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Pacific Rift

Where Japan Meets The West

Michael Lewis

For the last four centuries, Tokyo has been leveled by quakes about every 70 years: 1633, 1703, 1782, 1853, 1923. That is, 70, 79, 71 and 70 year intervals, until now: 91 years since last one.

The Japanese bureaucracy, trying to compete with America's commercial power, injected capital into the family groups (zaibatsu) like Mitsubishi. These groups spread across multiple industries, but were not monopolies in the American sense. They were fiercely competitive and none had a dominant share of any one market. But they swallowed up small firms every time there was a recession, because they were the only ones with access to capital.

Acquiring land in Japan is easy compared with getting rid of the people who happen to live on it. A small zaibatsu called Asano owned precious land next to the Imperial Palace but needed cash to pay inheritance taxes. So an American insurance company bought the plot of land which had a ramshackle dormitory for 15 families of Asano workers. The agents of the insurance company hired a team of 'very tough Japanese negotiators' to persuade the tenants to leave. After 10 years, there was just one family left, living on the top floor. So they took the roof off.

The hardball tactics needed to evict recalcitrant tenants gives Japanese property companies bad reputation. So high quality grads will only work for them if there is a chance of working overseas, preferably in America. So the companies buy real estate, mainly in New York, because most other cities have little status in the eyes of Japanese. Then once one big company buys a prestigious building for a truck-load of money, it's competitors feel the need to go one better. So after Mitsui bought the Exxon Building, and Sumitomo picked up 666 Park Avenue, Mitsubishi was left. When the Rockefeller Building came on the market in 1989, Mitsubishi paid $846 million for 51% of the shares, more than double what the next tender offered.

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