh: "Now if we could only get the Germans to reflate as well."

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