AMPONTAN

Japan from the inside out

Takahashi and Hasegawa on the real Japanese prime minister

Posted by ampontan on Thursday, October 13, 2011

It isn’t that they can’t see the solution. It is that they can’t see the problem.
– G.K. Chesterton

THE focus of the primary political articles in the 8 October edition of the weekly Shukan Gendai is on the influence of Finance Ministry bureaucrat Katsu Eijiro on the Noda administration. The headline on the front cover just below the logo dubs him “the real prime minister who is manipulating the dojo (fish) Noda”. Following the lead story is a dialogue between Hasegawa Yukihiro, a member of the Tokyo Shimbun editorial board, and Takahashi Yoichi, a former Finance Ministry bureaucrat, official in the Koizumi administration, college professor, and author. They are perhaps the foremost advocates in Japan for curbing the influence of the bureaucracy, and both have been frequently cited here.

Their dialogue is an excellent précis of the issue, both in general and how it involves the Noda administration. The amount of detail in the complete dialogue is overwhelming, so I’ve excerpted the important points in English.

*****
Hasegawa: A look at the personnel appointments of the Noda Yoshihiko administration shows a clear shift to a policy of tax increases. Also, the consensus of opinion is that Katsu Eijiro, the administrative vice-minister for the Finance Ministry, is the producer and scriptwriter for this administration that’s making a beeline to tax increases.

Takahashi: In short, he’s the backstage prime minister (laughs).

Hasegawa: …I’d like to touch on some of the Noda administration personnel appointments. First, priority was clearly given to circumstances in the Democratic Party. Former Foreign Minister Maehara Seiji was named the party’s policy chief, a position that is key for the determination of policy. Former Chief Cabinet Secretary Sengoku Yoshito (N.B.: a Maehara ally) was named as the acting policy chief. Finally, former Finance Ministry bureaucrat and Finance Minister Fujii Hirohisa was appointed the party’s tax policy chief.

The party seems to have been allocated a rather important role during the preliminary spadework of policy formation, but that’s because there are elements within the party that are either opposed to a tax increase or are hesitant about supporting them. The reason for a structure with this depth of personnel is to suppress the anti-tax sentiment (in the party) and achieve a tax increase.

Takahashi: In the normal process of policy determination, the government first creates a proposal, the (ruling) party massages it, and then it is submitted to the Diet. Absent Diet gridlock, the primary emphasis is on either the government or the ruling party.

We have Diet gridlock now, however, and the (primary opposition) LDP is in agreement with higher taxes to begin with. Therefore, for the Finance Ministry, the ideal tax increase proposals will be raised by the government, and they will be leveled down to a certain extent by the party. Then, in the Diet, they’ll get the LDP involved and make the tax increase a reality. The script has already been written. In short, the key is how to weaken the anti-tax elements in the party. That’s why the priority in the selection of the personnel appointments was placed on the party rather than the government.

Hasegawa: They certainly picked some lightweights for the Cabinet considering how much emphasis they placed on the party. There’s Azumi Jun as Finance Minister, who knows very little about financial policy, and there’s the former Finance Ministry bureaucrat, Furukawa Motohisa, as the Minister for National Policy. (N.B.: Also Minister for Economic and Fiscal Policy and Minister for Total Reform of Social Security and Tax) The Finance Ministry can completely control these two. Also key is the appointment of Katsu Eijiro as administrative vice-minister.

Takahashi: That’s right. The Cabinet itself consists of lightweights, but the Finance Ministry bureaucrats that were sent over are all heavyweights….

Hasegawa: Tango Yasutake as a deputy Finance Minister is a dead giveaway of Finance Ministry control….

Takahashi: …Also surprising was that a Finance Ministry bureaucrat (a former division head of mid-level seniority), was appointed as the parliamentary secretary for Ren Ho, the Minister of State for Government Revitalization. Usually, that sort of post is given to the aides of division heads at the end of their career, but the Finance Ministry sent over Yoshii Hiroshi, who joined the ministry in 1988.

Hasegawa: The portfolios of government revitalization and civil service reform given to Ren Ho are important for the bureaucracy, so it’s clear their objective is to keep a lid on it. In addition, she has some star appeal for the DPJ, is a capable speaker, and attracts a lot of attention.

Takahashi: Actually, Mr. Katsu sent Mr. Yoshii over to be her secretary when she was a minister in the Kan Cabinet. He kept his post as her advisor even after she was downgraded to the job of special advisor to the prime minister, and he’s been with her ever since. Mr. Katsu has perceived the value of using Ren Ho and so is keeping her marked.

Hasegawa: 1988 is also the year that Furukawa Motohisa entered the Finance Ministry. Another member of that class is Ito Hideki, the parliamentary secretary for Minister of Financial Services Jimi Shozaburo.

Takahashi: That’s because Mr. Furukawa combines the functions of Cabinet minister and parliamentary secretary (laughs). These three men are a powerful trio. In addition to the normal orientation that all new employees are given when they enter a government ministry, the Finance Ministry has its own three week intensive “boot camp”. This cements the ties between the people who were hired at the same time, which results in a personnel network unlike that at any other ministry.

Hasegawa: Mr. Katsu’s personnel choices were well thought out, weren’t they?

Takahashi:…With Ota Mitsuru of the class of 1983 as the prime minister’s parliamentary secretary, and the number of parliamentary secretaries they’ve had assigned, the Finance Ministry can pretty much run the Cabinet. To be blunt, they don’t care who the ministers are…

*****
Hasegawa: Mr. Katsu has engineered a complete shift toward a tax increase both within the Cabinet and in the ministry…the question is now whether he’ll make a headlong rush toward a tax increase.

Takahashi: That question was already answered by Prime Minister Noda during Question Time in the Diet. He was asked by the opposition whether he should take the issue to the people (in a general election) before increasing the consumption tax. The prime minister answered, “We will ask for their trust before it goes into effect.” That seemed to satisfy both the public and the mass media, but there’s no question that’s a trap laid by the Finance Ministry. “Asking for their trust before the tax is raised” usually means holding a lower house election on that issue, but “asking for their trust before it goes into effect” means they’ll hold the election after the bill for the tax increase has passed and before it is implemented. In other words, they’ll submit and force through an increase in the consumption tax during the regular session of the Diet next year, as is already planned. After that, they will hold an election at what they consider to be a suitable time. That way, because the bill has passed, the consumption tax will be raised whether or not the ruling party wins the election. That is the Katsu/Finance Ministry scenario.

Hasegawa: The tax increase could be stopped by legislation freezing it before it goes into effect.

Takahashi: Not possible. Not possible. If they hold a general election just before taxes are raised, there won’t be enough time to submit a bill freezing the implementation. That sort of schedule management is the forté of the Finance Ministry, and that’s why they sent all those accomplished people over to the Cabinet as parliamentary secretaries. They’ll also have no compunction at all over threatening the politicians by telling them that freezing the tax increase will cause a major disruption in the economy…
…One more thing we shouldn’t forget is the use of the media to brainwash the public.

Hasegawa: The problem of the pet reporters who cozy up to the Finance Ministry bureaucracy. If you dig just a little deeply, you find that the Finance Ministry is really driving the government. A reporter antagonistic to their bureaucrats gets cut out of the loop. That’s why the reporters themselves cozy up to the bureaucrats. Nearly every day you can pick up the newspaper and read stories about the need for all sorts of taxes — income taxes, corporate taxes, inheritance taxes, environmental taxes. The Finance Ministry lobs them fat pitches, and they’re more than happy when they get converted into articles. It isn’t long before the people turn numb, and that creates an atmosphere in which everyone believes tax increases are unavoidable. That’s what’s happening now.

Takahashi: People can only think about things based on the information they’re provided. There are other revenue sources besides higher taxes, but people gradually stop looking in that direction. It really is brainwashing.

Hasegawa: That is the Finance Ministry’s strategy for the masses using the media. And the person driving the Finance Ministry now is Katsu Eijiro.

(end excerpts)

*****
Note that Mr. Takahashi said the script was already written. On the morning of the 12th, Finance Minister Azumi Jun read his lines:

“Next year, the bill for the consumption tax (increase) and the reform for integrating the tax with social security will definitely be introduced together.”

Meanwhile, Deputy Finance Minister Igarashi Fumihiko said in a television interview on the 11th that based on his own calculations, a 17% consumption tax rate would be necessary in the intermediate to long-term. That same rate has already been floated by the Japanese Association of Corporate Executives, one of the country’s major business groups.

In short, the problem of the alliance between Big Government and Big Business is just as serious in Japan as it is in the West, if not more so.

*****
The hucksters of the DPJ campaigned on ending the political dependence on the bureaucracy and not raising taxes for four years.

They’ve been in office now just a few days more than two years.

*****
How many more years are we going to have to let them dog us around?

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One Response to “Takahashi and Hasegawa on the real Japanese prime minister”

  1. toadold said

    As they are saying again in the US, “The clothes have no Emperor.”

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