Basically, yes. In both countries there was a major asset price bubble that got brutally popped. In Japan it was in real estate, and in the US it was in share prices. There are several major differences between Japan in 1989 and the US in 2002, though.

First, the US has a healthy banking system. Back in the 80s, when the savings and loan debacle hit, the US shut down all of the insolvent banks and increased bank capital requirements. This means that banks are healthy enough to lend, and more importantly foreclose on insolvent customers. In Japan the banks don't foreclose because they can't afford to write off the bad debt. This means that resources stay tied up in unprofitable enterprises, rather than being redirected into new wealth-creating enterprises. (Also, US businesses are much less dependent on banks for credit than Japanese ones are.)

Second, a share price bubble is much less painful to recover from than a real estate bubble. In both cases the bubble causes serious misallocation of resources, but once that happens you have to fix the problem by correcting the prices. Since stockmarkets are much more liquid than real estate markets are, prices will correct themselves much more quickly, and bad assets can be sold and the capital redirected into profitable businesses more easily.

Third, the US is in the middle of an un-frigging-believable productivity boom. The annualized productivity growth rate for the first half of 2002 is 7%. That's an *insane* number, and one of the two main reasons that we haven't seen much of a decline in unemployment -- people are working so much more efficiently that businesses are growing without hiring. This makes up for a whole host of structural problems, since the US is really in a position to grow itself out of trouble.

So my prediction is we're going to have a "jobless recovery" like we did in the early 90s, and the outlook for the longer term (2-10 years) is very bright if our productivity growth holds up (meaning it stays at or above 2%/year).