America helped create Livedoor Scandal

When you read this in the year 2066 it might not be big news, but at the moment in Japan it is: the president of a high-flying internet startup has been arrested for cooking the books, the stock has crashed, there has been panic selling on the Tokyo stock exchange, the sheer volume of which brought the system to its knees.

First of all, I am puzzled by why this is such big news, why so many people are in a panic, and why all the sensationalistic "wide shows" are making such a big deal out of it. For example, we get diagrams of what he ised to eat for breakfast in his expensive Roppongi Hills mansion and the gruel he gets in jail. Ha ha, serves him right. Hubris. To be fair, a lot of reasonable Japanese I speak to feel the same. It is all over the place in the domestic media, but on CNN or BBC it's a 5 word entry on the newscroll at the bottom of the screen.

Ok, I think what the company, Livedoor, and it's boss, Mr. Horie did was wrong. They clearly violated the law but altering financial information to boost the stock price. But my take on it is that he hasn't done anything much different from a lot of japanese companies have been doing for years. Every bank has played with its financial statements (in amounts 10 times larger that the US S&L scandal f the 80's (George Bush senior's buddies) )during and after the "Bubble" in order to keep share prices up. That may seem too abstract to some, but the past year or so is not short of other scandals: car companies lying about safety tests, public corporation using funds for personal gain, powerful strong willed bosses of large department store-railway conglomerates lying about financial info for personal gain, construction companies and gov't regulators allowing high rise hotel and condominium apartments to be built by falsifying earthquake standards. These are all recent scandals that should be fresh in people's minds.

I think was separates the Livedoor scandal is that it seems like a new, sinister, dare I say, foreign way of cheating. These other scandals were done by "old school" firms, the Japanese equivalents of Sears and Caterpillar. So even though they are symptoms of a rotten core, they don't shock people so much as a young entrepeneur who bucks the system, speaks out against the establishment, and starts a new firm based on the Internet and stock buyouts. Even though the money, relatively speaking, is small and the end effect on the Japanese economy will be negligible. For example if Ford or E-trade.com were to disappear, which would have a greater effect on people's lives?

I thought it was just a paranoid hunch until one of my student brought it up in class yesterday. He said "This scandal is just like Enron"
"Sure, similar but much much smaller. Lucky for Japan. Enron was a big mess"
"Mmmm, yes. It is because of the bad influence of America."

He figured this out because a guy on TV said so, by the way.

So there you go. The president of a large rail company can lie about stock prices for years and get away with a tearful apology and a bow. Oh wait, he didn't even do that. He was defiant the whole time. Well, go ahead pick a scandal. They're ok because they're "one of us." That's the way we're always broken the law. But break the law in the American way, whatever that means, and like Mr. Horie get carted off to jail within a week.

Mr. Horie made a lot of enemies and some of them were in high places. The japanese have a saying "To step on a tiger's tail." So to reiterate, I think Mr. Horie broke the law and should be punished if the accusations are true. But I wonder why no one is bothered by other similar Old School scandals and I cringe at the way this one is being sold to the public as being the result of dangerous American influences disturbing the innocent, peace loving japanese staus quo.