The most populous U.S. state received 709,014 barrels of crude from Canada by rail in December, a 4.9 percent increase from November and up from zero a year ago, data posted on the state Energy Commission’s website show. Canada made up 67 percent of the state’s total oil-by-rail receipts. North Dakota, where fields in the Bakken formation are producing a record volume of crude, shrank to a 5.9 percent share.
U.S. West Coast refiners from Valero Energy Corp. (VLO) to Tesoro Corp. (TSO), lacking pipeline access to the glut of shale oil in the middle of the country, have been turning to rail to counter declining supplies in California and Alaska. California brought in a record 2.83 million barrels of oil by rail in the fourth quarter from all sources, almost double the amount from the three months prior, the state said.
“We’re seeing a lot of Canadian crude-by-rail loading facilities coming online, so it’s no surprise it’s beginning to show up in California,” David Hackett, president of energy consulting firm Stillwater Associates in Irvine, California, said by telephone. “Refinery configuration in California is oriented toward heavy or medium, sour crude, and the Canadian barrels, which are heavy and somewhat sour, are a better fit than the light Bakken barrels.”
Alaska North Slope crude, which made up 12 percent of California’s oil slate in 2012, has traded an average $27.73 a barrel above Western Canadian Select, a heavy sour blend, over the past month, data compiled by Bloomberg show. Bakken oil has traded $16.09 a barrel above Western Canadian.
“The discounts have been pretty big, an indication of how constrained the pipelines are up in Canada,” Gordon Schremp, a fuels analyst at the state Energy Commission, said by telephone fromSacramento. “I’m not surprised to see more Canadian come in. Wait until some of these rail projects get built here. The economics will be even better than what we’re seeing today.”
Oil-by-rail receipts from Wyoming totaled 221,793 barrels in December, making up the second-largest share of the state’s volume at 21 percent. North Dakota sent 62,325 barrels and New Mexico 12,927.
Alaskan oil output has declined every year since 2002 as the yield from existing wells shrinks. Alaska North Slope crude production averaged 567,600 barrels a day in December, down from 582,150 a year earlier, data posted on the Alaska Department of Revenue’s website today showed.
To contact the editor responsible for this story: Dan Stets at email@example.com
Clashes broke out after a counter-demonstration staged by a group opposed to Golden Dawn [AFP]
|Riot police and anti-fascist protesters in Greece have clashed in central Athens, leaving at least two people injured.
Police said more than 3,000 supporters of the extreme-right Golden Dawn party held a rally on Saturday to commemorate a 1996 dispute over an uninhabited Aegean Sea island that brought Greece and Turkey to the brink of war.
Saturday’s rally was largely peaceful, but violent clashes were triggered by the counter-demonstration, staged by leftist groups protesting against the Golden Dawn rally.
Last November, the government began a crackdown on Golden Dawn following the fatal stabbing of an anti-fascist musician in Athens.
The fate of the party is being closely watched ahead of the May vote – where it is expected to perform strongly due to a wave of anger against government cuts – amid speculation of new efforts to rein in the group, which denies it is neo-Nazi.
Despite the crackdown, the party has said it will find a way to contest local and European elections in May, a senior Golden Dawn MP told a defiant crowd of a few thousand supporters in central Athens.
Party closely watched
“We will participate in the elections, one way or another,” Ilias Kasidiaris told about 3,000 supporters rallying in Athens.
Kasidiaris is the most prominent public face of the party since the arrest of its leader, Nikolaos Mihaloliakos.
Golden Dawn remains Greece’s third-most popular party. Two polls published last week showed the party would get 8.9 percent to 10.3 percent of the vote if elections were held now.
Kasidiaris, who plans to run for Athens mayor in May, suggested that a new party, National Dawn, could replace Golden Dawn if it was prevented from running in the election.
Black-clad supporters waved Greek flags and unfurled a banner with the face of Mihaloliakos and chanted “traitors” against the government. Some handed out leaflets advertising National Dawn.
Golden Dawn entered parliament for the first time in 2012, tapping resentment against illegal immigrants and politicians blamed for a crisis that has forced millions out of work and plunged the economy into a six-year recession.
Six of the party’s 18 MPs, including Mihaloliakos, are in pre-trial detention over a probe into Golden Dawn and a string of attacks against immigrants and political opponents.
The bad news first. The People’s Republic of China now believes it can successfully prevent the United States from intervening in the event of a Chinese invasion of Taiwan or some other military assault by Beijing.
Now the good news. China is wrong—and for one major reason. It apparently disregards the decisive power of America’s nuclear-powered submarines.
Moreover, for economic and demographic reasons Beijing has a narrow historical window in which to use its military to alter the world’s power structure. If China doesn’t make a major military move in the next couple decades, it probably never will.
The U.S. Navy’s submarines—the unsung main defenders of the current world order—must hold the line against China for another 20 years. After that, America can declare a sort of quiet victory in the increasingly chilly Cold War with China.
How China wins
The bad news came from Lee Fuell, from the U.S. Air Force’s National Air and Space Intelligence Center, during Fuell’s testimony before the U.S.-China Economic and Security Review Commission in Washington, D.C. on Jan. 30.
For years, Chinese military planning assumed that any attack by the People’s Liberation Army on Taiwan or a disputed island would have to begin with a Pearl Harbor-style preemptive missile strike by China against U.S. forces in Japan and Guam. The PLA was so afraid of overwhelming American intervention that it genuinely believed it could not win unless the Americans were removed from the battlefield before the main campaign even began.
A preemptive strike was, needless to say, a highly risky proposition. If it worked, the PLA just might secure enough space and time to defeat defending troops, seize territory and position itself for a favorable post-war settlement.
But if China failed to disable American forces with a surprise attack, Beijing could find itself fighting a full-scale war on at least two fronts: against the country it was invading plus the full might of U.S. Pacific Command, fully mobilized and probably strongly backed by the rest of the world.
That was then. But after two decades of sustained military modernization, the Chinese military has fundamentally changed its strategy in just the last year or so. According to Fuell, recent writings by PLA officers indicate “a growing confidence within the PLA that they can more-readily withstand U.S. involvement.”
The preemptive strike is off the table—and with it, the risk of a full-scale American counterattack. Instead, Beijing believes it can attack Taiwan or another neighbor while also bloodlessly deterring U.S. intervention. It would do so by deploying such overwhelmingly strong military forces—ballistic missiles, aircraft carriers, jet fighters and the like—that Washington dare not get involved.
The knock-on effects of deterring America could be world-changing. “Backing away from our commitments to protect Taiwan, Japan or the Philippines would be tantamount to ceding East Asia to China’s domination,” Roger Cliff, a fellow at the Atlantic Council, said at the same U.S.-China Economic and Security Review Commission hearing on Jan. 30.
Worse, the world’s liberal economic order—and indeed, the whole notion of democracy—could suffer irreparable harm. “The United States has both a moral and a material interest in a world in which democratic nations can survive and thrive,” Cliff asserted.
Fortunately for that liberal order, America possesses by far the world’s most powerful submarine force—one poised to quickly sink any Chinese invasion fleet. In announcing its readiness to hold off the U.S. military, the PLA seems to have ignored Washington’s huge undersea advantage.
The Silent Service
It’s not surprising that Beijing would overlook America’s subs. MostAmericans overlook their own undersea fleet—and that’s not entirely their own fault. The U.S. sub force takes pains to avoid media coverage in order to maximize its secrecy and stealth. “The submarine cruises the world’s oceans unseen,” the Navy stated on its Website.
Unseen and unheard. That why the sub force calls itself the “Silent Service.”
The Navy has 74 submarines, 60 of which are attack or missile submarines optimized for finding and sinking other ships or blasting land targets. The balance is ballistic-missile boats that carry nuclear missiles and would not routinely participate in military campaigns short of an atomic World War III.
Thirty-three of the attack and missile boats belong to the Pacific Fleet, with major bases in Washington State, California, Hawaii and Guam. Deploying for six months or so roughly every year and a half, America’s Pacific subs frequently stop over in Japan and South Korea and occasionally even venture under the Arctic ice.
According to Adm. Cecil Haney, the former commander of Pacific Fleet subs, on any given day 17 boats are underway and eight are “forward-deployed,” meaning they are on station in a potential combat zone. To the Pacific Fleet, that pretty much means waters near China.
America has several submarine types. The numerous Los Angeles-class attack boats are Cold War stalwarts that are steadily being replaced by newerVirginia-class boats with improved stealth and sensors. The secretiveSeawolfs, numbering just three—all of them in the Pacific—are big, fast and more heavily armed than other subs. The Ohio-class missile submarines are former ballistic missile boats each packing 154 cruise missile.
U.S. subs are, on average, bigger, faster, quieter and more powerful than the rest of the world’s subs. And there are more of them. The U.K. is building just seven new Astute attack boats. Russia aims to maintain around 12 modern attack subs. China is struggling to deploy a handful of rudimentary nuclear boats.
Able to lurk silently under the waves and strike suddenly with torpedoes and missiles, submarines have tactical and strategic effect greatly disproportionate to their relatively small numbers. During the 1982 Falklands War, the British sub Conqueror torpedoed and sank the Argentine cruiserGeneral Belgrano, killing 323 men. The sinking kept the rest of the Argentine fleet bottled up for the duration of the conflict.
America’s eight-at-a-time submarine picket in or near Chinese waters could be equally destructive to Chinese military plans, especially considering the PLA’s limited anti-submarine skills. “Although China might control the surface of the sea around Taiwan, its ability to find and sink U.S. submarines will be extremely limited for the foreseeable future,” Cliff testified. “Those submarines would likely be able to intercept and sink Chinese amphibious transports as they transited toward Taiwan.”
So it almost doesn’t matter that a modernized PLA thinks it possesses the means to fight America above the waves, on land and in the air. If it can’t safely sail an invasion fleet as part of its territorial ambitions, it can’t achieve its strategic goals—capturing Taiwan and or some island also claimed by a neighboring country—through overtly military means.
That reality should inform Washington’s own strategy. As the United States has already largely achieved the world order it struggled for over the last century, it need only preserve and defend this order. In other words, America has the strategic high ground against China, as the latter must attack and alterthe world in order to get what it wants.
In practical military terms, that means the Pentagon can more or less ignore most of China’s military capabilities, including those that appear to threaten traditional U.S. advantages in nukes, air warfare, mechanized ground operations and surface naval maneuvers.
“We won’t invade China, so ground forces don’t play,” pointed out Wayne Hughes, a professor at the U.S. Naval Postgraduate School. “We won’t conduct a first nuclear strike. We should not adopt an air-sea strike plan against the mainland, because that is a sure way to start World War IV.”
Rather, America must deny the Chinese free access to their near waters. “We need only enough access to threaten a war at sea,” Hughes said. In his view, a fleet optimized for countering China would have large numbers of small surface ships for enforcing a trade blockade. But the main combatants would be submarines, “to threaten destruction of all Chinese warships and commercial vessels in the China Seas.”
Cliff estimated that in wartime, each American submarine would be able to get off “a few torpedo shots” before needing to “withdraw for self-preservation.” But assuming eight subs each fire three torpedoes, and just half those torpedoes hit, the American attack boats could destroy all of China’s major amphibious ships—and with them, Beijing’s capacity for invading Taiwan or seizing a disputed island.
Waiting out the Chinese decline
If American subs can hold the line for another 20 years, China might age right out of its current, aggressive posture without ever having attacked anyone. That’s because economic and demographic trends in China point towards a rapidly aging population, flattening economic growth and fewer resources available for military modernization.
To be fair, almost all developed countries are also experiencing this aging, slowing and increasing peacefulness. But China’s trends are pronounced owing to a particularly steep drop in the birth rate traceable back to the Chinese Communist Party’s one-child policy.
Another factor is the unusual speed with which the Chinese economy has expanded to its true potential, thanks to the focused investment made possible by an authoritarian government … and also thanks to that government’s utter disregard for the natural environment and for the rights of everyday Chinese people.
“The economic model that propelled China through three decades of meteoric growth appears unsustainable,” Andrew Erickson, a Naval War College analyst, told the U.S.-China Economic and Security Review Commission.
What Erickson described as China’s “pent-up national potential” could begin expiring as early as 2030, by which point “China will have world’s highest proportion of people over 65,” he predicted. “An aging society with rising expectations, burdened with rates of chronic diseases exacerbated by sedentary lifestyles, will probably divert spending from both military development and the economic growth that sustains it.”
Wisely, American political and military leaders have made the investments necessary to sustain U.S. undersea power for at least that long. After a worrying dip in submarine production, starting in 2012 the Pentagon asked for—and Congress funded—the acquisition of two Virginia-class submarines per year for around $2.5 billion apiece, a purchase rate adequate to maintain the world’s biggest nuclear submarine fleet indefinitely.
Given China’s place in the world, its underlying national trends and America’s pointed advantage in just that aspect of military power that’s especially damaging to Chinese plans, it seems optimistic for PLA officers to assume they can launch an attack on China’s neighbors without first knocking out U.S. forces.
Not that a preemptive strike would make any difference, as the only American forces that truly matter for containing China are the very ones that China cannot reach.
For they are deep underwater.
California officials have warned that tap water may not be delivered to local agencies that distribute it to homes in the state. Two thirds of residents in the state and more than a million acres of farmland get part or all of their water from the California Department of Water Resources.
Mark Cowin director of the Water Resources Department said in an interview with Bloomberg:
This isn’t a coming crisis, this isn’t an evolving crisis. This is a current crisis.
The water originates n the Sacramento-San Joaquin River Delta and from there is is distributed to local water agencies via a system of aqueducts, reservoirs, pipelines and pumping stations.
From this point forward, local distribution agencies will have to rely on other sources such as stored water and groundwater to try and keep their customers supplied.
Chris Carrington is a writer, researcher and lecturer with a background in science, technology and environmental studies. Chris is an editor for The Daily Sheeple, where this first appeared. Wake the flock up!
“The ‘Recovery’ Is A Mirage” Mark Spitznagel Warns, “With As Much Monetary Distortion As In 1929” | Zero Hedge
“Today there is a tremendous amount of monetary distortion, on par with the 1929 stock market and certainly the peak of 2007, and many others,” warns Universa’s Mark Spitznagel.
At these levels, he suggests (as The Dao of Capital author previously told Maria B, “subsequent large stock market losses and even crashes become perfectly expected events.”
Post-Bernanke it will be more of the same, he adds, and investors need to know how to navigate such a world full of “monetary distortions in the economy and the creation of malinvestments.” The reality is, Spitznagel concludes that the ‘recovery is a Fed distortion-driven mirage‘ and the only way out is to let the natural homeostasis take over – “the purge that occurs after massive distortion is painful, but ultimately, it’s far better and healthier for the system.”
Via Investments & Wealth Monitor:
On the “recovery” in the United States…
Spitznagel: The somewhat improved economic activity that we’re seeing is based on a mirage—that is, the illusion created by artificial zero-interest rates.
When central banks lower interest rates in hopes of stimulating the economy, that intervention is not the same as a natural move in interest rates.
A genuine drop in interest rates is in response to an increase in savings, as consumers defer consumption now in order to consume later. In a high-savings environment, entrepreneurs put their capital to work to become more roundabout,1 layering their tools and intermediate stages of production to become increasingly productive. The time to make these investments is when consumers are saving, so that entrepreneurs can be in an even better position to make the products that consumers want, when they want them.
In an artificial rate environment, however, that’s not what’s happening. Instead of consumers saving now to spend later, they are spending now.
But because interest rates are artificially lower, entrepreneurs are being fooled into investing in something now that they will have to back out of later—building up what the Austrians call “malinvestment.” Therefore, the illusion is unsustainable, by definition. The Fed can’t keep interest rates low forever.
From an investor perspective, people are trying to extract as much as they can right now. Consider the naïve dividend investment argument: “I can’t afford to be in cash right now.” Investment managers have to provide returns today.
Whenever investors sell a low dividend-paying stock to buy a higher-dividend stock, some piece of progress is sapped from our economy. (The cash needed to pay that higher dividend isn’t going to capital investment in the company.)
This is the exact opposite of entrepreneurial thinking that advances the economy. Consider the example of Henry Ford, who didn’t care about paying dividends today. He wanted to plow as much capital as possible back into making production more efficient for the benefit of the consumer who would pay less for a higher-quality product.
In summary, a major message of my recent book, The Dao of Capital, is recognizing the distortions that come from central bank intervention. Because of the Fed’s actions, interest rates are no longer a real piece of economic information. If you treat them like they are, you will simply do the wrong thing.
After all, when the government tries to manipulate things, the inverse of what was intended usually happens. On that point, history is entirely on my side.
On The Government & Federal Reserve’s “Interventions”…
Spitznagel: The reality is, when distortion is created, the only way out is to let the natural homeostasis take over. The purge that occurs after massive distortion is painful, but ultimately, it’s far better and healthier for the system. While that may sound rather heartless, it’s actually the best and least destructive in the long run.
Look what happened in the 1930s, when the actions of the government prolonged what should have been a quick purge. Instead, the government prevented the natural rebuilding process from working, which made matters so much worse.
I draw a parallel to forest wildfires. Fire suppression prevents small, naturally occurring wildfires from error-correcting the inappropriate growth, and thus prevents the system from seeking its natural homeostatic balance—its natural temporal structure of production, if you will. Instead, everything is allowed to grow at once, as if more resources exist than actually do, and the forest actually gradually consumes itself. When fire inevitably does break out, it is catastrophic. This is a perfect analogy for the market process. We simply do not understand the great homeostasis at work in markets that are allowed to correct their mistakes.
Suppression that makes the cure that much worse than the initial ill, until exponentially more damage is done, calls to mind the wry observation made by the great Austrian economist Ludwig von Mises: “If a man has been hurt by being run over by an automobile, it is no remedy to let the car go back over him in the [opposite] direction.”
As the Mises protégé Murray Rothbard would say, the catharsis needed to return to homeostatic balance “is the ‘recovery’ process,” and, “far from being an evil scourge, is the necessary and beneficial return” to healthier growth and “optimum efficiency.”
It is unfair to call the Austrians heartless because of these views. The Keynesians are the ones who got us into this mess in the first place—just like those who advocated for the suppression of natural forest fires are the ones who created the tinder box that puts the forest at risk.
On The Yellen Fed… (hint – no change)
Spitznagel: Post-Bernanke it will be more of the same. Therefore, investors need to know how to navigate a distorted world—and post-Bernanke the world is likely to get even more distorted—until the markets, ultimately and inevitably, flush out that distortion. This is why I rely on the Austrian school so much.
Austrian business cycle theory (ABCT) shows us what is really happening behind the curtain, so to speak, from monetary distortions in the economy and the creation of malinvestment. When the economy is subject to top-down intervention from the government and especially the central bank, investors need to read the signs in order to protect themselves—as well as still find a way to own productive assets.
People can avoid becoming trapped into chasing immediate returns along with the rest of the ill-fated crowd.
A far better approach is to wait for the return to homeostasis that will prevail even in the midst of pervasive distortion. In that way, investors can embrace roundabout investing by avoiding the distortion and, thus, have all the more resources later for opportunistic investing.
On investing (for retail inevstors)…
Another option for investors is a very simplistic, “mom-and-pop” strategy that starts with recognizing when you are in a distorted environment. For this I use what I call the Misesian stationarity index, which describes the amount of distortion in the economy.
This simple, back-of-the-envelope strategy would be to buy when the index is low and sell when it is high. In other words, people should stay out of the market when it is distorted and thus preserve their capital to deploy after the inevitable purge and correction, when productive assets become bargain-priced. Such an approach has resulted historically in an annualized 2-percent outperformance of stocks. Logically it makes sense, and when you look at it empirically, it’s incontrovertible.
Yet, admittedly, in the world of investing, sitting with one’s arms folded and not taking advantage of a rising market pumped up with distortion, is difficult—even though avoiding the enticement leads to better intermediate means for positional advantage to be exploited later.
It is difficult to do and may even feel anticlimactic. Nonetheless, the disciplined Misesian approach is healthier for one’s portfolio.
On the worst case scenario…
the Fed keeps winning and the illusion continues. The equity markets keep ripping along.
On extreme monetary distrortion and the Q-Ratio…
In simplest terms, the equity Q ratio is the total corporate equity in the United States divided by the replacement cost. Another way to think about it is the appraised value of existing capital in the United States divided by what it would cost to replace or accumulate all that capital.
This ratio has tremendous meaning from an Austrian standpoint, as it reflects what the markets are saying about the state of distortion in the economy.
This aptly illustrates Mises’s concept of “stationarity.” (In a stationary economy, in the aggregate, balance is achieved between the return and replacement costs.) The farther the ratio moves above “1,” the more monetary distortion there is in the economy. For this reason, and as a tip of the hat to the man who gave us the Austrian business cycle theory, I call this ratio the Misesian stationarity index, or MS index for short. When the MS index is high, subsequent large stock market losses and even crashes become perfectly expected events.
Today there is a tremendous amount of monetary distortion, on par with the 1929 stock market and certainly the peak of 2007, and many others (except the 2000 peak, which got a bit more ahead of itself). And all were caused by monetary distortion. As the Austrians show us, the business cycle is a Fed-induced phenomenon.
by Brian Covert
When International Atomic Energy Agency (IAEA) officials praised the authorities in Japan in October 2011 for their “efficient” handling of the Fukushima nuclear accident seven months after it occurred, perhaps the organization was speaking a little too soon or thinking too wishfully.
Or perhaps it had something to do with the head of the IAEA at the time, Yukiya Amano, being a career bureaucrat from Japan who was just doing what he was hired to do. Or perhaps the IAEA itself was just doing the job it was created to do back in 1957 by the United Nations of supporting and promoting the “peaceful use” of nuclear energy worldwide.
Or maybe it was just a simple matter of laying the first foundation of The Official Story: that the Fukushima nuclear disaster was basically, as Japanese authorities have insisted, sotei-gai — beyond expectations — that it was totally unforeseen and could not possibly have been predicted, but not to worry: Everything would soon be under control and back to business as usual.
Despite the best efforts of a “poodle press” in Japan, snuggled comfortably in the elite laps of power, to repeat such reassuring words to an anxious public, some of the truth did manage to come out about what is arguably the worst nuclear accident in human history.
Looking back decades from now, however, 2013 may well be remembered as the year when the iron lid finally came down over the truth and The Official Story concerning Fukushima was set firmly in place.
It was this year that the Tokyo Electric Power Co. (TEPCO), operator of the Fukushima plant, admitted that, among other problems, 300 tons of radioactive groundwater could not be stopped from leaking every day from the Fukushima plant into the nearby Pacific Ocean. It was highly contaminated water, of course, but it was not officially expected to harm sea life or human beings in any way. Not to worry.
Then there was the announcement in September 2013 that Tokyo — a city located less than 320 kilometers (200 miles) from the ongoing nuclear crisis at Fukushima — was chosen to be the site of the 2020 Summer Olympic Games.
A month later, as if to bolster Japan’s good news, a United Nations scientific committee, in a report to be submitted to the UN General Assembly, downplayed all the public worry over Fukushima. The UN committee placed the levels of radiation as being “very low,” stating: “No discernible increased incidence of radiation-related health effects are expected among exposed members of the public or their descendants.” This prompted a strong rebuke from citizens groups and others in Japan who saw this as an attempted whitewash of major proportions by the UN.
But there was one more step to be taken before The Official Story could be called airtight: In November and December 2013, the Japanese government — with the blessing of the administration of U.S. President Barack Obama and despite strong public opposition at home in Japan — proceeded to ram a bill through its parliament that, upon becoming law, would make whistleblowing a crime of state that could result in a prison term of up to 10 years.
This “state secrets protection bill” was supposedly intended to protect Japanese government and military secrets from possible terrorist actions (and, no doubt, from an Edward Snowden-type of situation) at a time when Japan’s military-industrial complex was expanding in lock-step with that of the U.S. But it could also be considered no mere coincidence that this state secrets bill was being pushed through to law at a time when TEPCO was just starting a yearlong operation in decommissioning the Fukushima nuclear plant that was unprecedented both in scale and in the potentially devastating consequences that could result if the slightest thing — forces of nature, mechanical failure, human error — went wrong in the course of that year.
This operation involves removing some 1,500 fuel rods from a Fukushima reactor, one by one, and placing them in a more secure area, something that has never been attempted before anywhere. Radiation levels said to be many thousands of times those of the 1945 U.S. atomic bombing of Hiroshima could be emitted from the Fukushima nuclear plant if any unforeseen problems occur along the way.
Now that Japan’s state secrets bill has become law, leaking sensitive information concerning Fukushima could technically be considered a crime, both for the whistleblower who leaks it and for any journalist who reports it. The extended “war on terror” has now joined hands with “atoms for peace,” with truth becoming the first casualty.
As of the end of 2013, nearly three years after the crisis began at Fukushima, there are an estimated 150,000-plus Japanese residents evacuated from the Fukushima area, many living in temporary housing. Some of that housing is reportedly now in substandard condition, with residents essentially being left to fend for themselves.
Confirmed cases of thyroid cancer are now appearing in some children from the Fukushima area, and the numbers of such cases are certain to rise in the future. Reports of increased levels of radiation, of varying degrees, have also come up throughout Japan and beyond its borders.
Meanwhile, TEPCO and two government ministries are busy arguing about which one of the three parties is responsible for cleaning up the contaminated water that is seeping into the ground and into the nearby sea. And yet, in spite of these and many other problems along the way, the IAEA has wavered little in its praise for Japan’s handling of the Fukushima accident and the quote-unquote “good progress” that has resulted.
The Official Story surrounding Fukushima is one of an unexpected disaster being dealt with swiftly and safely by honest, open authorities facing unlucky circumstances — and being duly investigated by an independent-minded news media that is diligently doing its job. But like all official stories, this story has a long and sordid history behind it. It is a history that people need to know about if they are to understand how and why Fukushima happened in the first place, and which direction the crisis is likely to take in the future.
Here, then, is the story behind the story of Fukushima.
This research was originally published as chapter 14 in Censored 2013: Dispatches From the Media Revolution, eds. Mickey Huff, Andy Lee Roth, and Project Censored (New York: Seven Stories Press, 2012).
On the Road to Fukushima: The Unreported Story behind Japan’s Nuclear-Media-Industrial Complex
The most powerful earthquake to ever hit the islands of Japan struck on the afternoon of March 11, 2011. The magnitude 9 quake, centered about 70 kilometers (43 miles) off the Pacific coast, sent oceanic shock waves racing toward Japan’s northeastern Tohoku region. Located squarely on the tsunami’s course were coastal areas that are also home to several nuclear power plants, such as in Fukushima Prefecture, which is situated about 240 kilometers (150 miles) from Tokyo, the most populated metropolis on the planet. As it became clear that something had gone seriously wrong and, due to the tsunami, Japan now had a nuclear catastrophe on its hands at Fukushima, all eyes turned to the Japanese press.
But the Japanese press was nowhere to be found. In the immediate aftermath of reactor meltdowns and the release of radioactivity at the Fukushima Nuclear Power Plant, when evacuations and press restrictions had not yet been set by Japan’s government, the major Japanese news companies did not have a single reporter on the ground in the area.1 Such media companies in Japan usually spare no expense in having their reporters or photographers camp for days at a time outside the homes of suspects in sensationalized crime cases or when stalking scandal-tainted celebrities. But when it comes to pursuing real news stories of public concern, investigating the nation’s political or corporate centers of power, and exercising the freedom of press as enshrined in the Japanese constitution, the news media of Japan can be strangely submissive or even silent. Nowhere has that been more on display than in the reporting of the Fukushima nuclear crisis.
How is it that one of the most technologically advanced, democratic societies in the world finds itself with a press that serves more as a lapdog to the powerful than as a watchdog for the public? How does Japan’s nuclear power industry in particular fare in the news media? And more importantly, how is censorship fostered in such an environment and how did it get this way?
The answers to such questions can be found by taking a look back on the road to Fukushima that Japan has traveled since the Second World War. It is the story that most of the mainstream media in Japan are failing to report or to piece together in the wake of Fukushima, perhaps because, in many ways, the media itself is the story.
It is the story of how of the Japanese press has risen to become a global media power unto itself,2 and how Japan’s corporate-dominated news industry grew hand-in-glove with the nation’s development of atomic energy and other major industries following the war. It is the story of a Japanese war crimes suspect imprisoned by US occupation forces, of Japan’s preeminent media tycoon, of the godfather of Japanese nuclear power development, and of the father of Japanese professional baseball—all of whom happen to be the same man, the powerful Japanese predecessor of today’s Rupert Murdoch.
It is the story of the power wielded by right-wing forces in Japan and, at the fringes, of the Japanese mafia. It is a story that also closely involves the United States of America as benefactor: the Central Intelligence Agency, the US Congress, and the US media establishment. It is the story of America’s Cold War geopolitical priorities over the long-term security and environmental safety of the planet.
It is the story, in the end, of Japan’s rise as a modern nuclear-media-industrial power from the ashes of Hiroshima and Nagasaki in 1945 up to Fukushima more than sixty-five years later. This report attempts to connect the dots of Japan’s atomic past and present, providing the much bigger picture behind the individual acts of censorship surrounding Fukushima and, in doing so, will hopefully offer lessons for the future of a democratic, responsible press in Japan.
The Shoriki Factor
If there is one person who has stood at the nexus of nuclear power, media conglomeration, politics, and industrial development in postwar Japan, it would be Matsutaro Shoriki.
Shoriki, in the early 1920s, was a high-ranking official of the Tokyo Metropolitan Police Department, and in previous years had reportedly been involved in every major incident of police repression of social unrest.3 That included the Great Kanto Earthquake of September 1923, Japan’s deadliest natural disaster up to then, in which more than 100,000 people died and tens of thousands of others went missing.4
After the earthquake’s ensuing panic and confusion and the Japanese government’s declaration of martial law, the police took the opportunity to round up ethnic Koreans living in Japan, along with leading Japanese socialists, anarchists, labor activists, and other leftist dissidents of the day—some of whom were later reported killed.5 This all happened on Shoriki’s watch, and a month after the quake he was promoted to a department head position within the Tokyo police hierarchy.6 Shoriki’s law enforcement career came to a halt a couple months later, however, when a young Communist Party supporter attempted to shoot Hirohito, the emperor-to-be, in public. Shoriki was among those dismissed from their police posts for the lapse in security surrounding the assassination attempt.
It was the end of Shoriki’s days as a hard-line police official, but just the beginning of his career as a central figure in the Japanese media world.
One month after his firing from the Tokyo metropolitan police, Shoriki—with no past media experience whatsoever—found himself serving as president of the Yomiuri Shimbun newspaper, then a fledgling 50,000-circulation Japanese metropolitan daily paper in Tokyo.7 He had bought out a controlling stake in the newspaper through a huge personal loan from a cabinet minister then serving in the Japanese government. A rebellion immediately arose among the editorial staff of the paper, but the new owner had no regrets. “Instead of committing hara-kiri” (ritual disembowelment) over the police firing, “I bought a newspaper,” Shoriki would boast.8
The openly pro-capitalistic, anticommunistic Shoriki quickly showed himself as having a finger on the public pulse, understanding well the links between three key areas: mass entertainment, mass mobilization, and massive profits.9
His Yomiuri Shimbun newspaper company sponsored tours in Japan of major league baseball players from the US—first in 1931, then again in 1934, when the Yomiuri paid for US baseball legends Babe Ruth, Lou Gehrig, and others to come and play in Japan. The next year, the Yomiuri Shimbun newspaper created its own baseball team, the Yomiuri Giants, in the exact image of the famed Giants baseball team of New York (later of San Francisco). In 1936, Japan’s first professional baseball league was started, with Shoriki going on to serve as owner of the Yomiuri Giants pro team and as the first commissioner of the Nippon Professional Baseball league years later.
By the late 1930s and early 1940s, the winds of war were blowing in Japan. All of the Japanese press was expected by the military-dominated government to support Japan’s war of aggression throughout East Asia and the Pacific, and the major news publications—from liberal to conservative—toed the line, either under government pressure or out of a sense of patriotism. Two days after the Japanese military attack on the US-occupied Pacific island of Hawaii in December 1941, the major newspapers in Japan sponsored a public rally in Tokyo denouncing the US and Britain. Shoriki, representing the Yomiuri Shimbun newspaper, was reportedly one of the main speakers.10
In the fifteen years since Shoriki had taken over the paper, the Yomiuri had gone from being a fairly liberal Tokyo metro daily paper to being an unashamedly conservative national daily newspaper—the third-largest daily paper in Japan, in fact—with a circulation of 1.2 million.11 The Yomiuri became the most nationalistic of Japan’s mainstream news media during World War II. For his efforts, Shoriki, like other press executives in Japan, was appointed to several key government propaganda organizations during the war, including as cabinet-level advisor in the government.12
Behind Prison Walls
Following the US atomic bombings of Hiroshima and Nagasaki, which killed more than 200,000 people in August 1945, and Japan’s formal surrender a month later, the occupation forces under General Douglas MacArthur wasted no time in sniffing out suspected war criminals as part of victor’s justice, Yankee-style.
The top ranking of war criminals, “Class A,” applied to persons in the highest decision-making bodies in Japan who were believed to have taken part in the starting and/or waging of war against the Allied powers. Among those who were openly demanding that the Americans include Shoriki, the Yomiuri newspaper president, in that Class-A category were Shoriki’s longtime enemies on the Japanese political left and, incredibly, some of the newspaper magnate’s own editorial staff at the Yomiuri Shimbun.13 Long considered to be something of a “dictator” within his paper,14 Shoriki was now facing a serious mutiny by his crew at a very sensitive time in Japanese history. In December 1945, he was ordered by the US occupation forces to report to Japan’s notorious Sugamo Prison in central Tokyo as an inmate.
The dozens of initial suspects of Class-A war crimes at the prison made up a virtual “who’s who” of the most elite of Japanese political, military, and business circles. Shoriki was placed in cellblock 2-B of the prison, directly across from a prominent industrialist who had once been head of the mighty Nissan group of corporations.15 As a media baron, Shoriki commanded respect even behind bars. The Buddhist priest in charge of counseling the accused war criminals at the prison recalled: “Mr. Shoriki, former president of the ‘Yomiuri Newspaper,’ I had met two or three times at banquets given by the Chief Priest, whose advisors in various matters we both had been. He [Shoriki] was still as vigorous as ever. . . .”16
George Herman Ruth, one of the US baseball idols invited by Shoriki to play for Japanese audiences back in the 1930s, had little sympathy for his former patron. “That bum [Shoriki] seemed like a pretty nice fellow,” Babe Ruth, now retired from baseball, said on hearing the news of Shoriki’s imprisonment in Tokyo. “I guess he was too nice, come to think of it. All any of them guys did was bow to us, and even then they must have had a knife in their kimona [sic].”17 Ruth even complained that the American ballplayers had been cheated during their tour of Japan a decade before: “Shoriki didn’t pay us what he promised to pay. Most of us spent more money in Japan than we made.”18
As Shoriki and the others languished in prison not knowing their fate, the US, at least in the early stages, proceeded with its plan of “reforming” Japan, putting a high priority on strengthening democratic institutions and the rights of the individual.
But a funny thing happened on the way to democracy: on a parallel track, the government of the United States, under the umbrella of the Truman Doctrine of President Harry Truman, was also proceeding on a “reverse course” in Japan. From 1947–48 onward, the US priority began shifting away from promoting democracy to fighting communism. General MacArthur’s occupation forces in Tokyo now sought to “strengthen, not punish” right-wing Japanese leaders so as to secure Japan as a key ally especially against the regional influence of Communist China.19
The Cold War was starting and, almost overnight, the US had gone from purging its sworn wartime enemies on the political right in Japan to purging those on the left. Japanese ultra-rightist organizations and even the yakuza, Japan’s mafia syndicates, were becoming useful tools for the US occupation authorities in suppressing the growing social movement of organized labor and liberal political dissent, including in the Japanese news media.20
And so it was that right-wing media mogul Matsutaro Shoriki walked out of the Tokyo prison gates on September 1, 1947—twenty-one months of prison time served and no war-crime charges filed against him.21 Shoriki and many of his fellow Japanese war-criminal suspects were looking much more useful to the United States beyond—rather than behind—prison walls.
Television and “Atoms for Peace”
In summer 1951, with the official end of the American occupation of Japan just around the corner, Shoriki and other released Japanese war criminal suspects were finally removed from General MacArthur’s war-criminal “purge list” and were now free to resume their former public lives. Shoriki received his pardon on August 6, the sixth anniversary of the Hiroshima atomic bombing. The very next day, he went to work on his next big project: establishing Japan’s first commercial television network.22
In this venture, Shoriki had warm support from conservative members of the US Congress, who, like their right-wing counterparts in Japan, apparently saw the mass media not as a way to inform or educate the poverty-stricken Japanese masses but rather as a means to essentially feed the Japanese public a steady stream of pro-American messages of progress and development in the postwar period.
Shoriki’s key ally in the US Congress for this was Karl Mundt, a Republican senator from South Dakota. Through the mid-1940s, Mundt had served as an active member of the House Un-American Activities Committee (HUAC) that was investigating suspected Communist infiltration throughout US society. During that same period, Mundt pushed a bill through Congress in 1948 that became law, creating the Voice of America short-wave radio propaganda program.23 But Mundt had an even bigger dream: using the rising medium of television to carry VOA broadcasts throughout the world, including in Japan, as a way to counter the growing global “red” menace. Mundt called his grand plan “Vision of America.”24
It was Hidetoshi Shibata, then a popular conservative, America-friendly radio commentator on Nippon Hoso Kyokai (NHK, Japan’s public broadcaster) and a former Yomiuri newspaper reporter under Shoriki, who eventually hooked up Mundt and Shoriki.25 On August 14, only a week after Shoriki’s pardon as a US-branded war crimes suspect, Mundt, at a press conference in Washington DC accompanied by a member of Japan’s parliament, announced plans for a team of three American “experts” to fly to Japan the following week to firm up the plans for this new Japanese TV broadcasting network.26 Another week later, the Japanese and American sides met in Tokyo and worked out the details: it was agreed that instead of making this new TV station a part of Mundt’s worldwide “Vision of America” scheme, it would be a wholly Japanese-owned and Japanese-run network financed in part by airing Voice of America radio broadcasts within Japan.27
Shoriki had meanwhile regained his old position as the largest shareholder of the Yomiuri paper, and now persuaded the heads of his archrival daily newspapers, the liberal Asahi and Mainichi, to join the conservative Yomiuri in putting up joint capital of about ¥2 billion ($25 million) for the TV station. Shoriki also used his highly placed connections in Japanese government and financial institutions to further strengthen support for the new station, promoting the TV network as potentially attracting three million Japanese viewers within five years.28
In July 1952, just three months after the US occupation bureaucracy had packed its bags and gone home, the new Nippon Television Network (NTV) was granted its broadcasting license by Japanese media regulators. Shoriki became the first president of NTV in October 1952, and in August 1953, the station went on the air with black-and-white television programs. Now it was just a matter of getting the message out to the masses.
“Kilowatts, not killing”
At the United Nations in December 1953, US President Dwight Eisenhower announced the start of his “Atoms for Peace” program. Several months later in September 1954, US atomic energy commissioner Thomas Murray stood before a convention of American steelworkers at Atlantic City, New Jersey, and called for a nuclear power plant to be built in Japan with US know-how and manpower as “a dramatic and Christian gesture which would lift all of us far above the recollection of the carnage” of Hiroshima and Nagasaki nine years before.29 An editorial in the Washington Post immediately and enthusiastically supported this “brilliant idea,” stating: “How better, indeed, to dispel the impression in Asia that the United States regards Orientals merely as nuclear cannon fodder!”30
A few months after that in early 1955, Representative Sidney Yates, a Democrat from Illinois, took it even further when he stood on the floor of the US Congress and called for that proposed first nuclear power plant in Japan to be constructed, of all places, in the atomic-bombed city of Hiroshima. He was then sponsoring a bill in Congress for a 60,000-kilowatt nuclear power generating plant to be built in Hiroshima as part of Eisenhower’s “Atoms for Peace”—a power plant, Yates said, that would “make the atom an instrument for kilowatts rather than killing.”31 (Plans for the Hiroshima nuclear plant eventually fizzled out.)
Back in Japan around that same time, Matsutaro Shoriki, while still president of NTV, campaigned in February 1955 for a seat in his own country’s House of Representatives and won. He was appointed to the cabinet-level position of minister of state. Everything now seemed to be in place. For the better part of 1955, Eisenhower’s newly established United States Information Service (USIS), with its mission of overseas “public diplomacy” (read: propaganda) and Shoriki’s Yomiuri Shimbun newspaper, which now had a colossal circulation of more than two million readers,32 worked closely together on plans to bring America’s atomic-age vision to the Japanese people.33
The Atom Returns to Japan
On November 1, 1955, the USIS and Shoriki’s Yomiuri Shimbun newspaper kicked off the opening of a futuristic, traveling “Atoms for Peace” exhibition at an event hall in downtown Tokyo, not far from the Imperial Palace.
The fifteen sections of the exhibition, touted as the first of its kind in Far East Asia, explained “how the boundless wealth of the atom has been unlocked, and now it is already being used in many ways for man’s benefit in medicine and industry.” The exhibition was to be shown in Tokyo for a month and a half, then rotated on to seven other major Japanese cities.34 The exhibition included profiles of ten pioneering nuclear scientists; a small demonstration nuclear reactor; a movie about the peaceful uses of nuclear energy; panel displays; and an introduction to the medical, agricultural, and industrial uses of atomic isotopes.35 On New Year’s Day of 1956, while the exhibition was still touring Japan, state minister Shoriki was appointed the first chairman of the Japan Atomic Energy Commission, a move praised by US atomic energy commissioner Lewis Strauss as “an important contribution to international peace.”36
The “Atoms for Peace” exhibition finally arrived in Hiroshima in May 1956 and was shown for three weeks at the recently opened Hiroshima Peace Memorial Museum, located within the city’s Peace Memorial Park commemorating the victims of the 1945 US atomic bombing. An estimated 110,000 Japanese visitors came to see the “Atoms for Peace” exhibition in Hiroshima, and a reported 2.5 million people had seen the exhibition nationwide.37 At the end of it all, notwithstanding some public and press criticism that arose, the “Atoms for Peace” exhibition in Japan was considered a resounding success, primarily due to the positive spin given to it by the Japanese media, especially the Yomiuri newspaper and NTV network headed by Shoriki.38
Code Name: PODAM
Tetsuo Arima, a professor of media studies at the elite Waseda University in Tokyo, goes where the Japanese mainstream press fears to tread in researching and making public the CIA’s past connections to the media and nuclear power in Japan, having published several books on the subject in recent years. He has visited the US National Archives and Records Administration (NARA) in Washington DC and obtained almost 500 pages of once-secret documents detailing the introduction of atomic energy technology to Japan.39
“Relations with PODAM have now progressed to the stage where outright cooperation can be initiated,” Arima quotes one of those CIA documents as reading, concerning political maneuvering against the Japan Communist Party back in the 1950s.40 Another document approves “PODAM” as being used to gain information about political developments and trends in Japan, along with information on persons working in Japanese newspapers and media. PODAM, the code name of a CIA asset, was none other than Japanese media tycoon Matsutaro Shoriki.41
Indeed, a cursory check of the NARA website (www.archives.gov) reveals Matsutaro Shoriki as being listed under the cryptonym PODAM as well as “POJACKPOT-1.”42 Equally revealing is Shoriki’s TV station, Nippon Television, being listed in the archive’s CIA file index as part of a project called “KMCASHIER.”43 Project KMCASHIER, as Arima notes, was a failed 1953 US plan to construct a massive microwave communications network covering four Asian countries (Japan, South Korea, Taiwan, and the Philippines) as part of a larger international microwave communications network. Japan’s role in KMCASHIER was listed under the CIA code name of “POHIKE.”44 “POBULK” is listed in the archive index as the CIA code name for the Yomiuri, Shoriki’s newspaper.
Arima found also that Shibata, the popular NHK radio newscaster who initially put Shoriki in touch with US senator Mundt of VOA fame, had contacted and met in Tokyo with persons connected with the CIA (presumably on Shoriki’s behalf), both before and after Shoriki obtained the broadcast license for NTV.45 The professor also came across a document dated May 5, 1955—placing it around the time of joint preparations by the USIS and Shoriki’s Yomiuri newspaper for the “Atoms for Peace” exhibition—in which a “provisional” security clearance was sought for Shoriki as an “unwitting cutout.”46 This indicates that Shoriki would have been considered a trusted intermediary for passing along highly sensitive information, yet not necessarily aware of the details of that information or exactly how he was being used for such intelligence purposes.
According to one CIA document that Arima uncovered, Shoriki as atomic energy commissioner was so impatient to get nuclear power online in Japan following the 1955–56 “Atoms For Peace” exhibition that he seriously considered buying a small reactor to power his own home as a public show of atomic energy’s benefits.47 And what was PODAM’s urgent motivation? To help reach his political aspiration of becoming the prime minister of Japan.
The Deep Ties that Bind
Japanese nuclear power, industrial production (especially in electronics), and the news media grew side by side in the critical Cold War years that would see Japan elevated to the status of “economic miracle.” Without doubt, from the end of the Second World War onward, the media industry has been a crucial part of that whole corporate synergy in Japan—not an objective, neutral force standing outside it.48
That is still the situation today for the most part. The electric power companies in Japan advertise widely in the major print and broadcast media companies. Tokyo Electric Power Company (TEPCO)—operator of the Fukushima nuclear plant and two others—alone spent about ¥27 billion ($330 million) on public relations and other events promoting nuclear energy in 2010, ranking tenth highest among all Japanese corporations in the amount of money spent on such expenses that year.49 Of that amount, TEPCO spent ¥9 billion ($110 million) directly on advertisements placed in the media.50
So what effect does this kind of relationship between nuclear energy and media in Japan have on news coverage? According to author and independent journalist Osamu Aoki, a former reporter for Japan’s Kyodo News wire service, “Newspapers, TV, magazines—it makes no difference: because they receive these huge advertising monies, it’s hard for them to criticize the power companies, especially with nuclear power. It’s a taboo that’s been going on for some time.”51
Where Japan differs from the US and other developed countries is in the sheer breadth and depth of external press controls and media self-censorship in the form of the “kisha club” (reporters’ club) system.52
The kisha clubs are press clubs attached to various Japanese government agencies (from the highest levels of government down to local government agencies), political parties, major corporations, consumer organizations . . . and electric power companies. At last count there were an estimated 800 to 1,000 kisha clubs nationwide. Membership in such clubs is mostly restricted to the big Japanese newspaper and broadcasting companies, with smaller Japanese media and the foreign press normally not allowed in. One important rule: kisha club reporters are not usually allowed to “scoop” fellow club members on any given story, even if they are reporters for rival Japanese news companies. In most cases a kisha club is based on the premises of the institution that the reporters are covering, with the operating expenses of the club paid by that institution. The kisha club rooms generally are off-limits to the average Japanese citizen, even when located inside of public buildings.
TEPCO, like other power companies around Japan, has its own in-house kisha club. And what was the chairman of TEPCO doing at the time of the March 11 quake/tsunami and subsequent Fukushima nuclear plant disaster? He was hosting Japanese journalists on a press junket in China, courtesy of the power company.53
According to an independent journalist attending a press conference hosted by TEPCO soon after the accident on March 11, 2011, not one of the power company’s kisha club reporters got around to asking the TEPCO chairman at press conferences about the possibility of plutonium leaks from the Fukushima plant until the independent journalist himself raised the critical question two weeks after the accident. Another independent Japanese reporter working for Internet media was shouted down by the TEPCO kisha club reporters when he tried to ask the TEPCO chairman a question at the same press conference. These are not uncommon occurrences at kisha clubs in Japan.54
How did all of this translate in terms of Japanese versus overseas reporting on Fukushima soon after the accident? There were often major gaps between the two. On the morning of March 12, the day after the accident, for example, Japan’s public broadcaster, NHK television, was telling evacuees from Fukushima to calmly “walk instead of drive to an evacuation area” while also repeating Japanese government assurances that there was “no immediate danger.”55 That same morning, the tone of reports carried on BBC News, as just one foreign news media source, was one of skepticism of such Japanese government assurances rather than blind acceptance.56 That kind of gap between Japanese and overseas coverage would widen considerably as the Fukushima crisis went on, with the Japanese public increasingly voicing distrust of their government and suspicious that Japan’s media were not reporting the whole story.
That is certainly true for one related issue that has been underreported in Japan for years: the so-called “nuclear gypsies”—the thousands of day laborers, many unskilled and homeless, that make up a large part of the workforce at Japan’s fifty-four nuclear power plants nationwide—and the yakuza (organized crime) syndicates as suppliers of such temporary workers to the industry.57 The underside of Japan’s economic miracle in the postwar era was the existence of pools of cheap, “disposable” labor from the slums of the big cities, such as the Sanya district in Tokyo and Kamagasaki district in Osaka, working in the vast construction industry with which the yakuza have long been aligned. But the electric power companies today also use such day laborers, doing highly dangerous work with little or no job security, and many of these nuclear workers are financially exploited by the yakuza and other labor agents as well.
It has been left mainly to independent journalists in Japan to uncover and expose these facts. One of them, photographer Kenji Higuchi, had worked for decades before Fukushima, trying to tell an indifferent Japanese media and public the stories of these exploited, intimidated nuclear power plant workers and the illnesses that afflicted them after they had worked at the plants. Higuchi’s efforts to get at the truth are the focus of a short documentary film, Nuclear Ginza, broadcasted in 1995 on Britain’s Channel 4 television.58 More recently, another Japanese independent journalist, Tomohiko Suzuki, went undercover as a day laborer at the Fukushima nuclear power plant after the March 2011 accident and found that the yakuza were still recruiting day laborers to work there, with top management at the Fukushima plant—like most construction companies in Japan—not necessarily knowing (or caring) how these workers got hired there in the first place.59
The Selling of a “Miracle Man”
To be fair, the Japanese people are not the only ones who have been sold a bill of goods about nuclear power and been shielded from seeing its dark side by the media. Americans have too, and the US media role over the years is one that has to be acknowledged in this post-Fukushima age. This is most clearly seen in the US media treatment of Matsutaro Shoriki and the vital role he played in bringing US-sponsored atomic energy to Japan during the Cold War years.
In 1946, six months after the American occupation of Japan had begun, the US progressive magazine the Nation correctly noted how “Shoriki’s yellow journalism, combined with the scandalously low wages he paid his newsmen and printers, brought him rich profits, and his fervent support of aggression [in the Pacific War] won him a seat in the House of Peers and a position as Cabinet adviser.”60
Compare that with the glowing coverage a few years later by US mainstream media: Shoriki as “bitterly anti-Communist” ally to the US and Japan’s “most successful publisher,” known “among Western newsmen as the [William Randolph] ‘Hearst of Japan’” (Time magazine, 1954);61 Shoriki as “father of professional baseball in Japan” who nobly sent then–US president Eisenhower an ancient suit of Japanese armor as a show of goodwill (Washington Post, 1954);62 Shoriki as “Japan’s Mr. Atom,” a man who “has made a brilliant success of nearly everything he has tried” and who, “‘if he lives long enough . . . will make Japan one of the leading atomic powers of the world’” (New York Times Magazine, 1957);63 and Shoriki as pioneering TV network president aiming to make Japan the first country in the world to have color television (Time, 1959).64
Then there was the 1963 Time tribute to Shoriki as art connoisseur, head of his Yomiuri Shimbun newspaper’s own symphony orchestra, architect of the “Yomuiri Land” amusement park in Tokyo named for his newspaper, and all-around Man for the Millennium. The article quoted Bob Considine, a well-known columnist for the Hearst media empire in the US, who sounded almost shocked with awe: “[W]henever editors speak of the great press lords of our age, they often mention Hearst and sometimes [Canadian-British tycoon Lord] Beaverbrook. But they always mention Shoriki.”65
Just a few years earlier, this same Hearst underling and ghostwriter, Considine, had written the foreword to the American publishing industry’s own nod to Japan’s premier media baron in a 200-page book titled Shoriki: Miracle Man of Japan—A Biography. The book was published in 1957 by Exposition Press, back then a leading publisher of so-called “vanity books” that are essentially paid for by the person who is the subject of the biography—which, in this case, would have been Shoriki himself. The book was coauthored by the publishing company’s president, Edward Uhlan. A New York Times obituary would later list Shoriki: Miracle Man of Japan as one of the late Uhlan’s most noteworthy accomplishments.66
All in all, Shoriki: Miracle Man of Japan stands out as a cleverly crafted work of disinformation. It covers up Shoriki’s infamous reputation as a police bureaucrat before the Second World War, plays down his wartime role in anti-US propaganda and war-criminal imprisonment by the US after the war, and plays up his subsequent achievements in baseball, news media, and atomic energy in Japan—with a strong line of anticommunist sentiment running throughout. Newspaper, magazine, and book publishing media in the US had now weighed in with Shoriki and his crusade for a pro-America, pro-nuclear Japan, and on the whole found him to be on the right side of the cause.
Epilogue: The Road from Fukushima
When Matsutaro Shoriki died in 1969 at age eighty-four while in office as a representative of Japan’s parliament (and while still NTV network president), his obituary in the Washington Post was surprisingly sparse. Nowhere did the Post mention that Shoriki, as Japan’s first atomic energy commissioner, had been Washington’s point man on nuclear energy development after the war—indeed, he had led Japan to embrace atomic power as a prime energy resource ten years after Hiroshima and Nagasaki. Also missing was Shoriki’s tainted past as a former police official and as a prisoner during the US occupation of Japan. And of course, there was no mention at all of the CIA’s interest in Shoriki as an asset of the agency.67
Just a few years later in 1976, however, the late Shoriki’s name surfaced in connection with the “Lockheed scandal,” a major political scandal in Japan involving bribe money paid by the US aerospace corporation Lockheed to a former Japanese prime minister. The conservative Yomiuri newspaper denied allegations of Shoriki, its ex-president, having been a past “recipient of CIA favors” and spoke of suing for libel the American publications that carried the stories.68
If most Japanese people know or remember anything at all about the late press lord today, it is probably the “Matsutaro Shoriki Award” bestowed in Shoriki’s name every year with great fanfare to some outstanding Japanese baseball figure by NTV network and Yomiuri Shimbun newspaper—whose circulation of thirteen million readers today makes it reputedly the largest daily newspaper in the world.69 The majority of Americans know even less about Shoriki, including the fact that the prestigious Museum of Fine Arts in Boston today has a respectable chair position named after him.70 And for their part, few if any Japanese mainstream media companies in their news reporting are linking Shoriki to nuclear energy and the Fukushima accident of March 11, 2011—even though it was his influence and vision of a fully atomic-powered Japan, with firm support by the US, that had led Japan as a nation to that place.
Demands have arisen in the wake of Fukushima for Japanese government nuclear regulators and politicians to be more independent of the nuclear power industry that they are supposed to be keeping an eye on.71 But looking to the future, there is one more party that equally needs to be separated from Japan’s nuclear power establishment (or “nuclear power village,” as it’s called), and that is the Japanese press. The media in Japan, like the government regulators, have been intimate with the nation’s atomic energy club from the very start. Until the day when the Japanese news media are finally weaned off the nation’s nuclear power village, the whole truth about nuclear energy—and the corruption and great public dangers surrounding it—will continue to be mostly unseen and unknown in this country. Disengaging the Japanese press from the nuclear powers-that-be will not be easy, but it must be done.
One place to start would be to begin dismantling the Japanese kisha club system. This too will be no easy task, given the deep historical and institutional roots of the system. But if the toothless Japanese lapdog press of today is to regain the public credibility at home and abroad that it lost in the wake of the Fukushima nuclear power plant disaster—and if it is to earn the respect that it would deserve as a true watchdog of the people over Japan’s centers of power in the future—then it is the Japanese news media that must now take the first steps in that direction on this long and uncertain road away from Fukushima.
BRIAN COVERT is an independent journalist and author based in Kawanishi, western Japan. He has worked for United Press International news service in Japan, as staff reporter for three of Japan’s English-language daily newspapers, and as contributor to Japanese and overseas newspapers and magazines. He is currently a lecturer in the Department of Media, Journalism, and Communications at Doshisha University in Kyoto.
1. David McNeill, “Fukushima Lays Bare Japanese Media’s Ties to Top,” Japan Times, January 8, 2012, http://www.japantimes.co.jp/text/fl20120108x3.html.
2. Five of the world’s top ten daily newspapers with the highest circulations are based in Japan. See Jochen Legewie, Japan’s Media: Inside and Outside Powerbrokers, Communications & Network Consulting Japan K.K. (Tokyo, March 2010), 3,http://www.cnc-communications.com/fileadmin/user_upload/Publications/2010_03_Japans_Media_Booklet_2nd_Ed_JL.pdf.
3. Simon Partner, Assembled in Japan: Electrical Goods and the Making of the Japanese Consumer (Berkeley: University of California Press, 1999), 74.
4. August Kengelbacher, “Great Kanto Earthquake 1923,” http://www.japan-guide.com/a/earthquake.
5. Sonia Ryang, “The Tongue That Divided Life and Death: The 1923 Tokyo Earthquake and the Massacre of Koreans,” Japan Focus, September 3, 2007,http://www.japanfocus.org/-Sonia-Ryang/2513. For similar accounts, see also Mikiso Hane, Reflections on the Way to the Gallows: Rebel Women in Prewar Japan (Berkeley: University of California Press, 1988), esp. 171, 176, 191–92; and Asahi Shimbun newspaper, “Murder of an Anarchist Recalled: Suppression of News in the Wake of the 1923 Tokyo Earthquake,” Japan Focus, November 5, 2007, http://www.japanfocus.org/-The_Asahi_Shinbun_Cultural_Research_Center-/2569.
6. Shinichi Sano, Kyokaiden: Shoriki Matsutaro to Kagemusha-tachi no Isseiki (ge) [Biography of Matsutaro Shoriki, vol. 2] (Tokyo: Bungeishunju, 2011), 442.
7. Sano, Kyokaiden: Shoriki Matsutaro to Kagemusha-tachi no Isseiki (jo) [Biography of Matsutaro Shoriki, vol. 1] (Tokyo: Bungeishunju, 2011), 217.
8. “The Press: Lord High Publisher,” Time, August 16, 1954, 74.
9. Partner, Assembled in Japan, 172.
10. Ben-Ami Shillony, Politics and Culture in Wartime Japan (New York: Oxford University Press, 1981), 99.
11. Sano, Kyokaiden [vol. 2], 446.
12. Partner, Assembled in Japan, 76; see also Shillony, Politics and Culture, 105.
13. “1,000 Ask Trial for Publisher,” New York Times, October 30, 1945; see also Sano, Kyokaiden [vol. 1], 438–44.
14. “Yomiuri Chairman Defends Actions in Internal Feud,” Asahi Shimbun, November 29, 2011, http://ajw.asahi.com/article/behind_news/AJ201111290056b.
15. Shinsho Hanayama, The Way of Deliverance: Three Years with the Condemned Japanese War Criminals (New York: Charles Scribner’s Sons, 1950), 4; see also Partner, Assembled in Japan, 73–74.
16. Hanayama, The Way of Deliverance, 5.
17. “Ruth’s Ex-Pal Held as Jap [sic] War Criminal,” Washington Post, December 6, 1945, 15.
19. United States Department of State, “Milestones 1945–1952: Korean War and Japan’s Recovery,” http://history.state.gov/milestones/1945-1952/KoreanWar.
20. David E. Kaplan and Alec Dubro, Yakuza—The Explosive Account of Japan’s Criminal Underworld (London: Futura Publications, 1987), esp. 69–71, 75–78.
21. Edward Uhlan and Dana L. Thomas, Shoriki: Miracle Man of Japan—A Biography (New York: Exposition Press, 1957), 181–82.
22. Partner, Assembled in Japan, 83.
23. Ibid., 78–79.
24. Ibid., 84.
25. Ibid., 78.
26. Ibid., 83–84.
27. Sano, Kyokaiden [vol. 2], 449; see also Partner, Assembled in Japan, 84.
28. Partner, Assembled in Japan, 84–86.
29. Edward F. Ryan, untitled article from Washington Post archives, September 22, 1954, 2.
30. “A Reactor for Japan,” Washington Post, September 23, 1954, 18.
31. “Belgium and Japan Seek 1st ‘A-for-Peace’ Power,” Washington Post, February 15, 1955, 5.
32. Sano, Kyokaiden [vol. 2], 450.
33. Ran Zwigenberg, “‘The Coming of a Second Sun’: The 1956 Atoms for Peace Exhibit in Hiroshima and Japan’s Embrace of Nuclear Power,” Japan Focus, February 6, 2012, http://japanfocus .org/-Ran-Zwigenberg/3685.
34. Robert Trumbull, “Japan Welcomes Peace Atom Show,” New York Times, November 1, 1955, 14.
35. Tetsuo Arima, Genpatsu—Shoriki—CIA [Nuclear power—Shoriki—The CIA] (Tokyo: Shinchosha, 2011), 119.
36. Japan Atomic Energy Commission, text of letter from US ambassador in Japan John M. Allison to Matsutaro Shoriki, January 13, 1956,http://www.aec.go.jp/jicst/NC/about/ugoki/geppou/V01/N01/19560510V01N01.HTML.
37. Yuki Tanaka and Peter Kuznick, “Japan, the Atomic Bomb, and the ‘Peaceful Uses of Nuclear Power,’” Japan Focus, May 2, 2011, http://www.japanfocus.org/-Yuki-TANAKA/3521. See also Zwigenberg, “‘The Coming of a Second Sun,’” Japan Focus.
38. Ran Zwigenberg, “‘The Coming of a Second Sun.’”
39. Tetsuo Arima, Nippon Terebi to CIA—Hakkutsu-sareta “Shoriki Fairu” [NTV and the CIA—The uncovered “Shoriki files”] (Tokyo: Takarajima-sha, 2011), 30.
40. Arima, Genpatsu—Shoriki—CIA, 113; see also “From Hiroshima to Fukushima: The Political Background to the Nuclear Disaster in Japan,” World Socialist Web Site, June 23, 2011, http://wsws.org/articles/2011/jun2011/fuku-j23.shtml. Quotation is retranslated into English from the Japanese original.
41. Arima, Genpatsu—Shoriki—CIA, 112.
42. National Archives and Records Administration, “Cryptonyms and Terms in Declassified CIA Files—Nazi War Crimes and Japanese Imperial Government Records Disclosure Acts,” dated June 2007, http://www.archives.gov/iwg/declassified-records/rg-263-cia-records/second-release-lexicon.pdf. Accessed on March 13, 2012.
44. Arima, Nippon Terebi to CIA, 63; see also Partner, Assembled in Japan, 86–87.
45. Arima, Genpatsu—Shoriki—CIA, 58.
46. Arima, Nippon Terebi to CIA. A copy of the document is partially displayed on the book’s front cover.
47. Arima, Genpatsu—Shoriki—CIA, 110; see also “Tsunami: Japan’s Post-Fukushima Future,” Foreign Policy, 2011, 198,http://www.foreignpolicy.com/files/tutEkfeUr4fOa3v/06282011_Tsunami.pdf.
48. Partner, Assembled in Japan, 228.
49. “Advertising Expenditure of Leading Corporations (FY 2010),” Nikkei Advertising Research Institute, http://nikkei-koken.com/surveys/survey14.html.
50. “Toden Kokoku-hi 90-oku en no Hamon” [Ripple effect of Tokyo Electric’s nine billion yen advertising expenses], Tokyo Shimbun, May 17, 2011, 26–27. The figure of nine billion yen is for 2009.
51. Translated commentary by Osamu Aoki on Asahi Newstar cable TV program Nyusu no Me [Eyes of the news], April 7, 2011, http://www.youtube.com/watch?v=-2Ma4eWhX_U&feature=related.
52. For an overview of how the “kisha club” system works and other related issues, see Tomoomi Mori, “Japan’s News Media,” in Censored 2007: The Top 25 Censored Stories, eds. Peter Phillips and Project Censored (New York: Seven Stories Press, 2006), 367–82.
53. Kanako Takahara, “Tight-lipped Tepco Lays Bare Exclusivity of Press Clubs,” Japan Times, May 3, 2011, http://www.japantimes.co.jp/text/nn20110503f1.html.
55. Days Japan magazine, “Genpatsu Jiko Hodo no Kensho Shiryo” [Verified documentation of nuclear accident reporting], February 2012, 41.
56. Kenichi Asano, “BBC ni yoru Jiko Hodo” [Accident reporting by the BBC], Days Japan, February 2012, 60–61; see also “Japan Earthquake: Concerns over Nuclear Power Stations,” BBC News, March 11, 2011, http://www.bbc.co.uk/news/world-asia-pacific-12719707.
57. “Japan’s Desperate Nuclear Gypsies,” Al Jazeera English, June 30, 2011,http://www.aljazeera.com/video/asia/2011/06/2011630173015833205.html.
58. Nuclear Ginza, Small World Productions, Cardiff, England, 1995,http://www.smallworldtv.co.uk/public/main.cfm?m1=c_75&m2=c_2&m3=c_56&m4=e_0. A Japanese subtitled version of the film can be viewed at http://www.youtube.com/watch?v=CNq0qyQJ5xs.
59. Tomohiko Suzuki, press conference at the Foreign Correspondents’ Club of Japan, Tokyo, December 15, 2011, http://www.youtube.com/watch?v=6_lYwNyTyiU. Suzuki goes into more detail in his book Yakuza to Genpatsu [The yakuza and nuclear power] (Tokyo: Bungeishunju, 2011).
60. Andrew Roth, “Japan’s Press Revolution,” Nation, March 16, 1946, 315.
61. “The Press: Lord High Publisher,” Time, 1954, 76.
62. Herb Heft, “Baseball Men Cite Good-Will Created on Trip by Giants,” Washington Post, February 7, 1954:C2.
63. Foster Hailey, “Japan’s Mr. Atom,” New York Times Magazine, November 17, 1957, SM50.
64. “Show Business: Television Abroad—Come-On in Color,” Time, August 3, 1959, 57.
65. “The Press: Publishers—Bigger & Better than Anyone,” Time, May 24, 1963, 57–58. Emphasis in the original.
66. Edwin McDowell, “Obituaries: Edward Uhlan, 76, Founder and Leader Of Vanity Publisher,” New York Times, October 26, 1988,http://www.nytimes.com/1988/10/26/obituaries/edward-uhlan-76-founder-and-leader-of-vanity-publisher.html.
67. “Matsutaro Shoriki, 84, Dies; Publisher of Japanese Daily,” Washington Post, October 9, 1969, M10.
68. Richard Halloran, “Premier Miki Vows Lockheed Inquiry,” New York Times, April 4, 1976, 2.
69. Legewie, Japan’s Media: Inside and Outside Powerbrokers, 3.
70. ArtDaily.org, “Museum of Fine Arts, Boston, Announces New Chair of Art of Asia, Oceania, and Africa,” September 20, 2008, http://www.artdaily.com/index.asp?int_new=26246&int_sec=2.
71. Norimitsu Onishi and Ken Belson, “Culture of Complicity Tied to Stricken Nuclear Plant,” New York Times, April 26, 2011,http://www.nytimes.com/2011/04/27/world/asia/27collusion.html?pagewanted=all.
The gap between the rich and poor continues to grow. The wealthiest 1 percent held 8 percent of the economic pie in 1975 but now hold over 20 percent. This is a striking change from the 1950s and 1960s when their share of all incomes was slightly over 10 percent. A study by Emmanuel Saez found that between 2009 and 2012 the real incomes of the top 1 percent jumped 31.4 percent. The richest 10 percent now receive 50.5 percent of all incomes, the largest share since data was first recorded in 1917. The wealthiest are becoming disproportionally wealthier at an ever increasing rate.
Most of the literature on income inequalities is written by professors from the sociology departments of universities. They have identified factors such as technology, the reduced role of labor unions, the decline in the real value of the minimum wage, and, everyone’s favorite scapegoat, the growing importance of China.
Those factors may have played a role, but there are really two overriding factors that are the real cause of income differentials. One is desirable and justified while the other is the exact opposite.
In a capitalist economy, prices and profit play a critical role in ensuring resources are allocated where they are most needed and used to produce goods and services that best meets society’s needs. When Apple took the risk of producing the iPad, many commentators expected it to flop. Its success brought profits while at the same time sent a signal to all other producers that society wanted more of this product. The profits were a reward for the risks taken. It is the profit motive that has given us a multitude of new products and an ever-increasing standard of living. Yet, profits and income inequalities go hand in hand. We cannot have one without the other, and if we try to eliminate one, we will eliminate, or significantly reduce, the other. Income inequalities are an integral outcome of the profit-and-loss characteristic of capitalism; they cannot be divorced.
Prime Minister Margaret Thatcher understood this inseparability well. She once said it is better to have large income inequalities and have everyone near the top of the ladder, than have little income differences and have everyone closer to the bottom of the ladder.
Yet, the middle class has been sinking toward poverty: that is not climbing the ladder. Over the period between 1979 and 2007, incomes for the middle 60 percent increased less than 40 percent while inflation was 186 percent. According to the Saez study, the remaining 99 percent saw their real incomes increase a mere .4 percent between 2009 and 2012. However, this does not come close to recovering the loss of 11.6 percent suffered between 2007 and 2009, the largest two-year decline since the Great Depression. When adjusted for inflation, low-wage workers are actually making less now than they did 50 years ago.
This brings us to the second undesirable and unjustified source of income inequalities, i.e., the creation of money out of thin air, or legal counterfeiting, by central banks. It should be no surprise the growing gap in income inequalities has coincided with the adoption of fiat currencies worldwide. Every dollar the central bank creates benefits the early recipients of the money—the government and the banking sector — at the expense of the late recipients of the money, the wage earners, and the poor. Since the creation of a fiat currency system in 1971, the dollar has lost 82 percent of its value while the banking sector has gone from 4 percent of GDP to well over 10 percent today.
The central bank does not create anything real; neither resources nor goods and services. When it creates money it causes the price of transactions to increase. The original quantity theory of money clearly related money to the price of anything money can buy, including assets. When the central bank creates money, traders, hedge funds and banks — being first in line — benefit from the increased variability and upward trend in asset prices. Also, future contracts and other derivative products on exchange rates or interest rates were unnecessary prior to 1971, since hedging activity was mostly unnecessary. The central bank is responsible for this added risk, variability, and surge in asset prices unjustified by fundamentals.
The banking sector has been able to significantly increase its profits or claims on goods and services. However, more claims held by one sector, which essentially does not create anything of real value, means less claims on real goods and services for everyone else. This is why counterfeiting is illegal. Hence, the central bank has been playing a central role as a “reverse Robin Hood” by increasing the economic pie going to the rich and by slowly sinking the middle class toward poverty.
Janet Yellen recently said “I am hopeful that … inflation will move back toward our longer-run goal of 2 percent,” demonstrating her commitment to an institutionalized policy of theft and wealth redistribution. The European central bank is no better. Its LTRO strategy was to give longer term loans to banks on dodgy collateral to buy government bonds which they promptly turned around and deposited with the central bank for more cheap loans for more government bonds. This has nothing to do with liquidity and everything to do with boosting bank profits. Yet, every euro the central bank creates is a tax on everyone that uses the euro. It is a tax on cash balances. It is taking from the working man to give to the rich European bankers. This is clearly a back door monetization of the debt with the banking sector acting as a middle man and taking a nice juicy cut. The same logic applies to the redistribution created by paying interest on reserves to U.S. banks.
Concerned with income inequalities, President Obama and democrats have suggested even higher taxes on the rich and boosting the minimum wage. They are wrongly focusing on the results instead of the causes of income inequalities. If they succeed, they will be throwing the baby out with the bathwater. If they are serious about reducing income inequalities, they should focus on its main cause, the central bank.
In 1923, Germany returned to its pre-war currency and the gold standard with essentially no gold. It did it by pledging never to print again. We should do the same.
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Frank Hollenbeck teaches finance and economics at the International University of Geneva. He has previously held positions as a Senior Economist at the State Department, Chief Economist at Caterpillar Overseas, and as an Associate Director of a Swiss private bank. See Frank Hollenbeck’s article archives.
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