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He has a savagely good point. The most important parallels between the Japanese situation and the US situation:

1. The BOJ did QE - at the advice of people from our Federal Reserve (Greenspan).

2. They ran HUGE deficits, and in the process went from one of the world’s largest creditor countries to one of the world’s largest debtor nations. Japan’s national debt is now unsustainable, both for fiscal as well as demographic reasons.

3. The money went into the Japanese banks, which should have been broken up. There, like here, huge amounts of money were poured into the banks to keep them solvent - with no accountability, no change in structure, nothing. And as a result, the bailout money ran down ratholes.

4. The bailouts helped spawn the US bubble by means of the Yen carry trade. The Fed’s ZIRP is even now blowing up an equity bubble, and the price premium of US Treasury debt is unsustainable in the face of the unrelenting supply.

In Japan, just as here in the US now, the central bank warped the yield curve to create a situation of absurd profit for the banks (ie, a zero short term rate, so ergo, the yield curve is by definition “steep” because the long term rates never go to zero). The idea was then (as we’re doing now) that they’d relax the accounting standards to allow the bankers to carry around dubious loans and use profits from the manipulated yield curve to underwrite losses on bad debt.

The problem with this idea, then as now, was that the analysts and wonk types seriously underestimated the amount of bad debt that the banks had. It took more than a decade for the bad debt to finish coming to the surface, and in the meantime, people lost confidence in both the bankers and the political leaders, which led up to the election we saw in August of this year.

There’s only so many lies, obfuscations and only so much thimblerigging that the public will stand out of bankers. The patience in Japan was probably more prolonged than the patience here will be, owing to cultural differences.