New vs. Old. Could the Cosa Nostra be next?

Weak economy hits Japan's gangsters
Posted by Charley Blaine on Tuesday, October 6, 2009 3:56 PM

How's the Japanese economy doing? Maybe not so good, which may come as a surprise as the yen continues to rise against the dollar. Times are tough enough that some gangsters in Japan are actually having to pass exams to be, well, gangsters.

Gangsters, known as yakuza, are on the run as growth wanes and deflation worsens. Yet the oddest development by far involves yakuza members sitting for exams covering key aspects of their work. If you think this is just a law-enforcement issue, think again, Bloomberg News said today. It’s a sign Japan’s funk will be longer than economists predict.

That may surprise those betting Japan is recovering. Oddly, though, the plight of gangsters tells the story. Huddled over legal texts and documents isn’t the popular image of Japan’s storied mobsters. When they aren’t collecting debts, shaking down shop owners, overseeing prostitution rings or rigging stocks, members of Japan’s biggest organized crime group, Yamaguchi-gumi, are studying for 12-page tests. The tests allow gangs to weed out their weaker links. Surreal? Yes, but also a telltale sign of the seriousness of Japan’s deflationary cycle.

The yakuza are having to work harder than ever to get by and are stepping up education efforts. This column isn’t meant to convey sympathy for them. It’s that the advent of a yakuza version of the Series 7 exam that stockbrokers take is a bad omen -- very bad.

"The yakuza are a real barometer," says Jake Adelstein, a blogger and the author of a new book, "Tokyo Vice." "When the yakuza are doing poorly, the economy is doing poorly."