ABSTRACT
Japanese savings end up disproportionately in banks because real property is often exorbitantly expensive, because stock and bond markets are comparatively undeveloped, and because appliances are high-priced due to wholesaling mark-ups and national excise taxes; the interest on bank deposits, however, is untaxed. The tax system, like the banking system, is so fashioned as to transfer wealth from the society at large to favored industries. Bank of Japan controls long-term interest rates and keeps them artificially low, that is, below the market rate, in order to accommodate long-term investment growth by the strategic corporations. Japanese planners use mediating institutions to intervene in markets, to exercise decisive influence over major movements of funds and of certain materials, and to govern prices of certain goods separately for producers and users, thereby also governing production rates. Regulation of the price and distribution of important materials is achieved through public policy companies.
