IN THE LATE 1980s, the United States and Japan used to fight over who was on top. In a 1988 book, Trading Places, a former US trade negotiator, Clyde Prestowitz, predicted that Japan would replace the US as the world's leading economy on the basis of its manufacturing prowess and strategic management.
Fourteen years later, the two giants seem to be competing again, although this time in a race for the bottom.
As corporate scandals in the US roil stock markets and shake confidence in the icons of American capitalism, Japanese commentators have begun to muse about the possibility of a long-term US decline similar to Japan's 'lost decade'.
Last month, senior financial newspaper the Nikkei Financial Daily wrote that the WorldCom and Enron affairs showed a striking similarity to the collapse of confidence after the bursting of twin stock market and real-estate bubbles in Japan in 1990.
The Japanese newspaper found parallels between the corruption surrounding Enron and an early 1990s scandal in Japan in which brokers made pay-offs to favoured clients who had lost money on stocks, in a unique form of hedging that was manageable as long as Japanese equities were booming. As the market slumped, such practices began showing up on the bottom line of major brokerages. The head of Nomura Securities, then the world's largest brokerage, resigned in disgrace, along with many colleagues.
'These phenomena point to the probability that the US economy is following the typical pattern of the bursting of a bubble economy,' journalist Masataka Maeda wrote.