AMPONTAN

Japan from the inside out

Archive for September, 2010

Kan the man

Posted by ampontan on Friday, September 17, 2010

TO READ SOME descriptions in the English-language print media, one would think Japanese Prime Minister Kan Naoto is a “fiscal conservative” who is a “pragmatic reformer”.

Very few politically aware Japanese would use those terms to describe Mr. Kan, however, particularly those of a certain age. Even those in the Democratic Party camp don’t use those expressions. (Exceptions would be those from the asteroid belt left for whom the term “fiscal conservative” is an epithet, such as Social Democratic Party head Fukushima Mizuho. She’s already complained that the prime minister is a lackey of Big Business.)

A more accurate description was provided this week by university professor, author, and blogger Ikeda Nobuo on the Japanese-language Agora blog. He began by noting that both Mr. Kan and his opponent in the Democratic Party presidential election, Ozawa Ichiro, are remnants from an earlier era. Here’s the rest of it in English:

*****

“Mr. Kan himself said that he started out as a citizen activist, and it felt strange to hear him talk about his activist background. It might be understandable if he were the head of an opposition party, but he doesn’t seem to be aware that he is governing a nation. He still hasn’t grown beyond an attitude of “opposition to authority”. For good or ill, this is a baby boomer government from the generation of the Zenkyoto.”

Sidebar 1: The Zengaku Kyoto Kaigi (Zenkyoto), or University-Wide Joint Struggle Councils, reached a high-water mark in 1968-1969. They were defined by Carol Fisher Sorgenfrei as “loose organizations of radical students protesting authoritarian control (who) rejected unified ideology, membership rules, or hierarchy of any kind.” There were 13,497 arrests at Japanese campus demonstrations in 1969 alone.

“To be accurate, Mr. Kan himself was not a part of Zenkyoto, but rather the activist movement of Eda Saburo (former Secretary-General of the Socialist Party) and Ichikawa Fusae (reporter and member of the International Labor Organization). Some reports say, however, that Chief Cabinet Secretary Sengoku Yoshito, often dubbed the “shadow prime minister”, was a member of a University of Tokyo council, Justice Minister Chiba Keiko a member of a Chuo University council, and former Agriculture Minister Akamatsu Hirotaka a member of a Waseda University council.

“That in itself is not surprising. In that generation, students with a certain amount of political awareness were often involved in student movements in some form. The ones with which Mr. Kan and Mr. Sengoku were affiliated were milder factions to the right of the Marxism-Leninism of the (Japanese) Socialist and Communist parties of the era. Their dogma was just as clear as that of the Communist Party, however, and while it is easy for the milder factions to graduate from that dogma, it is difficult for them to notice left-wing bias. It is the same as trying to eliminate one’s Tochigi accent.

“Put simply, their bias is that of the “New Constitution”. They were born in the immediate postwar period, so they were taught as children that war is an absolute evil and that the Peace Constitution was the ideal of humanity. The Liberal Democratic Party was tied to Big Capital, and since Big Capital was the principal cause of imperialism, war was inevitable as long as capitalism existed. Therefore, the only way to end war was to eradicate capitalism. Taken to extremes, that led to the armed conflict of the United Red Army (Rengo Sekigun, an amalgamation of radical leftist/terrorist groups of the late 60s and early 70s). But that way of thinking was also shared by such citizen activists as the Beheiren (and perhaps Mr. Kan as well).

Sidebar 2: In June, former Prime Minister Aso Taro charged that both Mr. Kan and his wife were part of the leadership of the Beheiren, an anti-Vietnam War group. He also criticized the group for remaining silent when China invaded Vietnam and Vietnam invaded Cambodia.

“In short, the core of the Democratic Party government believes that capitalism = evil. They are people who have spent their entire lives working to eliminate capitalism as their ultimate objective. Of course, they’ve become aware of their mistake along the way. But for them, recognizing capitalism would be tantamount to denying (what they have done with) their lives, so they have prolonged the life of their left wing ideology in the form of the welfare state.

“Unfortunately for them, the economic crisis means they can no longer use the welfare state as their billboard. They tried to camouflage that with the slogan “eliminating waste through political leadership”, but that slogan is no longer effective. They must now at last confront the inconvenient truth that they will be unable to achieve fiscal reconstruction without reducing the size of the castle keep of social security (the name given to the protection of the elderly). That issue will be the challenge faced by the second Kan Cabinet.”

(end translation)

More data

While asking a question during a hearing at the lower house Budget Committee on 13 February 2007, Kan Naoto went off on a riff about the “income gaps” in society:

“Where are the real primary causes of this expansion of the (income) gaps? I think there are two primary causes.

“The first is the change in the industrial structure. People have recently been talking about the “new economy”, but in a sense, companies and the related sectors have grown from the so-called mass-production, mass-consumption age into the skillful use of information. That caused an increase in the number of relatively simple, manual labor jobs. On the other hand, while the jobs are fewer, there are more sophisticated…if you’re going to create a convenience store, for example, there is the job of planning the store, that sort of sophisticated job…and the job of looking after the store or working the registers, the mostly manual labor jobs. This polarization is the backdrop (for these changes). That’s why (the current age) is fundamentally different from the economic growth of 40 years ago…If we are not fully aware of these fundamental changes in the industrial structure, we will only be able to treat the symptoms.”

This analysis, while a bit wooly, is unremarkable in Japan because it is so commonplace. Everyone understands this; indeed, Nire Shuhei published a best-selling collection of essays this year called Shugu no Jidai (The Age of Mass Stupidity), in which he takes to task those members of the general public complaining about income gaps and non-permanent employment. Mr. Nire tells his readers that their consumption patterns demand a wide variety of ever-changing, inexpensive products, and claims that what Mr. Kan calls the new economy (which includes non-permanent employment) is how producers must respond to those consumption patterns to stay in business.

Mr. Kan continued:

“The other one is truly that there was an inadequacy of policy. In particular, market fundamentalism, shall we call it, or neo-liberalism…that market fundamentalism was taken somewhat to an extreme, which led to the conditions of today…that aspect.”

Did he explain how market fundamentalism or neo-liberalism was taken to an extreme, or how it led to the conditions of today? Did he explain how his policies would have prevented that and still allowed the Japanese industrial structure to survive? Of course not—for people with Mr. Kan’s outlook, merely mentioning the words is enough. Everyone else is to take it on faith.

Not that he could explain it if he tried. The new economics has little or nothing to do with Koizumian policies and everything to do with changes that transcend nation or policy. The difficulties that result from the transformation are exacerbated here because they represent such a drastic change from the old structure, which included (but was not limited to) the lifetime employment system, the employment of surplus labor, interlocking domestic business alliances, and the inevitable higher prices that resulted.

Sengoku Yoshito Bonus!

While we’re on the subject of people applying outdated, impractical, and irrelevant worldviews to modern conditions, here’s a comment about Sengoku Yoshito from Your Party President Watanabe Yoshimi. Mr. Watanabe was speaking on the 16th at a Chamber of Commerce and Industry function in a Tokyo hotel. He referred to Mr. Sengoku’s comment on the 15th at a news conference that the government considered their line of defense in the forex markets to be 82 yen to the dollar.

If I were involved with the investment business, I would assume that everything was fine until the yen hit 82 to the dollar, and definitely aim for that. He is truly an idiot (baka). Japan will collapse by entrusting the management of the nation to those who have never managed the affairs of the nation.

It’s standard operating procedure for all Japanese politicians to complain at some point that their opponents’ policies will cause the country to “collapse”, so that can be discounted. It’s also true that the DPJ doesn’t know what it’s doing, but bringing governing experience into question recalls the days of the LDP, which defeats the purpose of his criticism.

But not only is Mr. Sengoku inexperienced in government, his lifelong beliefs and background as a former Socialist Party member mean that he really isn’t all that down with the world of finance and the rest of that stuff. While his current views might be more mature than those of his younger days, his experience in the private sector came as a lawyer, sometimes as a hired wordslinger for sokaiya. Those are professional extortionists, often gangster-connected, who seek hush money from businesses to not disrupt annual shareholders’ meetings with loud complaints about real (or contrived) corporate mismanagement.

His is not the ideal background for explaining the government’s position about the value of its currency in world markets.

Consider the DPJ’s current debt-heavy budget, which Mr. Kan sold in the Diet as the Finance Minister. It tested the credulity of people in the financial industry around the world, a group already inured to government fiscal excess.

Any fiscal conservatism eventually practiced by a Kan Cabinet will have been forced on it by elements outside the ruling circle, including people in the financial industry or members of opposition parties.

Any time you read something that suggests Kan Naoto is a “fiscal conservative”, it’s a signal to stop there and move on to the next website.

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Posted in Business, finance and the economy, History, Politics | Tagged: , , , , | 3 Comments »

Modern times

Posted by ampontan on Thursday, September 16, 2010

They have to get money from someplace.
– Edwin Merner, president of the Atlantis Investment Research Corp. in Tokyo

CALIFORNIA GOV. Arnold Schwarzenegger is touring Japan, South Korea, and China as part of a PR campaign to boost tourism and to coax companies in the three countries to bid on the construction of the high-speed rail network that is planned to begin service in the state in 2020. When completed, it will extend from San Francisco to San Diego. California is also encouraging companies in Germany and France to submit bids.

The Japanese bid will probably be higher than the others, which will offset their advantages in technology, product quality, and operating experience. The state of California will have trouble paying for any system because it is $US 19 billion in debt, according to this Bloomberg article on the governor’s tour. It has one of the highest unemployment rates in the country, a net population outflow for the past four years, and a Democrat-controlled legislature that wants to raise taxes instead of cutting expenditures, even if it means reducing $US 100,000+ pensions to former public employees every year for life. California already has the 6th highest state/local tax burden in the United States. The governor and the legislature are continuously sparring over the budget. The state had to issue IOUs to creditors last year, and might have to do it again this year .

The system is estimated to cost $US 40 billion. California will sell bonds to help offset the costs, and also will receive grants from the U.S. government. To enhance their bid, the Japanese government will allow the Japan Bank for International Cooperation—the international arm of the Japan Finance Corp., which is wholly owned by the Japanese government—to loan an unspecified amount to the Californians to help them pay for it.

Now remember that the Japanese government had to borrow 45% of the money—a record—for its own record-high budget this year, approved when Prime Minister Kan Naoto was Finance Minister.

In other words, the Japanese government wants to lend money it doesn’t have to a deadbeat sub-national government that would be kicked out of any bank in the world if were a private citizen or corporation asking for a loan. The former land of milk and honey is in the second-worst financial condition of the 50 states. The United States government, which doesn’t have any money either, is going to chip in with grants. The state of California, struggling to stay out of insolvency, might well default on the bonds or the loan. Another unpleasant scenario is the potential for subjecting their creditors to what’s called financial oppression. Thus, there is a real possibility the Japanese would take a financial bath if it wins the bid. Even if California doesn’t default, by the time it pays off the loan, it might be in seriously inflated dollars.

Yet the Japanese government thinks this is a winning proposition.

And all of this is to build a rail system that will almost surely be a perennial money-loser in a state that is Ground Zero for the American car culture.

Is that not a metaphor for our times?

Bloomberg link stolen from The Marmot’s Hole.

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Posted in Business, finance and the economy, Government, International relations | Tagged: | 3 Comments »

But then, I regress

Posted by ampontan on Wednesday, September 15, 2010

IN 2001, brothers Bradley and D. Craig Willcox teamed with Makoto Suzuki to publish The Okinawa Program, a plan for life extension based on the results of a 25-year study into Okinawan longevity. Here’s an excerpt from their first chapter:

Okinawa is the home of the longest-lived people in the world. People there seem to have beaten the aging process and the debilitating diseases that accompany the “Golden Years” in the West. Heart disease is minimal, breast cancer so rare that screening mammography is not needed, and most aging men have never heard of prostate cancer. In fact, as a group, the three leading killers in the West—coronary heart disease, stroke, and cancer—occur in Okinawa in with the lowest frequency in the world (1996 WHO study).

To understand the magnitude of this health phenomenon, imagine a typical town of 100,000 inhabitants. If the town were located in Okinawa, only 18 people would die from coronary disease in a typical year. If the town were in the United States, 100 people would die. Simply put, if Americans lived more like Okinawans, we would have to close down 80% of the coronary care units and one-third of the cancer wards in the United States, and a lot of nursing homes would also be out of business.

The Okinawan secret to longevity and the program they recommended is no mystery to people already interested in healthful living. From the Foreword:

The general principles of living the Okinawa way are not foreign. Indeed, they are highly accessible to everyone and quite consistent with the latest medical research on healthy lifestyles and healthy aging. They include getting lifelong, regular physical activity, eating a mostly plant-based diet that includes fish and soy foods with a great variety of vegetables and moderate amounts of the right kinds of fat, and enjoying strong social and community support as well as a sense of independence and self-responsibility for health.

While the authors noted that the Okinawans had pushed back the limits of population life expectancy, they also realized then that the pace of gains was slowing, and suggested: “What may potentially end this meteoric rise is not a biological barrier but the tragic loss of old ways.” In other words, younger Okinawans were increasingly adopting unhealthful lifestyle habits.

The day the authors dreaded may have arrived. The Ministry of Health, Labor, and Welfare yesterday released the results of their latest study on longevity showing that Okinawans no longer have the highest number of centenarians per 100,000 people in Japan. The national leader in that category is now Shimane, with 74.37. Okinawa—which had been the leader for 37 consecutive years—slipped to second place with 66.71.

The ministry thinks this might be due to the declining population of Shimane and the rising population of Okinawa. They have a point. Shimane has the highest percentage of population aged 65 or older in the country at 29%, though that has been the case for the past 35 years. Meanwhile, Okinawa has the highest birthrate in the country. (There has also been a slight trend for people from the rest of the Japan to move there in the same way Americans have moved from the Snow Belt to Florida, California, and Arizona over the years.)

Nevertheless, the results came as a jolt to the Okinawans. Said a prefectural official: “The impact (of the study) is overwhelming. We will immediately analyze the factors.”

They should already have an idea where to start. Here’s a blog post that quotes extensively from a Bloomberg article from three years ago that’s no longer on line. The headline of the article reads:

“Fries, GIs, Beef Bring Diabetes to Japan’s Isle of Centenarians”

And a quote:

The island that once boasted more centenarians than anywhere else in the world now has the highest prevalence of obesity in Japan, and life expectancy is falling rapidly. The government is concerned the deteriorating health of Okinawans may be a prelude to a nationwide crisis.

Don’t think that Bloomberg article is an exercise in American-bashing, either. If anything, the Americans are getting worse. Try this brief article with a clip from ABC news in which they interview a man who says that America is living in “The Periclean Age of Bacon”. He also says that for him, bacon fat is the meat and the bacon meat is the vegetables.

As if on cue, Lady Gaga (or her publicity machine) weaves all the strands together by crossing the Pacific to wear a raw meat bikini for the cover of Vogue Japan. Is that not a classic example of the primary motivation for all youthful rebellion—flouting contemporary social convention by shocking the easily shocked and living dangerously?

Now’s the time to trot out an old Chinese saying:

Everyone likes life, but few like the path of long life. Everyone dislikes death, but many like the things conducive to death.

Bon appétit!

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Posted in Books, Demography, Food, Social trends | Tagged: , , | 8 Comments »

Eda Kenji on the DPJ election

Posted by ampontan on Tuesday, September 14, 2010

IN FOUR SENTENCES on his blog, Your Party Secretary-General Eda Kenji says all that needs to be said about Kan Naoto’s victory over Ozawa Ichiro in the Democratic Party presidential election:

It’s not that Mr. Kan is (a) good (selection), but the mere candidacy of Ozawa Ichiro was an aberration that flew in the face of the common sense of the people.

The margin of victory between Kan and Ozawa shrunk in this sequence (of the voter categories): Party members and supporters, sub-national legislators, and DPJ Diet members. The difference between the two men in the number of Diet member supporters was only six MPs (out of 406 total).

This demonstrates the most serious problem with politics today. The common sense of the people fails to penetrate the closer it gets to the Diet.

Now the speculation begins about whether Mr. Ozawa will be content to fade away or to leave a party whose current leaders he detests, and whose current leaders consider him to be persona non grata.

It’s not as if Mr. Kan won because the party thinks he’s their man. He won because enough people thought Mr. Ozawa wasn’t their man, and that another prime ministerial change so soon after the last one would result in the opposition, the media, and public opinion joining to create an irresistable force pressing for a lower house election.

And speaking of lower house elections, add LDP President Tanigaki Sadakazu to the list of those who suspect there will be one soon rather than late anyway.

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Posted in Politics | Tagged: , , , , | 3 Comments »

The worst and the worse

Posted by ampontan on Sunday, September 12, 2010

If there’s one thing I’ve learned up here (in Washington)…the only way to get Congress to balance the budget is to give them no choice, and the only way to keep them out of the cookie jar is to give them no choice, which is why – whether it’s balanced budget acts or pay as you go legislation or any of that – is the only thing. If you don’t tie our hands, we will keep stealing.
– Tom Perriello, Democratic Party congressman from Virginia

Current Keio University Professor and Former Man of Many Portfolios in the Koizumi Cabinet, Takenaka Heizo, last week described the Democratic Party of Japan presidential election as a contest between “the worst and the worse”. He didn’t specify which one of the candidates was which, but deciding which tail to pin on those two donkeys would be enough to stump anyone.

Here’s what the former Minister for Economic and Fiscal Policy and Minister for Financial Services said about Kan Naoto:

There are no experts who think Japan’s economy will improve with Prime Minister Kan’s economic policies.

And about Mr. Ozawa:

His approach to democracy is extremely unsound. Historically, when the conflict between political parties creates a stalemate, dictatorships emerge.

Mr. Kan was challenged by an interviewer earlier this week on his view that employment drove economic growth, rather than the opposite. He answered:

If the national government provided subsidies for the salaries of long-term health care workers, for example, to increase employment, it would enhance those services and boost consumer demand. Economic growth would result.

He plans to fund those subsidies, of course, with a massive consumption tax increase. The best description of measures of that sort is Your Party President Watanabe Yoshimi’s analogy of an octopus feeding off its own tentacles.

The people who filled Mr. Kan’s head with these sugarplum visions must realize fiscal stimulus of this type is a sugar high whose growth ends when the stimulus ends. The only sustainable growth achieved is in the money the government filches from one set of pockets to place in another. How is the employment supposed to continue when the subsidies stop? Regardless of whether the subsidies to hire more long-term care workers are a short-term measure or a long-term government employment program, they are little more than a form of unemployment compensation.

Is not the conclusion inescapable that they don’t want the subsidies to stop? More money under the control of the government and the bureaucracy is where they perceive their interests to lie. In Mr. Kan’s case, it has the advantage of being in accord with his political philosophy.

The long-term health care industry isn’t even a true growth sector. Even assuming a rise in consumption from the workers employed with the subsidy money, the revenue from the services they provide depends on the social insurance premiums paid by the public. Which is more likely to result from rising social welfare expenditures for an aging population: families spending more disposable income, or increasing their savings in anticipation paying for those welfare expenditures? One of Mr. Kan’s economics tutors, Ono Yoshiyasu, would attribute the higher savings rate to the public’s “love of money”, rather than to the public’s common sense. Yes, ivory towers populated by social engineering elites with little or no real-world experience also exist in Japan.

This outlook also ignores the true engine of growth, which is not consumption, much less consumption resulting from artificially created employment. The factor that spurs economic growth is net private-sector investment. Mr. Kan might benefit from reading that link:

Politicians, if they truly wish to promote genuine, sustainable recovery and long-run economic growth, need to focus on actions that will contribute to a revival of private investment, not on pumping up consumption.

But Mr. Kan, a lifelong leftwing citizen activist, was unfavorably disposed toward the supply side even before his recent remedial economics tutorials began.

The prime minister might be an all-in-one package of the worst and the worse himself. Here is his answer to a similar question in a different setting:

Q: You’ve brought employment policies to the forefront. What specific policies do you have in mind?

A: There are three elements. The first is to create hiring by such means as long-term care, for which there is long-term, latent demand, and relaxing the issuance of visas to foreigners. The second is (ameliorating) the mismatch between (job-seekers and employers, i.e., more of one than the other). One more is protecting employment to prevent the disappearance of jobs when plants move overseas. Employment will be created by providing subsidies to build new plants for a low-carbon society.

That idea of issuing more visas to foreigners came out of nowhere, by the way, and so far hasn’t generated much comment. How many visas he would issue to whom and for what jobs, he hasn’t specifically addressed. This wouldn’t be the first time he regurgitated undigested briefing material: His blunder about discussing a consumption tax increase during the recent election campaign was another example. One wonders what other schemes are being discussed behind closed doors that he’s managed to keep from blabbing about so far.

And as for green jobs stimulus, even the Socialist government of Spain admits their program was a disaster that cost the country 2.2 jobs for every one it created.

The punch line to this sick joke is that the English-language media and commentariat are peddling the story that Mr. Kan is a “fiscal conservative”, thereby obliterating what little credibility they had about people and issues in Japan to begin with. One suspects their journalistic probes went no further than the nearest source in the Finance Ministry, which already has the Japanese print and broadcast media marching in lockstep and sounding off about the necessity for a consumption tax increase.

Now comes word on Friday that the Cabinet of Mr. Fiscal Conservative has approved another stimulus, this one worth $US 10.9 billion:

“We will ensure growth by laying the basis for employment and ensure employment by encouraging growth,” Kan told his economic ministers.

He probably thinks that was a clever line.

Ozawa Ichiro

At least Mr. Kan has the excuse of his lifelong political philosophy. Ozawa Ichiro has no excuse at all.

In fact, he seems to have forgotten the practical wisdom of his political patron and father figure, Tanaka Kakuei. Here’s an excerpt from Mr. Tanaka’s 1972 book, Building a New Japan:

Some people claim that high growth isn’t necessary, or that they would rather not see industrial development, or that we should enhance welfare services in the future instead. But it’s a mistake to think it must be a choice of either growth or welfare, or either industry or the lives of the people. Social welfare is not bestowed upon us by heaven, nor is it something provided from overseas. There is no other way to obtain the funds required than to use the vitality of the Japanese people to expand the economy, and to create that society through economic strength.

Instead, Mr. Ozawa now speaks in non sequitur:

Everyone wants to hear about what we can do to expand employment. We must be forward-looking about improving the economy with public spending.

It gets even worse. As reported in the 13 September issue of the weekly Aera, he says that extraordinary measures are required because conventional policies are unlikely to lead to recovery. One of these extraordinary fund-procurement measures he touts is the securitization of national assets. He claims this will raise the money to pay the bills for all the pork in the 2009 DPJ manifesto that the country can’t afford. In some cases, he seems to be using the term securitization loosely, by referring to the conversion of housing for civil servants into homes for the elderly, or the public/private joint use of public buildings as a revenue source.

For example, he would issue zero coupon bonds to obtain the money for highway construction. Instead of receiving interest payments, those who bought the bonds would be exempt from inheritance tax. The government would benefit by getting off the hook for some or all of the JPY 7.7 trillion in interest payments that they paid last year.

But it’s immediately obvious that the bond purchasers will not be exempt from inheritance tax. They’re just making a deal with the government to pay a lump sum in advance and call it by a different name.

The Mainichi Shimbun points out only 4% of all estates are large enough to trigger the payment of an inheritance tax. The government received JPY 1.3 trillion in revenue from these taxes in FY 2009. It would require a substantial amount of tax exemption for this scheme to work, which means the government would receive less revenue over the long term.

The Mainichi also noted this is not the first time the idea has been floated. It was suggested during the Hashimoto administration in 1997 as a way to retire the pre-privatization debt of the Japan National Railway, during the Mori administration as a way to raise revenue in 2000, and during the Aso administration in 2008 as an economic stimulus. Yet it’s never been adopted.

In some cases, the scheme would also “securitize” government-owned office buildings and residential properties by selling them to investors. The government would continue to use the properties for a rental fee, while receiving the income from the sale. If any securities are issued, it would be by the purchaser of the property, who would use the land, buildings, and the rental income as collateral. The Finance Ministry doesn’t care for this idea. They say it could generate losses over the long term, i.e., after the amount of the rental payments exceeds the revenue received.

Others have noted that at the end of FY 2008, the government’s assets totaled JPY 665 trillion, with fixed assets and real estate amounting to JPY 183 trillion. Of the latter category, however, roads, bridges, military bases, and other public financial assets that do not generate revenue accounted for JPY 143 trillion. Mr. Ozawa said he would securitize JPY 200 million worth of assets. What exactly does he intend to securitize?

Mr. Kan offered his opinion on the matter, which is of interest to those who would like to know the Finance Ministry’s view. Here’s what he had to say on NHK:

The securities would have little liquidity, and the interest payments could be higher than for bonds. I’m studying this, but it would be difficult.

Difficult in Japanese is a euphemism for impossible. When he said “study”, he used the expression benkyo suru, as if he were in school, rather than study in the sense of examine. Give him credit for honesty.

Some speculate Mr. Ozawa is not offering a serious proposal, but rather an overture to Your Party for an ad hoc coalition if he were to win the election. In their upper house election platform earlier this year, Your Party called for securitizing two-thirds of the government’s JPY 500 trillion in financial assets. (Your Party does think outside the box, but some of their ideas shouldn’t be taken out of the box to begin with. During the dark days of 2008, Watanabe Yoshimi seriously suggested that the government issue a second, temporary currency.)

Precedents

Few government securitization schemes have been implemented in Japan. Niigata Prefecture successfully raised money in 2006 using a residential building for prefectural employees they owned in Tokyo’s Kita Ward. They “securitized” it, but it was a de facto sale of the land to real estate developer Morimoto for JPY 2.5 billion, as the prefecture’s website clearly states. (Configuring the sale as a securitization gave everyone tax breaks.) Morimoto tore down the building and put up a five-story condo with 69 units for themselves and a seven-story building with 20 units for the prefectural employees. The prefecture pays rent to Morimoto for the latter building.

What actually happened is that the prefecture sold the rights to the land and its use to a special purpose entity created with the funds from the real estate developer. That entity issues the securities for sale, rather than the prefecture.

What did they do with the money? This is also on the prefecture’s website:

In regard to the connection with the prefectural baseball stadium, (the income from this transaction) exceeds the JPY 1.9 billion from general finances required for now, so we’ve gotten the funding we need.

There you see the problem. Niigata automatically expects that everyone will understand the need for a prefectural baseball stadium. But the people in Niigata and other prefectures who use baseball stadiums are high school teams, adult recreational leagues, and semi-pro teams. If those teams in the United States can get by playing their games on high school diamonds or in public parks with non-permanent bleacher seating and restroom facilities instead of the unneeded stadium superstructure, Niigata (and the other prefectures) could certainly do the same. They could have spent that money on essential services, or better yet, not spent it at all.

Unfortunately, the Japanese public’s sense of urgency for tying the hands of the politicians flares up only sporadically and hasn’t reached the prairie fire proportions of the United States. The American movement arose only because of the combination of a severe economic downturn, a rapid increase in unemployment, and stimulus programs that succeeded mainly in throwing money down the public sector rat hole. The ruling elites here are perhaps not as overtly arrogant as those in the United States, but they compensate with the blithe nakedness of their self-interest. The Japanese electorate is more than willing to throw the bums out when the opportunity presents itself, but their righteous anger has yet to manifest as a sustained force.

That might change before long, however. Whether the DPJ chooses the worst or just the worse in this week’s election, their stewardship of the Japanese economy is about to become a lot uglier.

Yes, Japan has a serious debt problem. The solution to a debt problem, however, is to stop spending money you don’t have–not to allow the people who are responsible for the problem to figure out ways to find more money to spend. There’s no reason to reward failure.

Afterwords:

Another strain of thought that has yet to appear in the public debate is the one expressed by David Warren of Canada:

(T)he only measure that can possibly save us from riding over that cliff…is, quite frankly, the complete dismantlement of the Nanny State, and the restoration of the status quo ante — governments focused on the provision of national defence, and domestically on the machinery of law and order. Full stop.

While that happens to be the only available formula for mitigating our impending economic and social catastrophe — leave people free not only to earn, but to help each other flexibly and directly — the issue of freedom itself lies deeper. For the Nanny State isn’t, and never was, compatible with the organic development of a free society. We do need laws to be enforced against specific, definable evils. But insofar as we are adults, we have never required comprehensive daycare.

Political criticism in Japan is often framed by saying that an opponent’s idea or behavior is counter to the principles of democracy, but that misses the point. Democracy is not a principle, or a means to feed, inform, educate, or distribute money. It is instead the means by which the people hire their representatives in the legislative and executive branches of government.

The issue is not democracy. It is, as Mr. Warren observes, freedom.

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Posted in Business, finance and the economy, Government, Politics | Tagged: , , , , , | 9 Comments »

The fundamental things apply

Posted by ampontan on Friday, September 10, 2010

TEN DAYS AGO, in this post about labor disputes between China and Japan, I wrote about the Chinese government’s decision to limit rare earth exports:

(T)he Chinese restrictions guarantee that rare earth metals will eventually become cheap and plentiful outside the country (or cheaper and plentiful substitutes will be found). The Chinese will have wound up killing the goose that lays their golden eggs.

The goose isn’t ready to be cooked yet, but it’s time he started thinking about finding a place to hide in the barnyard. Try this article from Forbes, titled Japan Works To Slip China’s Chokehold On Rare Earth Metals:

Japan’s Nikkei business daily reports that Japanese manufacturers have developed technologies to make automotive and home appliance motors without rare earth metals. Hitachi has come up with a motor that uses a ferrite magnet made of the cheaper and more common ferric oxide. Meanwhile the chemicals conglomerate Teijin and Tohoku University have co-developed technology to make a powerful magnet using a new composite made of iron and nitrogen.

It’s tempting to call this the magic of the markets, but it’s really just more evidence that the fundamental things still apply. Unfettered human ingenuity will continue to find cheaper and better solutions. In this case, the solutions developed so far also seem to be environmentally friendly.

It’s time to realize that the Paul Erlichs, Al Gores, and the other passionately committed Luddites are the contemporary equivalent of the bearded nut on the sidewalk hoisting a handlettered sign about the end of the world. The sooner we clear them out of the traffic flow, the better off everyone will be–the bearded nuts included.

UPDATE: Raoul sent this excellent article from the English edition of the Asahi suggesting that the Japanese explore the potential of thorium.

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Posted in Business, finance and the economy, China, Science and technology | Tagged: | 4 Comments »

More inspired musical goofiness from Japan

Posted by ampontan on Friday, September 10, 2010

POSTER 21st Century Schizoid Man uploaded some YouTube links in his comment to a previous post here of some inspired Japanese musical goofiness from the pre-war era. The first is a combination of Carmen and naniwabushi. But we all know that once you get started on YouTube, it’s hard to stop. That link led to some serendipitous discoveries.

First, here’s Zeze doing the well-known dance from Carmen on shamisen:

And that led to the discovery of a trio verson of Smoke on the Water with shamisen and percussion:

Now that we’ve had the appetizers, DO NOT MISS Kunimoto Takeharu playing shamisen and singing the blues with Buddy Guy’s band on a television program hosted by Tamori in 1995:

Mr. Kunimoto just does the blues gig in his spare time. He more often plays with an American bluegrass group called the Last Frontier:

That brings it full circle in more ways than one. Yesterday’s post also featured a fusion of bluegrass and traditional Japanese music. The first blog post I ever wrote, five years ago on another site, was a profile of Kunimoto Takeharu. I offered it as an encore presentation here soon after I started this site. But here’s fair warning–If you click on that link, you’ll also see and hear a YouTube video of Mr. Kunimoto doing naniwabushi with a rock band, and a naniwabushi fusion was how this post got started.

Earlier today on an American website, I read someone’s offhand comment about “norm-following Northeast Asians”.

Not in this part of Northeast Asia, dude.

And I didn’t even upload the video of Kunimoto and the Last Frontier doing a bluegrass version of Cream’s White Room.

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Marching through Yamagata and Tokyo

Posted by ampontan on Thursday, September 9, 2010

ARE YOU READY for this musical mix? The Tohoku University of Art and Design in Yamagata City held a concert on Tuesday night with performances by two groups. The first was by the school’s taiko group, called Taishin (太悳), and the second featured an American bluegrass group called The Fox Hunt. Then they tried a jam session.

How’s that for hip in a regional city of 255,000?

You can hear for yourself what it sounded like in this short video. It starts with Taishin, follows with The Fox Hunt, and ends with them both. The MC is John Taylor, who’s in charge of the cultural exchange programs at the American consulate in Sapporo.

His idea was to have young people think about world peace through music. I don’t know how much of that went on, but the audience seemed to enjoy themselves, even though rain forced the event indoors.

Seeing this made me wonder if there wasn’t a Japanese music style that would make a better partner with bluegrass than taiko. You know, something like…chin-don! Besides, I was way overdue for a chin-don post.

But the Japanese were way ahead of me, as it turns out–by almost a century. In 1919, a teenager named Soeda Satsuki wrote some goofy lyrics about Tokyo that he called Painopainopai, that also became known as Tokyo-bushi. He borrowed the music to Marching Through Georgia, written by Henry Clay Work in 1865 about Gen. William Sherman’s March to the Sea at the end of the American Civil War. The tune was already popular in Japan when Soeda wrote the lyrics.

Here’s a version of Tokyo-bushi performed by Daiku Tetsuhiro—from Ishigaki on one of the smaller Okinawan islands—in chin-don style. Does it work? Is makizushi wrapped in seaweed? The scenes in the video are of Tokyo in the 1930s, including the Marunouchi, Ginza, and Asakusa districts.

Now for a comparison, here’s a video of Marching Through Georgia that combines two versions–the first by a bluegrass band, which lasts about a minute, and the second done marching style. Yeah, that’s Tokyo-bushi all right.

The singer in the second version, by the way, is Tennessee Ernie Ford. In short, a native Southerner is singing a song about the Union army burning its way through the Confederate South.

And for more on the wonderful world of chin-don, get clicky with the tag below.

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Posted in Foreigners in Japan, Music | Tagged: , , , | 5 Comments »

Does a lower house election loom?

Posted by ampontan on Wednesday, September 8, 2010

OPPOSITION PARTIES in the parliamentary form of government must remain alert for signs that the ruling party will steal a march by unexpectedly dissolving the primary legislative body and calling a snap election. That’s doubly important for smaller opposition parties trying to establish themselves and grow.

Your Party now holds five seats in the lower house of the Diet, but has an ambitious plan to field a slate of 100 candidates in the next election. Whenever that election might be, they have to recruit the candidates, so for them the timing of that election is critical. Party President Watanabe Yoshimi thinks one might be coming soon rather than late:

Will the aimless Prime Minister Kan Naoto win (the DPJ party presidential election), or will it be the out-of-control former Secretary-General Ozawa Ichiro? Whoever wins, we must consider the possibility that the lower house will be dissolved.

His cryptic take on the current status of the race also shows a taste for invective:

In the race between the villain and the hypocrite, some people think the villain will win.

He means Ozawa Ichiro. I think. Both men are hypocrites, but Mr. Ozawa is generally assumed to have the blacker heart.

Sub-national governmental elections will be held throughout the country next spring, and others have brought up the possibility of a joint election with the lower house at that time.

Speaking of terms of endearment for Ozawa Ichiro, television producer-turned-commentator Terii Ito said on a morning TV program this week that Mr. Ozawa gives him the creeps (kimochi ga warui).

For those unfamiliar with Mr. Ito, here’s what he looks like when he appears on TV.

UPDATE:

Your Party Secretary-General Eda Kenji, who founded the group with Mr. Watanabe, has a post on his blog that passes along a story about Mr. Ozawa.

It came from a politician he says was a very close Ozawa associate. One day, the politician went to visit Mr. Ozawa at home to offer him some encouragement. He took four other politicians with him who were known for keeping their distance from the man.

One of Mr. Ozawa’s aides met them in the front yard and asked them to wait. They did so for an hour. They were finally taken in through the kitchen and ushered to a room that looked as if it belonged to a maid. They waited there another hour. Finally, the aide returned and told them, “You will not be able to meet Mr. Ozawa today.”

The politican, humiliated in front of the others, has no idea why he was treated that way. Needless to say, he is no longer an Ozawa associate.

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Let’s make a deal

Posted by ampontan on Tuesday, September 7, 2010

Many (on the left) are correct when they bemoan the collusion of government and corporations. They even have a point when they decry special deals for Halliburton or Archer Daniels Midland as proof of creeping fascism. What they misunderstand completely is that this is the system they set up. This is the system they want. This is the system they mobilize and march for…The fascist bargain goes something like this. The state says to the industrialist, “You may stay in business and you may own your factories. In the spirit of cooperation of amity, we will even guarantee you profits and a lack of serious competition. In exchange, we expect you to agree with—and help implement—our political agenda.” The moral and economic content of the agenda depends on the nature of the regime.
– Jonah Goldberg

KEIDANREN (The Japan Business Federation) last week restated the conditions of a deal initially offered by Kan Naoto’s government when it assumed office, according to this report in the Daily Yomiuri. Here are the terms: Keidanren wants the government to cut the corporate tax rate from 40% to 30% “as quickly as possible”. The nominal 40% rate is the world’s highest, and the country’s largest lobbying group for big business says that rate will force companies to relocate overseas. In return, they’ll support the government/Finance Ministry objective of boosting the consumption tax to 10% in 2% increments.

As part of the deal, Keidanren is also trying to nip in the bud the introduction of an “environmental tax”, a euphemism for a carbon tax.

They’re just following up on a nearly identical proposal from Mr. Kan shortly after he took office in June. That deal offered an even sweeter corporate tax cut:

The government pledged in its medium-term economic plan today to bring the corporate tax rate down to a level “commensurate” with other leading nations. That rate is “about 25 percent,” Yosuke Kondo, parliamentary secretary for the Trade Ministry, said in an embargoed briefing yesterday. Firms in Tokyo pay a levy, including local taxes, of 40.7 percent.

Parliamentary secretary for the Trade Ministry = Kasumigaseki’s mouthpiece. In other words, the Kan Cabinet = The newest messenger boys for the Japanese dirigistes. There you have a glimpse of one of several reasons reformers discounted Mr. Kan’s administration before the new ministers hung up the scrolls on their office walls.

But there’s a lot more to this story that few people talk about—such as how Big Business makes money off the consumption tax, and which of the Keidanren members actually pay the 40% corporate rate. One of those who did bring up the other parts of the story was the weekly Shukan Post in a 9 July article. Here’s a summary in English.

*****
The first order of business for the Kan Cabinet was to strike a deal with Keidanren, with whom relations had deteriorated during the Hatoyama administration. On 8 June, the day the Cabinet was inaugurated, DPJ Secretary-General Edano Yukio paid a courtesy call on the organization.

Ten days later, three leaders of the organization, including Chairman Yonekura Hiromasa, visited the Kantei and offered their support for an increase to 10% in the consumption tax: “(The tax) should be increased, considering (the need for) social welfare and fiscal restructuring. This has encouraged the business community.”

Those business and financial leaders should know full well that a consumption tax increase to 10% will harm the economy. They welcome the increase because it’s a scheme that allows them to show a clear profit through the “Export Return Tax”.

Ordinarily, companies pay consumption tax in a formula determined by subtracting the amount equal to 5% of their purchases from an amount equal to 5% of their sales. To avoid double taxation due to the application of overseas value-added taxes or other charges, exports are exempted from consumption tax. The consumption tax is levied for procurements, however, so this is a mechanism to refund that portion to exporters.

Certified tax accountant and former Kanto Gakuin University Prof. Koto Kyoji explains:

“It’s called a refund, but it’s not a refund of money that the large exporting companies pay to the National Tax Agency. The subcontractors are the ones paying the taxes, but only the big companies profit from the refunds. It is a de facto tax break for big business.”

Most of the core Keidanren companies have a high export ratio, so they receive an enormous amount in refunds. A group of tax experts, including Prof. Koto, performed a trial calculation based on corporate financial reports as of March 2007. Ten of the country’s biggest companies, including manufacturers of automobiles and electric machinery, alone received roughly JPY one trillion in refunds that year.

History shows that while big business will profit from the consumption tax increase, the burden will weaken the SMBEs that support the big businesses. The consumption tax was raised from 3% to 5% in April 1997. The amount of delinquent taxes the following year totaled roughly JPY 725.0 billion, a 34% year-on-year increase. According to Prof. Koto, the amount of the consumption tax exemption for all companies was lowered from JPY 30 million to JPY 10 million with the amendment of the tax code in 1993. The number of delinquencies continued to rise.

“According to Japanese business practices, the parent companies have the right to set prices, so in most cases the suppliers, subcontractors, and other subsidiaries have the consumption tax portion discounted. Ordinarily, the consumption tax increase would be passed along in the price, but the large companies, who are the prime contractor, won’t allow that, which cuts sharply into profits. In contrast, the big companies pocket the consumption tax portion that is the liability of the subcontractors in the form of a refund. The real nature of the consumption tax increase is that the general public and the SMBEs will be battered, while only the big companies get preferential treatment.”

Corporate tax

The same captains of business and industry who are on board for an increase in the consumption tax are also petitioning the government for a reduction in the corporate tax. Keidanren’s position has long been that lowering the corporation tax, which is high by international standards, is necessary to overcome deflation. They claim that corporations will move overseas otherwise.

Prime Minister Kan said in a debate during the previous DPJ presidential election that he would give consideration to lowering the corporate tax.

But is it true that the Japanese corporate tax rate is all that high? According to Finance Ministry data, the effective tax rate for corporations in Japan is 40%. It is roughly the same in the United States, but 33% in France, 28% in Great Britain, and 25% in China.

Prof. Koto, however, says these figures are a sham (Emphasis mine).

“The effective tax rate as stated by the Finance Ministry bureaucrats and the business leaders is nothing more than the superficial rate that does not reflect the deductions from special tax measures. Calculating the effective tax rate that incorporates the special tax measures for reducing taxes by avoiding them altogether shows that the average rate for the top 100 companies ranked by current profit is 30%. It is 32% for the large auto companies, 15% for the telecommunications companies, and 8-9% for the trading companies. There are many provisions for revenue exemptions when calculating the corporate tax, and all of them benefit big business. Considering these hidden tax reductions, the Japanese corporate tax is not that high at all.”

Keidanren established categories of preferential categories as standards for evaluating the political parties to which they’ll donate money. The members determine the amount of their contributions. In 2008, at the end of the LDP/New Komeito coalition government, contributions to the LDP from Keidanren members totaled about JPY 2.7 billion, while those to the DPJ totaled about JPY 100 million. The LDP became the “running dog” of business interests to receive their contributions, so the tax reductions in the form of special measures were established for big business with the special measures…

The Kan Cabinet quickly embraced the idea of a consumption tax increase, though the DPJ party ran on a platform in the lower house election of freezing that tax for four years. It abandoned the policy of criticizing the LDP’s system of cutting sweet deals for tax policy and is attempting to replace the LDP as the ones who cut those deals.

Says Prof. Urano Hiroaki of Rissho University:

“The DPJ was opposed to the LDP/New Komeito plan for lowering the corporate tax. The people also surely expected them to keep Mr. Hatoyama’s pledge of freezing the consumption tax for four years. But the party has now replaced him with Prime Minister Kan, who has fallen in line with the objectives of the bureaucracy and business and financial leaders. He’s returned to the track laid down by the LDP/New Komeito. The voters must be wondering why they voted for a change in government.”

There’s plenty of room for discussing a reduction in the corporate tax rate. That discussion should be held after the Iron Triangle of the government, the bureaucracy, and big business is broken.

(End summary)

*****
Meanwhile, Forbes magazine last week released its annual list of the top 200 small and medium sized companies in Asia:

Only two Japanese firms made it onto Forbes magazine’s list Thursday of Asia’s 200 top small and medium companies. The number of Japanese firms dwindled from 24 last year according to Forbes latest annual “Best Under a Billion” list that picks 200 firms from 13,000 listed Asia-Pacific companies with sales below $1 billion.

The reason for the drop?

“Japan, which produced 24 entries last year, has only two companies represented this year because of domestic economic woes,” Forbes said.

However:

There are also 20 South Korean firms, down from 23 last year, and 19 Taiwanese firms, up from 16 last year…There are also fewer Japanese firms on the list than those from Southeast Asian countries such as Malaysia, Thailand, Singapore and the Philippines. Countries other than Japan with two firms on the list are Sri Lanka and Pakistan.

Here’s a list of the Keidanren officers showing the companies at which they are employed.

And here’s another passage from Jonah Goldberg. He’s writing about the United States, but it’s applicable here, too:

This is the hidden history of big business from the railroads of the nineteenth century…to the outrageous “Big Tobacco” cartel today: supposedly right-wing corporations work hand in glove with progressive politicians and bureaucrats in both parties to exclude small businesses, limit competition, ensure market share and prices, and generally work as government by proxy.

Now try the quote at the top of the post one more time.

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Posted in Business, finance and the economy, Government, Politics | Tagged: , | 2 Comments »

Not that into you

Posted by ampontan on Monday, September 6, 2010

IT WAS only one question in the latest political poll conducted by Shinhodo 2001, but the answer speaks volumes about voter sentiment.

Here’s the question:

The possibility has arisen that the ruling Democratic Party of Japan might break up after the party presidential election. What do you think they should do?

A. They should not split: 45.2%
B. They should split and move ahead with a political realignment: 43.2%
C. Don’t know/Other: 11.6%

The margin of error for most polls is ±3 points, which means that’s an even break between those who think the DPJ is a viable institution and those who think it’s a waste of time.

In other words, one year after the DPJ captured a lower house majority in a landslide and formed their first government, half of the public with an opinion–and nearly half of the public overall–is so disenchanted with the party they think it should just disappear. Begone! Out damned spot!

Will the DPJ take the hint and begin some serious soul-searching, both jointly and individually? Of course not. Political parties never do, until the brick wall falls on them.

Nevertheless, considering the party’s internal dynamics, and depending on the results of the presidential election, that half of the public who just isn’t all that into them might get its wish.

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The awareness gap

Posted by ampontan on Sunday, September 5, 2010

HERE’S a quick reprise of part of a post from a fortnight ago:

In Yoron no Kyokkai (The Distortion of Public Opinion), Sugawara Taku writes:

All the data indicate that the Liberal Democratic Party’s post-Koizumi agenda was a mistake. Public opinion rejected the readmission of the postal privatization rebels to the party and urged the Abe administration to correct their course. It was clear that the 2007 LDP defeat in the upper house election was not due to the Koizumi structural reforms. The data show that the idea that Aso Taro was a popular figure among the people was laughable. The party took a direction opposite to that indicated by the data, so their defeat in the general election (of 2009) was completely in accord with predictions.

Fujisawa Kazuki is employed at a foreign capital-affiliated investment bank in Japan, is the author of Why Do Investment Professionals Lose to Monkeys?, and has a popular Japanese-language blog. This week, he offered his thoughts on Mr. Sugawara’s book. Here they are in English.

******

Until the Democratic Party of Japan achieved a change of government by winning the 2009 lower house election, the mass media was tenacious in its Koizumi/Takenaka bashing. They claimed the people revolted because the Koizumi-Takenaka structural reforms led to greater (income) gaps and battered local economies. The author’s data, however, show that a revolt against the Koizumi-Takenaka course was not the cause of the Liberal-Democratic Party defeat. Rather, the opposite was the case. He concludes that the people continued to support the structural reforms, and the loss resulted from the rapid restoration, starting with the Prime Minister Abe, of the old LDP that protected vested interests.

I agree completely, and think the media’s bashing of the structural reforms is extremely odd. At the height of their attacks, they conducted public opinion surveys that showed Koizumi Jun’ichiro was far and away the favorite when people were asked to name the person most suited to be prime minister. They published these results in small articles in the back pages of the newspaper.

The reason for the continued decline in support for the Democratic Party of Japan is their insufficient enthusiasm for the reforms and politics that are obsequious to the vested interest class. Support for Your Party surged in the upper house election because they’ve picked up the Koizumi-Takenaka baton and championed structural reform.

I think the assertions of the author hit the mark, and that gives rise to an important question: Why did the mass media bash the Koizumi-Takenaka structural reforms to that extent? I still don’t know the answer to that question. They never bashed those reforms when Mr. Koizumi was prime minister, so why did they start the groundless criticism so soon after he left office?

The appeal of this book is the author’s objective analysis of the statistical data. He also takes a dispassionate look at the influence of the Internet. Sadly, he draws the conclusion that the Internet has little impact (in Japan), and I think that’s largely accurate.

My blog has a large amount of traffic, and I like to think it could be called a part of the micro-media. Nevertheless, I have to say it has no influence at all compared to television and newspapers. The impact of the alpha bloggers is even less than that of a late night program that few people watch. The viewer totals of even the most popular programs on Nikoniko Doga (an Internet video site) are barely in the tens of thousands.

There is some dynamism in parts of the Internet media, but those parts are still extremely small. I think there is still room for large growth, however, and that the Internet has great potential.

(End translation)

Afterwords:

Long-time readers know I’ve been saying the same thing for several years about the prefererence of the Japanese voters for large-scale reform and the popularity of the Koizumi program. It’s gratifying to know there’s supporting statistical evidence, but the conclusion should have been obvious.

For example, Mr. Koizumi dissolved the lower house and called a general election to force the upper house to change its mind over their rejection of his plan to privatize Japan Post. He threw several veterans out of the party for their opposition to the plan.

Were the people on board? Oh, yes–His party won the second-highest postwar majority in the lower house, and he left office a year later with a 70% approval rating. He bequeathed those numbers to his successor, Abe Shinzo.

At the urging of Mori Yoshiro and other LDP mudboaters, Mr. Abe invited those bounced from the party to return. Some of them did. His poll numbers took an immediate 20 percentage-point hit.

Really, anyone who doesn’t see this just doesn’t want to look.

Earlier this week, I referred to an interview with Hokkaido University Prof. Yamaguchi Jiro in Sight magazine. Prof. Yamaguchi served as an informal advisor to the DPJ’s Ozawa Ichiro. He says the reason for Mr. Ozawa’s low approval rating is that he too failed to understand the public’s preference for Mr. Koizumi’s structural reforms and the reasons for the DPJ’s 2009 election victory. The public has had it with the old LDP style of politics.

Mr. Fujisawa also seems to be missing a few things, perhaps because he hasn’t been cured in the brine of the American media/political environment.

The full Koizumi package was structural reform, part of which included the destruction of the old LDP and its Iron Triangle with the bureaucracy and big business. But it also included smaller government, privatization, and encouraging private sector/individual initiative.

The Japanese media is just as infused with left-of-center thinking as their counterparts in the Anglosphere. They were on board with the part of the program that involved the removal of the LDP, but not the part about giving power to the people. Their real agenda emerged when Mr. Koizumi left office.

Meanwhile, the negligible impact of the Japanese blogosphere on events results from several factors. The American (or English-language) blogosphere has successfully disintermediated Big Media and destroyed their monopoly on setting the parameters of discussion. That hasn’t happened here yet. Too many people still cede the presumption of credibility too often to Big Media.

It also doesn’t help that much of the Japanese blogosphere is boring as hell, particularly the visual media. There’s no awareness of the need to be entertaining or to attract an audience. The video presentations I’ve seen are too long and a deadly combination of the amateur and the pretentious. People aren’t interested in tedious sermonettes or panel discussions with too little content consuming too much time.

One popular American blog has on its masthead a quote from H.L. Mencken: “Every normal man must be tempted at times to spit on his hands, hoist the black flag, and begin slitting throats.” The Japanese Internet could use a lot more of those buccaneers, as well as people who understand they’re supposed to differentiate themselves from the competition. NHK will always have the edge in soporific discussions, and Beat Takeshi’s TV Tackle will always present slicker infotainment. They can’t do what the Internet can, however–guerilla warfare.

Also, the synergy that’s been created in the Anglosphere sector of the Internet has yet to emerge here, perhaps because too many bloggers think they have to imitate the Big Media model. Mr. Fujisawa says he has achieved micro-media status, and that might be the problem. He and some others have staked out their own small patch of commentator/hyoronka turf, but haven’t created the horizontal connectivity that can take a story viral and blow a hole in the Establishment’s credibility.

There are Japanese capable of doing that. Most of them, however, spend their time writing books or articles in monthly magazines, and none of it appears online. A couple of weekly magazines are starting to get the idea, but all of this is still happening in the dead tree medium.

It’s time to draw the blades and start slashing. Lord knows there are plenty of targets that need some stout whacks, if not complete beheading.

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Can’t they find anybody who can read?

Posted by ampontan on Saturday, September 4, 2010

WRITING FOR the Market Watch website, Lisa Twaronite thinks what she calls the “Ozawa Shock”–the candidacy and possible victory of Ozawa Ichiro in the Democratic Party presidential election next month–may have been a factor in boosting bond yields in Japan for the first time in about a year of blue moons. She also allows that other factors may have played a role.

She may be right, but if she is, it would be the classic case of the broken clock being correct twice a day. For example:

Kan is known as a fiscal conservative, whereas Ozawa is more expansionary, calling for even more stimulus.

Kan Naoto has been called many names, but “fiscal conservative” is not one of them. This is the same man who claims that raising taxes in a deflationary period and spending the revenue “in the right places” will create sustainable growth.

Well, let’s be fair. He doesn’t really make those claims. He’s just the ventriloquist’s dummy speaking in the poorly disguised voices of his economic tutors and Finance Ministry handlers.

This is the same man who–FOUR DAYS AGO–proposed an additional stimulus package worth JPY 920 billion.

On what plane of consciousness does that count as “fiscal conservatism”? And did you notice that she thinks Mr. Ozawa is the man calling for an extra stimulus?

She also writes:

The latest opinion polls show Ozawa’s public support ratings are down in the teens, while Kan’s are around 70%…

That’s true–in response to the question, who would you prefer to see as the DPJ candidate. Mr. Kan’s public support ratings as the head of government are nowhere near that. When the public is specifically asked to choose between the two men, he benefits from the public’s dislike of Mr. Ozawa.

Then she says:

But part of is likely due to Ozawa, and his refusal to quit the DPJ race, even though he is under investigation for a political funds scandal and could face indictment.

He just got into the race last week because of Mr. Kan’s refusal to step down after his party took a pasting in the upper house elections last month. How does that translate into a “refusal to quit”, even though, as she admits, the race is too close to call?

She asks:

If Ozawa succeeds in becoming prime minister, will fiscal reform go by the wayside?

Yes, if you think fiscal reform consists of sharp increases in both the consumption tax and the personal income tax rates, and policies similar to those now corroding the American economy.

Whoever wins the DPJ election, the big loser will be the Japanese economy. Yet what conclusion does Ms. Twaronite draw?

(T)here could be some very happy hedge fund traders out there.

If Market Watch saw fit to hire someone with some basic knowledge of current events in Japan, there could be some very happy readers out there.

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Sumo, the Olympics, women, and sex

Posted by ampontan on Friday, September 3, 2010

WILL SUMO soon be an Olympic sport? The Japanese have been promoting the idea for a while, but now they’ve got plenty of other people on their side. According to one recent report:

“Japan has been active in the Olympic Games bidding campaign. Once a Japanese city succeeds in the bid, it will be time for sumo’s entry into the Olympics,” Mai Yaoxiang, vice president of the Asian Sumo Union, was quoted as saying by Xinhua.

He thinks it would be easy to arrange:

“We have organised sumo championships on every continent. Currently, an international sumo system has been founded, establishing a strong foundation for the future development of the sport,” he said.

Japanese efforts over the past 20 years to popularize the sport internationally through the International Sumo Federation are bearing fruit. Many of the top rikishi in Japan are not Japanese, and Europeans in particular do well in amateur international competitions, according to this Xinhua report:

“At the sumo world championships, eighty percent of the gold medals go to Europe,” said Stephen Gadd, the General Secretary of the European sumo union, at the first SportAccord Combat Games here on Sunday.

This shouldn’t be surprising. The rules are simple—put the opponent out of the ring, or put any part of his body other than his feet on the ground, and you win. Anyone who can handle Greco-Roman wrestling, the defensive line in American football, or rugby should be able to transfer those skills to sumo.

A few sports seem more closely related. Some people cite Mongolia as the point of origin of sumo. Here’s a video of Mongolian buh, which is performed in a field rather than a ring. Note the bird-like dance, which makes for an intriguing comparison with the ceremonies of sumo rikishi.

It then spread to the Korean Peninsula before arriving in Japan. Try this video of Korean ssireum. Note the loose sand in the ring rather than the packed dirt.

The article was distributed by IANS (the India-Asia News Service), who in the space of a few paragraphs display an incompetence equal to that of their fellow guild members overseas. For example:

In Japan…wrestlers have strict restrictions in dressing.

Strict? They wear what’s called a mawashi, which is essentially a beefed-up loincloth. That’s it, unless you include the hairstyles.

They also claim:

In Japan, women are not allowed to play sumo.

Yes, women do not compete at the highest professional level, but otherwise this statement is incorrect, as a glance at the photo will show. Or, you could look at the photo gallery of champions in the annual women’s tournament in Fukushima-cho, Hokkaido, on this Japanese-language page. And there’s no mistaking the sex of these children, some of whom are of pre-school age, having a go in matches last year.

Those willing to do the basic research will find a lot of information and misinformation on the web about women’s sumo, both in English and Japanese.

Here’s a Kyodo report from five years ago about moves to revive—not start—women’s sumo.

The author states that women’s sumo was as popular as men’s sumo in Japan, Taiwan, and Hawaii until the 1960s, when it disappeared. She also claims there’s a “persistent prejudice” against it, and “many people remain tight-lipped about women’s sumo”. Speaking of tight-lipped, she neglects to mention that any avoidance of the subject is due to the connections between women’s sumo and prostitution, as we’ll see in a bit. Then again, I’ve yet to meet any Japanese who are tight-lipped about anything that was supposedly popular until the 1960s, not to mention anything to do with sex.

She’s also incorrect when she says that women’s sumo originated in the 1880s, but does get it right when she says it was banned in the 19th century as being harmful to public morals. Novelist Hayasaka Akira, who at the time was planning to write a stage play about the sport, said he saw a women’s sumo tournament under a tent on a vacant lot in Ehime around 1941. (He wrote the screenplay for this TBS drama called Onnazumo, or Women’s Sumo.) On the other hand, a Mainichi Shimbun article no longer on line states that women’s sumo originated with World War II and the shortage of men.

Meanwhile, this page on a Russian website comes closer with its assertion that onnazumo began in Osaka in the 1700s and was performed by prostitutes. They also report that women competed with blind men. (Feel free to take a few minutes to consider all the possibilities of those matches before continuing to read. I did. And I dare you to say you wouldn’t pay to see that at least once.)

The site contains the claim that it was banned in 1926, which contradicts other sources. It also asserts that people in Japan don’t talk about it, but they openly cite the associations with prostitution. That makes sense on a superficial level, but it still doesn’t sound like any Japanese people I know. Where I live, more than one person has shown me the location of the red-light district during the Edo Period. (Small apartment houses now occupy the site.) Come to think of it, that might explain the Kyodo article’s statement that it was more popular than men’s sumo at one time.

Keep clicking at that site, by the way, and you’ll find photos of enormous Russian women grunting, grabbing, and shoving each other. One of them is performing a split that’s quite impressive considering all that poundage on her frame. But be warned: Just because the photos are work-safe doesn’t mean you should eat lunch and look at the same time.

Japanese-language sources clear up a lot of the confusion. According to one, the earliest reference to women’s sumo is found in the Nihon Shoki (The Chronicles of Japan), which was finished in the 8th century. In fact, this is supposed to be the earliest written reference to sumo at all in Japan. It appears in Vol. 14, which describes women removing their kimono to put on loincloths and grapple in the presence of the Yuryaku Tenno (The 21st Emperor) in September 469. So yes, the idea was to appeal to the prurient interests of the spectators. The sources also say the next written references didn’t appear until the 17th century, but they assume the raunchy and randy aspects of the bouts meant that people continued to do what comes naturally; they just didn’t write about it. They suspect it was most often performed in those days as a titillating diversion for men and women in the pleasure quarters.

The women’s matches went public again in 1744, and the Osakan blind man’s bluff described by the Russians began in 1769. Throughout the Edo period, women wrestlers assumed professional names in the same manner as the men, but their names were often sexual puns. It was banned shortly thereafter, but emerged yet again in 1848. You can’t keep a good woman down, now can you? Well, some people try–It officially became forbidden fruit once again in 1874, perhaps this time to forestall the newly arrived Westerners from puritanical moralizing or to prevent them from grabbing all the ringside seats for themselves. There are also reports of public performances in 1890, however, which suggests the ban was more nominal than real. Perhaps the Western influence had an effect; women began dressing more modestly in the ring and competing seriously. At the turn of the century there were as many as 23 barnstorming troupes of various sizes, based mostly in Yamagata. The Hawaiian performances were popular from 1930 until they ended in 1941, and then resumed in 1951.

There were other differences between the male and female versions besides the sexual aspects. Sumo began in Japan about 2,000 years ago as a way to entertain the deities during festivals, and many Shinto rituals are still used for the matches today. (Here’s a good summary of the religious aspects, though the information at the end is dated.)

That was not the case with women’s sumo, however. Entertainment seems to have been the primary objective, even during the 19th and 20th centuries. Japanese women participated in tournaments called gonin nuki (beating five wrestlers in succession), which is not part of the men’s tournaments, and performed hajikara. The latter is a type of entertainment that more closely resembles the circus: The wrestlers picked up rice straw with their teeth and pounded steamed rice on their bellies into the dough used for rice cakes. (That’s probably a variation on mochitsuki, a New Year’s custom in which a special variety of especially glutinous rice is pounded by friends, family and neighbors to make the rice cakes, or mochi, which are eaten during the holiday.) Performances also included traditional singing and dancing.

There’s a touch of irony to all this. Women were banned from sitting at ringside to watch the professional sumo matches until the 20th century, and they’re still forbidden to enter the ring. The ban has to do with the Shinto insistence on purity. Women in primitive societies were considered unclean because they menstruate, and big-time sumo still hasn’t gotten over it. Even the men have to purify the ring before they step into it; that’s why they throw salt into it first.

The International Olympic Committee refused to go along with the idea of sumo in the Olympics in the past because of the lack of female participation. But those grounds for opposition no longer apply.

Besides, as Mr. Mai explained, everyone’s stepping into the ring. The Women’s Sumo World Championships have been held every year since 2001. Here’s an article about women’s sumo in the U.S. written by California Sumo Association President Andrew Freund that same year. Taking advantage of journalistic privilege, he quotes himself in the third person: “We are very proud of our women’s team.” And here’s a 2003 article from Britain’s Daily Telegraph that focuses on British sumo.

A national organization for women’s sumo was formed in Japan in 1996, called the “New Sumo Federation” to forestall any objection to the participation of women, and their first tournament was held in Osaka 1997. Try this YouTube clip of an attractive NHK announcer showing off her moves during a tournament. She seems a bit too slender to go for the Olympic gold, but the intensity of her fighting spirit certainly caught her opponent by surprise.

I had hoped it would show the women competing in the traditional style wearing only loincloths, but no such luck!

Afterwords:

A comparison of the statements in the Kyodo article in particular and the last video, made just four years later, demonstrate the pitfalls in accepting at face value blanket statements about Japan and the Japanese, particularly those that are negative, and just how quickly the silent path of change in Japanese society renders those statements obsolete.

For those of you who read Japanese, some of the shikona for women in the Edo period included 玉の越, 乳ヶ張, 姥ヶ里, 腹檜, 貝ヶ里, 色気取, 美人草, and 穴ヶ淵.

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Posted in Foreigners in Japan, History, Sex, Social trends, Sports, Traditions | Tagged: , , | 5 Comments »

What makes Ichiro run?

Posted by ampontan on Thursday, September 2, 2010

PEOPLE ARE STILL PUZZLED about the motivations of Ozawa Ichiro, now challenging Prime Minister Kan Naoto for the presidency of the ruling Democratic Party of Japan, though he’s been one of the most dominant figures in Japanese politics for 20 years. Those in the dark include politicians and journalists who’ve been watching him for most of his political career.

The confusion stems from Mr. Ozawa’s political behavior over the past decade, which is in contrast to the ideas he expressed in his 1994 book Blueprint for a New Japan: The Rethinking of a Nation (translated into English with an introduction by U.S. Senator Jay Rockefeller). In the book, Mr. Ozawa argued that Japan must become a “normal nation” and create a society with greater individual self-reliance.

There is a clear Reagan/Thatcher cast to many of the ideas in the book. Yet Koizumi Jun’ichiro was the one to put those philosophies into practice as prime minister and became wildly popular as a result. Meanwhile, Mr. Ozawa controlled from behind the scenes the hapless Hosokawa administration that collapsed in less than a year, created and destroyed three political parties, joined and left an LDP-led coalition under Obuchi Keizo, and finally merged his last party with the Democratic Party of Japan.

As a member of that left-of-center party, Mr. Ozawa formed strong alliances with Rengo (the Japanese Trade Union Confederation) and Koshi’ishi Azuma, formerly of the Japan Teachers’ Union. He has also called for the restoration of Japan’s corporate lifetime employment system, and supports in his current campaign the provision by 2012 of the full amount of the child allowance promised in the DPJ’s party platform of 2009.

None of these are the actions of a man influenced by Ronald Reagan or Lady Thatcher. Putting aside the pursuit of power as a factor—Mr. Ozawa would prefer to be a party’s secretary-general and run the money rather than be a prime minister—his political objectives are still a mystery to most people.

During an interview published in the Spring issue of Sight, however, former DPJ advisor and Hokkaido University Prof. Yamaguchi Jiro offers a theory that makes more sense than any, even though it might leave people in other countries scratching their heads.

Prof. Yamaguchi observes that Mr. Ozawa has long admired the British parliamentary system and wants to create a strong two-party system in Japan. (Remember that Japan has been under nominal one-party rule for all but about two years since 1955.) Mr. Koizumi refashioned the LDP into the sort of party that Mr. Ozawa envisioned, albeit temporarily. No one seriously thinks he has undergone a political conversion. Prof. Yamaguchi reasons that since one of Japan’s primary parties had a Reaganite-Thatcherite stance, Mr. Ozawa thought a strong two-party system required a viable party on the left. Therefore, he would use the existing vehicle of the DPJ to create one.

In other words, Ozawa Ichiro is trying to create structural reform rather than implement a political philosophy.

The professor’s theory may or may not be valid, but no one’s come up with a better one.

While we’re on the topic of Ozawa Ichiro, another rumor floating around about the deal he proposed to Prime Minister Kan earlier this week is that in addition to demanding his reinstatement as the DPJ Secretary-General, he also wanted to be able to name the Justice Minister. That would enable him to root out those pesky prosecutors who keep him linked in the public mind with political fund-raising scandals. Mr. Kan declined, winning him the praise of some who commended him for a willingness to die in battle like a samurai.

And while we’re on the topic of purging insubordinates, a Prime Minister Ozawa would probably chop a head or two at the Imperial Household Agency, the organization responsible for state matters involving the Imperial House. Last fall, Mr. Ozawa stirred up enormous criticism for his attempt to use the Tenno (Emperor) as a stage prop in the effort to build closer ties to China, and his public bullying of agency head Haketa Shingo after the latter had the impertinence to oppose him.

A pissing contest between the likes of Kan Naoto and Ozawa Ichiro is not what the Japanese public had in mind when they voted for the DPJ in August 2009.

Update: Freelance journalist Uesugi Takashi, who openly supports the DPJ, is calling this an “allergy election” between the forces allergic to Kan and those allergic to Ozawa. Whoever causes the lower allergic reaction will win.

He uses two examples as illustration. DPJ elder Watanabe Kozo has been in four political parties with Ozawa Ichiro, and he is supporting Mr. Kan. Hatoyama Yukio was a member of the New Party Sakigake in 1993 with Kan Naoto, and both were founding members of the modern DPJ. He is supporting Mr. Ozawa.

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Posted in Government, Politics | Tagged: , , , , | 4 Comments »