MashGet

In the 1990s, when I was a technology analyst on Wall Street, I often heard economists explain why Japan's economy and stock market were mired in a lost decade.

Japan, the economists said, refused to acknowledge that its banks were insolvent. Japan was allowing the banks to continue to pretend that they were healthy--by not writing down bad loans and by making new loans so companies could pay interest on bad loans and the bankers could say that the bad loans were good loans. Until Japan forced its banks to write off bad loans and stop making new loans to pay interest on bad loans, the economists said, Japan's economy would suffer.