"Free market forces aren't going to do this, " he said in a lecture earlier this year.

BBC: Profile: Steven Chu

State Conservative Party Chairman Michael Long, influential with Senate Republicans, said last week that market forces should determine wages so employers aren't stuck with political mandates that sap commerce.

WSJ: Minimum wage game changed when NY lawmakers return

As for Japan, KMV's model says that if the government lets market forces take their course, 3 of Japan's 19 largest banks -- it won't name names -- have at least a 2% chance of defaulting on their debt over the next year.

FORBES: Default-risk bookies