AMPONTAN

Japan from the inside out

Hatoyama talks money, others talk Hatoyama money

Posted by ampontan on Saturday, August 8, 2009

AS WE’VE SEEN before, the opposition Democratic Party of Japan leader Hatoyama Yukio–who could well be prime minister by this time next month—has been embarrassed by revelations of campaign funding oddities. (That’s assuming a man who has spent that much time in politics is still capable of embarrassment.) His campaign war chest is enormous, dwarfing those of other party leaders and past prime ministers. That war chest was filled by an eyebrow-raising number of both the anonymous and the dead.

We’re about to find out some more next week. The September issue of the monthly magazine Bungei Shunju is due out on Monday, and it will have a long feature on some of Mr. Hatoyama’s financing issues. In addition to the personal contributions, it will examine some problems that may exist with the money received from his mother, 86-year-old Yasuko, the daughter of Bridgestone Corp. founder Ishibashi Shojiro. It’s widely suspected that she has shoveled a substantial amout of cash to both Yukio and his younger brother Kunio, who recently left the Aso Taro Cabinet.

Another publication taking a closer look at the Hatoyama finances will be the weekly magazine Shukan Bunshun in its holiday 13/20 August issue. The same company publishes both the monthly magazine and the weekly magazine.

This is serious money we’re talking about here. Hatoyama Yasuko still owns about 70 million shares of Bridgestone stock. Before he died, grandfather Shojiro gave both brothers enough Bridgestone stock to ensure they would remain plutocrats for life. In January 2008, Kunio said he had suffered a paper loss of “three to four billion yen” on his holdings, and added that his brother took a four-billion-yen hit. Yukio’s comment? “He talks too much.” (JPY 4 billion is about $US 42 million. If those were just valuation losses, you can imagine what the size of the portfolios must be.)

The article will reportedly focus on the connection between the Bridgestone fortune and the brothers’ assets, and the lack of transparency in Yukio’s campaign money. Whether any damaging revelations will emerge remains to be seen, but considering how the Japanese electorate feels about money politics and the DPJ leader’s attempt to don the clean party mantle, the articles are unlikely to burnish his reputation.

Coming out the same day will be an article in the September issue of Voice featuring an article written by Hatoyama the Elder holding forth on other people’s money rather than his own. Mr. Hatoyama says he would like to work toward the creation of an East Asian Union with a common Asian currency in the future. (The article isn’t out yet, so I don’t know how close of a union he has in mind.) Mr. Hatoyama says the union would be a framework for economic cooperation and security in the region.

Titled “My Political Philosophy”, the article also discusses the problems of a global currency system centered on the dollar. Mr. Hatoyama thinks the current financial crisis will accelerate the trend toward regional union.

One the one hand, he writes:

“Stronger economic ties and regional interdependence have formed a sufficient foundational structure for an economic sphere.”

He refers specifically to Japan, China, South Korea, Taiwan, Hong Kong, and the ASEAN countries. But on the other:

“There are differences in population, development, and political systems, so an economic union won’t be achieved overnight…it will require at least 10 years.”

Considering the differences in population, development, and political systems, not to mention scores of other factors, a properly functioning common currency would take so many years one wonders why Mr. Hatoyama is talking about it at all, but the man does love him some pie in the sky. Yes, he really is serious about that yuai stuff.

For starters, true currency integration would mean that individual countries or territories would have to give up control of their monetary policy. While you’re calculating the odds of that one, consider how long it will be before the Chinese provide enough transparency in their financial system to make the idea workable.

Before getting grandiose, how about encouraging smaller-scale steps first, such as fostering the growing economic ties between the southeastern Korean Peninsula and Kyushu? Meanwhile, the Sinosphere can work on its own regional integration.

The public intellectuals who like to talk about this sort of thing will probably love the idea, but there’s going to be so much on Mr. Hatoyama’s plate, let’s hope someone in the DPJ will attach a tether to the Man from Outer Space—as even he refers to himself—to keep him from floating into the ether and his mind focused on more immediate and pressing issues.

Afterwords:

Here is a very brief explanation of what can happen with common currencies, and what is needed before they can function well. The conclusion:

A common currency can be expected to result in comparable prices in different regions only after a substantial equilibrating period of widespread trade.

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