the current economic crisis is a structural problem.

I believe the current economic crisis is a structural problem.

If we analyze the bad debt problem as a combination of debt, liability and current value, then debt is a problem of housing prices and liability is a problem of housing loans. And the current value is a problem of repayment funds.

To solve the sub-prime problem it is necessary to apprehend the repayment funds, i.e., the currently attainable currency value, from both sides -- debt and liability.

The key to doing this is how to harmonize the volatility of assets, which supports the liability, the fixed nature of indebtedness, and how to integrate them into the current value.

I believe that the bad debt issue cannot be solved only by disposing of loans.

Small business is the backbone of employment. According to SBA for 2004, 99.7% of all U.S. companies were small businesses. Of all employees in the pubic sector, 50.9% were employed by small businesses and their income accounted for 44.3% of the total paid to all public sector employees.

In this light, small business is clearly the key to overall business recovery. Basically, money is circulated by businesses earning cash everyday.

While small businesses and self-employed people are more susceptible to adversely changing business conditions, they are more able to be flexible enough to survive.

Financially independent, self-employed people are essential for small business.

They are modestly successful, and therefore they have large political influence. Such self-employed small business owners are the backbone of regional economy.

Regarding the industry segment they occupy, small business are more engaged in traditional industries and product-based industries, which are sunset industries, rather than sunrise industries.

Apparently, sunrise industries are thought to generate new employment and demand. But, in fact, we should think that sunrise industries involve risk and limits. As a good example, we can see that sunrise industries have induced the economic bubble and confused the market.

The question is why traditional industries or product-based industries have declined. The answer lies in the market -- the reason is that the market cannot sustain proper prices.

Japanese researchers have noted that small businesses in the U.S. have difficulty borrowing money from banks because of stringent restrictions.

In any event, I believe fostering small business is essential for increasing market density and facilitating smooth fund circulation.

It is important to protect the market, rather than to protect industries and corporations.

In any era, dreams and innovation arise from back-street factories.

　　　　　　　　　　　　　　　　

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