Japan from the inside out


Posted by ampontan on Wednesday, February 22, 2012

RECENT opinion polls show that support for Prime Minister Noda Yoshihiko’s Cabinet is now below 30%, generally regarded as the danger zone. The non-support figures in those polls are north of 50%. More alarming for the prime minister is that the combined Cabinet support rate and the generic support rate for the ruling party is less than 50%. That means it’s time to start taking the empty glasses to the sink and dumping the ashtrays. This party’s just about over.

The terrible swift slide in support for Mr. Noda’s two Democratic Party predecessors should not have been surprising to people who pay attention. Neither Hatoyama Yukio nor Kan Naoto had ever demonstrated executive ability, an appealing political persona, or the political skills and character traits required of a successful national leader. Both were clumsy and transparent when lying, a fatal flaw for any politician.

Different factors are behind the accelerating decline for Mr. Noda, however. While not charismatic, he is not as obnoxious as either Mr. Hatoyama or Mr. Kan were in their own way. One reason he seems to have been chosen by party powers is that he is personally unobjectionable. Also, because he comes from a wing of the party unaffiliated with his predecessors, he was untainted by either of their disasters.

In some ways, however, his offense is greater than their incompetence and off-putting personalities. He’s perceived as having betrayed the electorate’s wishes — clearly expressed for more than a decade of elections — regarding what they think is the most important domestic issue: Reform of the government, political process, and the bureaucracy.

Exacerbating the problem for Mr. Noda is that he’s now been caught with his political pants down. A video of the prime minister giving a street corner speech during the August 2009 lower house election campaign (when Hatoyama Yukio was party president and the prime minister-to-be) has been circulating on YouTube for about a month. Here’s the text in English. Note that he’s explaining his party’s manifesto (platform in the U.S.) because having a manifesto at all was one of the major selling points for the DPJ when they were in the opposition.

Manifestoes began in Great Britain. There is a rule. (The party) will implement what’s written as if its life depended on it. They won’t do anything that isn’t written. That’s the rule. (The LDP government) hasn’t done anything that was written for four years, and nonchalantly did what wasn’t written. Don’t you think that’s strange? I hope all of you realize they aren’t qualified to talk about manifestoes.

The starting point is to not allow the wasteful use of tax money…JPY 2.5 trillion is equal to one of the five percentage points of the consumption tax, and JPY 12.6 trillion is the equivalent of the 5% consumption tax. Therefore, the 5% consumption tax, of the taxes you pay, goes to amakudari corporations. They are a swarm of termites. But are we to raise the consumption tax without eradicating the termites? If the consumption tax revenue were JPY 20 trillion, the termites might still be swarming. That’s why Mr. Hatoyama won’t raise the consumption tax for four years. He will exterminate the termites, eliminate the amakudari corporations, and end amakudari. It would be improper to raise the consumption tax without starting from there…

During his indoor speech in the Diet, he says:

We’ve talked about raising the consumption tax to 10% from time to time. I talked about it during the DPJ presidential election (last year).

He then offers some reasons for raising the tax.

Very few, if any, sentient adults in Japan think the party has made even a half-hearted attempt to exterminate the termites or end amakudari, the term for former bureaucrats landing cushy, well-paid jobs in public or semi-public corporations in sectors they once were responsible for regulating. Indeed, many suspect that any such efforts were presented only as political theater.

The DPJ manifesto called for maintaining the consumption tax for four years; now the party wants to raise it without taking it to the people first. Even Kan Naoto said that taxes shouldn’t be raised until the budget was held upside down and no more money fell out — and then he blew his party’s chance at ruling without coalition partners by changing his mind on taxes before the 2010 upper house election.

In short, the dissemination of Mr. Noda’s street corner speech has made him look like an ass in public.

The text of a speech he gave in the lower house in support of the no-confidence motion against then-Prime Minister Aso Taro in 2009 has also turned up. (The opposition knew the motion wouldn’t pass; the idea was to prevent the LDP from selecting a new candidate to lead the party in the election everyone knew was coming.) Here it is in English:

The people see amakudari and watari (jumping from amakudari job to job) as the biggest problem. (The Aso government) has no enthusiasm at all for eliminating them with a workable method. We conducted a survey this May and discovered how the money was used in FY 2007. Twenty-five thousand veterans of the civil service were given amakudari jobs in 4,500 companies. We discovered that JPY 12.1 trillion of your hard-earned tax money went to those 4,500 companies. We discovered that JPY 12.6 trillion of your hard-earned money went to those companies the year before. That is equivalent to the 5% consumption tax. The combined general and special accounts of the Tokyo Metro District budget amounted to JPY 12.8 trillion.

In short, this is a structure in which the termites are swarming to the tax money. The termites must be exterminated, and the worker ants must handle politics. Regrettably, I am forced to say that the LDP – New Komeito government is not willing to do this at all.

It’s the same with watari. The head of the Social Insurance Agency, an organization where pension funds disappear or are mislaid, will receive a large pension on retirement. Perhaps JPY 60 or 70 million. After that, he will be hired by a special corporation or an independent government corporation that has been established for amakudari purposes. He’ll get a large salary and another large pension from them. Then, after a certain amount of time, the same thing will happen again — and again after that. After six of these changes, some people receive more than JPY 3 trillion in retirement funds.

The Aso government, which ignores the people’s call to eliminate amakudari and watari, is well deserving of a vote of no-confidence.

The reason the people have no confidence in this government is that it forgot all about bringing in the exterminators and fed the termites instead. Mr. Noda’s use of the word termites on several occasions has boomeranged into his face. That word will now be one of the shorthand definitions for his political career, in the same way that George H.W. Bush is identified in the United States with “Read my lips, no new taxes.”

Last month, the Noda Cabinet announced that it planned to reduce amakudari corporations from 102 to 65 (why not all of them?), but it was sketchy on the details for the final disposition of the funding they receive. Critics charge the government is only cutting the numbers without cutting the funds. Some of the largest amakudari companies will survive. The Nippon Export and Investment Insurance Co. is to be fully funded by the government when it could be privatized instead. (Two of the four officers listed on their website are former METI bureaucrats.) The National Research Institute of Brewing will be eliminated, but all of its functions will be assumed by the government (even though none of its functions need to be performed by the government). The people understand they’ve been betrayed, and their understanding of the identity of the termites’ allies is apparent in Mr. Noda’s poor poll numbers.

Some people insist that the consumption tax, raised from 3% to 5% in 1997, should be boosted much further because it is the lowest national sales tax rate among the OECD countries that have one, while the central government’s expenditures rose by more than 33% in the same time. The budget for the next fiscal year is the fourth in a row in which the government plans to obtain more revenue from floating deficit bonds than through taxes. That includes all three DPJ administrations and the last LDP administration of Aso Taro, which combined the myopia of a government stimulus after the global financial crisis of 2008 with the stupidity of pork barrel spending to forestall an electoral defeat.

That none of the politicos now clamoring for a tax increase couldn’t be bothered to slash the budget when they had the chance (or, in the case of overseas observers, to suggest budget cuts) demonstrates, as it does in other countries, their political ideology, their lack of qualifications for holding public office, and the futility of taking seriously whatever they suggest as solutions, much less allowing them to participate in the debate. That explains the reason for the evaporation of the slight majority once in favor of increasing the consumption tax, especially after last year’s Tohoku disaster.

Here’s Mr. Noda caught in the act during his street corner speech. It also includes his peculiar pledge in English to “never never never give up” on his and his party’s retrograde course:

The self-congratulatory left in the foreign community amuses itself by snarking superior about the ultra-rightist groups’ sound trucks that blare speeches and music in Tokyo. They don’t seem to have any problem with the members of the party they support blaring speeches from a stationary position, however. At least the Imperial diehards say what they really think. And they’re never going to be in the position of power now held by the immobile ones.

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One Response to “Termites”

  1. σ1 said

    Noda’s behaviour is so contrary to a rational sense of his own political interests and survival that you have to wonder if he knows exactly what he is doing. Maybe he has figured out that everyone had the order around the wrong way – instead of cutting expenses first and tax raise second, the more efficient way would be to raise taxes first and wait for the wrath of the electorate to demand the blood of the bureaucracy and politicians both. Because that is exactly what is going to happen and I find it hard to believe that Noda does not understand this, especially given his previous rhetoric that you have mentioned. After all the “cut expenses first” approach seemed only to succeed in the bureaucrats playing the public off against the politicians.
    S: Thanks for the note.

    The view in Japan is somewhat different. Here, they think he (Kan too) has been convinced in this course by the bureaucrats. (They call it brainwashed.) He probably thinks he is being a statesman acting in the best interests of his country. There is also the factor that some politicians are not opposed to the “administrative state”. (One was Fukuda Yasuo, who said a country like Japan needs that.) And finally there is the real possibility that the bureaucracy will find a way to bring down his government (or him personally) if he doesn’t listen.

    Also, the electorate has been demanding, directly or indirectly, the blood of the bureaucracy for some time, so that factor’s already been discounted into the calculations.

    – A.

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