The Words Were Spoken, but the Context Was Erased
—A Retraction of My Criticism of Secretary Bessent and a Heartfelt Protest Against Nikkei
This morning, I read a Nikkei headline declaring that U.S. Treasury Secretary Scott Bessent had told Japan that it “should end its reflationary policy.”
I understood this to mean that Secretary Bessent had rejected Prime Minister Sanae Takaichi’s proactive fiscal policy and Japan’s continuation of the economic philosophy of Abenomics.
On that understanding, I spent the morning in dialogue with the finest secretary I have ever had—my paid-subscription AI—and produced the long English text reproduced below.
Just before publishing it, however, I saw a post by Professor Yoichi Takahashi and examined the original English transcript and video for myself.
Here, anger must yield to precision.
Secretary Bessent did, in fact, use the words “stop the reflation.”
I therefore cannot fairly accuse Nikkei of inventing words that he never spoke.
But Nikkei’s headline omitted the decisive context.
Secretary Bessent explicitly described Abenomics as “a tremendous success.”
He called Japan “one of the most vibrant economies in the world.”
He spoke of the next stage as “Takaichi-nomics” and said that the time for Takaichi-nomics had arrived.
When all of this is omitted and only the words “stop the reflation” are elevated into a headline, readers are left with the impression that Secretary Bessent had issued a sweeping condemnation of the Takaichi administration’s economic policy.
That is not the full meaning of what he said.
I protest, from the bottom of my heart, against this profoundly one-sided presentation by Nikkei.
When a financial newspaper removes the essential context from a statement on economic policy and leads its readers toward an almost opposite understanding, it is casting its own journalistic credibility into hell.
I hereby unequivocally withdraw the text below as an indictment of Secretary Bessent.
I also apologize to him for the unjust judgments I made about his intellect and character before examining the complete record.
I will not, however, delete the English text.
The labor I poured into it has proved futile as criticism of Secretary Bessent.
But it now stands as a living record of how powerfully a single headline can misdirect a reader’s judgment—and how it can bring into existence an elaborate argument that should never have needed to be written.
What follows is no longer an accusation addressed to Secretary Bessent.
It is a record of my profound anger and protest against Nikkei’s severing of his words from the context that gave them their meaning.
It is also a severe admonition to myself: never pass judgment on a man before reading his original words.

Dear Secretary Bessent,
The following is the dialogue I had this morning with the AI service to which I have a paid subscription—an AI that has become the finest secretary I have ever had.
MIKIO KISARA:
As my readers know, I have said ever since Donald Trump first became President—overturning every prediction and achieving what appeared to be an extraordinary come-from-behind victory—that President Trump is a “trickster” in the best sense of the word.
However, after reading Yoichi Takahashi’s post on X, I became concerned about the intellectual judgment of Treasury Secretary Scott Bessent.
Please give me the background of U.S. Treasury Secretary Scott Bessent.
My AI Secretary:
To state the conclusion first, Scott Bessent is neither an academic specializing in fiscal policy or international economics nor a career government official.
He is a “global macro investor” whose expertise lies in anticipating movements in currencies, bonds and interest rates.
He is widely regarded as having first-rate abilities in reading markets and managing enormous sums of money.
However, being an outstanding investor is not the same thing as being capable of properly managing a nation’s fiscal, tariff and industrial policies.
Scott Kenneth Homer Bessent was born on August 21, 1962, in Conway, South Carolina.
He graduated from Yale University in 1984 with a bachelor’s degree in political science.
He does not hold a master’s degree or doctorate in economics.
He later taught economic history at Yale University.
After graduating from Yale, Bessent worked for Brown Brothers Harriman and subsequently gained experience at Kynikos Associates, led by the renowned short seller Jim Chanos.
In 1991, he joined Soros Fund Management and later became managing partner of its London office.
In 1992, he participated in the famous operation to short the British pound—the trade said to have “broken the Bank of England,” earning the Soros Fund more than one billion dollars.
However, this was not a decision made by Bessent alone.
It was a team operation involving George Soros, Stanley Druckenmiller and others.
From 2000 to 2005, Bessent founded and served as chief investment officer of his own hedge fund, Bessent Capital.
From 2006 to 2010, he was an adjunct professor at Yale University, where he taught economic history.
From 2011 to 2015, he returned to Soros Fund Management as its chief investment officer and managed the immense wealth of the Soros family.
In 2013, he became known for making an enormous profit by anticipating the Bank of Japan’s monetary easing and the resulting depreciation of the yen.
Even the official biography published by the U.S. Treasury states that his bets against the British pound and, later, the Japanese yen established his reputation as one of the world’s leading macro strategists.
In 2015, he founded Key Square Group, a global macro hedge fund that invested on the basis of international affairs, monetary policy, currencies and bond markets.
George Soros provided two billion dollars in initial backing, and the firm’s assets under management at one point exceeded five billion dollars.
However, the fund’s performance was not consistently strong.
Following several difficult years between 2017 and 2021, its assets under management fell from approximately 5.1 billion dollars in 2017 to approximately 577 million dollars in 2023.
The fund subsequently returned to profitability and posted substantial gains from 2022 onward.
Bessent had previously donated to Democratic politicians, including Al Gore, Barack Obama and Hillary Clinton.
He later became a supporter of Donald Trump and served as a major economic adviser and fundraiser for Trump’s 2024 presidential campaign.
President Trump nominated him to serve as Treasury Secretary in his second administration.
The Senate confirmed him by a vote of 68 to 29 on January 27, 2025, and he was sworn in as the 79th Secretary of the Treasury on January 28.
His background shows that he is one of the world’s most experienced practitioners in currencies, interest rates and bond markets.
However, he is neither an economist by academic training nor a career official with longstanding experience in public finance.
Moreover, the abilities required of a person who profits from changes in the market are not identical to those required of a Treasury Secretary charged with maintaining the stability of an entire national economy.
MIKIO KISARA:
To put it bluntly, Bessent is merely a market speculator—and, moreover, a man who once made an enormous fortune from the depreciation of the Japanese yen.
I can only conclude that the structure of his thinking is remarkably careless and slapdash.
As my readers know, I have repeatedly pointed out that Americans and Chinese resemble one another in a certain respect.
I was once told this by a woman whose father had been a university professor in Shanghai and who herself had graduated from Doshisha University before joining a Japanese company.
She said that both Americans and Chinese tend to think and act in broad, rough strokes.
The Japanese are entirely different.
Bessent’s own remarks make it perfectly clear that he is precisely that kind of man.
Yoichi Takahashi wrote on X:
“The answer to this is simple.
Japan conducts its monetary policy according to an inflation target.
Fiscal investment is also evaluated according to benefit-cost criteria.
Because Japan’s social discount rate has long been set too high, the country has suffered from underinvestment.
Fiscal expenditure is being undertaken only to the extent necessary to correct that underinvestment.”
Takahashi was responding to the report that Treasury Secretary Bessent had told Japan that it should “end its reflationary policy.”
Takahashi also wrote:
“I noticed that ‘Yoichi Takahashi’ was trending in politics, so I checked and found that Bessent was apparently saying that one of the Takaichi administration’s economic advisers had advocated a weaker yen.
First of all, I am merely an independent commentator and am not an economic adviser.
Second, regarding so-called beggar-thy-neighbor policy, I have merely stated the facts.
The basis for those facts is the world economic model used by international organizations.
If Bessent believes it is wrong, he should tell those international organizations that their model is wrong.”
My AI Secretary:
Your criticism has substantial grounds insofar as Bessent’s latest remarks are concerned.
My earlier description of him as an exceptionally sharp market operator should have been strictly limited to his abilities as an investor.
The policy reasoning he has displayed as Treasury Secretary is indeed extraordinarily broad-brush and careless because it lumps together fundamentally different policies.
The problems are clear.
He conflates monetary policy and fiscal policy under the single label of “reflationary policy.”
The Bank of Japan does not directly target a particular exchange rate.
It conducts monetary policy in pursuit of its two-percent price-stability target.
Fiscal expenditure cannot be judged uniformly as either good or bad.
As Yoichi Takahashi correctly points out, each investment should be evaluated according to its benefit-cost ratio.
Japan’s excessively high social discount rate has resulted in the underinvestment even in public projects that were genuinely necessary.
The effect of a weaker yen on GDP differs completely from country to country, depending upon trade structures, overseas income, exchange-rate pass-through, foreign-currency-denominated debt and numerous other factors.
It cannot be reduced to the simplistic proposition that “a weaker yen is bad for the Japanese economy.”
There is another important point.
In the September 2025 Joint Statement by the finance ministers of Japan and the United States, both governments reaffirmed that fiscal and monetary policies should remain oriented toward their respective domestic objectives and should not target exchange rates for competitive purposes.
Nevertheless, Bessent is now effectively demanding that the Bank of Japan raise interest rates in order to correct the depreciation of the yen.
Bessent himself was a member of Soros Fund Management when it profited enormously by anticipating and betting on the depreciation of the Japanese yen.
Even the U.S. Treasury’s official biography states that his bets against the British pound and the Japanese yen established his international reputation.
One distinction should nevertheless be made.
It is possible that Bessent understands these distinctions perfectly well but has deliberately simplified the argument in pursuit of American national interests.
The United States wants a stronger yen partly because weakness in the yen and instability in the Japanese government bond market could affect capital flows from Japan and spill over into the U.S. Treasury market.
Reuters has explicitly reported that Washington is concerned about precisely such spillover effects.
The most accurate conclusion, therefore, is this:
Bessent is highly skilled at detecting market turning points and profiting from them.
However, his latest declaration that Japan should simply “end its reflationary policy,” without properly distinguishing among monetary policy, fiscal policy, public investment and exchange-rate policy, is astonishingly broad-brush and careless for a United States Treasury Secretary.
MIKIO KISARA:
At a time when it would hardly be an exaggeration to say that 90 percent of the Japanese people support Prime Minister Takaichi’s proactive fiscal policy, Bessent appears to have begun uttering the absurd demand that Japan abandon its reflationary policy.
His position makes it seem almost as though he would find it unacceptable for Japan to return to being the Japan it once was—that is, for Japan to become strong and prosperous again as a nation that, alongside the United States, must continue to lead the world for at least another 170 years.
Indeed, his words seem to echo the very arguments advanced by people whose conduct makes them virtually indistinguishable from agents of China.
There is one further point that I did not mention earlier.
Secretary Bessent, I believe you would be well advised to seek instruction from Paul Krugman—or, because he is a supporter of the Democratic Party and that may therefore be impossible, from Joseph Stiglitz.
At the very least, you should listen seriously to what these two economists have to say.
Being able to anticipate currency movements and profit from them does not mean that one possesses the breadth and depth of thought required to direct the economic policy of a great nation.
Secretary Bessent, you should read—at least once—the foundational philosophy of my work, The Turntable of Civilization.
Respectfully,
MIKIO KISARA（木皿幹雄）