Putting peoples’ lives first

…(I)ncestuous relations between corporations and governments are fascistic. The problem comes when you claim that such arrangements are inherently right-wing.
- Jonah Goldberg

The type of businessmen who seek special advantages by government action (are the) actual war profiteers of all mixed economies.
- Ayn Rand

PEOPLE have been complaining since the 19th century about a type of government/corporate collusion that has come to be known as the socialization of risk and the privatization of profit.

Risk is inherent in any commercial enterprise, and profits are an enterprise’s reward for successfully avoiding or negating those risks. Too often, however, Big Business colludes with Big Government (of either party) to create ways to keep the profits for themselves while making the public pay for risks gone sour. “Too big to fail” is one of the most common, as well as the one of the most stupid, justifications.

Now here comes the Japanese version, proposed as a way to keep Tokyo Electric Power Co. afloat while it deals with what are likely to be enormous compensation payments resulting from the problems with the Fukushima power plant. We already know who’s going to get stuck with the tab.

Both the Yomiuri Shimbun and the Asahi Shimbun are reporting that either the Democratic Party of Japan, or the DPJ-led government — keeping track of the more than 20 bodies Prime Minister Kan created to deal with the earthquake/tsunami makes it difficult to pin down — is discussing a new mechanism that will allow Tokyo Electric Power to raise rates to defray the compensation costs for Fukushima. No one knows the final bill for that compensation, but one initial estimate suggests it could be JPY one trillion a year for four years.

If the nation’s other power companies are asked to contribute to the compensation, the mechanism will allow them to raise their rates, too. Of course, say the proponents, the government will monitor the rates to make sure the increase is not excessive — doesn’t that allay your concerns? — but the average household will be on the hook for several hundred yen more a month in utility bills.

Their excuse reasoning is that it will be difficult for Tokyo Electric to maintain its operations absent a raise in rates. Therefore, investors will dump their bonds, which therefore will roil the commercial bond market, which therefore could cause problems for Japanese government bonds.

In short: TEPCO and its shareholders, primarily the big financial institutions, have been the ones to make the profits. By rights, they should also be liable for the risk. But when a natural disaster, exacerbated by power company and government mismanagement, requires the people who made the profits to assume the risk — you know, the free market mechanism — they want to socialize that risk by having those with no responsibility for the problem pay for it.

Access the website of the Democratic Party of Japan and the first thing you see is their slogan: “Putting Peoples’ Lives First”.

More than a half-century ago, Alfred Jay Nock wrote: “Professional politicians…are known of all men to be pliant mountebanks when they are not time-serving scoundrels, and are usually both.” Still true after all these years.

*****
It’s encouraging that several people unleashed a barrage at that trial balloon as soon as it hove into view. Kono Taro of the LDP, who claims (sometimes believably) to champion small government, asks why everyone else should pay to clean up the TEPCO mess just to keep stock prices stable for the banks.

Mr. Kono notes that the power companies already have a reserve fund of JPY 2.4 trillion for reprocessing, which is derived from user fees. He suggests dipping into that fund before anyone talks about rate increases. He further suggests that TEPCO should sell its assets (some of which are ownership stakes in affiliated companies) and apply the proceeds to the compensation.

He puts his finger on the problem that the DPJ promised to solve, but perpetuated instead:

“Bureaucrats from the Ministry of Economy, Trade, and Industry, and representatives of Tokyo Electric and the Federation of Electric Power Companies circulate through the Diet office building every day, buttonholing individual MPs and promoting their different agendas, (including) ‘Forcing Tokyo Electric to pay their claims could result in a financial crisis’.”

Are those quotes at the top of the post beginning to make sense?

Mr. Kono is one of those who offers another alternative: Spin off TEPCO’s atomic power division and split the parts of the company responsible for power generation and power transmission into separate entities. His version is a bit dodgy because he calls for the utility to be nationalized first, and then selling the individual units after it’s been split up. (His small government rhetoric does have some holes.) But he’s well aware that the LDP Diet members aligned with power company interests will also need to be squelched.

Earlier this week, Koga Shigeaki took that idea one step further on the Asahi TV program Morning Bird. Mr. Koga is a rara avis in Japan — a METI bureaucrat with an impressive resume in government service who favors radical civil service reforms to restrict the power of Kasumigaseki. Before raising rates, he argues, the utility should first make provisional compensation payments and limit cash outflow. Then, there should be a national debate about Tokyo Electric’s restructuring and the liability of stock and bond holders. (They are the company’s owners and creditors, after all.) He calls for the separation of the generation and transmission units as a way to shift to the use of smart grids.

The Japanese edition of the Wall Street Journal reports that Tokyo Electric earned JPY 1.34 trillion in consolidated net profit in FY 2010. Total consolidated assets stood at JPY 13.2039 trillion.

Takahashi Yoichi, formerly of the Finance Ministry and a reform bird of Mr. Koga’s feather, also argues that this is an excellent opportunity to separate the units and incorporate smart grids, with the proviso that the supply network be completely open. That would allow individual households and companies to generate and sell electricity, though large companies would still have to operate the grids. Mr. Takahashi uses the analogy of telephone company deregulation; the Internet might work as an analogy as well.

The LDP’s leading Koizumian, Nakagawa Hidenao, says that any trouble in the bond market could be forestalled by having the Bank of Japan buy either TEPCO or Japanese government bonds. He admits that solution is “non-traditional”, but he also says these are exceptional circumstances.

Finally, Yamaguchi Iwao at the Agora website points out that businesses account for 70% of Japanese power consumption and individual households 30%. Raising the rates will cause some companies to shift manufacturing overseas, or to incline them in that direction. Those who stay will be more likely to investigate ways to generate power on their own. That might be a good idea, but it also means that households will be forced to bear a large part of the liability.

So to sum up, the people with the most reactionary and hidebound approach to this problem, the ones who would use the power of government to protect the vested interests at the expense of the public, are the Democratic Party of Japan.

But then classical fascism has always been a phenomenon of the progressive left.

*****
I’ve mentioned before the rumors that Mr. Kan pressured the executives of Tokyo Electric Power into cutting a deal: They start making substantial financial contributions to the DPJ, and he’ll make sure they don’t get in any serious trouble because of Fukushima.

Wouldn’t it be nice to see some behavior that would reveal those rumors to be groundless?

*****
Also on the DPJ English-language website is a section that presents their political philosophy. One paragraph is titled Our Political Standpoint and includes the following:

“We stand for those who have been excluded by the structure of vested interests, those who work hard and pay taxes, and for people who strive for independence despite difficult circumstances. In other words, we represent citizens, taxpayers, and consumers.”

There’s yet another reason why the Japanese public no longer takes the DPJ seriously.

*****
Those with long memories might remember that Koga Shigeaki was on the receiving end of the gangsterish threats of then-Chief Cabinet Secretary Sengoku Yoshito last fall when the former testified in the Diet against the DPJ civil service reform proposals. Mr. Koga didn’t think they were real reforms at all. He’s due to publish a book on 20 May called 日本中枢の崩壊. I’m already standing in line at the bookstore.

*****
For those interested in more detail about smart grids, here’s an explanation from the Center for Progress, which favors “progressive ideas for a strong, just, and free America”.

That’s my only problem with smart grids at this point. The people most excited by the idea are the people least likely to favor anything progressive with a lower-case P that would foster strength, justice, and freedom anywhere.

Les Routledge at this site understands the objections and insists that smart grids must be completely open, transparent, and competitive. Unfortunately, the first words out of his mouth about the advantages of smart grids are that they would be a more efficient way to ration supply.

With friends like these, the idea of free market competition for smart grids doesn’t need any enemies.

*****
I never cared for hip-hop music until I saw this video of Neba Solo.

White lightning in Northeast Asia

IN THE WEST, the primary consumers of sweet alcoholic beverages are usually either young people slightly above or below the legal drinking age, unaccustomed and ill-disposed to the taste of the real thing, or women a few years older. (Southern Comfort was the liquor of choice for the well-known juicehead Janis Joplin.) I’ve never seen an adult male drink a rum and coke. Daiquiris might be an exception, but they’re more tart than sweet. And I’ve never seen anyone drink a mint julep at any time other than the first Saturday of May — Kentucky Derby day.

Sweetness seems to be more to the taste of northeast Asians in their tippling traditions, however. While there are both sweet and dry varieties of Japanese sake, the original beverage was probably sweet. The Japanese version of white lightning, doburoku, is sweeter still. That’s a milky white form of sake that isn’t fully pressed from the fermenting rice solids, which are left floating inside.

Nongju

Sweet white lightning made from rice is another of the many elements Japanese and Korean culture have in common. The Korean analog is called makgeolli, and it shares several attributes with doburoku: It’s just as white, just as sweet, and just as likely to cause those who consume it to wake up the next morning convinced there’s an axe embedded in their forehead. The background story says it was originally brewed for farm workers to drink instead of water while in the fields, which might be the reason Korea has never been an agricultural superpower. It was originally called nongju, a name that translates as farm liquor. Japanese will recognize it from the kanji: 農酒. Both doburoku and makgeolli are 6-8% alcohol by volume, slightly more than local beers, but less than sake.

There are an estimated 40 different kinds of makgeolli, and rice is not the only farm product used to brew it. When then-Prime Minister Hatoyama Yukio visited South Korea in October 2009, President Lee Myong-bak used makgeolli for the toast at the state dinner. That variety, however, was made from a purple variety of sweet potato known in Japan as satsumaimo. The Kagoshimanians of Kyushu use it to make their own hairy-chested version of shochu, which isn’t sweet in the slightest. This particular satsumaimo was created by cross-breeding the Japanese and Korean types. Using that beverage on that occasion was a brilliant idea, and whoever in the Blue House came up with it deserves a toast in their honor.

Most of the doburoku in Japan sits in a corner of the liquor store shelf gathering dust, while the South Koreans have succeeded in turning makgeolli into a popular commercial beverage, as we’ve seen before. Sales have gotten high rather quickly. A year or so ago (there was no date on the article), a Korean outfit called GS25 analyzed liquor sales at 3,700 convenience stores nationwide as of August and found that makgeolli ranked fourth, behind beer, shochu/soju, and whiskey, and one slot ahead of wine.

Those rankings might be a reflection of the type of customer likely to shop for grog at convenience stores. A survey conducted by the Lotte department stores in South Korea of liquor sales at their own outlets for a recent July-September period revealed that makgeolli was in third place behind wine and whiskey, and ahead of beer and Japanese sake. The ranking the year before was whiskey, wine, beer, sake, and makgeolli. Of course, you don’t need to see the stats from the marketing survey division to know that women do most of the buying at department stores. Another factor is seasonal and cultural—chusok, the Korean version of o-bon, falls in September, and makgeolli has become a popular choice for gifts.

Soju distiller Jinro ignited the boom by producing more marketable versions of the beverage. (There’s a good video with details at the link above.) Suntory is trying to do something similar in Japan, as they’ve brought out a slightly carbonated version in a can they call Seoul Makgeolli. It’s safe to assume Suntory thinks the foreignness of makgeolli will hold more cachet for young women than the familiarity of doburoku, the choice of hayseeds.

But before you hard guys snort with derision and reach for something more manly, get a load of this: A team at the Korean Food Research Institute announced last month their discovery that makgeolli has anti-carcinogenic ingredients in quantities up to 25 times greater than beer or wine. Specifically, they mean farnesol, which is also one of the critical elements that add aroma to wine.

The team made a point of examining liquors commonly sold on the market. The amount of farnesol in makgeolli tested out at 150-500 parts per billion, 10-25 times the 15-20 ppb of beer and wine. Their research showed the cloudiest parts of the beverage had the greatest amount of farnesol, so it was best to shake up the sediment before drinking it.

These tidings of good cheer come with the chaser of some bad news, alas. The head of the team said that a real effect would be achieved by drinking three or four cups about twice a week. I had that much one evening in Busan (and a similar amount of doburoku that I bought in Nagasaki and broke out at a party), and I’ll stick to other health maintenance methods. As Voltaire is said to have replied when declining a second invitation by the Marquis de Sade to another orgy after he’d enjoyed the first one: “No thanks. Once is philosophy, twice is perversion.”

That research team seems to have performed their task with single-minded devotion. There’s only a small amount of farnesol in makgeolli, which is 90% water, so it was difficult to extract and analyze. They had to develop new technology just to perform the analysis. Now for the unfortunate news: They used the announcement of their discovery as an opportunity to let their Korean little man complex out of the closet for some fresh air:

“Through this research, we developed for the first time the technology to analyze the farnesol from the traditional alcoholic beverage makgeolli. We thus obtained the basic technology enabling the scientific verification of the superiority of South Korean makgeolli.”

Use your new technology and run the tests on doburoku before you say that, guys. It’s the same stuff, after all.

*****
The Japanese and South Koreans also share a cultural taste for a more sedate beverage — tea, which some of them are using to further cross-strait ties. Chomu-kai (朝霧会), a tea ceremony group in Yame, Fukuoka, (a noted tea production area) last week welcomed the “tea culture research group” Unnim Chahue (雲林茶会) from Gwangju, South Korea, to celebrate 10 years of friendship. The chairman and six members of the Korean group hopped over to Yame for two days of tea parties and planting.

The Yame group was formed to promote interest in local tea using the tea ceremonies of the five major Japanese schools. Bak Guang-sun, the husband of the Unnim Chahue chairman, found out about the group when he taught at nearby Kurume University. He thought hanging out with them would be an excellent way to pursue his study of the tea culture in Japan.

The tea bushes they planted together will take four or five years to sprout drinkable leaves, and when they do they’ll have a friendship party and savor it together. Maybe as the night wears on they’ll switch to makgeolli/doburoku and conduct some research into rice culture while they’re at it!

Those who don’t want to wait that long to conduct their own research can analyze this previous post about a Shinto festival with doburoku, or this one about doburoku ice cream.

Here’s how Jinro is plugging makgeolli on Japanese TV. I’m tempted to buy some and invite the ladies over for a pajama party. That game looks like fun.

Meanwhile, Suntory imported Jang Geun-seok from South Korea to pitch Seoul Makgeolli, as you can see in this ad. The company’s choice in models shows they know exactly which market segment they’re trying to capture. Isn’t he precious? Isn’t that earring just darling? And what an adorable hairstyle!

If you’ve worked up a thirst after all this talk about booze, maybe it’s time to get on the ladder—i.e., go bar-hopping in Japanese—with Sabor de Gracia from Spain as they set fire to a few themselves.

Bar-hop far enough, and you might walk into this joint in England. (That’s a flash file.) Whether you walk out again in one piece is a different matter.

Eco-torii

COMING to Japan from the United States, it sometimes seems as if the people of the former have a more relaxed approach to their many traditions than do the people of the latter about their fewer traditions. That’s to the extent that people in either country take an active interest in tradition at all.

Here’s another example I discovered recently. Nakashima Biniiru Kako in Hitachi, Ibaraki, manufactures torii for Shinto shrines using polyvinyl chloride pipe. That’s a good idea when you think about it—the material is cheap, durable, light, easy to replace, impervious to water or ultraviolet rays, and if it’s red, most people won’t notice the difference anyway.

Company President Nakashima Masayoshi came up with the idea to use PVC pipe as a replacement for the usual stone, steel, or wood about 17 years ago. (There are also a few made of porcelain, including one at a shrine in the ceramics center of Arita.) Mr. Nakashima says he receives orders for about 20 in a good month, so there might be more of them around than anyone realizes. In fact, he does well enough to have a website for them, which you can see here. (Japanese only, of course) His company has another clever product, by the way: folding, portable storage containers for garbage. Keeping the magpies away until the garbage trucks show up can be a problem.

No one has come up with a satisfactory theory on the origin of torii, which mark the entrances to the shrine’s sacred space, and have become the symbol of shrines themselves. A few of the oldest ones have doors, including those at secondary shrines at Ise, so they probably were real gates at one time. Now the gates are all doorless, which means anyone can come and go as they please. “Straight is the gate and narrow is the path” isn’t an idea that would have originated in Shinto, but then the Japanese have a relaxed approach to religion, too. Try this torii and shrine combo in Okayama City for another example.

None of this should be surprising. After all, no one is able to agree whether Shinto is a “religion” to begin with.

*****
Here’s something that is a bit of a surprise, however: Eighteen-year-old Terakubo Erena holding her own with some very heavy hitters.