Japanese government is major shareholder in nearly 500 Japanese companies

Aden Forecast (Sep 2016)... For 20 years Japan has been boosting its QE effort, printing larger amounts of money to buy all the bonds they could. and when they essentially ran out of bonds they started buying stocks. Currently the government is the major shareholder in nearly 500 Japanese companies. 1) Could this move Japan closer to having a large number of Employee owned and run companies? 2) Could other countries including the USA also start buying companies?

Official response from submitted
Dear John Caulfield,
Thanks for your communication. To respond briefly, yes Japan's government could use its ownership leverage to demand and force changes in the internal organization and operation of Japanese enterprises (much as the US government's rescue of the major US banks and such companies as AIG insurance, GM, etc could have enabled it to change them). But for that to happen, the government has to be effectively in the hands of the social forces who want such changes. In reality, in Japan as in the US, the opposite is the case. The government will take extraordinary steps (as well as ordinary ones) to keep the status quo in tact and NOT use its leverage for the changes you suggest. Of course, were political struggles to change who the government serves, outcomes could be like those you suggest.
There is already talk in the US about the possibility that the US Fed or Treausry or both might have to go beyond buying asset-backed securities and begin to buy corporate securities. Then too there has long been speculation that secretly the US government has done that repeatedly in the past.

 


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  • responded with submitted 2016-09-19 12:39:22 -0400
  • published this page in Ask Prof. Wolff 2016-09-15 16:59:58 -0400

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