Rubin emerged having promised nothing -- and said everything. "The U.S. is being quite candid," says TIME business correspondent Bernard Baumohl. "Japan must do something to revive their economy." What the U.S. has in mind are not only long-term structural reforms but a very simple short-term Keynesian solution of government spending and tax cuts. But despite repeated promises by Prime Minister Hashimoto, Japan's government has been frustratingly slow to act.
"There's a battle among Hashimoto's own people," says Baumohl. "Many of them are intent on further reducing the budget deficit -- tax reduction would knock them off that course." But in recessionary times, belt-tightening (as the U.S. learned under Herbert Hoover) can be disastrous. Instead of leading the recovery in Asia, Japan's doldrums are suppressing it. The rest of the world is waiting.