Continuing with what I've gleaned from Daniel Kahneman's "Thinking Fast and Slow" as it applies to Fushishima (sorry for the length):

Typically, after a crisis, there will be some expert who pops up and says: here is this piece of information that would have given you proper warning if only you had listened. This was true after Pearl Harbor, 9/11, Fukushima, etc. Sometimes, this is legitmate, sometimes not. Intelligence agencies have to pore over tons of data. They have to decide what data is important to look at and which is not.

So, that raises the question of what caused the disaster at Fukushima. Were the utilities and government agencies acting on a reasonable assessment of risks, and making a reasonable cost-benefit decision about the needed height for a seawall against the tsunami? After all, higher electric rates have negative effects. One cannot prevent all bad outcomes. I've seen no one blame the authorities for not building a seawall high enough to block the tsunami--even though 30,000 people died.

So, do we have scenario A or B or C?

A) They made a reasonable decision, which happened to turn out wrong because the tsunami was much higher than almost every expert said was remotely likely. If 99 experts say you only need a 6-meter wall and one guy says you need 11 meters, was it unreasonable to built the 6-meter wall because the cost is significantly less?

B) The authorities were unconciously biased against seeing the risks. If they build the higher wall, that is a sure cost now. But the possible event they are spending money to prevent is not only remotely possible in the long-term, but even more unlikely to happen on their watch. In such circumtances, Kahneman says, experiments show that even experts regularly undervalue the cost and probability of the rare event and overvalue the cost of prevention. B is worsened by the psychology of groupthink that makes dissent tough.

B) They were corrupt deceivers who deliberately turned a blind eye to the risks, and who consciously deceived the public as to the risks.

Which is worse? Which is more correctable?

If the answer is A, it is hard to see how one can correct this. We'd have to accept that, if we want nuclear power, accidents are going to occur from time to time. On the other hand, B and C might be correctable if there were a tough independent watchdog whose sole mission were safety rather than promoting nuclear power. Or if there were more opportunities and a more accepting environment for dissent among the advisory groups. People would rather believe in C because it implies some correctability. In addition, people like to assign blame when disasters occur (look at JFK assassination conspiracy theories). So, C has been the dominant narrative in the press, even if A and B are also present. If we accept B and C, we might have to accept that corruption and conflicts of interest and groupthink will always occur and so, once again, nuke accidents are going to occur from time to time.

I think there are elements of all three at work here.
Even though there were a couple experts who pointed out a very high tsunami near the Fukushima Dai-Ichi plant in 869, most experts didn't go back that far. So, they said a 6-meter wall was enough. A disaster was avoided at the nearby Onagawa plant only because one man, a former Tohoku Electric VP, insisted on a 14.8 meter wall while everyone else said 12 meters was enough and was less expensive. Luckily, this one man prevailed, but he could just as easily have lost the fight and we'd have had an even worse disaster (http://mdn.mainichi.jp/perspectives/news/20120319p2a00
m0na020000c.html).

As for scenario C, we have a history of falsification of reports at TEPCO, reports of a number of official groups (including TEPCO's own advisory group) advising a seawall twice as high as what they had, reports of a number of incidents in which authorities refused to undertake measures to reduce risks that they knew existed. For example, Asahi reported that, in 2010, the "watchdog" Nuclear and Industrial Safety Agency (NISA) decided that there were some flaws in the nuke design that needed to be corrected. But, in the words of Asahi, NISA "shied away from tougher regulations, concerned that it could pave the way for lawsuits disputing the soundness of the design of some reactors."
http://ajw.asahi.com/article/behind_news/social_affairs
/AJ201203240031

Yoshisuke Iinuma, former editor-in-chief at Toyo Keizai wrote in The Oriental Economist:

The pro-nuclear faction was overly
assertive about the safety of Japanese
nuclear plants, and reluctant about safety reforms and plant replacement. They were even more negative about the introduction of further safety regulations because they feared that the public would react: "If plants can be made safer than they are now, doesn't that mean there were flaws in the first place; how many more flaws remain?"
That reminds me of how the Finance Ministry stifled precautions or admissions on the non-performing loan problem, even sometimes ordering bank executivies to engage in illegal cover-ups, according to court testimony of the bankers who were prosecuted

In the case of Fukushima, knowledge was hidden even after the crisis. Even if one grants the authorities'
excuse that they were trying to prevent panic, the fact is that their dishonesry worsened the distrust and anxiety. When you keep "crying sheep" when there is a wolf, people won't believe you even when it really is a sheep. Polls showed only 12% of people believed Noda's statement that the Fukushima plants had acheived cold shutdown. All this has made it difficult to speak rationally about the benefits and risks of nuclear power compared to the genuinely available alternatives.

And while scenario C is undoubtedly true, is it the whole story? Or are scenarios A and B being given less weight than they should be given?

I have no answers. But I've learned from Kahneman that framing the questions correctly is the beginning of wisdom, even for experts.

P.S. to Ron Dore, among all the competing schools of economics, I don't know of one that thinks you can stimulate investment by raising interests rates, especially to to a prohibitive 5-6% real rate. On the contrary, that's what central banks do to stall an overheating economy.

Richard Katz
The Oriental Economist Report