“There is no time to wait for the wobbly and unsteady Democratic Party to acquire the ability to be responsible for government through on-the-job training and for a two-party system to mature…At this rate, there will never be any reason whatsoever for entrusting the government to the Democratic Party.”
- Yosano Kaoru, Minshuto ga Nihon Keizai wo Hakai Suru (The Democratic Party Will Destroy the Japanese Economy), published in 2010
The treasury says the national debt
Is climbing to the sky
And government expenditures
Have never been so high
It makes a fellow get a
Gleam of pride within his eye
To see how our economy expands
The country’s in the very best of hands
- Johnny Mercer, “The Country’s in the Very Best of Hands”
THE WORD politicians themselves are using to describe the government of Prime Minister Kan Naoto is “absurd”. Nishioka Takeo, the president of the Diet’s upper house, called on Chief Cabinet Secretary Sengoku Yoshito to resign earlier this month. After taking one look at the lineup of the new Cabinet in which Mr. Sengoku was replaced, Mr. Nishioka called it “absurd”.
The presidents of both houses of the Diet traditionally resign their party memberships before assuming office. Mr. Nishioka was a member of the Democratic Party of Japan—Mr. Kan’s ruling party.
Another reshuffled Cabinet card was Kaieda Banri, who moved from the Ministry of Economic and Fiscal Policy to the Ministry of Economy, Trade, and Industry. His former slot in the deck is now occupied by Yosano Kaoru, who resigned from the opposition Sunrise Party to take the position. Quitting parties is getting to be a habit for Mr. Yosano. Before last year’s upper house election, he resigned from the Liberal-Democratic Party to form the Sunrise Party. Mr. Yosano owes his Diet seat to the LDP because they placed him on their proportional representation list. He lost his bid for reelection to the seat in Tokyo’s District #1 in 2009. The winner was Kaieda Banri.
That’s the same Yosano Kaoru quoted at the top of this post.
When reporters asked Mr. Kaieda about this thoughts on the new Cabinet lineup, he answered, “Life is absurd.”
There was little enthusiasm for the changes even in the ruling party. Said a DPJ member of the Saitama prefectural assembly after the new ministers were announced: “Even today I was asked at the train station, ‘Just what is the DPJ doing?’”
Kamei Shizuka of the People’s New Party—yes, they’re still in the ruling coalition—addressed a DPJ party conference on the day before the Cabinet changes were announced, and put it in their faces:
“The DPJ is now a disgrace. I am sincerely anxious for you to rouse yourselves.”
One of Mr. Kan’s three themes for his administration is “ending the absurdities”, which tells you all you need to know about his political tin ear. He’s given no sign of either stepping down or calling an election any time soon, however.
Mr. Kan’s Cabinet reshuffle may be absurd, but it was that or vacate the premises. One of the several reasons the upper house censured Mr. Sengoku was his attitude and intemperate language during Question Time in the Diet. (That’s why Mr. Nishioka wanted to see him gone.) Watanabe Yoshimi of Your Party described it as “impertinence, intimidation, and evasion,” to which he later added “bluster and prevarication”.
The upper house also censured the generally well-liked Land, Infrastructure, and Transport Minister Mabuchi Sumio because his ministry is responsible for the Coast Guard, and he had to take the fall for the YouTube release of the Coast Guard video of the Chinese banditry in the Senkaku islets. While the censures are not legally binding, the opposition refused to discuss legislation with the ruling party with those two men still in the Cabinet, and the opposition has more seats in the upper house.
Another reason for the realignment was that the prime minister is desperate to juice his flagging popularity among the electorate. (He is said to be particularly unpopular among women.) An indication of his standing with the public was the ratings for his live appearance on the television program Hodo Station (News Station) on 5 January. The program usually pulls in an audience of 13% to 14%, and averaged 14.7% for the four weeks prior to his appearance. Those ratings often rise slightly when a sitting prime minister shows up. Then-Prime Minister Abe Shinzo picked up a 16.7% share.
Mr. Kan could manage only 6.9%.
But it’s not his fault! Said the PM at the DPJ party conference earlier this month:
“What we have done so far was not wrong. We have carrried out our job with resolution, but the problem is that we’ve failed to fully convey what we’ve done.”
If you think that sounds as if he’s channeling Barack Obama, here’s more: To remedy the situation, he’s considering a televised address to the nation, after the style of American presidents.
It had better be a good speech. The latest Shinhodo 2001 poll has his rate of support at 28.8%, with 67.0%–a cool two-thirds—opposed. Just a skoche under half of the respondents want a lower house election now, at 49.6%, while 41.8% were content to let it ride.
Here’s why the DPJ falls into the second camp. The 16 January edition of the weekly Sunday Mainichi features a simulation by two university professors of a lower house election. The magazine admits it’s a speculative endeavor because candidates for several constituencies have yet to be decided by some parties. That caveat notwithstanding, they project the DPJ to lose 124 seats from their current total of 306 to fall to 182. They think some of the DPJ party stalwarts could be at risk, including Hatoyama Yukio and Sengoku Yoshito, and that most of the Ozawa-backed candidates who won for the first time in 2009 should think about other employment. The LDP would regain its position as the party with the most seats at 212, a pickup of 96, but that’s still short of the 241 needed for a majority. The magazine suggests they would have to create a coalition with both New Komeito and Your Party (+25) to form a government.
Former Yokohama Mayor Nakada Hiroshi observed that Cabinet reshuffles to boost electile dysfunction are a perverse part of Japanese political culture. He’s also concerned that the use of the censure weapon in an upper house controlled by an opposition party could get out of hand and turn the Diet into a political battleground. Mr. Nakata has a point, but in this case the DPJ were hoist by their own petard. They were the ones who created the weapon after their 2007 upper house election victory.
Now the DPJ wants to introduce Diet rules that would prevent upper house censure motions from causing Cabinet members to lose their position. Fancy that.
The new lineup
A common observation is that the DPJ, which proclaimed itself the standard bearer for new politics, has become a throwback to the bad old days of the LDP with a leftward tilt. Five of the 17 Cabinet ministers are affiliated with Rengo, the Japanese Trade Union Confederation.
One criticism of the old LDP was its faction politics. During its heyday, five major factions functioned as parties within the party. The DPJ criticized that approach, but in 2008, Keio Professor Kusano Atsushi argued in Seiken Kotai no Hosoku (The Law of the Change of Government) that the formation of factions was inevitable in the DPJ.
The new Cabinet suggests he was prescient. Six “groups” in the DPJ have two members each. Former Prime Minister Hatoyama’s group has only one. No one affiliated with former party President and Secretary-General Ozawa Ichiro was appointed. All the members have won at least five terms in the lower house, similar to an older informal rule of thumb used by the LDP.
The absence of Ozawa allies suggests there might be something to the rumors that Mr. Kan and Mr. Sengoku are ready to purge him. The Asahi Shimbun gossips that they’ll dump him if a citizen review panel forces his indictment. UPDATE: Mr. Ozawa was indicted. (The appointment of only one Hatoyama affiliate—the man who launched and bankrolled the party, and its first prime minister—might also be a sign they’re ready to have Mr. Hatoyama leave along with him.)
They say you can’t tell the players without a scorecard, but in this case, a scorecard won’t make much sense without knowing the game they’re playing.
People often cite the system of 1955, when two conservative parties merged to create the LDP and dominated politics for the rest of the century, as Japan’s primary political problem. Others, however, such as Watanabe Yoshimi of Your Party and Nakagawa Hidenao of the LDP, point to the statist system implemented in 1940 as explicated by Prof. Noguchi Yukio. That system instituted a total mobilization for the war effort and concentrated power in the central government under bureaucratic control. In that system, it makes no difference who the prime minister is. (Prof. Noguchi also thinks that the consumption tax would have to be raised to at least 20%–European VAT levels—to pay for social welfare programs.)
The Kan worldview
On 25 December last year, Kan Naoto met at the Kantei for three hours with a group of long-time friends who included Shinohara Hajime, professor emeritus at the University of Tokyo, and Kataoka Masaru of the old Shakai Shimin Rengo (Socialist Citizens Federation). It is thought they gave the prime minister a pep talk, urging him to stay the course to achieve a citizen revolution. They might have suggested Mr. Kan remember his lifelong political motto of “Deal with one problem and then move forward on all fronts.”
We already know the prime minister is a devotee of the ideas of Matsushita Keiichi, who looks forward to the dissolution of the nation-state and its replacement by supranational institutions above and local institutions below. Another aspect of the Kan philosophy is found in Prof. Shinohara’s book Shimin no Seijigaku (The Citizens’ Political Science), which holds that modern legislative democracy is unresponsive. Instead, Prof. Shinohara thinks policy should be determined by a random and compulsory (yes, compulsory) sampling of public opinion, followed by a time-limited debate in so-called “planning cells”. This would include even central government policies for science and technology.
That vision was shared to a certain extent by Hatoyama Yukio, who in his first Diet speech in October 2009 called for the creation of new values in a society that would enable greater participation by regional NPOs and citizens in issues involving public services. The DPJ favors greater support of NPOs with public funds.
Americans are familiar with the potential abuses of taxpayer-funded support of NPOs, as exemplified by the activities of the nefarious ACORN in the United States, which was forced to disband. Other Japanese point out that the Shinohara model resembles the Russian system of soviets (soviet being the word for “council”), originally worker and soldier councils thought to be a grassroots effort to promote direct democracy.
During the DPJ Party Conference held earlier this month, the delegates expressed the opinion that they had to return to their roots and differentiate themselves from “neo-liberals”.
Sengoku Yoshito traded for Edano Yukio
The widespread assumption that Chief Cabinet Secretary Sengoku Yoshito was the real power in the government prompted Kan Naoto to grumble to associates that he, and not Mr. Sengoku, was the prime minister. It was also widely assumed Mr. Sengoku took on so much responsibility for the operation of government because Mr. Kan was a constant threat to walk smack into the proverbial lamppost on the street.
As we’ve seen, however, the problem with this arrangement was that Mr. Sengoku’s behavior in office was so repellent people were fed up with him in just a few weeks.
He was traded straight up for Edano Yukio, the party’s acting secretary general, another former labor lawyer with ties to radicals. Mr. Sengoku will take Mr. Edano’s old job, and will also serve as the head of a party committee dealing with pension reform and whatever euphemism they’re using for raising taxes.
People thought Sengoku Yoshito was Kan Naoto’s puppeteer, and they think he operates the strings for Mr. Edano too. As far as it is possible to speculate about such matters, the most common view is that Mr. Sengoku is trying to take control of the party. He seems to be waiting for his chance to cut Ozawa Ichiro adrift, and the latest rumors have him trying to elbow aside the real party secretary-general, Okada Katsuya.
Here’s one DPJ MP on the selection of Mr. Edano as chief cabinet secretary:
“He was the secretary-general when we lost the upper house election last year. Should we forget his responsibility for that in just six months? I don’t understand it…none of the people have any expectations for this Cabinet.”
That was former Prime Minister Hatoyama Yukio, speaking of his own party while on a visit to India.
Okazaki Tomiko released outright
Okazaki Tomiko is another rodent who fled the sinking ship of the Socialist Party and scampered up the gangway to the Democratic Party vessel. She is opposed to Japan’s national flag and anthem. In July 2001, her political group illegally received funds from foreigners, including the director of the North Korean-affiliated schools in the country—a North Korean citizen–and a South Korean citizen who operates a pachinko parlor. The most controversial aspect of her career, however, was this:
That’s Ms. Okazaki participating in one of the weekly Wednesday comfort women demos at the Japanese embassy in Seoul in March 2005. She called for a Japanese embassy car to take her there.
They didn’t find some token make-work position for her in the Cabinet, either. She was named the chair of the National Public Safety Commission, which administers the National Police Agency. In other words, she was the head of the government agency in charge of maintaining public safety.
Politicians have the same right to free speech as anyone else, but they’re expected to exercise it with common sense and an awareness of their position. When a member of the Japanese Diet participates in a demonstration with Xs over the Japanese flag, it suggests an absence of common sense and self-awareness. Consider also what it suggests about Kan Naoto, who appointed her knowing about her background.
Ms. Okazaki’s immediate problem was that despite the ease with which she showed up for an anti-Japanese demonstration in Seoul, she couldn’t manage to drag herself to her office in Tokyo after North Korea shelled the South in November. Also, documents related to international terror investigations put together by the NPA somehow wound up on the Internet, and she made no effort to find a way to prevent the problem from recurring in the future.
She lasted just four and a half months in office.
Signed Yosano Kaoru to a free agent contract
Yosano Kaoru is the bad penny of Japanese Cabinet members. He’s now been a part of every Cabinet since Koizumi Jun’ichiro’s last one, with the exception of Hatoyama Yukio’s brief spell. He so often shows up when a Cabinet is on its deathbed that he became known as “the gravedigger” in the LDP.
He holds three portfolios in the Kan Cabinet: Minister for Economic and Fiscal Policy, Social Affairs and Gender Equality (which includes responsibility for the population decline), and Comprehensive Reform of Social Security and Taxes.
“Comprehensive reform of taxes” means promoting the Ministry of Finance position of raising taxes instead of cutting spending to fix the country’s budgetary problems. He’s long been known as the MOF bat boy. Your Party Secretary-General Eda Kenji was an aide to former Prime Minister Hashimoto Ryutaro when Mr. Yosano was the Deputy Chief Cabinet Secretary. Mr. Eda says he pushed the Finance Ministry line within the government more than even some ministry employees. Hashimoto wanted to reform the ministry by dividing up their responsibility for fiscal and financial service oversight, but the ministry was opposed. Mr. Yosano argued their case most strenuously. (A new agency for overseeing the banking, securities exchange, and insurance industries was created in 2000 after Hashimoto left office.)
Says Mr. Eda: “His entry into the Cabinet is the decisive factor in making this a Finance Ministry government.” That means, he explains, a tax increase government directed behind the scenes by the Finance Ministry.
He wasn’t alone in that opinion. Fukushima Mizuho, head of the Social Democrats, said much the same thing using many of the same words.
Takahashi Yoichi, a former official in both the Koizumi and Abe administrations, provides additional evidence in Gendai Business Online. When Takenaka Heizo shifted positions from Mr. Koizumi’s Financial Services Minister to Internal Affairs Minister to push the privatization of Japan Post, Mr. Yosano took his place. He argued within the Cabinet for rolling back government policy investment reforms, another Finance Ministry position.
Mr. Takahashi says he often debated with Mr. Yosano when the latter backed ministry efforts to debone reforms:
“Yosano is said to be an expert on policy, but he offered no policy-based arguments against my explanations. He only mentioned the names of people responsible for specific policies in the Finance Ministry and said we should do as they say. His statements were rather unlike that of a minister in charge of financial services.”
Mr. Yosano has also claimed there is no hidden surplus of funds in the Finance Ministry, but that nothing has manifested into something every year at yearend since 2006, and that something now totals JPY 40 trillion in the aggregate.
Here’s the delicious part: This politician who advocates a sharp rise in taxes to pay for social welfare spending, has no plans to cut spending or modify social welfare programs to make them more inexpensive, and fights governmental reform is referred to as a “fiscal hawk” in the Western media.
Mr. Kan’s selection of Mr. Yosano in the Cabinet is just the sort of move a dullwit would think is clever. The prime minister may even have thought the selection of a former enemy would been seen as a coup. The Asahi said Mr. Kan believed it would be the key to breaking the political deadlock. Three strikes and you’re out.
The prime minister had remarkably kind words for his former foe:
“I recognize that he is a politician with whom we have a great deal in common when it comes to the issues of the soundness of national finances and social welfare.”
But when Yosano Kaoru left the Liberal Democratic Party to form the Sunrise Party with Hiranuma Takeo, a high school classmate more than half a century ago, he told Reuters:
“We are fighting against the DPJ outside of the LDP. We intend to act as a brake. None of us is thinking about becoming the ruling party.”
In an April 2010 interview with the Asahi Shimbun, he said:
“This slovenly DPJ government must not be allowed to continue.”
“I have doubts about the DPJ policies overall, their political methods, and their use of the bureaucracy. It is unusual among the world’s democracies for a party to lack such clarity in the decision making process as the DPJ.”
During the same interview, he defined political leadership:
“Chart a general course and take responsibility for it. Take responsibility for your statements. That’s political leadership.”
Speaking to the Nikkei Shimbun about government pensions in 2005, he said:
“The DPJ follows the Swedish model. They’re trying to pull us toward a society in which the people are liable for 75%. It is clear they will rely on taxes, which will result in a large tax increase.”
In 2009, he called the DPJ party manifesto “almost fancy,” said it resembled “works of illusionist paintings”, and was “something like artificial bait for the election.” He also said the DPJ’s pet policy of child allowance payments “would not be fully achieved unless the consumption tax rate was raised to 25 percent or higher.”
He maintained that attitude through the 14th of this month, when he said at a press conference:
“The certainty of the effect of the (child allowance) policy was not fully explained when it was introduced…my spirit of criticism remains.”
He changed his mind in the intervening five days. On the 19th in an interview with Fuji TV, he said:
“I have little sense that it is unnatural”
Fujii Hirohisa named bench coach
The Hatoyama Cabinet’s first Finance Minister, Fujii Hirohisa (78) was brought back as the Deputy Chief Cabinet Secretary. He is the former head of the Finance Ministry’s Budget Bureau, and his appointment is an unmistakable signal to both the ministry and those hoping to reform Japanese government by curbing its influence.
He left the Hatoyama administration after little more than three months for “health reasons.” Those weren’t specified, but it might have been a sore back from being pushed out the door by former friend and ally Ozawa Ichiro. There were also rumors he had to carry a stash of liquor in his official vehicle to help him make it through the day. Perhaps Mr. Kan finds him a kindred spirit.
Sengoku Yoshito assumed the Justice Ministry portfolio when the former minister Chiba Keiko finally resigned after losing her upper house Diet seat last July. He was replaced by Eda Satsuki, who years ago started out in the same party as Kan Naoto: the Socialist Democratic Federation. He is known to be an opponent of the death penalty in a country whose electorate consistently polls from 60% to 70% in favor of capital punishment.
It was rumored that party poster girl Ren Ho was thinking of jumping the Kan Cabinet mudboat and running for governor of the Tokyo Metro District, but she chose to stay on board. Her puny 8.8% support rating among Tokyoites from among a hypothetical slate of candidates in a Shinhodo 2001 poll might have been one of the reasons.
Also staying put is Agriculture Minister Kano Michihiko. This is Mr. Kano’s second time in that post (the first was in 1989 during the GATT Uruguay round discussions). He is viewed as an ally of the Agriculture Ministry bureaucracy. As such, he is opposed to the prime minister’s proposal to join the TPP. Many thought he would be replaced for that reason, but now he most surely will join with ministry bureaucrats and the national agricultural co-ops to try to block entry into the TPP.
If you’ve gotten the idea by now that Kan Naoto has no idea what he’s doing, I’m not going to try to convince you otherwise.
Political commentator Yayama Taro was a long-time LDP supporter who backed the DPJ in the 2009 election because he saw them as the only way at the time to push forward with reform of the bureaucracy and government. His views have changed again:
“Prime Minister Abe of the LDP was the one who began to attack this disease, and Watanabe Yoshimi took up the baton as Reform Minister. They were unable to separate the adhesion between the politicians and the bureaucrats that has lasted 60 years. The DPJ won a massive victory in the 2009 election using the slogan, “Disassociation from the bureaucracy”.
“The resolution of this problem required the establishment of a National Strategy Bureau, a governmental reform council, and putting fiscal policy under the direction of the politicians. While implementing reform, they would establish a cabinet personnel bureau to evaluate civil service personnel.
“It should have been the work of the Hatoyama administration to pass the required legislation, but Finance Minister Fujii Hirohisa said a National Strategy Bureau wasn’t necessary and an office would do. Deputy Prime Minister Kan headed the office. He later became Finance Minister and was completely brainwashed by the ministry. He has not been interested in disassociating from the bureaucracy since becoming prime minister.
“Yosano is the politician the Finance Ministry bureaucrats have relied on the most. Based on his ideas and what he’s said, some have even referred to him as a Finance Ministry plant. Now he’s the Economic and Fiscal Policy Minister and Fujii is the Deputy Chief Cabinet Secretary. There are no laws securing the political disassociation from the bureaucracy. These personnel choices are simply to enable tax and social welfare policies in accordance with Finance Ministry specifications. The specifications for both policies were proposed by Yosano during the Aso administration. If the DPJ thought those policies were acceptable, they should have been adopted a long time ago.”
One economic news website quoted a politician whom the identified only as a former member of an LDP government:
“I have no idea what that person (Kan) wants to do. Even when he talks about the Heisei Opening of Japan, it has no backbone, and I can only view it as playing with words. The Cabinet reshuffle was just a switch from Mr. Sengoku to the Sengoku henchman Mr. Edano. The entry of the “lost bird” Mr. Yosano in the Cabinet has brought criticism rather than acclaim. A key will be how they change their methods of conducting the Diet. During the extraordinary session last fall, they adopted the fewest amount of bills as a percentage of proposed legislation in history.”
Coalition partner Kamei Shizuka was asked at a news conference on the 19th what he thought about the Cabinet and the prime minster’s policies about taxes, social welfare, and TPP. He answered:
“To present policies that you cannot achieve is not politics.”
As we’ve seen, one of those policies he might not achieve is participation in TPP. A total of 110 DPJ MPs affiliated with Ozawa Ichiro has formed a group to oppose Japanese participation, even though Mr. Ozawa has said he supports a free trade agreement.
Does even Mr. Kan know what he’s going to do? He just got back from giving a speech at the World Economic Forum in Davos, where he said that Japan will make a decision on its participation in TPP by June.
Before they worry about opposition either from inside or outside the party, the Cabinet still has to get on the same page. Kan Naoto says the issues of pension reform and the consumption tax are separate, but Yosano Kaoru says they must be considered together. Mr. Yosano’s stance on social insurance differs from the tax-based approach of the DPJ manifesto. The DPJ still does not have a common policy for a system for health care for the late stage elderly, despite their opposition to the system that came into effect during the Fukuda administration.
At a news conference on the 24th, Fujii Hirohisa was asked about Mr. Yosano’s statement that the age of eligibility for pension payments should be raised to 70:
“That’s his personal opinion. That question hasn’t been raised in a formal discussion.”
Absurdity in the fourth dimension
Mr. Kan is a recent convert to tax increases, at least in public. Speaking as the Finance Minister in the Diet on 21 January 2010, he said:
“First, there is the debate over the consumption tax, but as both the prime minister (Hatoyama) and I have said repeatedly, the current coalition government will not raise the consumption tax for four years….I think the primary reason the tax hasn’t been raised is the lack of trust by the people. They believe if they allow a government spending so wastefully is allowed to increase taxes, they will use the money wastefully.”
He also gave an opinion on when the discussion of a tax increase should begin:
“When we have so completely eliminated government waste that we could stand on our heads and not get a nosebleed…If we were to raise taxes at the present stage, when waste has not been sufficiently eliminated, we’d just repeat the same mistakes.”
Since he made that statement, there has been no sale of government assets, no effort to uncover the special accounts and hidden reserves in the bureaucracy, no effort to reduce personnel expenditures (they’ve put it off until 2013 at the earliest), only the most half-hearted of efforts to reduce government programs, a record-high budget with a record-high deficit, and a new proposal for an even higher budget.
The Cabinet reshuffle had no effect on market trading. Said Segawa Tsuyoshi, an equity strategist at Mizuho Securities:
“That it has absolutely no impact on stock prices demonstrates the relationship between politics and the market.”
In other words, the markets expect nothing from this bunch.
Kamei Shizuka visited the office of the Chief Cabinet Secretary as the official representative of the DPJ’s coalition partner to ask for an explanation of the prime minister’s Diet speech. He was angered when he discovered that Mr. Edano was not there, and the deputy secretary Fukuyama Tetsuro agreed that he should have been. Said Mr. Kamei:
“Don’t hold it against us if we leave the coalition.”
Mr. Edano belatedly showed up to provide an explanation, but Mr. Kamei was not mollified:
“They are incapable of consideration for other parties in their coalition. Politically, they have no idea what to do.”
One Western commentator observed that the DPJ is finding out that governing is different than campaigning. The real problem, however, is that they still haven’t found out, and the people in charge likely never will.
They’re certainly unlikely to find out in time for the 1,402 sub-national elections scheduled for April. DPJ-backed candidates have had their clock cleaned in several local elections after the government’s mishandling of the Senkakus incident with China, and their prospects are growing dimmer.
Yet at a party conference earlier this month, here’s what the prime minister had to say about DPJ support for those elections.:
“I’ve been in political parties that had no money for a long time, but this is the first time I’ve been in a party that can use all these funds for its activities. Shouldn’t I generously use the money that’s required (to compete)?
“All these funds” refers in part to the subsidies each political party receives out of public funds. The amounts vary based on their Diet representation. Those are the views of the man the foreign media hailed as a “fiscal hawk” when he assumed office last June on his fiduciary responsibility for taxpayer funds.
If Mr. Kan thought he would be showered in glory for the brilliant maneuver of including an opponent in his Cabinet, he was mistaken. An Asahi poll found 50% of voters opposed to Mr. Yosano’s selection.
On the 19th Oshima Tadamori of the LDP, the new minister’s party two parties ago, said Mr. Yosano had signed a pledge during the previous election in which he promised to resign from the Diet if he acted against the LDP. He’s now part of the DPJ caucus, but still in the Diet.
Said his old high school running buddy and co-president of the Sunrise Party, Hiranuma Takeo:
“It’s too bad that he’s leaving…When we formed the party, Mr. Yosano said that if we entrusted the government to the DPJ, Japan would be finished, so we had to bring it down. I wonder what’s going to happen with that.”
When Mr. Yosano gave his first speech as a member of the Cabinet in the Diet last week, he was heckled by members from both the LDP in the opposition and the DPJ in government. Would you dislike someone more if he was an enemy, or if he was a traitor?
After the speech, LDP MP Koizumi Shinjiro said:
“This is like a marriage proposal without a wedding ring. They won’t make any headway without sincerity and trust.”
And DPJ MP (and former Foreign Minister) Tanaka Makiko said:
“I do not sense any enthusiasm.”
Sengoku Yoshito saw as one of his primary duties the prevention or amelioration of the inevitable Kan Naoto blunders. His departure from the Cabinet thus presented the country with the unlovely prospect of Mr. Kan fending for himself. The prime minister’s only political skill is the bullying of opponents—a skill no doubt honed by all those years of arguing politics in drinking establishments. His sense of the appropriate is also different from that of most people. (That is not photoshopped, by the way.)
It’s only been two weeks, and already we’re going to have to shift to a second hand to get enough fingers to keep up with the blunder tally.
His temper has earned him the nickname Ira-Kan, which translates nicely to the Irascible Kan. At a recent news conference he was asked whether he would call an election to have the people revalidate the party’s promise to cut waste before boosting the consumption tax. He glared, turned away from the questioner, and gave no answer at all.
He was also asked what he thought about the general perception the new Cabinet is a group put together to raise taxes. He answered:
“It’s unfair to be judgmental and change the subject of discussion.”
When the opposition suggested it would not participate in DPJ-led discussions about social welfare reform, he got judgmental himself.
“If the opposition parties do not actively participate in discussions about social welfare reform, it is no exaggeration to say that will be an act of treason against history.”
See what I mean about his only political skill?
That’s when he lost New Komeito. The DPJ has been hoping to tempt the opposition party into the coalition and thereby solve its problems in the Diet, but his statement seems to have ended any chance of that. Said party head Yamaguchi Natsuo:
“That’s a rather presumptious choice of words, isn’t it? The prime minister has a responsibility. What does he think he’s doing, challenging the opposition like that?”
The prime minister most recently stepped in it when he was asked about rating agency Standard & Poor’s downgrade of Japanese government bonds, partly because they thought the DPJ didn’t have a coherent strategy for dealing with national debt. Mr. Kan, a former Finance Minister, replied using the word utoi, a word seldom used by prime ministers. The word has several meanings depending on the context. One is that he hadn’t heard the news, and another is that he doesn’t really understand the subject very well because it doesn’t have much to do with him.
He was immediately called on his word choice by the opposition, the media, and his wife (during an event in Kyoto). Mr. Kan explained that he meant he hadn’t been given any information about the news at the time, which is a) probably untrue, but if true means b) his Cabinet is inept at gathering and managing information. The news had already been out for an hour.
Everyone else suspected the other nuance, in part because of the financial illiteracy he demonstrated when Finance Minister. He made a statement in the Diet that revealed he had no idea what the multiplier effect was. He also admitted to giving up on Paul Samuelson’s standard textbook Economics after the first 10 pages.
Mr. Kan was forced to explain at a news conference that his latest blunder didn’t mean he didn’t know government bond ratings from hot pastrami. Yosano Kaoru defended him, however:
“That is not a problem about which the prime minister should make a statement. It was proper for him to use the word utoi.”
In other words, interpretation #2. One wonders whom Mr. Yosano thinks should deal with the problem—the Finance Ministry bureaucrats in Kasumigaseki?
But that was not Mr. Kan’s position in May 2002 when the rating of Japanese government bonds was downgraded during the Koizumi administration. He publicly slammed the prime minister and finance minister and sarcastically asked whether they knew of the ramifications of the change. The Japanese media quickly dug up this old quote and dubbed it the “boomerang effect”.
No excuses for this absurdity
And how have the members of the English-language news media who cover Japan reported the Cabinet reorganization story? They played mimeograph machine for the government’s (or the Finance Ministry’s) briefings by filing articles under their own bylines that almost unanimously described Yosano Kaoru as a “fiscal hawk” and claimed the new Kan Cabinet was committed to “tax and pension reform”. And they think the Japanese media practices convoy journalism?
Rick Wallace in The Australian even went so far as to say this about Mr. Yosano:
“Perhaps the closest thing to a deficit hawk in a country where governments routinely live beyond their means…”
If Wallace is interested in seeing what a Japanese deficit hawk looks like, he might try some of the books by Nakagawa Hidenao, Eda Kenji, or Watanabe Yoshimi. If reading written Japanese is not his forté, he can always try this. I’d also suggest he look at the deficit totals in the annual budgets for the past 10 years to see who’s supported living beyond the country’s means and who hasn’t, but all that research might give him vertigo.
“Yosano, known as a fiscal conservative, has called for raising Japan’s 5% consumption tax to help chip away at Japan’s mountain of public debt.”
…thus bringing an entirely new dimension to the term, “conservative”. At least she briefly mentioned the reason Sengoku Yoshito was censured, which was more than Rick Wallace could do.
In an admirable display of corporate loyalty, the BBC took its correspondent’s word for what was happening:
“Our correspondent says the changes also bring to the fore ministers who support reform to tackle Japan’s massive public debt and the trade liberalisation sought by business leaders.
“The appointment of a veteran fiscal hawk, Kaoru Yosano, as economic and fiscal policy minister is being taken as a signal that Mr Kan is serious about reining in the costs of Japan’s rapidly ageing society.”
In contrast, the People’s Daily of China wrote last 24 December:
“The Cabinet of Japanese Prime Minister Naoto Kan on Friday approved a draft budget which hit a record 92.40 trillion yen (1.11 trillion U.S. dollars) for fiscal year 2011.The figure is marginally higher than the initial budget for 2010, which stood at 92.30 trillion yen, as the government seeks to raise spending on key policies amid rising social welfare costs.The budget will include more than 44 trillion yen (530.11 billion U.S. dollars) from issuing new government bonds, a second straight year when bonds have exceeded tax revenue as a source of income. The swelling budget is believed to be contradictory to Kan’s pledge to cut spending to restore the nation’s fiscal health.”
When the People’s Daily reports on Japan are more accurate than those of the BBC, it’s time for some people to reevaluate their assumptions about contemporary journalism.
Assuming any of these people are not European-style social democrats and actually are interested in a functional definition of fiscal conservatism, they might consider this by columnist Robert Samuelson:
“If we ended deficits with tax increases, we would simply exchange one problem (high deficits) for another (high taxes). Either would weaken the economy, and sharply higher taxes would represent an undesirable transfer to retirees from younger taxpayers.”
They might also look into how other countries have accomplished spending reductions, as Dan Mitchell explains here.
What can you expect?
After reading those reports, it will come as no surprise that the Foreign Correspondents’ Club of Japan is “facing difficulties”:
Georges Baumgartner, current president of the FCCJ and a veteran reporter for Swiss Radio and Television, expressed his frustration with the lack of news in Japan that would interest people elsewhere. “It’s quiet, like a little country like Switzerland,” said Baumgartner, who has been reporting from Japan since 1982. Japan is “blocked and paralyzed by the politicians and bureaucrats who don’t have the political will and courage to restructure the country to give a chance to young people. There is no new energy. . . . There are days that you can’t sell any story to your editors back home.”
Any journalist who thinks Japan is a quiet country with no news of interest is unqualified for his position on the face of it. True, they do have to please their editors back home, the ones responsible for turning their business into the smokestack industry of the information age. Then again, Baumgartner thinks the FCCJ is “a little island of freedom in Japan”, a presumptuous and arrogant bit of horsetootie that might explain why his organization has become irrelevant. (Let’s play journalistic poker. For every story someone can cite that the Japanese press has ignored, I can call and raise that bet with stories the New York Times et al. have ignored.)
If the FCCJ were populated by people nimble enough to hop off their bar stools and conduct serious research, they might have taken the approach on this story adopted by Takahashi Yoichi in Gendai Business Online:
“It is a restructure of a government facing its final days.”
“(Yosano) is called a fiscal hawk because he parrots the Finance Ministry line. The objective is a fiscal balance, and the means is a tax increase.”
“The new cabinet is a lineup of people whose arguments support continued deflation and tax increases. Prime Minister Kan says the economy will improve with a tax increase. Chief Cabinet Secretary Edano says the economy will improve with a rise in interest rates. Fujii Hirohisa favors a higher yen and “fiscal restructuring”. If these people put their ideas in practice, the DPJ really will destroy the Japanese economy, as the title of Mr. Yosano’s book had it.”
* Mr. Yosano now says he thinks the consumption tax should be “more than 10%” by 2015. Watch for closer to 20%, assuming the same or similar people are still in charge.
* Another avenue the journos choose not to explore is Standard & Poor’s record of credit ratings. For example:
“Investors snapped up the $340.7 million CDO, a collection of securities backed by bonds, mortgages and other loans, within days of the Dec. 12, 2000, offering. The CDO buyers had assurances of its quality from the three leading credit rating companies –Standard & Poor’s, Moody’s Investors Service and Fitch Group Inc. Each had blessed most of the CDO with the highest rating, AAA or Aaa. Investment-grade ratings on 95 percent of the securities in the CDO gave no hint of what was in the debt package — or that it might collapse. It was loaded with risky debt, from junk bonds to subprime home loans. During the next six years, the CDO plummeted as defaults mounted in its underlying securities. By the end of 2006, losses totaled about $125 million.”
S&P downgraded Japanese government bonds, but they’re maintaining their top AAA rating on U.S. debt despite the huge American deficit and phalanx of foreign creditors.
The country’s in the very best of hands.