This reminds me of a White House state dinner in February 1979, when I was governor of Tennessee. President Jimmy Carter said, “Governors, go to Japan. Persuade them to make here what they sell here.”

“Make here what they sell here” was then the union battle cry, part of an effort to slow the tide of Japanese cars and trucks entering the U.S. market.

Off I flew to Tokyo to meet with Nissan executives who were deciding where to put their first U.S. manufacturing plant. I carried with me a photograph taken at night from a satellite showing the country at night with all its lights on.

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Federal Reserve officials judged that the U.S. economy was gaining traction when they met three weeks ago, but highlighted the potential negative impact of rapidly rising commodity prices on inflation expectations, consumer spending and business investment.

At the meeting, the Fed maintained its easy-money policies while offering reassuring words about the economic outlook and signaling vigilance on inflation.

Officials at the meeting indicated increasing energy and commodity prices had fed a recent boost in headline inflation, but expected that rise to be temporary. They showed some concern, though, that businesses and consumers may not feel the same way.

“Accordingly, participants considered it important to pay close attention to the evolution not only of headline and core inflation but also of inflation expectations,” the minutes said.

Fed officials also discussed new sources of uncertainty in the economy, noting that “unfolding events in the Middle East and North Africa, along with the recent earthquake, tsunami, and subsequent developments in Japan, had further increased uncertainty about the economic outlook.”

Despite some risks, Fed officials said the economy is on firmer footing, with unemployment declining while consumer spending and business investment show signs of strength. The Fed also maintained its easy-money policies. (more…)

WSJ’s Yumiko Ono reports on fears surrounding the Japanese’s government’s decision to dump more than 11,000 tons of radioactive water into the Pacific Ocean.

Earthquake in Japan

See all the graphics on the situation in Japan — from before and after photos to the status of the reactors to survivors’ stories.

Japanese authorities said Tuesday they had discovered for the first time fish swimming off the country’s Pacific coast carrying high levels of radioactive materials. The finding, the latest blow from the nuclear crisis, is stoking concerns about environmental damage to local marine life, the safety of the nation’s food supply, and the viability of Japan’s iconic seafood industry, which was already struggling following the tsunami.

The two separate samples of tiny fish were caught before Tokyo Electric Power Co., the operator of the crippled Fukushima Daiichi reactors, began the process Monday night of dumping 11,500 tons of contaminated water into the sea, raising fears that the problem could spread significantly in coming days. Tepco has said that, before the authorized unloading of water, there was an uncontrolled leak of an uncertain quantity of highly radioactive water from the reactors into the sea.

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The nuclear crisis in Japan is reviving a battle over what should be done with the spent nuclear fuel that has been piling up around the U.S. for decades.

Under a 2002 law, Nevada’s Yucca Mountain is the designated repository site for the nation’s high-level nuclear waste—which consists mostly of spent nuclear fuel from commercial power plants. But the construction and opening of the repository has stalled amid political and legal fights. The waste has mostly stayed at the dozens of commercial nuclear reactors where it was generated.

So far, the U.S. has generated roughly 70,000 metric tons of nuclear waste—enough to fill a football field more than 15 feet deep, according to the Government Accountability Office. The GAO has projected that number will more than double to 153,000 metric tons by 2055.

Federal regulators say current methods of storing the waste at power plants are safe and can continue to be so for decades. Yet in light of the overheating of spent fuel at Japan’s Fukushima Daiichi plant, some elected officials have renewed calls to remove waste from nuclear plants, many of which are near heavily populated areas. (more…)

Plan: Sell Nuclear Business to Comcast.

Discussion: GE’s legal position, as maker of the failed reactors, is exceptionally strong, based on long-standing immunities in Japanese and international law pertaining to builders of nuclear plants. Likewise, the outlook for the nuclear business, despite the Japanese setback, is currently excellent based on widespread concern about global warming.

Thinking outside the box, however, we believe therefore it is time for GE to exit the nuclear business. We apply the new operational discipline enunciated by CEO Immelt in late 2008. To quote the CEO: “Assume a black swan!”

First, liability. Whatever the law says, this accident will haunt us for a long time, perhaps expensively so. BP thought it was shielded by a U.S. law that strictly limited cleanup liability, and we all know what happened—BP was pressured to deliver up an extralegal settlement of $20 billion to politicians, no strings attached. Heed should also be paid to Japan’s relentless criminal pursuit of Mitsubishi Fuso executives, including the company’s president, over a truck accident that killed a single person. Management is certainly aware that we’ve been stymied in selling our latest reactor designs in India by a new local law that extends liability from plant operators to equipment suppliers (i.e., us) despite international agreements and precedents to the contrary. For that matter, remember the headache when GOPers in Congress wanted to put us (!) on the hook for any nuclear accidents in North Korea from reactors we would have sold as part of a Clinton plan to bribe Pyongyang to give up its atomic bomb program.

On Japanese blogs, wiseacres already are referring to our 1960s-era reactor design as the “third nuclear attack on Japan,” sniping that conveniently ignores our local partner, Hitachi. But this too poses a problem: Companies in Japan do not stand on their legal rights but follow the direction of politicians, who may find it useful to require Hitachi and other nuclear contractors to accept blame.*

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