Collision course

THE political and social forces in Japan are now arrayed and moving on a course that makes a noisy electoral collision inevitable. How the forces sort out post-collision isn’t possible to determine, but one thing is certain — the collision will be just one of the major engagements in an ongoing war.

Nagoya Mayor Kawamura Takashi in Tokyo

That much is clear now that we’ve seen the evisceration of the work of Koizumi Jun’ichiro after he steered Japan to the course of reform. The reactionary Politburocrats included the old guard of his own party, the bureaucratic establishment at Kasumigaseki seeking to reclaim sovereignty over policy, and the chancers of the Democratic Party snouting around for any excuse to rise to the level of Politburocrat Nouveau. They accomplished their work in less time than the five years Mr. Koizumi spent in office.

Last week, the Men of System demonstrated again how they operate. The ruling Democratic Party lacks an upper house majority, so it was unable to prevent the opposition from censuring two Cabinet ministers: Maeda Takeshi of Land, Infrastructure, and Transport (for political misbehavior) and Tanaka Naoki of Defense (for being a doofus on the job).

Upper house censures are non-binding, so the two men can technically stay, but the opposition parties are refusing to participate in negotiations until they’re removed. Said LDP head Tanigaki Sadakazu:

“As long as those two stay in office, there will be no progress on the bill to combine social security and the tax system.”

Added New Komeito chief Yamaguchi Natsuo:

“We cannot respond to any parliamentary proceedings in which they have jurisdiction.”

Everyone understands that it’s a chabangeki farce staged to gain political advantage. Mr. Tanigaki and most of his party already back a consumption tax increase, and the ruling Democratic Party intends to use only 20% of the revenue from the increase for social security. A larger amount will be allocated for public works projects. Just like the old LDP.

The DPJ understands the farce better than anyone because upper house censure was a weapon they created to gain political leverage after they and their allies took control of that chamber in 2007. They censured then-Prime Minister Fukuda Yasuo in 2008 for reasons that were trivial then and which no one can remember now.

But when the plastic sword was used to smack them around, Prime Minister Noda and DPJ Secretary-General Koshi’ishi Azuma decided they didn’t like the idea after all. Both men are protecting the censured miscreants, and Mr. Noda won’t remove them from office. Said Chief Cabinet Secretary Fujimura Osamu last Friday:

“The prime minister’s policy is clear. He wants them to fulfill the responsibilities of their job.”

Both men of course realize that’s beyond the capabilities of Mr. Tanaka, but they have appearances to maintain and the Ozawa wing of the party to mollify.

Their display of plastic backbone has caused some consternation in Japan’s real ruling class, however. That spurred one of their agents in the DPJ to give the prime minister his marching orders.

That would be Fujii Hirohisa, the former head the Finance Ministry’s Budget Bureau — Dirigiste Central — also the former secretary-general in Ozawa Ichiro’s old Liberal Party, the first finance minister in the DPJ government (for all of three months), the head of the Tax Commission in the Cabinet Office, one of the DPJ’s Supreme Advisors, and (if the rumors are to be believed) a daytime drinker.

Mr. Fujii and his comrades worry this will delay their objective of raising the consumption tax to European social democrat levels. Therefore, Mr. Fujii called on the prime minister to “remove the thorns”, because:

“The two of them have definitely done something wrong.”

But he quickly added the real reason:

“Whenever the prime minister makes a decision on what to do, the basis for everything is to pass the consumption tax increase by any means necessary.”

Now what is Mr. Noda to decide to do? He wants to project himself as a man of vision with the unwavering resolve to gouge the public and maintain the system do what is best for Japan. He also reportedly hates being called a Finance Ministry puppet.

On the other hand, Mr. Fujii has been molding Mr. Noda since the DPJ formed its first government, when the latter was the deputy finance minister in both the Hatoyama and Kan administrations. The prime minister is also aware that the Finance Ministry is capable of using the various means it has developed for staging de facto internal coups d’etat.

In other words, look for Messrs. Maeda and Tanaka to start cleaning out their desk drawers, soon rather than late.

Weapons

Kasumigaseki in general and the Finance Ministry in particular have developed a substantial armory over the years to maintain their citadel. For example, all the national dailies have now published several editorials supporting a consumption tax increase. Most of them used nearly identical phrases, probably because they all received the nearly identical Finance Ministry briefing. The most enthusiastic member of the print media has been the Asahi Shimbun. They ran an editorial on 31 March titled “A consumption tax increase is necessary,” which included this content:

“With the rapid aging of society, we must provide even a small amount of stability to the social security system and rebuild the finances that are the worst among the developed countries. The first step requires that we increase the consumption tax. That is what we think.”

And the next day:

“It is important to come to a prompt decision without evading a tax increase.”

Another column appeared on 6 April with the title: “Politics and the consumption tax increase – stop the excuses”. It contained this passage:

“While you’re saying “first”—such as first reduce government waste, or first let’s end deflation, or first dissolve the lower house for an election — Japan will become insolvent.”

The Asahi insists the voters can have their say after the tax increase has been safely passed. That’s the same strategy foreseen months ago by ex-ministry official and current reformer Takahashi Yoichi.

As a newspaper of the left, the Asahi might be expected to favor higher taxes and stronger central government, but perhaps they have a more compelling reason. That would be explained by another news report that the Asahi tried to hide in an overlooked part of the paper, but which the rival Yomiuri Shimbun gave more prominent coverage on 30 March.

It seems that a tax audit revealed the Asahi failed to report JPY 251 million in corporate income over a five-year period that ended 31 March 2011. They were required to pay substantial penalties.

Golly, what a coincidence!

On the other hand, the bureaucrats are not picking on just the Asahi. All the newspapers and their reporters are being audited, which is a process that can take from several weeks to several months. The reporters treat their sources, anonymous or otherwise, to food and drink, and we all know that expense accounts are there to be padded. Tax officials are even said to be visiting the eating and drinking places listed on the returns for confirmation. Both the Asahi and the Yomiuri already had to refile their taxes in 2009.

The Asahi insists their editorials are unrelated to the audits, and they might have a point. There are about 20 people on the paper’s editorial committee, and all of them support a tax increase. Most of them once covered the Finance Ministry as members of the ministry’s kisha club, a system that combines short leashes with exclusive access. And many of them are also graduates of the University of Tokyo, which is the institution of choice for the Finance Ministry’s recruitment.

It’s natural to assume that the members of the old boys’ club would think alike, but a tax audit certainly helps to focus their thinking.

Not a rhetorical question

Fortunately, irresistible forces are headed straight for these immovable objects. Nagoya Mayor Kawamura Takashi, one of the squad leaders in those forces, launched his political juku in Tokyo on Saturday. He told his 200 students:

“I want to change the mechanism of this country, in which taxes are not reduced by even one yen.”

Mr. Kawamura is screening and preparing candidates for the next lower house election by using the same juku mechanism employed by Osaka Mayor Hashimoto Toru and Aichi Gov. Omura Hideaki. There will likely be an alliance of some sort between those local parties and Your Party at the national level. Their message is the largely the same.

Delivering that message on Saturday as the first lecturer was former METI official turned bureaucratic reformer Koga Shigeaki. Mr. Koga rebuffed requests to run for governor of two prefectures to serve as Mr. Hashimoto’s senior advisor, and he also has connections with Your Party. He told the juku students something that everyone in Japan apart from the Politburocratchiks understand: The current system of governance is dead, and the creation of a new system starts with civil service reform.

Part of the problem

The experience of Koga Shigeaki illustrates one of the many reasons that Japan’s Democratic Party has become part of the problem instead of the solution. He was selected as an aide to then-Reform Minister Sengoku Yoshito in the Hatoyama Cabinet, but that appointment lasted only a few days. Kasumigaseki wouldn’t stand for it, and Mr. Sengoku is not one to stand on principle when his place in the power structure is at stake. Indeed, the former lawyer confronted Mr. Koga with a semi-gangsterish threat (likely picked up from his former clients) during the latter’s Diet testimony on reform at the request of Your Party.

Try this for a thought experiment: Imagine that the cities of Chicago and Los Angeles, and their respective states of Illinois and California, are governed by local parties calling for radical governmental reform. One of the primary planks of that reform is putting a leash on the public sector. Three of those four chief executives were once members of the two major parties. The deputy mayor of New York is a colleague, and the mayor is a sympathizer.

Need I mention that this would be topics #1, #2, and #3 in the American mass media 24/7, and that the Journolist-coordinated efforts to slime them all would be rank even by their standards?

(Of course, this is only a thought experiment. California is actually heading 180° in the other direction.)

Japan has the oldest and most dynamic of the modern anti-elitist reform movements of the world’s major democracies. It’s the one with the greatest chance of success, and it’s also possible to make the case that it is the most positive in outlook. (The French just gave 18% of the vote to Marine LePen, though in their defense the Eurabia concept was idiotic even by Eurocrat standards.)

Predictions are usually a waste of time, but here’s one you can hold me to: The English-language media in general, and the FCCJ lackwits in particular, won’t bother to notice what’s happening in Japan until they find themselves ankle-deep in the muck after the bloodletting of the next general election, and some well-coiffed and -dyed heads will be adorning the tops of pointed stakes. The media will then be “surprised”.

And then they’ll launch a slimeball fusillade. Take it to the bank.

Kasumigaura

Yes, this is a national phenomenon. It’s happening again, this time in the city of Kasumigaura, a largely agricultural town of 43,600 in Ibaraki Prefecture.

After the city was created in 2005 through the merger of two smaller municipalities, the residents expected to benefit from the economies of scale. They really should have known better. Instead of one unified municipal office, the new city officials created two, one in each of the constituent entities. One of them required the construction of a new building. They also separately maintained their former methods of collusion for deal-cutting: one controlled by the civil service, the other organized by private sector industry.

It got worse after the new city’s second mayor took office in 2007, when he was unopposed in the election. Opposition quickly materialized after the city council voted themselves a 40% pay raise. A citizens’ group was organized, and they ran Miyajima Mitsuaki for mayor in the next election. He upset the incumbent by a 276 vote margin.

The problem, however, was that there was little turnover in city council members. Four are reformers, 11 are in the flybait class, and one is a fence-sitter. In one year and eight months, City Council has rejected 32 of the mayor’s initiatives, including the rollback of the salary increase, other salary cuts, and a bill to provide free medical care for children through the third year of junior high school. (That last is an idea common to many of the reformers in local government. There are several possible explanations for this mixture of welfare statism into what is primarily a small government philosophy, but it does suggest they are not ideologues.)

The mayor therefore announced last week that he and the citizens’ group will start a petition drive to recall City Council. They’ll have a month to come up with 15,000 signatures. It won’t be easy, but Mr. Kawamura overcame the same hurdle in Nagoya, and his hurdle was much higher because of that city’s larger population. I wouldn’t bet against them.

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It bears repeating that the next lower house election will not be the last battle of the war, regardless of the result. The reformers at the regional level have found their voice and their allies are not going to go away. Meanwhile, the Politburocrats are stocking the moat with as many alligators as they can breed.

The current system of governance requires that the bureaucracy oversee the process as the Cabinet formulates a bill and the ruling party examines it before it’s submitted to the Diet. Defying the wishes of Kasumigaseki requires a thorough knowledge of policy and some serious spine, neither of which is a hallmark of the political class anywhere. The civil servants devote a lot of time to anticipating objections to their favored policies and formulating arguments against those objections to feed to the politicians.

One advantage of the reformers is that people such Your Party’s Watanabe Yoshimi and Eda Kenji, Hashimoto advisors Koga, Sakaiya Taiichi, and Hara Eiji, as well as advisor to both Takahashi Yoichi, have extensive knowledge of policy and Politburocrat tactics, and took a clear public stand long ago.

Another man who combines both is Takenaka Heizo, a Cabinet member throughout Koizumi Jun’ichiro’s entire term of office, and the man responsible for producing the Japan Post privatization package. Mr. Takenaka has said that victory will require 10 years of continuous guerilla warfare.

In short: Japan is in the midst of the most civil Civil War a modern democracy has ever seen.

Drunken sailor watch

The Prime Minister’s Office unveiled its new website earlier this month, which they created as a portal site to provide comprehensive information on policy. That’s a fine idea, but the Jiji news agency reported the redesign of the old site required an expenditure of JPY 45.5 million (almost $US 560,000 on the nose).

What? You didn’t hear the detonation on the Internet?

A lot of people thought it could have been done for 10% of that amount, and some said they would have been happy to take the job at that price. They also said they wouldn’t have created a site with text that was unreadable for those using Apple’s Safari browser and without the kanji errors on the page for children.

Prodigy

Piano prodigy Okuda Gen appeared on television again Sunday night. Now ten years old, Gen has been playing piano since the age of four and giving concerts since the age of seven. He’s composed 50 pieces of his own. He likes all sorts of styles and plays classical music well, but is a particular fan of jazz pianist Oscar Peterson. On Sunday, he performed as an equal with an adult drummer and bassist.

The boy is remarkably self-assured for his age, even without his musical ability. It seems unlikely at this point that he’ll acquire the problems that usually attend children such as these when they enter The Jungle of Puberty.

But the most astonishing part of Gen’s story is that he started playing because he thought he would like it. Neither parent is involved with music, and they say he’s never taken a music lesson.

Here he is at age eight. Pull your socks up.

More on Hatoyama the hapless, part three

This magazine has for some time pointed out that the policy reviews were nothing more than a performance staged by the Finance Ministry, and led to no actual reductions in expenditures.
- The 13 April 2012 edition of the weekly Shukan Post

EVEN someone with a grasp of reality as diaphanous as that of Hatoyama Yukio understood the primary reason for his party’s victory in the general election of 2009. Shortly after that election, the new DPJ-led administration began reviews of programs and quasi-governmental bodies with the stated intent of eliminating or cutting back on enough of them to achieve savings of JPY seven trillion. They barely managed to find enough to reach JPY one trillion, and even then the government and bureaucracy ignored or sometimes reversed the panel’s recommendations.

Many of those organizations were created specifically as amakudari featherbeds, soft landings for the retired bureaucrats suspended from yen-padded parachutes who once were responsible for the oversight of the industries that now employ them. Had the DPJ been serious, they could have found much more than JPY seven trillion; an estimated 4,700 of these organizations gobble up JPY 12.7 trillion yen a year.

On the day the reviews began then-Prime Minister Hatoyama said:

“(These reviews) are what all the people have the greatest expectations for, so the entire government must do everything it can to work together for this.”

Wakabayashi Aki worked for one of the quangos associated with the health ministry for 10 years and left to become a freelance journalist after blowing the whistle. Her book 裏切りの民主党, or The Backstabbers of the Democratic Party, is an eyewitness account of the first set of policy reviews. She was asked to help prepare for the reviews based on her decade of experience, but was bounced after the health ministry discovered her involvement. She attended the rest of the sessions as a journalist.

The DPJ-led policy reviews were not the first of their kind in Japan. LDP MP Kono Taro led a team that conducted a similar review a year before that, and they’ve often been used successfully by sub-national governments to reduce government spending. Ms. Wakabayashi notes, however, that the key to the success of the local government reviews has been the active involvement of the chief executive officer of government in every step of the process. In contrast, she reports that Hatoyama Yukio’s direct involvement with the 2009 review totaled 20 minutes. He came to the hall and listened to the questioning of officials from the Japan International Cooperation Agency.

Then again, he was a busy man with a full schedule. In her book, Ms. Wakabayashi provides details of his schedule during the first policy review.

Day Two: Mr. Hatoyama attended a party celebrating the Emperor’s 20th year on throne, and then went with his wife and three show business personalities, including actress Mori Mitsuko, to see a song and dance performance.

Day Three: After attending the Emperor’s tea party, he met with President Barack Obama for a summit, albeit showing up five minutes late. He and Mr. Obama held a joint press conference and later attended a banquet given in the American president’s honor. Mr. Hatoyama left the banquet and his guest early, however, to take a night flight to Singapore.

Day Four: The reason for the night flight was to ensure his attendance at the tape-cutting ceremony for the new Japan Creative Center in Singapore the next morning. He was there to attend the APEC conference that began later that day, but that necessitated neither the late flight nor his presence at the ceremony.

The day after his return, he attended a party celebrating the 70th anniversary of JASRAC (Japan Society for Rights of Authors, Composers, and Publishers) with about 1,000 other people in show business. He spent three hours at dinner with his wife, a fashion designer, and a pianist, among others.

The next day, he met with Japan’s baseball commissioner, the head of the college baseball federation, and others involved with the sport for one hour. He also spent an hour at a conference on government reform.

The day after that, he welcomed a popular singer to his official residence and later attended a concert by the Self-Defense Forces band and orchestra. (They present concerts nationwide, which are a popular attraction. I went once, and the house was sold out.)

Two days later, he visited the US embassy to watch an American football game with the ambassador. Later that day, he threw out the first pitch at the annual exhibition baseball game between pro and college players. That night, he went out to dinner in the Ginza with his wife and Mr. and Mrs. Kan Naoto.

Meanwhile, as Ms. Kobayashi reports, the people doing the real work for the policy reviews were on the job for a month straight with no days off. After returning home at night, they continued their research on the Internet.

In addition to his 20-minute drive-through, Mr. Hatoyama’s involvement with the policy reviews included his decision to reverse the panel’s recommendation to end the project to build the world’s fastest supercomputer. He gave the project his support after being lobbied by members of Japan’s scientific establishment, including Nobel laureate Tonegawa Susumu.

JICA

Ms. Wakabayashi also described her visit accompanying the review team to JICA headquarters.

The organization’s headquarters occupies six floors of a new building in Tokyo — the first floor and the top five. Roughly 1,000 of the agency’s 1,600 employees are assigned there. The rent costs the government JPY 2.8 billion a year. The first floor has an exhibition hall to give visitors an idea of the agency’s activities. One exhibit on display is a 10-kilogram jug of water that represents the work required of children in developing countries, who must fetch that amount for their families’ daily use. There were no visitors in the exhibition hall when Ms. Wakabayashi was there. The hall requires JPY 130 million in annual operating fees.

She ate lunch at the restaurant on the JICA site. The menu prices were about half those of a privately operated establishment, and that doesn’t count the sushi prepared by a chef at each individual table.

The meeting between the Diet members of the policy review panel and JICA executives took place in a room that Ms. Wakabayashi described as resembling a luxury hotel suite. She was not able to show readers the interior of the room because JICA forbid photographs.

The director of JICA at the time was Ogata Sadako, the former U.N. High Commissioner for Refugees from 1991 to 2000. She was appointed JICA head in 2003, when she was 75. Ms. Ogata comes from a family of diplomats, is the great-granddaughter of former Prime Minister Inukai Tsuyoshi, and is a personal friend of the Empress of Japan. Her salary was JPY 22 million a year.

Bureaucrats of all sorts reap the benefits of amakudari.

JICA has an annual budget of JPY 1.1 trillion, of which JPY 160 billion went to ODA in 2008. The largest bilateral aid organization in the world, they distributed funds to 151 countries that year, including China, India, and Brazil. They have two offices in Tokyo, and 10 in other cities stretching from Hokkaido in the north to Okinawa in the south. When asked about the necessity for the branch offices, it was explained that visiting officials from other countries could benefit from local expertise. For example, the office in Hyogo could give advice on earthquake recovery based on their experience in 1994.

The average annual income of JICA employees is JPY 8.3 million, or slightly less than double the average income of a private-sector employee. They can receive up to an additional JPY 13.2 million a year when posted overseas, an amount that includes living allowances and allowances for spouses and children. They are also given a special exemption from Japanese income tax. Few, says Ms. Wakabayashi, have special training.

This exchange took place with Ms. Ogata during the visit:

Q: Why are JICA salaries 30% higher than those of other civil servants?
A: We reward the employees who contribute to international cooperation in their salaries.

Ogata Sadako on the first day of her new job

Ms. Wakabayashi spoke to a department head recently returned from a posting to Vietnam. He told her that he sat in an air-conditioned office all day while the actual work was done by outsourced consultants and local staff.

JICA is financed entirely by the Japanese government and bonds the organization issues themselves. The government did cut direct contributions in FY 2010, but a look at the agency’s financial statements on the web shows that the cut was offset by funds received from government-guaranteed bonds, which were issued for the first time that year. They also increased the amount of their own bond floats.

Now 84, Ms. Ogata left her JICA post in March and was named this month as an “advisor on diplomatic policy” to Foreign Minister Gemba Koichiro. Said Mr. Gemba, according to the Kyodo report:

“She has contributed to heighten Japan’s presence in the international community. I would like her to continue to instruct us on issues such as those related to Afghanistan and security.”

The behavior of the political and governmental elites, and what they have wrought, speaks for itself.

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Ms. Wakabayashi tells the story of leaving a meeting briefly to visit the bathroom during a visit to a different government site with the review team. She was accompanied to the restroom door by a government employee and warned not to go anywhere else in the building.

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Some people get upset at the criticism of the bureaucracy, however. One of them is Kobe College Prof. Ishikawa Yasuhiro, who offered his opinion to Akahata, the daily newspaper published by the Japanese Communist Party:

“Civil servant bashing is the bashing of civil service that supports the lives of the people. It might be said that it is an attack on the people by the financial establishment and the government. They bring conflict into the midst of the people and drive a wedge between the people and the workers. The financial establishment then proceeds to use that opening for creating the type of country they seek.”

By civil service supporting the lives of the people, I suppose he means this project as described by Ban Ki-moon.

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Drunken sailor watch

At a conference on the 19th, the Japanese government agreed to increase the amount it would pay to move American troops from Okinawa and station them on the American territory of Guam from $US 2.8 billion to $US 3.1 billion. One reason cited was the rate of inflation in the United States.

Here’s more from Bloomberg:

“Japan pledged 600 billion yen ($7.4 billion) in development aid to support infrastructure projects in five Southeast Asian nations that share the Mekong River.

“Prime Minister Yoshihiko Noda, who met with the leaders of Thailand, Vietnam, Cambodia, Laos and Myanmar today in Tokyo, expressed appreciation for their self-help efforts, particularly Thailand’s contributions to the development of the Mekong region through bilateral and regional frameworks, according to an official statement issued after the summit.”

And from Reuters:

“Japan has agreed to forgive Myanmar 303.5 billion yen ($3.72 billion) in debt and overdue charges, and resume development loans to the Southeast Asian country, the two nations said on Saturday, in a move to help foster the nascent democracy’s economic development.

“They have decided to cooperate in drawing up a blueprint for the Thilawa Special Economic Zone in Myanmar, potentially giving Japanese firms a leg-up over rivals in winning infrastructure projects for the area.”

Meanwhile, according to an article in the issue of the Shukan Post quoted at the top of this piece, few infrastructure restoration projects have gotten underway in the three Tohoku prefectures most affected by last March’s disaster.

*****
It’s a shame these people aren’t musicians. If they were, we could ask them to play Far Far Away.

Obituaries

THE only living people for whom obituaries are written are politicians and their parties. So many are now being written for the Democratic Party of Japan that you can almost smell the lilies through the computer screen. The author of this one is freelance journalist Itagaki Eiken, who once covered the prime minister’s office for the Mainichi Shimbun.

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“The Democratic Party was formed in hasty confusion as a lifeboat to save those politicians in the existing parties whose prospects were threatened by the first election after introduction of the single-seat district, proportional representational system (21 October 1996). In that sense, it started as a hodgepodge that included people from the left to the right. They came together without any common beliefs, political ideals or philosophy, vision, or policy, and that state has continued to the present. This is clearly shown by their inability to formulate a statement of party principles. (N.B.: They tried several years ago, with such people as Okada Katsuya and Eda Satsuki on the drafting committee, but they gave it up as hopeless.)

“In short, the reality of the situation for the DPJ is that they are a motley crew of individual politicians of rigid self-interest who are satisfied if they win their own election campaigns. That’s why they casually break their promises to the people, and why the only tenacity shown by former Prime Minister Kan Naoto was a blithe attachment to extending the life of his government…

“…In December 1885, the Meiji government abolished the Daijo-kan (Grand Council of State) governing structure and instituted the Cabinet system. In the 127 years since the establishment of this centralized authority, there has been bureaucratic governance of the state under the control of the former and current finance ministries. Osaka Mayor Hashimoto Toru would extinguish this from the root. Obstructing that path now are Prime Minister Noda Yoshihiko, the Finance Ministry bureaucracy, starting with the prime minister’s Deputy Finance Secretary Katsu Eijiro, other bureaucratic groups in the central government, and the mass media that clings to its vested interests. These are literally the opposition forces. In that sense too, the Democratic Party of Japan under the leadership of Prime Minister Noda, the betrayers of the people, cannot escape their collapse. Prime Minister Noda has sold his soul to the finance ministry bureaucracy and betrayed the people. Hence, his fate is to become the chairman of the funeral committee for the Democratic Party of Japan.”

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I’m not going to go either. Living men have work to do.

Sunrise in the land of the rising sun

NOTHING is stronger than an idea whose time has come. Sakaiya Taiichi, the senior advisor to Osaka Mayor Hashimoto Toru, spoke to the Your Party convention in February. The speaker and his audience share a common purpose, and both know that the time for their ideas has come. This is what he said in English.

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Your Party is different from the other parties. It was not born in the Diet, but was born from a citizens’ movement — the first one in the postwar era. There might have been some in the Meiji period, but it’s a rare thing. Most parties are created when several MPs get together in the Diet. Most of those parties fall apart.

Your Party began when Watanabe Yoshimi advanced his own policies and started a citizens’ movement by himself. Mr. Eda (Kenji, party secretary-general) was in synch with that. It is a party of democracy that you should be proud of.

It happened again at the end of last year. Diet members scrambled together to form groups and receive the public subsidies given to political parties. They have no political views, ideology, ideas, or concept of what the state should be. Both the Liberal Democrats and Democrats are parties for creating political crises, trifling with the people and causing them misfortune. They leave policy to the bureaucrats, and never think about Japan the nation.

Postwar Japan had many splendid conceptions. One concept was in foreign affairs, in which it would stand with the Western powers, and become a small country in military affairs and an economic giant. The option to become a military power did not exist during the American occupation, so that is what happened. The second concept was economic: The (political) system of (19)55 (when the LDP was formed), bureaucracy-directed policy, the cooperation of the business world, and large scale mass production.

They thought that even if no one had any political views, all they had to do was defend these concepts. That continued until the 80s. After that, however, the times changed: The Cold War ended, and large scale mass production reached its limits. Despite that, however, no one still had any political views or a concept of the state. All they did was create political crises.

Then Watanabe Yoshimi became a minister in the Abe Cabinet, and continued to serve in the Fukuda Cabinet. He lasted longer than usual (laughter). He began to talk about something different — civil service reform. That earned him the enmity of the bureaucracy, but the amendment to the National Civil Service Law passed. I created the draft of that amendment in the advisory council.

But even though that amendment was passed, nothing changed. The bureaucrats are unyielding. The president of the National Personnel Authority did not appear in the Diet. In the end, the (Civil Service System Reform) headquarters revolted, and Deputy Chairman Koga was fired. Even though the law was passed, nothing happens. The reality is horrendous.

Watanabe Yoshimi is a rare politician. He thinks about the concept of the state. Those politicians have been extinct for a long time. Even if there are some drawbacks, the policies are truly great. This year — This is It! This is the year of decision. The one I uncovered was Mr. Hashimoto (Toru). The circle of reform is growing. This year is the year of decision.

Why will this be the decisive year? It will be an extremely difficult year for both the Japanese economy and the global economy. Thus, there are four parts to the agenda. One is a state/province system with regional authority. There are three forms of government administration: the nation, the prefectures, and the basic self-governing bodies. The Osaka Metro District concept would convert that into two levels. We must not mistake the state/province system as a model for merging prefectures. We must change the nation.

(After creating that system) the regions must not say anything about the affairs the national government will handle — specifically, foreign affairs, defense, and the currency. Meanwhile, the national government will not say anything about the affairs the regional governments will handle. That is how it should be.

Second is civil servant reform. Civil service is not a job, it is a form of status. Until the 80s, the Ministry of Health, Labor, and Welfare was a small government office. Both the health ministry and the labor ministry accepted only seven people each with a humanities background for the elite job track. At the same time, the Ministry of Agriculture, Forestry, and Fisheries, and the Ministry of International Trade and Industry were large ministries and accepted 26 people each. But now the Ministry of Health, Labor, and Welfare is a large ministry with oversight for 25% of the national income. The agriculture ministry has jurisdiction of no more than 1.8% of GDP.

Anyone can be a bureau chief in the health ministry. The agriculture ministry has no work. If you ask, what about transferring the career agriculture ministry bureaucrats to the health ministry, that would be absurd. It would be like entrusting the old Kishu domain (present-day Wakayama and part of Mie) to the people of the Satsuma domain (present-day Kagoshima). It isn’t a job, it’s a form of status.

Organizations and personnel must be based on the principle of functionalism, and selection must be based on ability and incentive. The organization of any body that defends its status will inevitably crumble.

Third is a growth agenda. Japan today is facing its third defeat. Defeat is not losing a war. Even if it loses a war, a nation will not collapse. True defeat is the collapse of an ethical view and the system.

The first defeat was the Bakumatsu period (at the end of the Edo period). The values of the Edo government were stability and equality. They purposely did not build a bridge over the River Oi (in Shizuoka). They sought stability and equality by preventing people from crossing the flow, and making the movement of people difficult. That’s when progress became important with the arrival of the Black Ships (Commodore Perry).

It goes without saying that the second defeat was in the war. Now Japan is in third period of defeat. The sense of ethics is in turmoil.

Now it is seen as a good thing to receive social welfare benefits. In Osaka, even if the primary school teachers scold their students by saying, “If you don’t study, you’ll have a hard time later,” the students retort, “I’ll get welfare payments, so I’ll be all right.” They say 10% of the junior high school students can’t do multiplication.

Mr. Hashimoto’s proposal is to conduct a relative evaluation of the teachers. Five percent of the teachers will be given the lowest grade of a D. Teachers who get Ds two years running will have to be re-trained. If they do not improve after re-training, they will be asked to leave. How many teachers receive the lowest grade under the absolute evaluation system now? It’s only 0.15%. That’s one-and-a-half people in 1,000. There’s maybe one in a school.

In Osaka, where the teacher evaluations are strict, the teachers’ union says the teachers there have three times the neuroses of teachers anywhere else. It’s a scam. The same statistics cite the cause of the neuroses. The primary cause is trouble with other teachers in the teachers’ lounge.

The fourth is creating an open Japan. That’s true also of the TPP. What did we do during the Meiji Restoration? The policy known as “The return of the lands and the people from the feudal lords to the Emperor.” In short, civil servant reform, giving up the status of samurai. That was the second year of Meiji (1870). Next, they cheerfully opened the country. (N.B.: The term Mr. Sakaiya invented for this idea, which he frequently uses in speeches, is suki suki kaikoku.) The Tokugawas grudgingly opened the country. In the brocade pictures (nishiki-e) of the times, foreigners are depicted as devils or tengu (monster-spirits). That changed.

The next thing they did in the Meiji Restoration was economic reform. In the new currency law of the fourth year of Meiji, the monetary units were unified as yen and sen. They started using paper money, and it became possible to create credit. In the Bakumatsu period, according to the calculations of Oguri Kozukenosuke, annual tribute accounted for only 40% of expenditures. Now, of the (government’s) JPY 104 trillion in expenditures, including quarterly adjustments, tax revenues account for JPY 42 trillion. Exactly 40%.

Annual tribute was only 40% of expenditures. Oguri Kozukenosuke worried that annual tribute would have to be tripled. That vanished in an instant with the start of the Meiji period and the new paper money under the new currency law. A deflationary economy has to be converted to an inflationary economy. In a deflationary economy, the past governs the future. There has to be nominal growth of about 3%.

The next thing they did in the Meiji period was eliminate the domains and create the prefectures. In other words, the state system. After that followed education reform. In Japan at that time, 40% of the boys and 25% of the girls learned reading, writing, and arithmetic at the terakoya, the Buddhist temple schools. It was the leading country in the world for education. Even in Great Britain during the Industrial Revolution, only one in four boys went to school. There was only one educational institution in all of Europe that admitted girls.

They eliminated all the terakoya and created schools. That’s because the objectives of education changed, from stability to progress. Educating people suitable for large-scale mass production was required. That idea still remains today. That’s why they taught that individuality and originality was a bad thing. They called all individuality a “defect” and originality was chastised as garyu (not following conventional methods).

Of course basic education is important. Ten percent of first-year junior high school students can’t multiply. That is the responsibility of the teachers, and they should be fired. Attending Board of Education meetings is a part-time job for teachers once a month. A view of education as a whole is not possible. The people who think that’s fine are the education ministry bureaucrats supported by the status system.

Teaching is also a form of status. There are many English teachers incapable of English. On the other hand, they have teachers who’ve come back from living in the United States teaching social studies. That’s all they have a license for. Next to the teachers fluent in English are the English teachers who can’t speak English at all, and the teachers back from the United States teach about the Japanese Diet, of which they know nothing.

We must change this absurdity with systemic reform. The drawback of reformers is their tendency to splinter without limit. That’s causing a lot of trouble right now in Osaka (laughter). The conservatives are surprisingly united. This reform is good, that reform is bad, only about 20% can agree on each issue. As a result, the unfortunate situation will continue.

That’s why, even if there are problems to a certain extent, we must agree that it (reform) is better than what we have now. Persons of good character are not capable of reform. Have you ever heard anyone say that Oda Nobunaga was a person of good character? (laughter) The requirement for reform depends entirely on the ability to achieve breakthroughs. Watanabe Yoshimi has that ability.

This is it. This is the year of decision. Let’s put aside our small differences and unite behind the big things we agree on. This year, please work so that we can increase our number to 300 (in the lower house of the Diet).

(end translation)

*****
Meanwhile, here is one of the most astonishing newspaper articles I’ve ever read anywhere, and that it appeared in the Asahi Shimbun is more astonishing still. The Asahi is the newspaper of the left in Japan, and the DPJ is the major party to the left of center (with quite a few members quite left of center). Here’s the headline. Note the past tense:

DPJ’S GOVERNING FIASCO: Party never challenged Finance Ministry

It’s a condensed version of everything I’ve been reporting on for the last three years. They’re writing off the DPJ.

It’s difficult to find a passage to quote because every sentence is a dagger thrust. Let’s stick to this:

Successive DPJ administrations have failed to make meaningful spending cuts. Despite rounds of budget screening, the three budgets compiled by the party effectively ballooned to record levels on an initial basis.

You know what they say: Read the whole thing. Also note the background of former Finance Minister Fujii Hirohisa and his opinion about the respective role of bureaucrats and politicians.

That’s the same Fujii Hirohisa who was the secretary-general of Ozawa Ichiro’s Liberal Party before it merged with the DPJ, and who doesn’t know what happened to the party’s public subsidies that it was supposed to return to the Treasury when it folded. (Some in the print media suspect it wound up in Ozawa Ichiro’s safe before being spent to buy real estate for his political funds committee.) That’s the same Fujii Hirohisa who appeared on a Sunday political talk show one day before Hatoyama Yukio made his first speech to the Diet as prime minister in 2009 and admitted the party had no intention of keeping all the promises in the manifesto. They would just keep enough of them to keep the people so happy they would return them to office four years later. They didn’t, they didn’t, and they won’t.

Remember all those so-called journalists who wrote about the “fiscal hawks” of the DPJ?

ROTFLMAO.

*****
The lead story in the 12 April edition of the weekly Shukan Bunshun is titled, Farewell, DPJ. They report the results of their polling that asks voters the question, “If a lower house election were held today…” (It’s becoming a cottage industry.) While they have the LDP doing better than in other surveys, they think the DPJ would lose close to two-thirds of its seats. They also think all three DPJ prime ministers — Hatoyama, Kan, and Noda — stand a good chance of losing their seats. (Hatoyama’s been on thin ice in polling for a while.)

*****
Get ready, people — the train is coming.
Oh, yes it is.

The end of the LDP

When your ideology has become rigid, you have checked your brains at the door. If you want proof of that, just look at today’s liberals. Their ideology has been extinct for years and they are walking around like the living dead, trying to preserve the welfare state and the vision of Lord Keynes while the whole world crumbles around them.
- Former leftist/liberal Roger L. Simon

SOME people are born with numb skulls, while other people have to shovel away at the irrigation ditches for years to get all that water onto the brain. No one works longer or more assiduously to obtain a black belt in cretinhood than the world’s political class, as a glance at any newspaper on any day in any country will demonstrate. Japanese politicos share the same defective DNA, but only their parents know whether the members of the established political parties here are congenital lackwits or shed all those IQ points after years of keeping their foreheads to the whetstone.

During his 5.5 years in office, Koizumi Jun’ichiro led the politicos by their nose on The Shining Path to landslide elections and real structural reform of government. A lower house election called specifically as a referendum on privatizing Japan Post rewarded his government with a historical mandate and solidified the prime minister’s poll ratings at 70%. It was one of those happy but rare occasions when the popular will intersected with sensible reform to exclude the entrenched parasitic interests. It should all be as obvious as a wet mackerel in the face.

There is never a reason for a government to own a bank or an insurance company, and there is no longer a reason for them to own post offices in the age of e-mail and private sector express delivery companies, and everyone knows it. To be sure, it’s possible that the victory was due in part to a gratitude vote: Sheer delight by the electorate because a politician actually asked for their opinion and staked his career on it. From the time he stepped down in 2006 until he left politics in 2009, Mr. Koizumi consistently topped the list of polls asking the public who they thought would make the most suitable prime minister. That’s too long to be called an afterglow.

The Democratic Party ran the classic bait-and-switch scam when they promised reform pre-election to gain control of government. One of their “reforms” was to stick a finger in the electorate’s eye and roll back the changes at Japan Post. While the DPJ couldn’t be expected to catch the plot if they ran that finger over the pages and mouthed the words, some members of Mr. Koizumi’s Liberal Democratic Party should have been unwilling to step into the mudboat. It turns out there are — three.

The LDP held a general meeting on the 27th and gave their formal approval to a proposal they worked out with New Komeito to amend the Japan Post law, thus neutering their signal policy achievement of the past decade. They and the DPJ will submit that proposal to the Diet. Instead of forcing the government to divest itself of Japan Post stock by 2017, the new law requires the government to “endeavor” to sell the stock “quickly”. There you have the perfect example of how reform is deboned by the butchers in the government and bureaucracy. If the law stands, they’ll still be “endeavoring” to sell the stock when all the girls of AKB48 are grandmas.

LDP President Tanigaki Sadakazu signed the original Cabinet resolution calling for privatization in 2004, so he was for it before he was against it. Last week, however, he said:

“The DPJ continues their indecisive politics, but we will present a serious resolution.”

That’s not inbred stupidity. He had to cultivate it.

Koizumi Shinjiro, the former prime minister’s son and successor to his Kanagawa Diet seat, was one of the three people to object to the party’s decision. He objected in particular to Mr. Tanigaki’s…statement, for lack of a better term:

“To say that (the DPJ’s) indecision is unacceptable, but that this proposal is decisive, is irrational.”

Suga Yoshihide was more statesmanlike:

“(Seven years ago) we had a great debate in the party and concluded that this country will be in trouble without structural reform. We won a major election victory on the Japan Post issue. Retreating from this principle is unacceptable.”

But more to the point was the party’s former secretary-general, Nakagawa Hidenao:

“It is the beginning of the end of the party.”

LDP General Council Chairman Shionoya Ryu seems to have a hearing disability in addition to being beef-witted. After the meeting voted to accept the proposal, he declared:

“It’s unanimous.”

But it wasn’t, and the opponents threatened to vote nay when it comes to the Diet floor. In a post-conference briefing, Mr. Nakagawa blasted the party for changing a policy ratified by popular mandate without another election. “If that’s how we’ll do it,” he said, “we’re the same as the DPJ.”

Now that’s a low blow.

The interview continued:

Q: The people supporting the amendment said, “The Koizumi reform era is over,” and “Times have changed.” What do you think?

Nakagawa: I don’t know who said that, but the recent history of our party includes an extremely important administration that lasted five years. After that, we had a series of very short administrations, and then became the opposition party. In that sense, we brought about today’s circumstances because we didn’t value our first principles, so we will continue to bring about the same circumstances in the future.

On the outside looking in, Your Party Secretary-General Eda Kenji didn’t say it was the end of the party, but he did say the party’s reversion is complete. The word he used for reversion was “atavism”.

Mr. Eda’s objections were practical as well as philosophical, noting that the problems were the obligation for JP’s financial companies to provide universal service and the government’s financial stake. He said that any attempt by the companies to enter new business sectors before the stock is sold would violate most financial regulations around the world, and the governments of those countries would object. (Good luck in the TPP negotiations.) He stated the obvious when he said that government ownership means fair competition in the banking and life insurance sectors is unlikely. He also knows the shares are unlikely to be sold. Where else is the government going to come up with the domestic cash to buy those deficit financing bonds?

He concluded:

“Your Party is of course opposed to this bill, which is a change for the worse.”

More than being the beginning of the end or a textbook example of political atavism, however, it would be more accurate to say that the three parties have now congealed into a largely indistinguishable mass of foul-smelling sludge that fills the moat around the Castle of Vested Interests. When the people leading the revolution of the regions against the center blast the “existing parties”, they’re talking about those three.

It is as if they were 18th-century barbers drilling holes into their own skulls to release the vapors. Now hear this: LDP Secretary-General Ishihara Nobuteru announced the LDP would consider voting for the DPJ’s consumption tax increase if the DPJ dumped Ozawa Ichiro. In a rare display of common sense, Deputy Prime Minister Okada Katsuya told him to mind his own business.

Taxation is a policy matter, and a politician has to look at the numbers — all the numbers, including the Finance Ministry’s secret money stash — to decide. The membership standards of a political party, no matter how lax, are unrelated to policy issues, and should not be a factor in another party’s collective position on any policy issue.

The three political stooges will eventually run the Nagata-cho Choo Choo off the rails, soon or late. The only solution is for the passengers to detach as many of the cars from the locomotive as possible before that happens. It’s a matter of life and death.

Afterwords:

One month after the DPJ formed a government, then-Prime Minister Hatoyama Yukio appointed Saito Jiro to head Japan Post. Mr. Saito is a veteran of the Finance Ministry, and was his era’s equivalent to Katsu Eijiro today.

Mr. Katsu was sent over by the Finance Ministry to serve as an aide to Prime Minister Noda. Many consider him to be the PM’s puppeteer and the man brainwashing the Cabinet into ever-escalating consumption tax increases. The size of the government doesn’t matter to the ministry as long as the size of the tax revenue is to their satisfaction. His fellows in the Finance Ministry hail him as a star bureaucrat of exceptional skill and talent.

Mr. Saito served in a similar capacity during the first non-LDP administration of Hosokawa Morihiro. He teamed with another backroom string-puller: Ozawa Ichiro, the man Mr. Ishihara wants the DPJ to dump. In those days, Mr. Ozawa and Mr. Saito came up with a scheme to introduce a 7% social welfare tax. The public didn’t like that either.

When Mr. Hatoyama appointed Mr. Saito to serve as Japan Post head several years after he had left the Finance Ministry, the prime minister tried to deflect the outrage by saying he had been out of the public sector so long his perspective had changed. With Mr. Hatoyama, there were so many eye-rolling moments the nation turned swivel-eyed.

Eighteen years later, Ozawa Ichiro is trying to bring down the Noda government for doing the same thing, with the same sort of Finance Ministry allies, that he himself tried do during the Hosokawa government.

The person who recommended Mr. Saito to Mr. Hatoyama was Kamei Shizuka, the head of the People’s New Party, then the DPJ’s junior coalition partner. The PNP is a single-issue party formed to turn back the Japan Post privatization. Mr. Kamei tapped Mr. Saito because he thought it would please Ozawa Ichiro.

Mr. Kamei used to be one of the bigger enchiladas in the LDP. He is said to have been the ringleader of the LDP machinations to bring down the Hosokawa administration, which was a coalition of eight small parties. He coaxed the Socialist Party to leave and join an LDP coalition by playing on their dislike of Mr. Ozawa’s dictatorial habits. He disliked them too, and he sometimes referred to Mr. Ozawa as a “fascist bastard”.

Kamei Shizuka last week left the governing coalition because he’s opposed to the tax increase. He’s conferring with Tokyo Metro Governor Ishihara Shintaro and others about forming a new old guy party. Earlier this week he talked about working out a cooperative arrangement between the new party and the fascist bastard himself, Ozawa Ichiro.

If Japan weren’t a civilized country, these people would wind up hanging from meathooks.

UPDATE: When China moves in the right direction, and that direction is the opposite of yours, that’s a sure sign you’re in trouble with a capital T.

China’s state banks make money “too easily” and their monopoly on financial services has to be broken if cash-starved private enterprises are to get access to capital when they need it, state media cited Premier Wen Jiabao as saying on Tuesday.

Wen’s comments, carried on China National Radio, come days after Beijing gave the go-ahead for financial reforms in Wenzhou — known as the country’s cradle of private enterprise — that will encourage private investment in local banks…

Private investors in Wenzhou will be encouraged to buy into local banks and to set up financial institutions such as loan companies and rural community banks, the State Council said in a statement posted on the government’s website last week.

*****
Then again, Sakamoto Ryuichi composed The End of Asia more than 30 years ago, and that hasn’t happened yet. Recreations of renaissance music haven’t ended after several centuries, either.

Hashimoto Toru (2): The company he keeps

**This is the second of a multi-part series on Osaka Mayor Hashimoto Toru and the phenomenon he represents. The first is here.**

SOME people in Japan were suspicious: Was Osaka Mayor Hashimoto Toru just blustering with his declaration of intent to capture the Bastille of Japanese politics at Nagata-cho and implement his revolution from the inside out? That concern is now a very unlikely scenario — to prepare potential candidates for a lower house election, which rumor has it could come as early as June, he opened and begun operating on Sunday a political juku to prep potential candidates running either under the banner of One Osaka, his local party, or as allied forces. Backing down now would seriously wipe out the credibility of a man who’s riding The Big Wave.

Nagata-cho, here we come. Hashimoto Toru announces that One Osaka intends to field candidates in the next lower house election.

The word juku is often mistranslated as “cram school” in English, inspired by those exemplary Western educators who think Japanese children study too much. (Kumon is one of those jukus, and its system was adopted some years ago in a few of the lower southern states in the U.S. as a way to help laggard students.) This, however, is a juku in the original sense of the term — a private facility for the instruction of one’s “disciples”.

Mr. Hashimoto announced his intention to eventually accept 400 students for intensive training, of which 300 will become candidates, and of which he hopes 200 will win election. That’s a bit short of a lower house majority, but with even half that number, nothing happens in the Diet without him. That’s also before the totals of Your Party and other regional parties are factored in.

An article in the 10 February weekly Shukan Asahi (Hashimoto opponents) presented the argument that it won’t be possible for One Osaka to field 300 candidates. They quote one veteran pol as saying that it costs about JPY six million for a campaign, either for a single-district seat or a proportional representation seat, and the party doesn’t have the national organization, money, or bed of existing votes to pull it off. He thinks that even 200 is a pipe dream.

Someone the magazine claims is close to One Osaka is quoted as saying that even Mr. Hashimoto knows its an impossibility to run that many candidates, but he’s using that as a ploy to get the national government to approve his Osaka Metro District plan.

An anonymous source affiliated with New Komeito in the Osaka area suggests that many of his local supporters are ready to back him in local elections, but because they are affiliated with other parties, they will revert to their former allegiances in a national election.

Elsewhere, LDP Secretary-General Ishihara Nobuteru declared, “They can’t take 100 seats. 30-40 is the reality.”

The magazine appeared on newsstands at beginning of February. Since then, he received 3,326 applications for admission to his school, and after a review of their essays, 2,262 students were accepted. The 400 selected for more intensive study will come from that group.

Some of the applicants were said to be sitting Diet members of the ruling Democratic Party of Japan. Now who can blame them? They didn’t learn anything about politics, the popular will, and keeping promises where they are now.

The funding for elections might be a problem because One Osaka is not a national political party with a minimum of five Diet seats. Therefore, it receives no public subsidies, and candidates will have to pay their own way. They’re already paying JPY 120,000 for the tuition to meet five times between now and June, when the winnowing takes place.

If you can tell a person by the company he keeps, Mr. Hashimoto is clearly a respectable but radical reformer. Several of the teachers already work with Your Party and have often been mentioned on this site. (In fact, there are tags for most.) Here’s a list:

Sakaiya Taiichi: Former head of Economic Planning Agency, non-fiction/fiction writer, chief Hashimoto advisor, professor emeritus at the juku

Nakata Hiroshi: Former lower house member and Yokohama mayor, member of the Spirit of Japan Party

Okamoto Yukio: Former diplomat, now foreign affairs commentator and independent businessman, former aide to Prime Minister Koizumi, has served on board of several companies, including Asahi Beer, and served as Mitsubishi auditor

Koga Shigeaki: Former Ministry of Economy, Trade, and Industry official, author of three books, and the man who became the symbol of the national victimhood when the DPJ betrayed its promises to get the bureaucracy under control.

Hara Eiji: Another METI vet and bureaucracy-bashing author

Takahashi Yoichi: Former Finance Ministry official, devised the original plan for Japan Post privatization under Takenaka Heizo’s supervision, now a commentator, advisor to Your Party, and university professor.

Yamanaka Toshiyuki: Former diplomat, now works in human resource training

Suzuki Wataru: Economics professor

Kitaoku Nobuichi: Professor specializing in foreign affairs and diplomatic history, former personal advisor to Prime Minister Koizumi.

The belle of the ball

Winning big is the best way for a politician to win friends, influence people, and become a supersized enchilada himself, and that’s just what Mr. Hashimoto does. Since his initial success as Osaka governor, many politicians flocked to the political alpha male in the hope some of his shine would reflect off them. Three years ago Masuzoe Yoichi, then the Health Minister in the terminal LDP governments and viewed by some as the last great hope for the LDP reformers, tried to coax the governor into an alliance. Some viewed him as an ineffective political organizer/operator, which subsequent events have borne out. Mr. Hashimoto seems to have understood that right away, and deflected his interest.

He’s also attracted the attention and approval of Tokyo Metro Gov. Ishihara Shintaro, who’s defended him against charges of dictator tendencies:

“People call him a dictator, so perhaps everyone’s a little daunted by him. But that’s just arbitrary. Unless a person with the power of ideas directs affairs from the top down, nothing gets done. It’s the same way here (in Tokyo).”

Mr. Ishihara’s only beef seems to be that the Osaka Metro District plan calls for the creation of an “Osaka-to” in Japanese. That’s a throwback to the Tokyo governor’s emergence into the public eye more than 50 years ago as a literary sensation writing best-selling fiction and non-fiction. (He was also a Vietnam war correspondent on special assignment.) He objects to the use of “to” (都), which he insists should be applied only to national capitals. (He has a point; one meaning of the Japanese reading of the word is “seat of government”. Then again, Osakans have always had a big idea of themselves.)

While Mr. Hashimoto welcomes the attention and is respectful of his elders, he’s also done a good job of deflecting the talk of an alliance with the Tokyo governor. Mr. Ishihara is discussing the formation of a new political party with Kamei Shizuka, an anti-Japan Post privatization non-reformer and paleo-conservative in the Japanese sense, whose party is still officially a junior coalition partner with the DPJ government. Mr. Hashimoto politely gave them the stiff-arm:

“There has to be a certain agreement on policies, such as opposition to tax increases and devolution from central authority.”

Mr. Kamei is not interested in the second of those policies mentioned. He’s part of the problem, not part of the solution.

The Osaka mayor has also developed a close professional relationship with Nakata Hiroshi and Yamada Hiroshi of the Spirit of Japan Party (more here). Both were appointed special advisors to the city after Mr. Hashimoto’s election, and Mr. Nakata is teaching at the juku. Asada Hitoshi, the chairman of the Osaka Prefectural Assembly and the policy chairman for One Osaka, attended a banquet for the Spirit of Japan Party in Osaka. Mr. Asada thanked them for their help in creating the Ishin Hassaku, or One Osaka’s policy framework, and added, “We share a sense of values.” Replied Mr. Yamada:

“We have great hopes for what’s happening in Osaka…We hope to be able to create a third political center by gathering people who share their view of the state and history.”

Former LDP Secretary-General Nakagawa Hidenao, the most prominent of the Koizumians left standing in the party, invited Mr. Hashimoto to Tokyo to participate in a study group and offer his opinions on devolution. Said the mayor:

“The people think that nothing will happen unless the Kasumigaseki social system is changed.”

But he was preaching to the converted. Several younger and mid-tier LDP members are attracted to the mayor’s movement, and there are also rumors of more private contacts with LDP member Kono Taro. The son of a former prominent LDP pol himself, Mr. Kono claims to be an advocate of small government, but sometimes skates onto very thin ice. (He thinks international financial transactions should be taxed and the funds given to multinational public sector do-gooders. He still hasn’t figured out that the global warming bologna was a scam.)

Another LDP member in the Hashimoto corner is former Prime Minister Abe Shinzo. Mr. Abe recently spoke at an Osaka symposium for a private sector group called the Organization for Reviving Japanese Education. Attending was new Osaka Gov. Matsui Ichiro, Mr. Hashimoto’s partner in One Osaka. Their common objective is to reshape the current educational system, and at a post-conference meeting with reporters, the governor said they were on the same page. Mr. Matsui also said that the schools’ opposition to the amendments of the Basic Education Law passed during the Abe administration means that the popular will is not reflected in the school curriculum.

The most important of Hashimoto’s allies, however, is the reform Your Party. (Reports of their activities often grace these pages.) Party head Watanabe Yoshimi was interested in joining forces when Mr. Hashimoto arose as a political figure (a year or two before Your Party was formed), but was said to have been restrained by his party co-founder and Secretary-General, Eda Kenji, due to concerns that the Osaka mayor was a loose cannon. If that was true, the leash is now off. Said Mr. Watanabe:

“We must work to ensure as a party that this movement (One Osaka) spreads nationwide.”

He says the policies of One Osaka and Your Party are nearly the same, and adds that they have plans to form a joint policy study group and a political alliance nationwide. Those policies include the reorganization of local governments into a state/province system, the creation of an Osaka Metro District, and the idea that the new sub-national units receive all the consumption tax revenue. Mr. Watanabe has created a catchphrase to crystallize the ideas of his party’s policies, which is “giving the ‘three gen’” to local governments. Gen is the final syllable of the words kengen (authority), zaigen (revenue sources) and ningen (people).

L-R: Gov. Matsui, Mayor Hashimoto, Mr. Watanabe, Gov. Omura. The shape of things to come?

Further, Your Party executives as well as others in the party responsible for the candidacies in single-seat districts will study at the One Osaka political juku with the party leadership’s blessing. That includes about 20-30 people from Osaka, Kyoto, and Hyogo. Your Party plans to run 100 candidates in the next lower house election, and they’ve settled on about 70 so far.

The Shukan Asahi also quoted a Your Party source as saying that Mr. Watanabe and Mr. Hashimoto have reached a private understanding that the former would be “the first prime minister”. They suggest that Mr. Watanabe thinks control of the Diet is in their aggregate grasp.

The Osaka mayor is also an official international phenomenon — he’s attracted the attention of South Koreans. That’s only natural: national elections will be held in that country in April and December this year. KBS-TV sent a crew to hop over to Osaka for interviews. Commenting on the Korean interest, the mayor said:

“I look forward to the emergence in South Korea of new politicians who aren’t beholden to vested interests.”

Asked by a Korean reporter about his political juku, he answered:

“We must create politicians who aren’t under the thumb of vested interests. If South Korea can get excited about the same thing, I’d like to see Japan and South Korea move in same direction.”

The Japanese media spoke to one of the KBS reporters after the interview, and he told them:

“There’s quite a lot of reporting on Hashimoto in South Korea. After actually meeting him, I sensed his strong intent for reform.”

Critical to the success of any politician is his capacity to appeal to people who don’t agree with all his positions, but are on board for the most important of them — in this case, governmental reform. For example, Mr. Hashimoto supports amending the Constitution to permit the Japanese to maintain military forces for self-defense. Chiba Mayor Kumagai Toshihito also supports amending the Constitution, but for the opposite reason — he wants to prevent Japan from becoming involved in any conflict. Nevertheless, he said:

“The structure of the local governments where we live is an important issue, but one that has not attracted much interest. That it became the primary issue contested in the Osaka election is epochal…We of the “government ordinance cities” (cities with authority similar to that of prefectures) strongly seek the transfer of authority from the prefectures. I don’t agree with all of the opinions in Mr. Hashimoto’s Osaka Metro District concept, but our intent to change Japan from the regions is the same.”

Local party time!

Hashimoto Toru is the most visible manifestation of the ferment of regional politics in Japan, but he is by no means alone. This time last year, all eyes were on the newly elected mayor of Nagoya, Kawamura Takashi, and the governor of Aichi Prefecture, Omura Hideaki. Their victory in a February 2011 triple election might have been more impressive than the Osaka result because the Kawamura — Omura alliance is between men originally of different parties. Also, their tax-cutting, small-government message was accepted by people in a region that has been a stronghold for the tax-raising, big government DPJ. (This is the national headquarters of Toyota, and there are plenty of labor unions.)

Mr. Hashimoto actively lent his support to the two men and their respective regional parties last year, and members of One Osaka came to help campaign. (It should not be overlooked that this revolution is occurring in Osaka and Nagoya, Japan’s second- and third-largest cities.) It’s expected that the three men will form an alliance for a national election, and while that will probably happen, there are some differences in viewpoints between them.

For example, Kawamura Takashi’s party is called Genzei Nippon, or Tax Reduction Japan. He favors sharp cuts in taxes (which he has partially achieved in his first year in office). Though Mr. Hashimoto has criticized the Noda Cabinet’s plan to raise the consumption tax, and he is allied with the anti-tax increase Your Party, he has also criticized the Kawamura approach. That criticism provides a fascinating glimpse of his philosophy:

“The awareness I would like to see is not transferring work or duties from city hall to the ward offices, but transferring decision-making authority from the mayor to the heads of the ward offices. The ultimate objective is, ‘We don’t need a mayor’.”

He’s also said that he would be cool to a formal alliance with them unless Mr. Kawamura makes some adjustments, including his campaign for tax cuts:

“At the current stage, let’s stop talking about tax increases, or reducing taxes, or opposing tax increases. It is nonsense in our present state for politicians to be expressing an opinion about either tax increases or cuts. If society as a whole is going to create a system of mutual support, it’s natural for the members of society to assume the liability for an appropriate share. First, we should identify what sort of social system we want to create. Whether or not the residential tax should be cut is a minor matter that should be discussed at the end of the process.”

Mr. Hashimoto has presented this view on several occasions. If he’s serious, that would represent a drastic departure from the political status quo anywhere, much less Japan. He’s talking about bottom up government with the political class last.

The Aichi governor and Nagoya mayor have a plan for the administrative reorganization of their own area, which they call Chukyo-to. (Ishihara Shintaro won’t like that to either.) While they’re working on common ground, Mr. Hashimoto believes they need to do some more thinking about the concept, and he has the sense that they aren’t clear on exactly what they want to accomplish. Representatives from Aichi and Nagoya have had meetings on the Chukyo concept, but they have yet to present a plan for changing the current form of the administrative bodies, such as breaking up Nagoya (The Osaka plan calls for eliminating the administrative entity that is the city of Osaka and creating self-governing wards in the region.)

Mr. Kawamura says, however, that he spoke to Mr. Hashimoto by phone and explained that their plan calls for the merger of Aichi and Nagoya, but that the framework will take into account regional considerations. That will include maintaining the form of a city of Nagoya. Nevertheless, he wants to maintain their alliance.

Complicating this somewhat is that Your Party’s Watanabe Yoshimi has his own plan for the region, which would eliminate Nagoya and its current 16 wards and create seven new regional districts. Each of these special districts would have a chief municipal officer and a legislature. As with the Osaka Metro District concept, the idea behind the Watanabe plan is to eliminate redundant government systems. It would reduce the number of city workers by 20% and save JPY 50 billion. Mr. Kawamura thinks the people of Nagoya would not support it, and Mr. Omura thinks the Watanabe plan lacks specifics.

Meanwhile, both men have decided to establish a political juku of their own. The first was Mr. Omura, who announced his at the end of January:

“I want the three major metropolitan areas of Tokyo, Aichi, and Osaka to form an alliance and change Japan.”

His idea is to present candidates for the four Tokai prefectures of Shizuoka, Aichi, Gifu and Mie. Mr. Omura announced yesterday that he had received 751 applications, and after reviewing their documents, 678 have been accepted. About 80% are from Aichi, and include company employees, national and local civil servants, and local government council members. One of the speakers will be Takenaka Heizo, the Koizumi privatization guru, and another will be one of the elder statesmen of Japanese journalists, Tahara Soichiro.

Oddly, Mayor Kawamura didn’t like the idea at first. He told reporters, “I cannot agree with how they’re going about it.” That didn’t change his relationship with the Aichi governor, however. He still supports the Chukyo-to concept, and said, “There is no change in our friendship.”

But Mr. Kawamura suddenly changed his mind — you know what they say about imitation and flattery — and plans to set up his own political science class to start next month. His reasons:

“I want to communicate my thinking to the next generation. It is also for the next lower house election.”

The curriculum at his school will focus on taxes and national defense issues, and he will ask Hashimoto Toru and Omura Hideaki to send over some teachers. He expects to run Genzei Nippon candidates in the next lower house election in the five lower house districts in Nagoya.

He’s sticking to his tax cutting pledge, too. Despite Mr. Hashimoto’s criticism, it’s easy to like his approach.

“To improve the people’s lives, we must not raise taxes. Rather than tax revenue, we must raise (the people’s) income…the revenue source for tax reduction is governmental reform.”

It’s not often mentioned in the media, but Mr. Kawamura would have special committees established in each district of the city to have the residents determine how they would spend the tax revenue in their area. While taxes would be cut, it would give — you got it — power to the people to decide how they want to spend the money.

Now this is the kind of debate I can get behind. One man is opposed to immediate tax increases absent reform and says let the people decide what they want first, while the other man says the issue is raising income rather than taxes and tax reduction should be achieved by cutting government.

That’s my idea of win-win.

Coming next: An overview of other Hashimoto policies and a first look at his critics. Here’s a taste — He’s backing an idea proposed by the man being interviewed.

21st century Class A war criminals

It’s been one year since the Tohoku earthquake. What we need now is not words, but actions. Not repeated words, but repeated actions — actions in which everyone shares a bit of the burden. There is nothing else.
- Osaka Mayor Hashimoto Toru

If Australia is to get the government it needs (and deserves) it must first experience the full horror of the government it doesn’t deserve.
- James Delingpole, who could just as well have been speaking of Japan

LAST Sunday was the first anniversary of the Tohoku triple disaster — the fourth-largest recorded earthquake in history, a monster tsunami, and the nuclear accident at Fukushima. The Nishinippon Shimbun presented the numbers in a small box on the front page of its Monday edition:

Dead: 15,854
Missing: 3,155
In shelters or temporarily in other areas: 343,935

Also in the Monday newspapers were the results of a recent poll:

* How would you evaluate the government’s response to date for recovery efforts in the stricken area?
Good: 25%
Bad: 67%
No answer: 8%

* How would you evaluate the government’s response to date for the nuclear accident at Fukushima?
Good: 12%
Bad: 80%
No answer: 8%

There are no excuses when four out of five people think you stink. It’s time to reach for the soap.

Fortunately, the public is doing it for them. Among the noise and distortion and useless pallid confetti of media discourse, a low but distinct signal is emerging. Long before 11 March, people understood the crimes of commission and omission of the so-called Iron Triangle: the political establishment in Nagata-cho, the governmental establishment at Kasumigaseki, and the business establishment everywhere else. The voters have persistently expressed the wish to destroy that triangle. But the national disaster seems to have focused their attention and made vivid the futility of relying on the long-running disaster that is the triple establishment. Another poll released this week revealed that pre-existing political trends are accelerating. The question asked was about the contours of the government they’d like to see. The answers:

A government centered on the Democratic Party (the current ruling party): 7%
A government centered on the Liberal-Democratic Party (the largest opposition party, and the ruling party for more than half a century): 10%
A DPJ – LDP coalition government: 26%
A government with a new framework after a political reorganization: 50%
No answer: 7%

Note that the current DPJ government could manage only a rating equal to that of the stragglers in any poll who can’t be bothered to form an opinion. It was lower than the No Answer response to the previous two questions. The LDP is not viewed as an acceptable option.

The people have thus disqualified the major political brands from serious consideration. While their enthusiasm for alternatives was evident before, it’s so strong now that even the Three Disasters in Tokyo have noticed. They see that the tsunami of popular will is surging in their direction. No one knows when it will break, but when it does, there is no levee big enough to stop it.

Kusaka Kimindo, born in 1930, a former director of the Long-Term Credit Bank of Japan, and a commentator on business and governmental affairs, recently released a book called The Collapse of the Japanese Establishment. He welcomes that prospect. The blurb on the front cover reads:

The government-patron academics, the Western-worshipping intellectuals, and Big Mass Media have lost their authority.
A new wind has begun to blow.

The next few posts, and others from time to time in the future, will focus on aspects of the speed and direction of that wind. Perhaps it might blow as strong as a third kamikaze, the divine wind, combining the salvation of the first with the internal origins of the second.

First, however, we must look at what is collapsing, and why.

The Kan Cabinet: Class A War Criminals?

That’s the question asked in the lead article of the 18 March weekly Sunday Mainichi, issued to coincide with the anniversary of the disaster. The tone of Japanese weekly magazines is often wild and woolly, but this time they’re quoting someone else: political commentator Kinoshita Atsushi, a former lower house member from the Democratic Party — the same party as Kan Naoto.

It’s the job of a leader to create a more comfortable working environment, but Mr. Kan did the opposite. You could say he was a Class A war criminal.

Mizote Kensei is the secretary-general for the LDP bloc in the upper house, and a former Minister for Disaster Management. He expressed the same sentiments in a different way:

If this were a backward country, they’d be taken to court, and might even be executed.

The Sunday Mainichi thought that was extreme, but they did spend an entire page discussing the possibility of court action against several former Cabinet members, including whether it would be a criminal or civil proceeding, the precedents for such action, and what might happen. (They conclude it would be possible in theory, but difficult to pursue in practice.)

Lower house LDP member Kajiyama Hiroshi doesn’t have Mr. Kan to kick around any more, but he called for the immediate resignation of Madarame Haruki, the chairman of the Nuclear Safety Commission:

The LDP certainly has responsibility for promoting nuclear power. But beyond that, Tokyo Electric and the government, particularly Prime Minister Kan, bear a heavy responsibility. After the Fukushima accident, Mr. Kan spoke only to Madarame Haruki, chairman of the Nuclear Safety Commission, about technical matters. That’s because no one else capable of expressing a different opinion was there.

That only Mr. Kan would listen to Mr. Madarame’s personal views on technical matters was decisive. Also, there are no records of their discussions. There is no choice but to assume that the information we’ve received has been doctored, and there are even doubts he didn’t want to hear the views of other technicians….The other members of the commission should have met together to create a consensus, and that should have been the advice given to Mr. Kan.

In addition to allowing other people to use the term Cabinet Class A war criminals, the magazine referred to Kan Naoto as a “self-righteous hothead” and said that Mr. Madarame was “unconnected to the real world”.

Then again, it’s not as if Mr. Kan listened to Mr. Madarame even when he was listening to Mr. Madarame. During the prime minister’s universally lambasted helicopter trip to Fukushima on the morning of the 12 March 2011 to view the facility from the air, the NSC chair tried to communicate several of his concerns en route. Mr. Kan issued an order: “Just answer my questions.” (It sounds even worse in Japanese.)

One of his questions was whether there would be a hydrogen explosion. Mr. Madarame thought not. There was an explosion, however, about eight hours later. When the prime minister saw it on television, he exploded himself:

Isn’t that white smoke rising? It’s exploding, isn’t it? Didn’t you say it wouldn’t explode?

See what they mean about “self-righteous hothead”?

The technicians thought a meltdown was possible at Fukushima the night of the accident, and detected evidence that it had started early the next morning. They informed the government, but Kan Naoto lied about it, not only the next day, but for several months thereafter — including on the floor of the Diet.

He also says he failed to receive information from SPEEDI, the system that generates projections on the dispersion of radioactive material. There are even claims that he didn’t know the system existed. Had the information from SPEEDI been employed, it could have limited the region’s exposure to radiation.

Itabashi Isao, a senior analyst for the Council for Public Study, explains that Ibaraki Prefecture publishes a book for high school students to explain nuclear energy, and that the book contains a description of the SPEEDI system.

They say the data reached the crisis management center and stopped there without going to Mr. Kan or the others. When politicians say they didn’t know something that’s being taught to high school students, it should not be the end of the discussion.

To continue the discussion, in October 2010, five months before the earthquake, a disaster prevention drill and simulation were conducted based on the premise of failure in the cooling function of Chubu Electric’s Hamaoka nuclear plant. The drill used data generated by SPEEDI. The government formed a group to oversee and monitor the drill and simulation. The head of the group was Kan Naoto, the man who supposedly didn’t know about SPEEDI.

But of course he did. Hosono Goshi was then an aide to Mr. Kan. He was later appointed as the minister in charge of dealing with the nuclear disaster, and added the Environmental Ministry portfolio with the inauguration of the Noda Cabinet. Last May, two months after the accident, Mr. Hosono said that SPEEDI information was not made public because of worries the people would panic. (There are also suspicions in some quarters that he held on it to it to enhance his career prospects.)

The Sunday Mainichi quoted a journalist:

They hid information because they thought if they told the truth, the ignorant people would panic. It is an indication of their viewpoint based on the premise of stupid people, stupid thinking (gumin guso).

We already know that’s the way they think — it was clear in the fall of 2010 during the incident in the Senkakus with the Chinese “fishing boat” captain. The government wouldn’t release their video of the incident because they thought it would inflame both the Chinese government and the Japanese people, but someone in the Japanese Coast Guard solved that problem by uploading it to YouTube. The government also claimed that the Naha prosecutors were in charge of the disposition of the case. More than 80% of the public thought they were lying.

Now the phenomenon of the circular firing squad is emerging as the Fukushima investigation continues. Mr. Madarame has been testifying to the Diet committee looking into the nuclear accident, and said the following about then-Chief Cabinet Secretary Edano Yukio:

From the perspective of those of us who work with nuclear power, saying (as Mr. Edano did) ‘there will be no immediate effect’, sounds as if he is saying the effect would be late-developing cancer. We would not say anything like that. Therefore, I did not make any suggestion of that sort to the chief cabinet secretary.

Not everyone in the Cabinet was complicit in the war crimes. One of those was Katayama Yoshihiro, then the Minister of Internal Affairs and Communications. A former governor of Tottori Prefecture, he has an idea about the way government executives are supposed to conduct themselves. He’s on the record about Mr. Kan:

Who was the leader of the operations? It was impossible to understand the intent of too many of the various demands and requests (from the government command center). They were fragmentary and childish. There was no leadership at all.

Mr. Katayama also cited the breakdown in communications between the underground command center for the crisis in the basement of the Kantei, and Mr. Kan’s fifth floor office. He said that the prime minister never took the elevator downstairs, but communicated with the center only by cell phone. Mr. Kan, meanwhile, complained that 90% of the raw data came through Tokyo Electric, and that “the gears of communication did not move”, even when he put Mr. Hosono and then-METI Minister Kaieda Banri on the job. Shifting the blame to someone else is a Kan hallmark.

It will be difficult to find out exactly what happened in the Kantei because no record was kept of governmental discussions immediately after the disaster. It is widely assumed that Kan Naoto didn’t want people to know.

There are no records of the first 18 of the 23 meetings of the main group tasked with dealing with the Fukushima problem. An official with the Nuclear and Industrial Safety Agency took records of the 19th meeting on his own initiative, but there is no organizational record.

One of the unindicted co-conspirators is then-Chief Cabinet Secretary Edano Yukio, who as the government spokesman said a meltdown had not occurred, and repeatedly insisted there would be no harmful effects from the nuclear accident. Mr. Edano is now the Minister of Economy, Trade, and Industry, the body overseeing nuclear power operations in Japan. He has reportedly aligned himself with the METI bureaucrats promoting the continued use of nuclear power. He’s interested in becoming prime minister, and thinks this will help him win the support of Big Business. (A former attorney who defended radical labor unionistas, he could use the credibility.)

Mr. Edano is also backing the METI position in the ministry’s dispute with Tokyo Electric Power. Remember how the Democratic Party was going to take political control of the bureaucracy?

Showdown at the hypotenuse

METI and the past two DPJ governments want to temporarily nationalize TEPCO. Their plan is to inject JPY one trillion of public funds into the company to help offset what could be tens of trillions of yen in eventual liabilities. They would receive a two-thirds ownership stake in return, replace all the top executives, and sell off the generating division. (That last one’s a good idea, and should be applied to all the power companies as part of the implementation of a national smart grid, but that’s yet another one beyond the capabilities of this government.)

Tokyo Electric objects. They think the government is incapable of operating a utility — can’t argue with that — and charge the government has no clear plan for divesting itself of ownership in the future.

So in classic Old Japan fashion, Tokyo Electric Chairman Katsumata Tsunehisa is getting chummy with the Finance Ministry to head off nationalization. The Finance Ministry is sympathetic to the utility, if only because they don’t want to put the government on the hook for paying off the liabilities. Katsu Eijiro of the ministry, serving as an aide to Prime Minister Noda (and dubbed his puppeteer by the press), told his subordinates they should not permit government control of the utility in negotiations, and to draw the line at 49% ownership, no matter how much they have to compromise before reaching that point. With that capital stake, the government could only reject major proposals, and the Tokyo Electric leadership would stay.

Prime Minister Noda, however, has left the responsibility for negotiations with Mr. Edano, as he is said to be too involved with a consumption tax increase to handle anything else. Mr. Noda wants to unify social welfare programs using the consumption tax as funding. The people backing this idea are calling it a “reform”, a term the Western media echoes. Yet the reform so far consists of allocating just one-fifth of the assumed revenues from the tax increase to social welfare programs (JPY 2.7 trillion) while earmarking JPY four trillion to public works projects. Remember how the Democratic Party was going to shift the emphasis from concrete to people? Nor has the Noda Cabinet come up with a specific proposal for the future form of the social welfare system. They just want the taxes first.

What they don’t want is to remind everyone that the last time the consumption tax was raised, during the Hashimoto administration, it had a negative impact on the economy that further decreased tax revenue.

Edano Yukio, however, says there will be no government support without a two-thirds stake. For negotiations, he has enlisted his political patron, Sengoku Yoshito, who became a Class A war criminal as chief cabinet secretary in the first Kan Cabinet during the Senkakus incident.

The METI bureaucrats are said to like Mr. Sengoku, including those with greater political ambitions, as well as banking industry veterans now in subordinate Cabinet positions. They think he’s a genius at lobbying and working behind the scenes. (Yes, they said “lobbying”; in Japan, the politicians in government are the lobbyists.) Mr. Sengoku is thought to be interested in shifting the power industry’s votes and money from the Liberal Democratic Party to the DPJ.

Another aspect of the stalemate is another Old Japan struggle for the authority over the nuclear power industry itself, with METI, the Ministry of Education (which includes science affairs), Defense, the National Police Agency, and the Cabinet Office duking it out.

While the servants of the people have been attending to what they perceive as national affairs, others have offered many good ideas for recovery programs. These included making the Tohoku region a special economic development zone as a trial for a move to a state/province system, giving tax breaks to donations (there are donation boxes nowadays in most public places and commercial establishments), and issuing long-term bonds bought by the Bank of Japan.

Neither the Kan nor the Noda governments could manage any of that.

Shiva’s second coming

Talk of dinosaurs brings up the subject of Ozawa Ichiro, the former president and secretary-general of several political parties, and now suspended as a member of the ruling DPJ, though he was their secretary-general until May 2010 and president until a year before that.

He’s back in the news because the government he wants to topple this time is the one led by Mr. Noda — ostensibly for failing to uphold the party’s 2009 election manifesto, but really for not paying attention to him.

One of the weekly magazines conducted an interview with him on 14 December 2011 and published it in their 31 January edition.

Ultimately, I look at Japan with doubt, wondering whether it is a democratic state…In Japan, the power of the citizenry is not linked to changing politics.

No one has to doubt who’s ignoring the democratically expressed desire for change. The Japanese say hansei, or reflecting on one’s past conduct, is a national trait, but that’s one mirror Mr. Ozawa passes by without looking in.

The interview contained the good, the bad, and the ugly. Here’s the good (or at least the accurate) part:

If Japan had the ability to negotiate with the US as equals, there would be no worry about TPP. But the present government isn’t capable of doing anything like that. The people are concerned that in the end, it will turn out the way America wants it.

It isn’t just TPP. It’s everything, including the security issue, starting with the Futenma base. It’s the same with economic issues. What has to happen is that the Japanese become independent. But the government has to be able to stand up for the Japanese national interest….I agree in principle with free trade, and we should negotiate based on that. If the government had any ability to negotiate, there’d be nothing to worry about.

Now for the bad:

To prepare for the market opening, the DPJ put in the manifesto a domestic policy of income supplements for agricultural households. If we (upheld) that, agriculture would survive.

The legal vote-buying schemes of power politicians might buy a few votes, but that wouldn’t ensure the survival of agriculture. The romantic vision of the family farm is no longer enough to put food on the nation’s table, especially considering that most farmers in Japan are not exclusively engaged in farming. Policies that promote agribusiness are the means for survival, but few politicians want to campaign on that.

Now for the ugly:

People who criticize my assertions don’t understand anything at all.

He also sat for an interview with the Asahi Shimbun earlier this month, which they thoughtfully translated into English:

Question: It has been two and a half years since the change of government, but the political sector does not appear to be functioning. Why?

Ozawa: That means that democracy has not matured to a point of taking hold in Japan. It is often said that politicians are only as good as the people who elect them.

Remember what the journalist said about stupid people and stupid ideas?

Ozawa: The change in government with the Lower House election of August 2009 was a major decision by the Japanese public, which dislikes change. I believe they held a dream.

The Japanese public likes change a lot in politics. They keep voting for it. They don’t get to realize the dream they hold because Mr. Ozawa and his party keep stepping on it.

Ozawa: However, the DPJ did not have the qualifications necessary to respond to those expectations. It was unable to fulfill its role because the responsibility may have been just too large.

Either that or their capacity to fulfill their role was too small.

Noda Yoshihiko: a chip off the old blocks

Noda Yoshihiko isn’t as appalling as the vaporous Hatoyama Yukio or the repellent Kan Naoto, but the performance of those two has jaundiced the media’s view of anyone who would lead the DPJ government. Here’s the 16 March edition of the Shukan Post:

It is usual for prime ministers to make frantic efforts to get the people on their side when managing the affairs of state becomes difficult, but this man, who has little experience or few accomplishments at the upper levels of government, does not understand the meaning of authority. He increasingly curries favor with the bureaucrats, the Americans, and his powerless supporters, while showing his fat ass (肥えた尻) to the people.

What has been appalling are his Cabinet appointments, despite his trite claim that he was putting the right people in the right places. A career bureaucrat was quoted on his opinion of Finance Minister Azumi Jun, a former NHK broadcaster:

He’s pretty good. Like Kan, he doesn’t pretend that he knows anything. He admits that he doesn’t understand fiscal policy. He stands up for (Finance Ministry policy positions) in the Cabinet. He’s also cute, and has a cute personality.

Yes, he said kawaii.

With public sentiment running against his plan to increase taxes, Mr. Noda is trying to trim expenditures to convince the public that he actually is the fiscal hawk in the portrait the spin doctor present.

He’s announced a plan to reduce public sector hiring 40% from 2009 levels in 2013, to about 5,100 people. The figures are likely to be similar in 2014. Hiring was already down in 2011 and 2012, however.

Another plan to cut civil servant salaries by 7.8% passed the Diet rather quickly. Japan’s industrial media played up the legislation, but one of the jobs of kisha club reporters is to circulate the PR handouts for the Finance Ministry.

The Shukan Post points out that’s officially only JPY 300 billion a year for two years, and probably closer to 270 billion. The politicos said the savings would be spent on Tohoku recovery, but the bill contains no specific mention of that, nor has a framework been created for that expenditure. It hasn’t even been allocated to the special recovery account.

Meanwhile, Mr. Noda not only rescinded the freeze on civil servant salary increases in place since 2006 this spring, he gave them a double bump. That increase will also be reflected in overtime allowances. The bureaucrats still get overtime while attending to Diet members, i.e., sitting and watching the Diet in session or going out drinking with MPs after the session is over. They also get taxi vouchers for the trip home.

He’s also retained the special allowances public employees receive in addition to their salary — JPY 26.4 billion a year in residential allowances, apartments in Tokyo at roughly 20% the rent of commercial properties, and JPY 7.1 billion for cold weather assignments. There’s even a special allowance for those assigned to work at a ministry or agency’s main office, which eats another JPY 10.2 billion a year.

Former bureaucrat and current freelance journalist Wakabayashi Aki asked them why they needed a special allowance to work at headquarters. She was told assignments there had the unique and difficult responsibility of formulating legislation and policies.

In other words, they get a bonus on top of their salaries to do the jobs they were hired to do.

But the generosity of the Japanese public sector doesn’t stop at the water’s edge. They’re also giving the money away overseas.

International exchange

This week the Foreign Ministry released its 2011 white paper on ODA, which offered their explanation of the reasons for foreign aid. They emphasized the importance of international cooperation and pointed out that the feelings of trust and thanks toward Japan from overseas were fostered by lavish ODA. To support their assertion, they cited the assistance received from 163 countries, including developing countries, after the Tohoku disaster.

You might have thought money can’t buy you love, but the Foreign Ministry has other ideas.

Some of it read as if it were a script for the TV commercials of the kind that oil companies produce to convince viewers of their environmental awareness: Students in Sierra Leone sold their meals and collected US$ 500 for donations, and all the national civil servants of Mongolia donated one day’s salary to Tohoku relief. While Japan’s ODA has declined for 13 straight years, the Foreign Ministry touts it as a great success, saying “active donations to the international community are connected to Japan’s own benefit.”

The prime minister thinks so too. Mr. Noda met Thai Prime Minister Yingluck Shinawatra on 7 March in Tokyo and promised to help rebuild her country’s infrastructure, including expressways, railroads, and IT, after last year’s floods.

Said Chief Cabinet Secretary Fujimura Osama at a news conference:

A friend in need is a friend indeed. We will never forget the goodwill of the Thai people, who offered us support as a country during the Tohoku disaster. There are many Japanese in Thailand working for companies in the Japanese manufacturing industry, and the expectations toward Japan are great. We want to formulate solid measures that will not betray those expectations.

The folks at the Seetell website are on the case again. They quote this from the Nikkei:

The Ministry of Economy, Trade and Industry has decided to provide Japanese companies with subsidies for their 18 infrastructure-related projects in China and other Asian countries, The Nikkei learned Saturday. The subsidy program mainly targets projects for building smart communities in China and Vietnam. It covers not only exports of infrastructure facilities and systems but also smart community projects involving land development in China, Thailand and Vietnam, sources said.

After providing some details about the programs, the paper added:

The ministry will extend subsidies of tens of millions of yen to these projects, sources said.

Seetell asks several excellent questions:

So, the bureaucrats at METI can allocate funds to build cities in China, Thailand, and Vietnam, but no one in the government can seem to rally any focused effort to rebuild cities in Japan? What could possibly cause such a mismanagement of resources and priorities? Are not the Japanese people of greater concern than the Vietnamese, Thais, and Chinese?

And how does it fit that Japan is building cities in China when the US occupation of Okinawa continues for its 67th year because China is seen as a threat to Japan?

Here’s one Seetell missed:

The Global Fund to Fight AIDS, Tuberculosis and Malaria today welcomed a $340 million contribution by Japan, the highest amount that Japan has ever made in 10 years of vigorous support for the Global Fund. Japan is now making its first payment of US$ 216 million for its 2012 contribution.

“Japan has always been a leader in the fight against disease, but this is a great vote of confidence in our commitment to saving lives,” said Gabriel Jaramillo, General Manager of the Global Fund. “We recognize Japan’s determination to see real advances in global health, and we are equally determined to deliver.”

This new contribution represents a significant increase over Japan’s previous highest contribution of US$ 246 million in 2010. In 2011, Japan’s contribution was reduced to US $114 million following the earthquake and tsunami that devastated northeast Japan in March of last year, but this new contribution demonstrates that Japan’s commitment to the Global Fund remains steadfast.

The Boy Finance Minister Azumi the Cute is warning of a Greek-like catastrophe, people in the cold Tohoku region spent the winter in prehabs, but Japan had to almost triple the amount of money it gives to this group? The Global Fund couldn’t get by with just 100 million again this year? Japan was the only country they could tap for cash?

Here’s another from the Shukan Post. The IMF wanted $US 100 billion (about JPY 8 trillion) from Japan to help bail out the Europeans. Japan said it could only contribute about half of that, but the IMF insisted. The Finance Ministry finally told Mr. Azumi to cave again, so now Japan will help bail out the unbailable Greeks. The magazine points out that this amount of money, if kept in Japan, would remove the necessity to raise taxes for the Tohoku recovery, and the necessity to float bonds to cover national pension outlays.

To be fair, returning favors and gifts for favors and gifts received is an important element of Japanese culture. Nonetheless, one has to suspect that part of the motivation is the fear of government ministries and agencies that they’ll lose the budget money they don’t use. Besides, the government has been selectively generous about which favors it returns. Taiwan, which contributed JPY 20 billion to the Tohoku recovery, sent a representative to the memorial service in Tokyo last Sunday. They were left off the list of donor acknowledgments, and the representative was shunted to the general seating area on the second floor while the other foreign delegates sat downstairs in a VIP section.

Prime Minister Noda later said he was sorry if he offended anyone, but his lack of sincerity was offensive in itself. Chief Cabinet Minister Fujimura admitted the seating arrangements were settled at the Foreign Ministry and the Cabinet Office.

Na Nu Na Nu

Former Prime Minister Hatoyama Yukio enjoys his nickname of The Alien, but one has to wonder if the entire DPJ that he once led is just the Martian Space Party morphed into human form.

Last week, the DPJ announced the appointment of Mr. Hatoyama as their supreme advisor on foreign policy and Kan Naoto as their supremo for new energy policies.

How fitting. One screwed up relations with the U.S., and the other screwed up Fukushima.

Mr. Kan also gave a speech to a DPJ study group on the 5th, attended by mid-tier and younger party members. The topic: Achieving real governance by the political class. “Japan should give serious thought,” he said, “to its approach toward state governance organs.”

Considering his accomplishments in office, that speech was over before his listeners could settle in for a nap.

If this were a backwards country, as the man said, Ozawa Ichiro might wind up being hung. But civilized Japan instead hung his portrait in a room in the Diet chambers last week.

A rule allows those MPs with 25 years of service to put their picture on a wall as long as the governmnent doesn’t pay for it. One of his political protégées did the painting, so he didn’t have to dip into his well-stocked safe at home for the petty cash.

If this were a backwards country, he might also be in the dock along with the other war criminals. But then again, he already is in the dock for political fund problems.

The party that insisted every day from 2007 to 2009 that elections be held immediately is none to excited about holding one themselves now that the executioner is motioning for them to stick their head into the hole of the guillotine. During a TV interview on the morning of the 10th, Deputy Prime Minister Okada Katsuya said:

If we dissolve the lower house now, the anger of the people will be directed at the existing political parties.

It already is, but then Mr. Okada is not known for his insight into popular sentiment.

They would complain that we were only holding elections without accomplishing anything.

Instead, they’re complaining that the DPJ has done little, what little they did was bad, and what they want to do now is what they promised they wouldn’t do.

Anachronisms

It is clear to everyone that these are men whose time has gone. They are living relics of a now irrelevant age. Their approach and viewpoint, while stemming in part from the self-interest endemic to politicians everywhere, is as obsolete as the Cold War. Adding their evident contempt for their own citizens to the list of charges means they’ll have a dread judge to face in the next election.

Disturbed as much by the failure of the Iron Triangle to deal with the triple disaster as they were by the disasters themselves, the people — wiser than their leaders — have moved on. Former Koizumi privatization guru Takenaka Heizo recently published a book-length dialog with former Yokohama Mayor Nakata Hiroshi, who is working as an advisor to Osaka Mayor Hashimoto Toru. Mr. Takenaka observed:

The people now have high hopes for new regional parties, and I think there’s a good reason for that. The era of putting government administration in the hands of the bureaucracy and somehow achieving consistent growth is over. This is now an era for solving our problems. In society’s terms, people are looking for new CEOs. In fact, the best CEOs are the heads of local governments.

The next posts will examine Mr. Hashimoto, the most prominent of those local government heads.

Afterwords:

Try this for a refresher of what democracy means in Ozawa World.

Worried about the potential unpleasantness of Kusaka Kimindo’s comment about “Western-worshipping intellectuals”? Don’t be. Nothing bad will happen, and a renewed appreciation for Japanese values might be salubrious. Besides, even a cursory glance at current social, political, and economic conditions in the United States and Europe is enough to know how well contemporary Western values are working out.

*****
Here’s Takeuchi Mari singing Genki wo Dashite (Cheer Up!).

There’s a good reason this is an evergreen song in Japan, and it’s not just the melody. The premise of the song is that a woman is singing to a friend who’s down in the dumps because she’s been dumped by a man.

But the lyrics have other applications as well:

All you have to do is start again at the beginning…

If you feel like you want to be happy,
Tomorrow will be easy to find.

Life isn’t as bad as you think
So cheer up and show me that smile.

White collar hit men

ONE reason people overseas fail to see the reasons for the dysfunction of Japan’s political system at the national level is the difficulty in comprehending the strength and influence of the bureaucracy, which considers itself to be permanent ruling class. Here are two views on one aspect of that problem. The first is by journalist Suda Shin’ichiro, which appeared in the 18 January edition of the biweekly Sapio.

*****
It’s well known that the Finance Ministry officials responsible for dealing with the mass media are sent to deliver individual briefings (“lectures”) to opinion leaders with a certain amount of influence in forming public opinion, such as television commentators. The objective of these briefings is to convince them of the necessity for raising the consumption tax.

This has become more evident of late. As a producer with an important Tokyo-based network says:

They haven’t tired of developing a pro-tax increase group, and they’ve begun to pressure television producers to prevent them from using commentators who are critical of tax increases.

To be specific, the name at the head of the list they’re told not to use is Koga Shigeaki, former Ministry of Economy, Trade, and Industry official. The producer continues:

Mr. Koga is their sworn enemy. Politicians with the support of the Finance Ministry are making it a condition for their television appearances that Mr. Koga not be invited.

The Finance Ministry seems to be in something of a rush. To pacify the Democratic Party Diet members, they’ve fastened on the idea of vote differentials. Explains one mid-level DPJ MP:

Prime Minister Noda said he will take the issue of the tax increase to the public after the legislation passes, but before it goes into effect. Some party members who favor tax increases have begun to argue it’s not possible to dissolve the Diet and hold a general election unless the unconstitutional condition (differences in voter weight in election districts across the country), frequently cited by the Supreme Court, is resolved.

They’re calculating that public opinion will simmer down and they won’t be at such a disadvantage if they can use this situation to put off the election as long as possible. The Finance Ministry is likely encouraging them in this belief.

It doesn’t seem possible that buying time will get the electorate to swallow the tax increase and settle down. But even if the DPJ, which has fallen for the con, loses the next election, it would present no problem at all for the ministry. The Liberal Democratic Party is also calling for a 10% tax increase.

(End translation)

*****
Furthering the discussion on his blog is Your Party Secretary-General, Eda Kenji:

I’ve raised in the Diet the question of what Katayama Yoshihiro, former Minister of Internal Affairs and Communications, calls the Finance Ministry’s “mind control”. Their assault in waves is something out of the ordinary. I got a real sense for the terror of it when I was involved with Finance Ministry reform during the Hashimoto administration.

Even then there was talk about Finance Ministry efforts to prevent television appearances by people such as Koga Shigeaki. But operations on that level are not so surprising. That’s child’s play for the Finance Ministry bureaucrats.

It’s often remarked that the trio of Finance Minister Azumi, Vice-Minister Katsu, and Deputy Vice-Minister Kagawa are on a “tax increase pilgrimage”. They’re making their explanatory pilgrimages to opinion leaders in many circles, including key people in the financial industry, academia, and mass media, in addition to politicians in the ruling and opposition parties. They pay particular attention to people asked to give commentary on television or in newspapers.

In a sense, it’s natural for the Finance Ministry to promote tax increases. One would have to question the insight of the so-called analysts who would fall for that sort of persuasion. They haven’t approached me, a dyed-in-the-wool member of the anti-tax increase faction, at all.

The problem is that their efforts go beyond that level. In my case, the Finance Ministry sent people out on pilgrimages to attack and slander me. Those bureaucrats even had a manual. Their stories of course filtered into the mass media, which thrives on such rumors.

If a person is going to assertively promote reform against the wishes of the Finance Ministry, they must be prepared for those attacks and stay clean.

(End translation)

*****
After all that, it’s time for a palate cleanser and a burst of sunshine on a winter’s day from the original Nenez.

More on the choreography

BUILDING on yesterday’s expose of the Finance Ministry-choreographed policy reviews of social welfare schemes, the Nishinippon Shimbun reported today that an office created by the (mostly) Finance Ministry bureaucrats in the Government Revitalization Unit held preliminary “study meetings” at which information was distributed and certain decisions and declarations encouraged. It was also revealed that Ren Ho, one of the policy review MCs, attended, along with private sector panelists, ministry bureaucrats, and Diet members.

During the meetings, the bureaucrats coached the private sector panelists by saying, “We would like you to make this statement in this form,” and “We’re thinking of something along these lines for the conclusions to be drawn from the debate”.

One participant who wished to remain anonymous said:

“The material distributed was clearly a script. While there may have been no coercion involved for specific statements, they did create the flow of debate.”

Another added:

“I suspected that it was all choreographed and stitched together to look like a debate.”

A senior member of the Ministry of Health, Labor and Welfare explained the reason:

“The unification of the pension systems and taxes are the most important issue for the Noda Cabinet. It would be very difficult to have the ruling party openly discuss ways to increase the burden on the citizens (i.e., raise taxes)…People are likely to be opposed to these policies, so they can’t be raised by politicians who face elections. We thought an alternative would be to have the recommendations made during policy reviews.”

Politicians take responsibility? Perish the thought. Then again, the politicians in this (as in most) instances are just willing tools.

The newspaper reported that Chief Cabinet Secretary Fujimura Osamu denied that any of this took place. Ren Ho promised to explain later today.

*****
This must have been the inspiration: choreography, cash, and Pig Latin.

There goes the last fig leaf

NOW this is getting interesting: The lead story on the front page of the Nishinippon Shimbun this morning is an expose of the Democratic Party government’s policy reviews, in which panels of politicians and private sector experts grill bureaucrats, ostensibly to eliminate wasteful programs and save taxpayer money. The first was conducted to popular acclaim in late 2009 by former cheesecake model/TV personality-turned-Cabinet Minister Ren Ho and Edano Yukio. Mr. Edano later went on to preside over the party’s poor showing in the 2010 upper house election as DPJ secretary-general and the government cover-up of the Fukushima disaster as Kan Naoto’s second chief cabinet secretary. He’s now the Minister of Economy, Trade, and Ministry.

While the public was thrilled by the first such review — Japanese taxpayers know there’s enough pork being distributed to feed every nation in Christendom during Easter — those who paid close attention soon discovered the process was a dog and pony show orchestrated and scripted by the Finance Ministry, both to assert its dominance over the rest of the bureaucracy as well as the DPJ government. Your Party Secretary General Eda Kenji revealed on his website that he was given a copy of the first script. The panels’ only authority was to recommend cuts, most of the cuts the panels recommended never materialized, and subsequent panels were largely ignored by the public.

Now, for the first time, this story has hit the fan of the industrial mass media, or one blade of it at least. The government conducted another policy review last month on the subject of social welfare programs. The Nishinippon Shimbun managed to obtain copies of what they call a “crib sheet” citing examples of issues to be discussed, and another document with suggestions for how to summarize the proceedings at the end. The documents were created by the Cabinet Office with input from the Finance Ministry. The newspaper reports that most of the panel’s conclusions were in line with the ministry’s initial proposals. The crib sheet suggestions on reevaluating social welfare systems were identical to documents distributed at the session presenting Finance Ministry positions.

Here’s what Prime Minister Noda Yoshihiko had to say about the recommendations of the policy review on Monday:

All the declarations presented to the people at these reviews are important for the future of our country…The Cabinet takes these declarations very seriously, and we must link them to concrete results.

Mr. Noda, by the way, reportedly gets very upset at the charge that he is a Finance Ministry puppet. He’ll also get upset at this passage from the newspaper’s editorial:

When the Liberal Democratic Party was in power, the Finance Ministry would cut budget requests from each of the ministries when the following year’s budget was formulated at yearend, and each of the Cabinet ministers would negotiate directly with the Finance Minister to restore them. It was a set performance to give the public the impression that the politicians were in charge. The opposition Democratic Party lambasted this as an event staged by the politicians and the bureaucracy. Now, their criticism could boomerang on them.

The paper prominently featured this comment by political scientist and political devolution advocate Shindo Muneyuki, a former Chiba University professor and current director of the Research Center for Decentralized Policies and Systems:

It is clear that the Finance Ministry and the Cabinet Office tried to manipulate public opinion to gain support for themselves by creating a script and employing a group of prominent private sector individuals who favor cutting some expenditures…the government is no longer qualified to criticize Kyushu Electric Power for its fake e-mail campaign (to restart the Genkai nuclear plant).

They also ran some comments from former METI official and bureaucratic reform advocate Koga Shigeaki. Remember that Mr. Koga was on the receiving end of a veiled threat on the floor of the Diet during his testimony last year by then Chief Cabinet Secretary Sengoku Yoshito. Here’s what he wrote:

The Finance Ministry was viewed from the start has having set the boundaries for the policy reviews, but this is blatant. They might have been fearful of getting caught at first, but over time, they lost their sense of caution and no longer bothered to create the impression that the reviews weren’t choreographed. The DPJ and the Finance Ministry just began to accept this as a matter of course. Most of the members of the Government Revitalization Unit in the Cabinet Office are from the Finance Ministry…and the topics they choose to discuss are arbitrary. For example, proposals that would upset the Finance Ministry, such as the one calling for a 20% reduction in civil servant salaries, will never be discussed.

The ministry creates a sense of gratitude in the Democratic Party, which wants to raise taxes, and it benefits by being allowed to eliminate parts of the budget over which it has no discretion. The DPJ benefits from the PR…In any event, there is no meaning in debating serious issues such as these in just a few hours, and it’s only advertising for the government. (The panel) presents conclusions in a tangible form, and all it does is give Ren Ho a stage on which to perform.

Also of interest is that it is not easy to find reports on the panel’s recommendations for social welfare programs, though there were reports on a different investigation last month into nuclear power policy. Thus, it is difficult to know whose ox is being gored by the revelations. And speaking of government PR, here’s a report of Mr. Noda addressing the opening meeting of the panel on a government website (Ren Ho is to his right in the photo). He says:

The ‘proposal-based policy review,’ which was decided in the previous Unit meeting, will start on November 20. I would like to position it as a tool for building a new, stronger Japan moving forward…In order for Japan to regain robust growth potential and bring more prosperity to people’s lives, we need to overhaul outdated regulations as well as regulations and other systems that only serve to protect the vested interests.

Fighting the vested interests, eh? How droll.

Finally, it is most interesting that the national dailies have yet to report this story as I write. A Google news search in Japanese turns up only articles from the Nishinippon Shimbun, though Chief Cabinet Secretary Fujimura Osamu was asked about it at his morning news conference. Caught flat-footed, Mr. Fujimura said he needed some time to make up an excuse would look into it. It would be fascinating to know who leaked the information to the newspaper, surely with the intent of injecting it into the public consciousness indirectly.

The newspaper tries to present some balance by offering the opinions of two professors defending the ministry’s input. The ministry is also known, however, to cultivate a stable of university professors and other members of the commentariat to promote its positions and defend it, and this pair likely are part of the group of steeds.

In two short years, the Democratic Party government’s credibility has been shredded in both foreign and domestic policy. These policy reviews have been their only putative success, and their credibility and legitimacy have been hanging by the slenderest of threads. That thread has now been cut.

****
They’ve got all the answers and lovely dancers too.

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More on the bureaucracy and the increasingly restless natives

COURTESY of someone with sharp eyes at Seetell, here’s an article in the Mainichi Shimbun about the political influence of the Kasumigaseki bureaucracy. They’re already getting down and dirty by the second paragraph:

In the eyes of the general public, the stereotypical Finance Ministry bureaucrat is one of the nation’s most intelligent and elite, and a graduate of the University of Tokyo’s Faculty of Law. If this actually describes the majority of Finance Ministry officials, why is it that Japan has a national debt of 1,000 trillion yen?

They try to walk the tightrope of journalistic balance and present the Finance Ministry’s views:

However, to the public, the Noda administration’s tax-raising line looks like it’s been initiated by the Finance Ministry.

It’s unavoidable that people see the administration as being pushed around by the Finance Ministry, since the Finance Ministry is the only public organ that wants to raise taxes. Sure, it’ll be very difficult to raise the consumption tax at a time when the gap between the haves and have-nots has widened this much. But there’s no alternative to raising consumption tax if we want the burden to be as thinly and widely spread out as possible.

“The nation’s finances require a tax hike, but there are far too few politicians who are willing to take that challenge on. It’s very unfortunate,” the official said.

Also very unfortunate is the absence of a mention of the first and best alternative: Don’t spend money you don’t have, and redline expenditures that aren’t needed. Entire ministries could be either eliminated or downgraded in size and scope, and entire books have been published explaining how it can be done.

The reason the public’s attention is focused on the Finance Ministry is because news media outlets and non-fiction authors who do not depend on close ties to either politicians or government ministries to survive regularly air out the dirty laundry in public, often using information provided from ex-Finance Ministry (or other) bureaucrats. In addition to the stories (much more critical than the Mainichi article) that appear in nearly every issue of weekly or monthly magazines, enough books to fill a few shelves are published on this subject every year. One, for example, described how those ballyhooed DPJ policy reviews were scripted and orchestrated by the Finance Ministry’s Budget Bureau rather than the DPJ, and some of the panel’s recommended cuts were quietly reinserted into the budgets of different ministries a few months later.

What the literature on the subject also reveals is the reason the Mainichi has to be so even-handed: newspapers that displease ministry officials will be cut out of the information loop.

Inserted into the middle of some heavyweight heartstring tugging about the bureaucrats crying when visiting the scene of the Tohoku disaster (I’m sure they did) and worrying about their children (I’m sure they do), is this brief passage:

“Those who object to a tax hike, saying, ‘But the very bureaucrats who are championing tax hikes have stable jobs,’ are right,” the same bureaucrat said. “I’m aware that people are a lot more critical of us than they have been in the past.

Not only do they have stable jobs, those jobs pay 40% more than equivalent private sector jobs, and yes, books have been written about that, too. As well as the fact that public sector unions are the largest organized support group for the ruling Democratic Party of Japan.

Finally, neither this article nor the Seenow post delves into the fabulous moneywasters of the so-called Third Sector enterprises that were so popular among local governments in the 1990s. (These are joint public-private enterprises that a sane government would leave entirely to the private sector.) The last statistics I read stated that more than 70% of these enterprises nationwide were losing money, most of them a deeper shade of crimson than merely being in the red. In fact, there’s a magnificent white elephant in the old shopping district of the city where I live. To counteract the shift of retail outlets to shopping malls and other suburban locations with parking lots — Why? — the city government teamed with private sector interests to redevelop the old district and put up a new 10+ story complex with shops and condominiums. It went bankrupt almost immediately, and survives as an enormous drain on the municipal treasury.

The Japanese have already begun to fight back through the ballot box, and we can expect that fight to continue in the future. It is unlikely to take form in a vehicle such as the Tea Party or the Occupy movement, but take form it surely will. It has already started.

****
This might be good advice, were governments not so anxious to take these off our backs, too.

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Kidz Я the Cabinet

IGNORANCE of the law is no excuse, say the authorities, in their perpetual search for new handholds by which to seize us by the scruff of the neck and keep us docile and lowing.

If the authorities have it right, there’s no excuse for the presence in the Cabinet of Azumi Jun, the Boy Finance Minister who’s extended to three the DPJ string of finance ministers that know squat about finance and even less of the law. Then again, Kan Naoto and Noda Yoshihiko, numbers one and two in the sequence, used the position as a steppingstone to the premiership despite their comradeship in the blind mice brotherhood. There might be hope for Master Azumi yet. After all, his only job experience before becoming a national legislator was as an NHK newscaster, and he’s never held a major Cabinet post until now. Thus, his one marketable skill is the ability to read without stumbling over someone else’s script on camera or in public. What other qualification is there for serving as a politician these days?

It was Mr. Azumi’s turn to flunk the test during Question Time in the upper house of the Diet on the 15th. Kawakami Yoshihiro, a fellow traveler in the Democratic Party, was ragging on the Bank of Japan and their monetary policy due to the presence in that chamber of the bank’s Deputy Gov. Yamaguchi Hirohide. Pressing Mr. Yamaguchi on what he considered to be an insufficient money supply, Mr. Kawakami fumed, “The Bank of Japan is hindering the Democratic Party.”

Azumi the Lad quickly stepped up to their defense and explained:

Under the Bank of Japan Law, we cannot disregard (the objectives) of price stabilization and increasing the value of the currency. It is an important requirement to conduct monetary easing to the extent possible in that context.

It would seem that he is under the impression monetary easing is something central bankers are supposed to be in the habit of. He’s also confused about the provisions of the law regarding the Bank of Japan’s activities.

Article 1.1: The objectives of the Bank of Japan…are to issue banknotes and carry out currency and monetary adjustments.

Article 1.2: In addition to the provisions of the foregoing item, the Bank of Japan shall contribute to the maintenance of trust and order.

Article 2: When conducting currency and monetary adjustments, the Bank of Japan shall contribute to the sound development of the national currency through price stability.

There’s no mention anywhere in the law of “increasing the currency’s value”, so his answer raises the question of where he came up with that idea.

There’s only one possibility. His knowledge of fiscal and monetary matters before Mr. Noda thought he was just the man to be finance minister was no greater than the average convenience store clerk, and that means he requires tutoring by Finance Ministry bureaucrats. They’re only too glad to help. That allows them another handhold to seize fiscal policy by the scruff of the neck. Besides, how could he convincingly read his script without special instruction? (Kan Naoto made a point of getting up earlier than usual to make his 8:00 a.m. briefings.)

Thus, Mr. Azumi’s only source of information is his ministry minders. QED, they have convinced him a strong yen is a Good Thing. Japan’s major exporting companies are groaning from their yoga contortions to deal with the havoc the high yen has caused, but the Finance Ministry seems to think it’s copacetic. The limited monetary easing during the Koizumi administration was a factor in helping the economy recover, according to some observers, and the average rate then was 116 to the dollar. Yes, so much better for the nation at the mid-70 level, isn’t it?

But more to the point is that the two elements of the Azumi Definition of the BOJ role —- price stabilization and increasing the value of the yen — are incompatible. Under the purchasing power parity theory, if there is price stability in all the advanced industrialized countries with, for example, a 2% annual rate of increase, the currency would also stabilize and could not increase in value relative to the others.

While we’re on the topic of what Mr. Azumi doesn’t know, it was apparent from his response to an Eda Kenji question in the lower house on the 9th that his education hadn’t progressed to an explanation of credit default swaps yet.

That would be ever so helpful for a finance minister to understand. If any of the European sovereign debt falls, the American financial institutions that issued swaps against the debt —- you know, like Goldman Sachs — will be liable for gadzillions of dollars they don’t have, even after Mr. Obama bailed out his campaign financiers. That would put the U.S. financial system at risk of default.

The swaps are also important in Europe, too. Or at least they used to be.

But perhaps the biggest sin of the lot was effectively to render all credit default swaps (a form of insurance against default) on sovereign debt essentially worthless, or void, by making the Greek default “voluntary”.

This has made it impossible to hedge against eurozone sovereign debt purchases, and thereby destroyed the market. Worse, it’s made investors believe that the euro cannot be trusted, that it’ll repeatedly find ways of reneging on contract. That’s the point of no return. This is no longer a serious currency.

So, we’ve got the combination of people openly talking about the extinction of the Euro as a currency, other people openly talking about a global economic crisis worse than that of 2008, still others who think the collapse of the massive Chinese real estate bubble is underway, and Japan’s finances under the nominal stewardship of Azumi Jun.

Isn’t that just ducky?

*****
An interesting theory was floated recently about all the pratfalls Japan’s “finance ministers” take on the Diet floor during Question Time. When Kan Naoto appeared before the Diet after his appointment as finance minister, it was obvious that knowledge of the multiplier effect was not part of his résumé. (Meanwhile, it was just at this time the English language media of the West was touting him as a “fiscal hawk”.)

Mr. Kan too was given daily instruction by the Finance Ministry bureaucrats. The story goes that he had trouble grasping the concept of the multiplier effect during his briefings. (That’s understandable; a lot of concepts can be slippery that early in morning if you’re nursing a hangover.) The LDP Diet member who asked the question that tripped Mr. Kan up is said to have close ties with ministry bureaucrats. Some people suspect that the ministry deliberately tipped off the questioner about the lacuna in Mr. Kan’s knowledge to make him look bad.

But why would they so blatantly humiliate a politician with whom they were working? The answer is that it was an object lesson to Kan Naoto in particular and all politicians in general. He had to have known the ministry deliberately handed a weapon to the political opposition to knife him in public. Unless he was forever after their humble and obedient servant, the ministry would find other ways to make life even more unpleasant for him…

Recall that the ministry has jurisdiction over the National Tax Agency. Was it coincidental that the tax problems of Hatoyama Yukio and Ozawa Ichiro came to light just two or three months after the DPJ formed a government in 2009 which promised to keep the bureaucrats from meddling in national governance? (Let’s assume for the moment they were serious about that promise, dodgy though the assumption may be.) Mr. Hatoyama had to pay the equivalent of $US six million in back taxes and penalties. The case against Ozawa the Real Estate Tycoon, who pulled the equivalent of roughly $US four million out of his safe at home in cash to give an aide so his political funds committee could buy some property, is still to be resolved.

*****
And we can’t end without a mention of Kawakami Yoshihiro, yet another rare bird in the DPJ aviary. Did you notice from his question that he thinks the Bank of Japan is supposed to conduct itself as an arm of the Democratic Party government?

His background makes for entertaining reading. Originally an LDP lower house member, he was one of the MPs that Koizumi Jun’ichiro tossed from the party for opposing the Japan Post privatization. He later joined the opposition DPJ and won election to the upper house in 2007, two years later.

One of his pet causes is the integration of the residents of Chinese and Korean nationality into Japanese society. In fact, according to a 2010 interview with China’s Global Times newspaper, he favors the common administration (共同統治) of Japan with the Chinese and Korean permanent residents, who should be given full political rights. He also advocates closer ties to North Korea and thinks Mr. Koizumi’s two visits while prime minister should have resolved all the problems with that country. He’s been quoted as saying that it’s strange Japan doesn’t support (支援) North Korea.

Strange is in the eye of the beholder, it would seem. That a man with his background and incongruous combination of beliefs actually sits in the Diet, sponsored by the ruling party, is strange in itself.

****
Ben and Jun got them Young Boy Blues.

Japan, the U.S., and the TPP: You don’t know the half of it

A free trade environment is beneficial for Japan. That is the national consensus…On the question of whether the prime minister has the ability to negotiate, however, the people don’t think so.
- Former Prime Minister Abe Shinzo

Britain is a world by itself; and we will nothing pay for wearing our own noses.
- Shakespeare

IT didn’t take long for circumstances to expose the inadequacies of Japan’s new “prime minister”, Noda Yoshihiko. After a mere two crisis-free months, it’s obvious that he lacks the skills at either governance or politics demanded of a national leader. Indeed, it’s an open question at this point whether he is in fact the national leader.

When he took office, some touted the new choice as a safe Democratic Party driver after the vaporous insubstantiality of Hatoyama Yukio and the toxic cluster of erratic electrons that is Kan Naoto. But beyond a constitutional predisposition to ambling along at 45 on the expressway with his hands frozen in position on the wheel, this safe driver is now perceived as a chauffer for the dirigistes of the bureaucracy-that-is-the-government at home — particularly the Finance Ministry — and the delivery boy for governments overseas. Mr. Noda has compounded that problem by behaving as an inert gelatin too incurious to inform himself on the laws of his country or the policies of his own government beyond the instructions received over the horn from the back seat of the Brougham.

The events of the past week have created suspicions that this paleface is speaking to his fellow countrymen with the most forked of tongues about the Trans-Pacific Partnership trade negotiations. If those well-founded suspicions harden into belief, it could jeopardize Japanese participation in the TPP, as well as the survival of the DPJ government and the party itself.

ISD

The fun started hitting the fan last Friday on the afternoon of the 11th, when upper house Diet member Sato Yukari of the opposition LDP questioned Mr. Noda about the TPP. The “prime minister’s” performance was so inept that 30-minute clips of the session began circulating immediately on YouTube. (The industrial media, both in Japan and overseas, ignored it, but I belabor the obvious.)

Ms. Sato asked the “prime minister” about the possibility that domestic law would be distorted by the ISD clauses in a TPP treaty. She was referring to Investor State Dispute (Settlement), which allows entities in Country A to initiate dispute settlement proceedings against Country B under international law, rather than in the courts of Country B, as has been customary in the past.

The first treaty to allow developed nations this option was the North American Free Trade Agreement (NAFTA) among Canada, the United States, and Mexico. If the Party of The First Part has a beef against the Party of The Second Part in another country, they can demand arbitration under the Arbitration Rules of the United Nations Commission on International Trade Law or the Arbitration (Additional Facility) Rules of the International Centre for Settlement of Investment Disputes. Entities in both Canada and the United States have already created some unpleasantness by employing this option against each other.

Here was Mr. Noda’s answer:

We will negotiate in order to enable a response under Japanese law.

First, note the word “negotiate”. The “prime minister” has been trying to buy time at home, particularly with the TPP opponents in his own party, by insisting that Japan hasn’t decided whether it will “negotiate”. It is only going to hold “discussions” with the related countries first.

At that point the sound shuts off on the video when two men approach the presiding officer for a discussion. (Their conversation is not recorded, and it resembles the scene in an American courtroom when attorneys approach the bench.)

Someone seems to have spoken to Mr. Noda during that time, because when the recording resumes, he adds:

The treaty takes precedence over Japanese law, so we will think of how to respond within the reality that we must respond to that.

A heckler, probably Nishida Shoji of the LDP, retorts:

What are you talking about? How are we going to be able to respond? The treaty takes precedence, so we can’t respond under international law.

The “prime minster” continues:

I didn’t have a detailed knowledge of ISDS, but treaties do take precedence over Japanese law. Therefore, we will not kill or destroy Japanese law to conclude a treaty.

In other words, when Ms. Sato first asked the question about ISD clauses, “Prime Minister” Noda had no idea what she was talking about.

She also presented a hypothetical example of a local government putting public works contracts to bid and restricting the bidding due to concerns about local employment or the hollowing out of the economy. That could generate a demand by overseas contractors for resolution in front of an international body. How, she asked, would you deal with a situation in which a local government puts the national government at risk?

Justice Minister Hiraoka Hideo was the picture of matter-of-fact, banal self-satisfaction when he answered for the government. Of course, he said, they had every intention of allowing international rules to apply, because it would be discrimination against other countries otherwise. Japan would be a good international partner.

Ms. Sato dismissed the idea that Japan could negotiate favorable terms for the treaty framework. Japan’s participation would begin in six months, she noted, and by then it would be too late to have an impact on the general structure.

As for the issue of ISD, she dismissed Mr. Noda out of hand:

Constitutionally, this is an elementary matter, so I’m flabbergasted that you couldn’t give an answer based on what is in the Constitution. To declare our participation in TPP without understanding this is to disrespect the people.

TPP supporter Eda Kenji, the secretary-general of Your Party, understood immediately that this line of attack presented a legitimate threat in the arena of public opinion. He attempted a counterattack on his blog this week by pointing out that Japan is already a part of 20 treaties containing such clauses, starting with a 1978 treaty with Egypt. He reported that no one has sought international arbitration against Japan stemming from those treaties.

Mr. Eda’s mention of Japanese-Egyptian trade is instructive, however, if only to vitiate his argument. Japan has a trade surplus with Egypt. The Japanese embassy in Cairo states that the primary Japanese exports to that country are transportation equipment and electric machinery, while the Egyptians export petroleum, petroleum products, cotton, and cotton textiles. Considering the relative economic development of the two countries, none of these categories is likely to generate a dispute of unfair access. He does not identify the other 19 countries Japan has such treaties with, though the United States is not one of them. Until demonstrated otherwise, it would be reasonable to assume that many, if not most, of those countries have trade relationships with Japan similar to those of Egypt; i.e., concentrated in a few sectors that supplement mutual needs.

That is unlikely to be the case in any treaty relationship with the litigation-loving Americans, however.

What country are you the prime minister of?

Fukushima Mizuho, head of Japan’s Social Democrats, is almost always a waste of air, water, and space in the enclosed hothouse of Japanese politics. But to give credit where credit is due, she was pertinent, direct, and relentless in her questioning of the “prime minister” following Ms. Sato on Friday. She pummeled him for not saying a word about Japanese participation in TPP negotiations in the Diet, yet promising to people overseas that Japan would participate.

You’re going to get on a plane to go to the APEC summit later today, but we’re here in the Diet now. Why aren’t you saying anything?

She added, with perfect justification:

* “Why won’t you make the declaration to participate in TPP in the Diet?”

* “You won’t make the declaration in the Diet, and at home you’re just like a dojo fish in the mud, so why can you go overseas and make that declaration?”

* “Just what country are you the prime minister of?”

* “For whose purpose are you conducting politics?”

The safe-driving chauffer, unwilling or unable to deviate from the road map, only repeated that the government was in the process of reaching a consensus, and that he would discuss it sometime later. A particular favorite was this word game:

We will participate in discussions with the related countries with an eye toward joining TPP negotiations.

That night, Mr. Noda met at the Kantei with Henry Kissinger, who stopped by on his way to Okayama to participate in a forum. The Japanese media reports said he conveyed to Mr. Kissinger his government’s policy of participating in TPP negotiations (not discussions). Mr. Kissinger was delighted to hear it.

APEC

Mr. Noda flew to the APEC summit in Honolulu and back last weekend, and well and truly stepped in some very deep poi. After discussions with President Barack Obama, the Americans announced that the Japanese “prime minister” had placed all Japanese goods and services on the negotiating table for TPP. The repercussions were audible on the other side of the Pacific.

Japan’s foreign ministry complained to the Americans that Mr. Noda said no such thing, and insisted that he had only committed to participating in discussions. The ministry claimed they filed an objection with the American government and received an informal acknowledgement of the error.

Question Time in the upper house resumed after Mr. Noda’s Hawaiian weekend. On Tuesday, Yamamoto Ichita of the LDP took up where the Sato/Fukushima tag team left off and amped up the voltage. If anyone thought the “prime minister” was capable of salvaging the situation, listening to his answers soon disabused them of that notion.

Mr. Yamamoto kept pressing for simple answers to simple questions, but never got one. He asked Mr. Noda several times about the discrepancy between the American and Japanese versions of the Japanese promise. He wanted to know why the Americans had not formally withdrawn and corrected their earlier statement. Mr. Noda robotically repeated that the U.S. government “recognized their error”. No, he would not demand that the Americans change their statement. No, he never said that to begin with. Japan would keep stating the truth about their negotiating position. How did the Japanese government intend to do that, Mr. Yamamoto asked. No clear answer was forthcoming.

It is already past the point at which anyone will believe a Japanese government “statement of truth” on the matter, however. Here was the headline on a 15 November piece on the Voice of America website:

Noda Pledge to Join Trans-Pacific Partnership

The VOA tried to soften it a bit in the body, but the intent is the same. Note how they mention that everyone has concerns about Japan without mentioning everyone’s mutual concerns about them:

Noda’s endorsement of joining the Trans-Pacific Partnership is merely the first step in a longer process that still must overcome opposition at home as well as concerns from the nine other TPP member nations involved in the talks.

Mr. Yamamoto asked several more questions — several more times for each — but Mr. Noda played talking Tar Baby:

Q: Why is the U.S. saying that you made that promise?
A: I haven’t said a word about that.

Q: Will you clearly state that non-participation is an option for Japan?
A: Nothing is 100% certain.

Q: Will rice be an exception in the treaty?
A: It will basically be an exception, but I can’t give a 100% guarantee.

Q: If the government is going to compensate farmers for opening the market, where is the money going to come from?
A:….

A slight note of hysteria arose in Mr. Noda’s voice on two occasions, but he soldiered on with a story that no one believes.

The White House isn’t bothering to pay attention. The WH website hasn’t altered its account of Mr. Noda’s statement. In fact, they’re not going to, either:

The White House said Monday it stands by an earlier press briefing on a Japan-U.S. summit Saturday and does not intend to revise it, despite a protest from Tokyo that the Japanese premier was misquoted in it over his position on the issue of the Trans-Pacific Partnership free trade initiative.

In response to reporters’ questions, Principal Deputy Press Secretary Josh Earnest said, “The readout that we put out was based on the private consultations that (U.S.) President (Barack) Obama and (Japanese) Prime Minister (Yoshihiko) Noda had. It was based also on the public declarations from Prime Minister Noda and other members of his administration.”

The statement is still accurate and “we don’t anticipate revising” it, Earnest said, while declining to clarify whether the White House has been asked to revise the statement.

The statement, available on the White House website, said Obama “welcomed Prime Minister Noda’s statement that he would put all goods, as well as services, on the negotiating table for trade liberalization.”

But the Japanese government said Noda had only explained the government’s basic policy in general on a comprehensive economic partnership and that the U.S. side misinterpreted it as an explanation of Noda’s stance on the TPP.

Who’s telling the truth?

Somebody’s lying. The United States government, regardless of the White House occupant, is certainly capable of that, particularly when it comes to squeezing an “ally” — but not this time. Here’s an excerpt from a Japanese Cabinet Decision rendered on 9 November 2010 following last year’s APEC summit in Yokohama. The emphasis is mine:

Basic Policy on Comprehensive Economic Partnerships

2. Concrete action to strengthen comprehensive economic partnerships
On the basis of the international and regional environment surrounding Japan, the Government of Japan will take the following concrete steps to strengthen comprehensive economic partnerships with major trading partner countries and regions.
With regard to EPAs or broader regional economic partnerships that are politically and economically important and will be of especially great benefit to Japan, the Government of Japan, while taking into consideration the sensitivity of trade in certain products, will subject all goods to negotiations for trade liberalization and, through such negotiations, pursue high-level economic partnerships.

“Prime Minister” Noda told Fukushima Mizuho in the Diet that the government was in the process of reaching a consensus when he should have known that the government’s own documents show the fix was in a year ago, unbeknownst to the public. (To be sure, the Senkakus incident was still dominating the news.)

Mr. Noda was serving in the Cabinet at the time as “finance minister”. One might expect that he would have read the decision of a Cabinet in which he was a key member, but let’s not forget whom we’re dealing with. This is the same guy who didn’t know the law about Bank of Japan purchases of government debt, and didn’t know about ISDs in international treaties.

So what’s going on here?

ASEAN +6

To find out what’s really at stake, let’s return briefly to Sato Yukari’s questioning of Mr. Noda in the Diet on Friday.

Ms. Sato presented a large chart with bar graphs and figures based on the research of someone affiliated with the Cabinet Office — in other words, someone in the government. The graphs compared the benefits of Japan’s participation in the TPP with the so-called ASEAN Plus Six. That’s an emerging free trade zone that would consist of the 10 ASEAN nations plus China, India, Japan, South Korea, Australia and New Zealand. (There’s also an ASEAN Plus Three that includes Japan, South Korea, and China only. ASEAN + 6 came about because the Japanese were worried about Chinese dominance of the +3 arrangement.) The chart also had a section showing the benefits that would accrue to the United States under TPP. America is not part of either ASEAN scheme.

As Ms. Sato explained using the chart, the Cabinet Office’s analysis clearly shows the benefits for Japan would be much greater with ASEAN + 6 than they would be with TPP. It also showed that America would benefit more from the TPP than Japan would.

Why then, Ms. Sato asked, is Japan not pursuing ASEAN + 6, but hot to trot with TPP? Mr. Noda tried to explain that the government had no preference for one over the other. He said they’re only “thinking about” ASEAN + 6 (kento was the word he used), but that TPP had already started, and they had to move on that one.

That’s another porkie, as the Brits would say. Ms. Sato pointed out that Japan will not be involved in TPP discussions for another six months, so it will already be too late to influence the structure of the talks.

But the Japanese government has been doing more than “thinking about” ASEAN + 6, and they’ve been doing it for a few years now:

At the second East Asia Summit (EAS) held on 15 January 2007 in Cebu, the Leaders of ASEAN and six other nations (China, India, Japan, S Korea, Australia and New Zealand, agreed to launch a study on a Comprehensive Economic Partnership in East Asia (CEPEA) among EAS participants. An underlying ambition was the establishment of an ASEAN + 6 FTA.

A free trade zone has already been created in the region:

Starting the first day of 2010, Brunei Darussalam, Indonesia, Malaysia, Philippines, Singapore and Thailand can import and export almost all goods across their borders at no tariff.

As of 1 January, for ASEAN-6 an additional 7,881 tariff lines will come down to zero tariffs, bringing the total tariff lines traded under the Common Effective Preferential Tariffs for ASEAN Free Trade Area (CEPT-AFTA) to 54,457 or 99.11%. Additionally, with the reduction, the average tariff rate for these countries is expected to further decrease from 0.79% in 2009 to just 0.05% in 2010. In 2008, intra-ASEAN import value of commodities for these 7,881 tariff lines amounted to US$ 22.66 billion, or 11.84% of ASEAN-6 import value within ASEAN.

Also last year, ACFTA (the ASEAN-China Free Trade Area) came into effect between the 11 countries. It is now the world’ s largest free trade area by population and third-largest by trade volume (behind the EU and NAFTA). Tariffs were eliminated on 90% of all categories. They are near zero for trade between China and the six original ASEAN nations, and are zero among those six countries.

WTF is going on here?

The Mainichi Shimbun explained it succinctly in a Japanese-language op-ed. They think the U.S. is determined to obstruct any trade regime in Asia that it isn’t a part of, for both economic and security reasons. They are using trade and commerce as a weapon to fight the Chinese in the Pacific, and Japan is caught in the middle of the Great Game.

Chinese Ministry of Commerce sources say they prefer the ASEAN + 3 arrangement, but they’re flexible. They also understand that they and the U.S. are involved in a tug-of-war over Japan, and think the Japanese are using TPP to patch over the strains in the relationship with the U.S. that emerged over the Marine air base in Okinawa.

Further, they are concerned about Japanese participation because it would provide a fillip to Japanese growth, reduce their own economic strength, and tend to weaken their position in dealing with the U.S. As far as the TPP goes, the Chinese are biding their time as they watch whether all the nations involved will be able to work out their differences. Finally, they think the TPP is too ambitious and doesn’t take enough consideration of newly emerging countries with growth markets.

The Russians aren’t involved in either arrangement, but they have a similar view. Though the TPP was started by three countries (Chile, New Zealand and Singapore), and joined by Brunei shortly thereafter, they think the Americans took over the process because they perceived it as a useful vehicle for regaining the influence they’ve been losing in Asia and for blocking the Chinese.

Of course the Yanks are also in it for the money, as Japan’s Cabinet Office survey demonstrates. Some in Japan opposed to or doubtful of the TPP suspect it is to allow Americans to conduct trade in the region under their own rules, including their export taxes and tariffs. American agriculture is also heavily protected, and if they can push their own tariffs into the agreement as a base, it could wind up implanting protected trade in a new form.

Meanwhile, in talks with ASEAN, China has brought up the subject of using the yuan as the common regional currency. Indeed, the Chinese claim they already have the common Asian currency. In one of their occasional stabs at cleverness, Britain’s Economist referred to the yuan as the redback.

The pols and the polls

Noda Yoshihiko’s safe driving skills will be tested when he tries to steer any TPP treaty through the Diet, as is required by the Constitution. There are 480 members in the lower house, so 241 is the magic number for passage. A media outlet’s informal survey of lower house members last week found more than 220 members opposed the treaty, including nearly one-third of the ruling DPJ’s delegation. If those numbers hold, the treaty would still squeak through, but it’s not a lock when one considers how Mr. Noda has handled the political automobile so far. According to the Japanese Constitution, the lower house decision will be the final determination if the upper house rejects it.

It’s quite a different story in prefectural assemblies, however. The Asahi Shimbun conducted a survey that found 44 of 47 prefectures opposed to TPP, often by large margins. A recent vote in Chiba, next to Tokyo, was 72-22 opposed.

The results of public polls are fascinating. The industrial media is playing up the results of a recent Yomiuri poll, which showed a public thumbs up by a 51%-35% margin, but that’s the only one with majority approval. A recent Asahi poll had it at 46%-28%.

Other polls are not as positive. The NNN poll (TV) had it 43.7%-35.7%. FNN, another TV network, came in at 46.5%-35.2%, and the numbers from the quasi-public NHK were 34%-21%.

No, it is not beyond the inclination or the abilities of either the Asahi or the Yomiuri to doctor the questions or the composition of those surveyed to get the desired results — particularly if the Foreign Ministry let it be known what results they desired.

More intriguing are the numbers behind the numbers. The Asahi poll found that 84% of the respondents thought the government’s explanation was insufficient, while Yomiuri’s response for the same question was 86%. That means there’s a nation full of people unhappy about what little the government is telling them, which suggests the current poll readings for approval/disapproval are just skin deep.

In addition, the undecideds in the surveys range from a low of roughly 18% to as much as 38% in one poll. There’s a lot of potential for a major swing one way or the other, and we all know in which direction any swing is likely to occur.

Here’s another one— the NNN poll also asked the respondents whether they were uneasy or hopeful about TPP. The results:

Uneasy: 56.1%
Hopeful: 39.3%

Why should anyone take seriously the results of an up or down question in the face of nearly universal dissatisfaction with the government’s handling of the issue and a majority in one poll more worried than hopeful about the treaty? Refer once again to Mr. Abe’s quote at the top.

Of course the mass media — particularly the foreign media — is thrilled that the farmers have wiped the dirt and dung off their boots and driven the buckboard to town to protest. Colorful videos of a farmer demonstration are circulating. But FNN had the wit to actually poll by occupational sector (as well as age). Their survey found that people in the agriculture, forestry, or fishing industries were evenly split at 45%-45%. While there is strong opposition in that sector, it is not as strong as the media would want you to believe. (Is that because the indolent louts who write for newspapers can’t be bothered to reexamine their assumptions, or is it that they prefer that narrative and they’re just as unimaginative as Mr. Noda?)

And here’s one more: All these polls are conducted by random digit dialing (RDD) to fixed-line telephones. That eliminates many younger people who sleep with their cell phones but don’t have any of those old clunkers with wires going into the wall. The FNN poll broken down by age shows that people over 60 supported the treaty by 52.8%, but only 36.3% of those in their 20s backed it. Thus, the numbers might look quite different if the younger demographic’s views were better factored in. (Also, 54.2% of men were in favor but only 39.3% of women.)

You don’t have to be a psephologist to know which way the wind’s blowing for Mr. Noda’s support ratings. The NNN poll had it down to 40%, which is a Kan-like drop from the 60% after he took office in September. The non-support is climbing and is now up to 34.2% in that poll, 8.1 points higher than the previous month. FNN had the Cabinet support down to 42%, while a TV Asahi poll this week pegged it at 39.5%.

What do we know?

Here’s a partial list of the conclusions we can draw from all this.

* Noda Yoshihiko has no business being in a real Cabinet, much less being “prime minister”. When serving as “finance minister”, his position in opposition to BOJ purchases of government bonds was based on his ignorance of the law. As “prime minister”, he was ignorant of a critical aspect of the TPP treaty that would irrevocably change Japan.

Not that he would tell the public even if he did know.

* Custom and courtesy require that everyone refer to Noda Yoshihiko as the “prime minister”, but he seems to have little influence on the decision-making process or control over what the government actually does. He’s what the mob lawyers call a mouthpiece. Indeed, Japan’s position on TPP was determined a year ago. It’s already taxing his abilities just to drive the Miss Daisies of Kasumigaseki and keep the car on the road.

* He fairly lays himself open to the charge that he and his government give precedence to American economic growth in the TPP rather than to Japanese economic growth in ASEAN + 6.

* European MP Daniel Hannan of Great Britain observes that the French have the terms pays légal, which now refers to the group composed of politicians, civil servants, business leaders, and newspaper editors, and pays reel, which refers to everyone else. Since the former are making the decisions everywhere else, why should Japan be the exception? Also, as in the Western world, some people in the Japanese branch of the pays légal detest the concept of nation states. They will support any international treaties that require countries to subordinate domestic law as a necessary step on the royal road to global governance. Why do you think Kan Naoto was so taken with the idea of TPP?

* Mr. Noda has no problem lying about an issue that will have substantial domestic consequences either to the people or to the rest of the political class, in public at any rate. He’s not very good at it, either. During his wind-up-doll line of defense in the Diet, he came off as a talking life-sized cardboard figure of Col. Sanders at a KFC regional sales managers’ convention. But then he knows he dare not give the real explanation. Not that it makes any difference. Everyone in Nagata-cho knows what’s going on anyway.

* Another reason he can’t come clean is because of the strong opposition to the TPP in his own party. Coming out and saying what everyone knows could wind up destroying the DPJ. In fact, that’s the paramount reason the DPJ has no business as a ruling party in the first place. The potential for collapse is why they are incapable of taking a stand on any major issue. They’ve abdicated governance to the bureaucracy as a result. Some people in Japanese media circles outside the industrial core think bureaucratic control is more blatant now than at any time in recent history.

* All the talk about opening or closing the country, the opposition by farmers, the exclusive focus on TPP, blah blah blah woof woof, is so much vaudeville and just as passé. We’ve got bleacher seats for the early 21st Great Game, and it’s all about making Japan choose sides.

Predictions aren’t what I do, but here’s one anyway: Noda Yoshihiko will not handle this very well. Here’s another: If Japan doesn’t join the TPP, or his government falls as a result, watch the foreign media and the pretentious blogs get it all wrong in their commentary.

Regardless of what happens, however, even those supporters of free trade — and I’m one of them — have to admit that all the issues raised here are legitimate and cannot be waved aside with airy-fairy platitudes. Being a neo-liberal is one thing, but being a neo-conservative is another.

Afterwords:

* The bilingual website Seetell makes an excellent and often overlooked point:

(I)n order to join, Japan will have to be “approved” by the current TPP member nations. That poses few problems for Japan from any of the nations except the US. And because the US Congress will have the final say on whether Japan is allowed to join, Japan will be forced to concede most of its negotiating points to the US before the negotiations even begin…

Plainly stated, Japan will have to negotiate first with the US – and without input from other member nations – before it will be approved to join the pact. The bulk of Japan’s negotiations will occur before the official negotiations begin.

The US has totally usurped the TPP from the original nations as a vehicle to gain access and influence into the Asian economy. Now, it sits as the sole judge and determinant as to the terms of the agreement.

* Before becoming “prime minister”, Mr. Noda was best known for delivering political speeches at his local train station every morning for years to the morning rush-hour commuters. One has to wonder: What the deuce did he tell them?

* Only the merest of glimpses of the real issues are being afforded in the mainstream Western press. The New York Times this week ran a lengthy article about United States pressure on China. Here’s all they could find to say about the TPP:

Mr. Obama wants to appear strong in pressing Beijing. He made headway on an ambitious American plan to create a Pacific free trade zone, known as the Trans-Pacific Partnership, that, for now, would not include China.

There was no mention of ASEAN + 6 in the article, but then we should all have seen through the tiresome fiction of full (or even intelligent) coverage from the New York Times by now.

It’s also noteworthy that the Times refers to the TPP as an “ambitious American plan”, when that certainly wasn’t how it started. Even the Times can be jingoists, it seems, as long as their Golden Boy is in the White House, rather than one of the evil, wicked, mean, and nasties of the other party.

* I listened to Yamamoto Ichita’s questioning of Noda Yoshihiko on NHK radio while working on a translation. Mr. Noda did not perform well. On NHK radio news that night, the announcer briefly mentioned one of Mr. Yamamoto’s questions without replaying it, and they ran a single, brief clip of one of the few times Mr. Noda gave a lucid and crisp answer.

Yes, there is media bias in Japan, too.

* It was puzzling to see that the Voice of America article was written by that well-known peddler of Weird Japan stories and FCCJ barfly, Justin McCurry. Justo is a Brit who, the last time I saw a sample from the cloaca that constitutes his body of work, was affiliated with The Guardian.

If it is the Voice of America, why do they speak through a Brit from an often anti-American newspaper? Do they think no Americans in Japan are capable of producing the same lukewarm dribble of the type at that link? Here’s one of the sentences from his piece on the TPP:

But it could mean stiffer competition for some domestic industries, especially Japan’s farmers who could struggle to compete against cheaper imports.

Yeah, I guess it “could”, couldn’t it? If the idea is to cook the gruel that thin, what’s the bleedin’ point other than filling website space?

* Now Canada wants to join the TPP discussions. They also want a bilateral trade deal with Japan.

* The Australian government says that TPP is an important priority for them, but they also have serious concerns about ISDS:

Some countries have sought to insert investor-state dispute resolution clauses into trade agreements. Typically these clauses empower businesses from one country to take international legal action against the government of another country for alleged breaches of the agreement, such as for policies that allegedly discriminate against those businesses and in favour of the country’s domestic businesses.

The Gillard Government supports the principle of national treatment — that foreign and domestic businesses are treated equally under the law. However, the Government does not support provisions that would confer greater legal rights on foreign businesses than those available to domestic businesses. Nor will the Government support provisions that would constrain the ability of Australian governments to make laws on social, environmental and economic matters in circumstances where those laws do not discriminate between domestic and foreign businesses. The Government has not and will not accept provisions that limit its capacity to put health warnings or plain packaging requirements on tobacco products or its ability to continue the Pharmaceutical Benefits Scheme.

In the past, Australian Governments have sought the inclusion of investor-state dispute resolution procedures in trade agreements with developing countries at the behest of Australian businesses. The Gillard Government will discontinue this practice. If Australian businesses are concerned about sovereign risk in Australian trading partner countries, they will need to make their own assessments about whether they want to commit to investing in those countries.

One Australian op-ed opposed to TPP made this point:

In its negotiations over the AUSFTA during 2003-04, the office of the United States Trade Representative focused in particular on Australia’s Pharmaceutical Benefits Scheme (which provides heavily subsidised access for patients to listed medicines under patent), its process of blood procurement (which for health and security reasons is not open to international competition) and its laws mandating minimum levels of local broadcast content on television. The USTR sees these policies as “protectionist” and wants them abandoned, regardless of Australia’s arguments that they are in our national interest.

The Australians have no trouble standing up for Australia. Does anyone think the Japanese government is capable of doing the same?

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Wrong question, Mr. Noda

FOR those who suspect that I exaggerate about Financial Ministry manipulation of Japanese politicians and the unsuitability of those Japanese politicians for either higher office or important government posts, here’s an anecdote from the 7 October edition of the weekly Shukan Post.

*****
After the Tohoku disaster this March, the Kan government discussed issuing more than JPY 10 trillion in bonds as a funding source for reconstruction and having the Bank of Japan accept the tranche. This was unacceptable to the Finance Ministry bureaucrats, who were intent on using the disaster as an excuse to raise taxes. They conveyed their position to then-Finance Minister Noda Yoshihiko, now the prime minister.

Mr. Noda declared at a news conference that it was against the law for the Bank of Japan to purchase Japanese government bonds, so he wouldn’t even consider it.

During Question Time in the lower house Financial Affairs Committee on 25 March, he was asked the following by LDP member Yamamoto Kozo, a former Finance Ministry official:

“Did you know that the Bank of Japan directly purchases a substantial amount of government bonds every year?”

According to the record, Mr. Noda replied:

“Directly? Uh, well…what the BOJ does is monetary policy, er…”

Asked again whether he knew that or not, the finance minister answered:

“No, I didn’t know that.”

Another LDP member then explained to Mr. Noda that while the law does prohibit BOJ purchases of government bonds, Article 5 of the law permits those purchases for specified reasons, within a specific monetary range, on the approval of the Diet. He also explained that the BOJ already purchases at least JPY 10 trillion worth of government debt issues every year, and this was well known by all government authorities involved with financial matters.

After the committee meeting, Mr. Noda complained to an aide, “Why didn’t they tell me about that?” He was referring to his tutors in the ministry.

*****
More to the point is why Mr. Noda didn’t do his basic homework when the Finance Ministry’s puppeteering skills are so well known in Japanese political circles.

The DPJ government has had four finance ministers in the two years since they assumed power. The last three — Kan Naoto, Noda Yoshihiko, and Azumi Jun — knew less about economic and financial matters when they were appointed than my mailman. They were tutored by the Finance Ministry after they were given the job. (In Mr. Noda’s case, when he was appointed deputy finance minister in the Hatoyama Cabinet.)

The first was Fujii Hirohisa, who lasted all of three months at the post. He resigned, reportedly because he found it too difficult to keep up with the job at his age. There were also stories, however, of friction with Ozawa Ichiro (as well as a taste for liquor in the daytime).

Mr. Fujii was the exception, because he is an ex-Finance Ministry bureaucrat — from the Budget Bureau, no less, which is the locus of power in the ministry. He might have been one of the tutors for the other three. Indeed, it was reported that he told Mr. Noda that true political leadership meant listening to the experts in the Finance Ministry.

Unfortunately for the rest of us, Mr. Noda believed him.

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Ichigen koji (64)

一言居士
- A person who has something to say about everything

* Though a supplementary budget using government bonds must be formulated immediately, the idea that the people will positively respond to a tax increase as long as it’s for (Tohoku) reconstruction is tantamount to holding reconstruction hostage.

* Some people say the reason Mr. Kan announced his intention to resign on 2 June was the delay in (Tohoku) reconstruction, but that (assessment) is off the mark. The real reason is lies in the fact that Mr. Kan did not challenge the strange logic of the Finance Ministry. In that sense, it could be said Mr. Kan’s judgment was in error

* With the Noda administration, there’s been an almost complete return to the era of the Liberal Democratic Party. I worked with Mr. Noda during my year in the Kan Cabinet, and he never went beyond the framework established by the financial bureaucracy.

* When the Democratic Party of Japan was in the opposition, one of the policies in the party manifesto had the sense of expanding the mechanism that would prevent the intervention of bureaucratic organizations, and (for the party to) act as the locus of opposition to the Liberal Democratic Party governments that had become integrated with the bureaucracy. That was the “new public commons”, and that was the reform of regional sovereignty. There really are people who seek that sort of society, but there are also people who think that isn’t necessary once they’ve assumed control of government. They think it’s better to play it safe by getting along with the bureaucracy. Mr. Noda is typical of the latter.

- Katayama Yoshihiro, Minister of Internal Affairs and Communications in both Kan Cabinets, in an article in the 25 October Asahi Shimbun. He is a political independent who served two terms as Tottori governor, and has never been a Diet member.

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