Weekly address to Ambassador Nye

"Gotta go where the money is"

Monday February 16th 2009

Good morning Ambassador Nye,
Today's theme. "gotta go where the money is"

My wife and I live in the Deep South where the 24 hundred mile long Mississippi River almost ends. Mandeville is a small sleepy Southern town in Louisiana. This is a 98% white Christian Republican country. People are gentle, caring and somewhat obese.

We often walk our dogs along lake Pontchartrain. One morning we came cross a couple with two daughters. They were not American. The mother told me they were moving to Atlanta Georgia for her husband new job. The teenaged girl said she wanted to go to New York City to study fine art at Cooper Union. The younger girl before school age came between us and said in a commanding voice. "I am Mona Monet Depressy." I asked her "So you are French. You also want to go to New York?" "No, I want to go to Atlanta. We gotta go where the money is."

Washington Post Sunday article -- titled "America's new rescuer : Japan"

Solving the financial crisis may be beyond the capacity of government finances. The likely $3 trillion price tag, --give or take, --of both saving the banks and stimulating the economy is causing interest rates to inch up. U.S. Treasury long-term rates have already risen from 2.1 percent just before Christmas to nearly 3 percent.

This is happening because the rest of the world, --which is also in trouble,-- is following in our fiscal footsteps. Financial markets envision a coming global credit Armageddon. And this scenario of rising interest rates, --with rates really jumping once our economy starts to recover, --could kill any chance that the recovery is sustainable.

The Obama team needs to do some quick, --creative, --global thinking. To escape a potential credit straitjacket, they should go where the money is. Today, the money is in Japan, still the world's largest source of excess savings.

Hmmm, Is that why Madam Hillary Rodham Clinton chose Japan as her first country to visit as Secretary of State? We could hear her husband Bill saying "Honey, we gotta go where the money is." I wish her good luck; Japan has been wary of her behavior for many years.

For an example, when Mrs. Clinton was running for president last year, she raised eyebrows in foreign policy circles -- especially in Japan, the key U.S. ally in Asia -- when she declared in an article in Foreign Affairs that "our relationship with China will be the most important bilateral relationship in the world in this century."

Now, as Secretary of Sate, Clinton will be putting that bold pronouncement into action. She is arriving in Tokyo tonight on her maiden voyage as America's chief diplomat, --and Tokyo snared the symbolically important first stop on four-nation tour. But Clinton and other Obama administration officials have made it clear that they want to move dramatically forward in relations with Beijing, finding new avenues for cooperation between the world's biggest economy and the world's fastest-growing economy, especially on climate change and the environment.

"Some believe that China on the rise is, by definition, an adversary," Clinton said in a speech Friday to the Asia Society in New York. "To the contrary, we believe that the United States and China can benefit from and contribute to each other's successes. It is in our interests to work harder to build on areas of common concern and shared opportunities."

Hello, Madam, be careful, China remains under communist rule.

While Clinton is heading for China, --our Prime Minister Taro Aso is scheduled to visit Sakhalin Russia on Wednesday the 18th,-- which is one day after Madam Clinton leaves Tokyo for Beijing. Mr. Aso is invited by the Russian Prime Minister Vladimir Putin. Rumor has it -- Moscow wants to normalize relationship with Tokyo by returning the northern islands. These four islands and half of Sakhalin peninsula were taken by the Soviet Union at the end of World War 2. Putin wants Japanese money and technology in exchange for these Islands. Putin knows he has to go where the money is.

I will continue to report to you what is in the Japanese mind. This world financial crisis will take our two countries relationship in to a new stage. In a worse case scenario, our fifty year marriage might end. I am afraid to say that Japan may be breaking away from this alliance. I will see you all next week. Thank you