Japan from the inside out

Hashimoto Toru (6): Hanging out in bad company

Posted by ampontan on Monday, April 9, 2012

THERE’S been a slight change of plans: The next phase in the series on Osaka Mayor Hashimoto Toru was to move on to the controversies that have erupted over his behavior and theories of government administration in Osaka. After last week’s episodes in the daily Hashimoto docu-drama, however, there’ll be a quick detour before getting to the red meat.

Episode #1 featured Mohammad in the form of Tokyo Metro District governor and national curmudgeon-in-chief Ishihara Shintaro traveling to Osaka to visit Mt. Hashimoto for a private discussion that lasted about 90 minutes. Both men were mum on the details of the confab’s contents. That the Tokyo governor, 38 years older, in his fourth term, and a celebrity for more than half a century, would be the one to travel is noteworthy in itself.

Most of the news media is still in the breathless schoolgirl diary phase with Mr. Hashimoto, so speculation over a possible political alliance spun their little hamster wheels even more furiously. Mr. Ishihara, who has been complimentary of the Osaka mayor, is in the process of forming a new political party with his curmudgeons-in-arms.

Mr. Hashimoto has demonstrated sound political instincts to this point, and he certainly knows the polls show the public takes a dim view of the new old guys’ party by a two-to-one margin. That’s the reverse of the two-to-one margin that looks forward to the contribution of regional parties such as the one he leads. Other than budgets, most politicos are clever at basic arithmetic, so if there are any positives to an alliance outweighing the negatives, they’re not easy to see.

One the other hand, Your Party head Watanabe Yoshimi took a more relaxed view, suggesting that the two men were just getting a sense for each other.

There were some minor revelations: Mr. Ishihara told Mr. Hashimoto that national politics is a different game altogether from local politics. (He was elected to the upper house of the Diet in 1968, and after four years there spent 23 years in the lower house.) Thus, one possible benefit of a meeting would be for the older man to explain the birds and the bees of Nagata-cho and national celebrity politics.

Episode #2 was much smaller in scale, but much larger in impact. In brief, here’s what happened: The Asahi Shimbun wrote an editorial criticizing Ozawa Ichiro for playing house wrecker again and balking at the DPJ leadership’s insistence on a tax increase. That’s unremarkable in itself; it’s what newspapers do. The Asahi, however, had to get all Asahi-ish about it and criticize Mr. Ozawa for being undemocratic. One of their employees actually wrote the line, “Democracy weeps”.

That pudding’s a bit rich even for left-of-center newspaper platitudinizing — the DPJ leadership forwarded the proposal to the Diet after squelching internal debate on their tax proposal without a vote. Several terms come to mind for describing that behavior, but “democratic” isn’t one of them. (Some party members, such as first-termer Miyazaki Takeshi, claim a majority of the DPJ MPs are opposed to a tax increase.)

In one of his Tweet-a-Ramas, the Osaka mayor stuck up for Mr. Ozawa while sticking it to the Asahi, which also runs editorials calling on Mr. Hashimoto to reconsider his positions. The mayor pointed out that the DPJ leadership’s decision to back a tax increase had nothing to do with democracy, yet his own clearly stated positions won a large electoral mandate in November. He wondered if the Asahi had any idea what they were talking about.

The defense of Mr. Ozawa prompted university professor, author, and blogger Ikeda Nobuo to sound off. Here’s what he said in English.

During the next general election, everyone’s eyes will be in the movements of One Osaka rather than those of the Democratic Party or the Liberal Democrats. Ozawa Ichiro has praised Hashimoto Toru as a “comrade in the reform of the governing structure.” Mr. Hashimoto also thinks the consumption tax should be converted to a local tax. In exchange, the regions would eliminate the tax fund allocations from the national government. The insufficient funding sources for local government would be offset by local governments raising the consumption tax on their own responsibility. In addition, project-specific tax revenues, such as those for roads, would be transferred to the regions in addition with the work. He praises “Ozawa Sensei” for supporting these changes in the governing structure.

One can sense Mr. Hashimoto’s intent in using sensei, a term of respect, for Mr. Ozawa, which he uses for no other politician. This is a misapprehension of reality, however. During the election for DPJ party president in 2010, Mr. Ozawa called for incorporating all the subsidies to local government in a lump sum. He said nothing about eliminating the tax grants to local governments and replacing it with the consumption tax.

If the consumption tax were to be converted to a local tax and each prefecture had different tax rates and category exemptions, there would be great confusion. What consumption tax would be levied for companies with branches throughout the nation? Some of the American states have a consumption tax, and there are different VAT rates for each European country, which creates the problem of tax avoidance. If this plan to have different areas in small Japan levy different taxes is not a joke, I can only think it is ignorant.

Mr. Hashimoto has said, “I am not completely opposed to a consumption tax increase, but I am opposed now to a tax increase for the purpose of social welfare expenditures.” Is he unaware that during the Hosokawa administration, Mr. Ozawa proposed raising the consumption tax to 7% and converting it to a national social welfare tax?

This incoherence results from making the decision to defend “Ozawa Sensei” first and then looking for a reason to oppose the consumption tax which conforms to that decision. As might be expected, even Mr. Hashimoto recognizes that he cannot “completely oppose a tax increase” in Japan’s current fiscal state, but says he is opposed to this tax increase proposal. But if he’s opposed to this proposal, he offers no substitute that spells out when and under which circumstances he would increase taxes. He has no plan specifying how he would rebuild the nation’s finances.

Mr. Ozawa was once in the forefront of a move to increase the consumption tax. The reason he opposes that now is clear: He wants to bring down the current anti-Ozawa leadership of the DPJ. That’s what politics is like, and it’s pointless to look for a logical consistency in his assertions. Mr. Hashimoto, who defends this fuzzy logic, has thus become a fomenter of political crises himself.

But I do not think this political crisis-focused intuition is bad. If Mr. Ozawa leaves the DPJ and combines his fund raising and organizational skills with Mr. Hashimoto’s popularity, they could become the strongest party in the next general election. If some of the LDP members join, it could result in a Prime Minister Hashimoto and a party Secretary-General Ozawa, a pattern similar to that of the Hosokawa administration.

The problem, however, is what they would do. Mr. Hashimoto’s policies are off-the-cuff populism, such as his labor union bashing and opposition to nuclear energy. If that is to be his approach to national politics, the Kasumigaseki bureaucrats would make short work of him. Mr. Ozawa’s power has also waned, so there would be serious concerns that this government would be as short-lived as the Hosokawa administration. The only thing to do is look forward to the election after next.

(end translation)

The part pointing out the contradictions is right on, but the rest of it is rather off. Before we get to that, however, here’s what author and commentator Asakawa Hirotada had to say about these episodes:

“It’s a form of lip service, or perhaps camouflage. Based on what I’ve heard from those involved with One Osaka, the people of that organization, which Mr. Hashimoto leads, think it would be a negative for them to work with the old-style politicians such as Mr Ozawa and now former People’s New Party head Kamei Shizuka (N.B., a potential Ishihara ally). One Osaka seems to have decided that those are not people they will align with. That one of the elder political statesmen, Mr. Ishihara, took the trouble to go to Osaka to talk with Mr. Hashimoto is very significant. Mr. Ishihara has two sons in the LDP (N.B., one the secretary-general), so he has move with extreme caution in regard to the formation of a new party. He cannot afford a misstep. He almost certainly had Mr. Hashimoto maintain a careful silence. That’s probably the background behind the Hashimoto Tweet.”

First, the obvious: If they handed out trophies for being the most unpopular politician in Japan, Ozawa Ichiro would be awarded enough palms to retire to a coconut plantation. His negatives surpass even those of the DPJ itself. If Hashimoto Toru is foolish enough to form an alliance with Mr. Ozawa, the bloom would go off the rose so fast you’d need time-lapse photography to see it. He would almost certainly be written off by Your Party and many of the people who have come to Osaka from elsewhere to work with him. (If they didn’t, they themselves would be written off by the public.) It would also legitimize the charges that he’s a power-mad despot who would adopt any policy to seize that power.

It’s never possible to rule out anything with politicians, tending as they do toward venal stupidity (or stupid venality), but a Hashimoto – Ozawa alliance does seem unlikely. For one thing, as Prof. Ikeda notes, Mr. Ozawa’s influence has waned. Regardless of the circumstances, the next election for his acolytes in the Diet will be the equivalent of the Light Brigade charging into the Valley of Death at Balaclava, giving One Osaka fewer allies to work with.

Now for the less than superb:

* Saying that Mr. Hashimoto’s anti-nuclear power stance reeks of populism is a legitimate charge, even considering that Prof. Ikeda is staunchly pro-nuke. The Osaka mayor hasn’t come up with anything remotely resembling an alternative energy plan, and his anti-nuclear appeals are based entirely on emotion.

But denigrating Mr. Hashimoto’s union-bashing (if that’s what it is) as populism is ill-considered word-slinging. We’re talking here about public sector union members, not trade unions. As prefectural and municipal employees whose salaries are paid by the citizens, their behavior and on-the-job conduct is Mr. Hashimoto’s responsibility as the chief executive officer of government. Those salaries have been pegged at 40% greater than those of their private sector counterparts, and the only people anywhere who pretend to think they work as hard or harder are the politicians receiving their support.

Having once been a municipal employee, I know that no one employed in the public sector actually thinks that. The opportunity for a paid semi-vacation while showing up at a warm office is the reason many of them got into it to begin with. Co-workers got angry whenever I put forth more than a minimum amount of effort: “What are you trying to do, kill this job?”

One of Mr. Hashimoto’s consistent themes is the necessity for public employees to work as hard as private-sector employees with the same sense of urgency.

And that doesn’t begin to examine the problems with the dark antimatter of Japan’s teachers’ unions in public schools. But we’ll leave all of that for another day.

* Prof. Ikeda thinks small Japan won’t be able to handle different tax rates, but Japan isn’t as small as some Japanese like to think — it’s larger than any European country, unless you count Russia. Mr. Hashimoto also favors a sub-national reorganization of the 47 prefectures into states or provinces, and most of those plans call for nine to 12 entities. Thus, there would be fewer tax differences than the professor suggests.

There’s no confusion over applicable tax rates for companies operating in different areas of the United States, and if the Americans can handle it, the Japanese can. The goal is decentralization and the devolution of authority to local governments. Skillful people in the regional areas can use tax policy to their advantage by enticing companies to relocate. For years, some Japanese have lamented the differences in the economic strength of the regions, and local tax policy is one way to change the balance. Successfully attracting companies would result in higher and better employment, and that would result in lower social welfare expenditures.

True, inept government management could create situations such as that which exists in California, where usurious taxation, over-regulation, and public sector emoluments are driving legitimate businesses and serious people out of the state. Japanese local government is not immune to that disease. For example, Rokkasho-mura in Aomori used tax subsidies from the national government to build an international school for the children of the employees at a local power plant. The construction costs were JPY 400 million, and annual operating costs are roughly JPY 100 million. That’s a splendid edifice for seven foreign children.

But that’s what happens in a free society when people take responsibility for their own affairs — some of them screw up, and they must be held accountable. The paternalist/nanny state alternatives have shown us their inhuman face, and it’s too ugly to contemplate.

* The United States has a sales tax, not a consumption tax. There are differences. Parents who send their children to a juku in Japan have to pay consumption tax, for example. American sales taxes don’t apply in those situations.

* Finally, Prof. Ikeda seems to have it backwards. Mr. Hashimoto opposed the consumption tax increase before he started looking around for reasons to defend Ozawa Ichiro. Criticize the man if he’s got his numbers wrong — and some say he does — but not for having the idea to begin with.

It might be that Mr. Hashimoto is the type of politician who brings out the worst in the prestige commentariat. They prefer to hash things out in salons or seminars, and few have an appreciation for the difficulty of retail politics, much less its necessity. The Osaka mayor is the type of guy who causes their sphincters to clench. Some politicians, such as Barack Obama, have a knack for the reverse. David Brooks, the token non-leftist writing op-eds for the New York Times, met Mr. Obama and gushed: “I remember distinctly an image of–we were sitting on his couches, and I was looking at his pant leg and his perfectly creased pant, and I’m thinking, a) he’s going to be president and b) he’ll be a very good president.”

Maybe Hashimoto Toru needs to get his trousers pressed.

Mr. Hashimoto read Prof. Ikeda’s post and countered with a bit of real populism:

“People who haven’t been involved in the actual operation of government shouldn’t make such facile criticisms.”

That’s an excellent rule of thumb, but it’s not applicable this time.

Another contributor to Blogos, the large blog aggregator Prof. Ikeda organized, suggests they cool it. He thinks there’s little difference between the positions of the two men apart from nuclear energy policy, and adds that a Hashimoto-Ozawa alliance is unlikely. What’s more likely are alliances such as this: The first election in Osaka Prefecture since last November’s One Osaka victory was held on Sunday for the mayor of Ibaraki. The winner was Kimoto Yasuhiro, backed by both One Osaka — their first endorsement — and Your Party.

Perhaps the most pertinent aspect is Prof. Ikeda’s concluding statement that an alliance would force people to wait for the election after next to get what they want. It bears repeating: The public anger is real, it’s been there for years, it’s growing, and Hashimoto Toru is only the most visible personification of it.

In the comments, reader Tony wonders if the Osaka mayor is flying too close to the sun. I don’t think that’s happened yet, but if the wax in his wings does melt, others will take his place.

As for waiting on an election, we might have a while to go. People are warning that a tax-raising, Ozawa-less DPJ-LDP coalition is not out of the question.

Drunken Sailor Watch

Here’s a sentence from a news item that appeared over the weekend:

“The Japanese government intends to extend support worth about 1 billion yen for ethnic minorities in Myanmar in the form of food aid and contributions to the U.N. refugee office.”

This is what the consumption tax is being raised for? The folks at the Seetell website have it right — perhaps the people of Tohoku should apply to international aid agencies if they want relief. Their own government would rather play rich uncle and spend the money somewhere else.

Here’s another guy who flew too close to the sun

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7 Responses to “Hashimoto Toru (6): Hanging out in bad company”

  1. Tony said

    Bill, I’m assuming the 40% difference in salaries between the private and public sectors you are referring to is in the U.S., right? That number, published by the CATO Institute in 2009, is an easily misapplied figure that has just enough fact in it for anti-public employee drum beaters to make it one of their choral refrains. Still this 40% difference is just peanuts for the hardcore anti-public employee zealots as they claim the salary difference is a whopping 61%.

    But when actual comparisons of similar job earning from the private and public sectors are made, the average difference shrinks incredibly and often shows the private industry doing better.

    Particularly in the area of war.

    I won’t argue against the contention that the overall difference in salaries between the two sectors favors the public sector. I’m sure it does and it may even be close to 40% but I do have a problem with the ham fisted way that number is used. Much of the private sector is made up of the service industry and the service industry pays lower salaries than other private sector industries such as mining and manufacturing (which are comparable to public sector salaries) Work such as retail sales people, part-time workers, waiters/waitresses, chambermaids, convenience store workers, and so on not only pay lower than average salaries but are also predominantly made up of women, who make significantly less than men in the same occupation.,8599,1983185,00.html

    Now, if you were talking about that 40% salary difference being in Japan, then I don’t know.
    T: Actually, I was talking about Japan. Kitami Masao wrote a book about it.
    I take your point about the lower salaries, but the public sector also employs people to do janitorial work and perform other usually low-paying jobs. One of the issues in Osaka is the pay of the municipal bus drivers.
    – A

  2. Tony said

    That’s true, although at my university, which as you know is a national university, all cleaning staff are part-time workers on renewable contracts. I don’t know what their salaries are but based upon part-time teacher aids and office staff in the area, their salaries are probably fixed at around ¥170,000 a month (gross) for a 30 hour work week. Not much really.

    As for the bus drivers, I think most people were shocked to find out that the average salary was ¥7.3 million a year. Not sure what it should be but that did seem a bit high to me.
    T: Bonuses aside, isn’t that about what your starting salary was at National U.?

    If prices are a signal resulting from the aggregate behavior and appraisals of the individuals in society, and a salary is the “price” a company pays to acquire the professional services of an employee, it would stand to reason that the salaries offered to and accepted by private sector bus company drivers are about what they should get.

    – A.

  3. toadold said

    Pensions, especially for government employees are another future problem. They can’t get enough of a return on stocks and bonds to meet the future obligations and there aren’t enough working taxpayers to fund them with a direct tax. Any tax increase is going to hinder economic development. Ye olde increase the tax rate gets you a decreased tax revenue problem.
    It looks like there is a world wide race to get government spending under control before the whole house of cards collapses. The joke circulating in Texas is, “We aren’t going to leave the union, we are going to get with other Red States and kick the remainder out. Some of the Blue States will split and create more Red States in the process.”
    T: NHK just conducted a poll with most interesting results. A plurality was opposed to a tax increase, and the primary reason was not that it hit their wallets (reason #2) but that the government hasn’t reduced its own expenditures, nor — get ready for it — reduced the number of legislators in the Diet.

    Because it’s backed by public sector unions, the DPJ wanted to push through a bill for collective bargaining for public sector workers (not here yet), but they weren’t able to do it.

    – A.

  4. Tony said

    The concept that prices result from the aggregate behavior and appraisals of the individual in society works in theory but not that well in reality. Since labor isn’t on a level playing field with management, they don’t get what they deserve but rather what management is willing to pay. Any look back in history before unions and some government regulations shows labor occurring in sweatshops with management actively fighting against collective bargaining. If people were altruistic by nature it would all work but free markets are based on greed (for lack of a better word). My greed may be just as great or greater than management’s but when they have all the money, ability to make rules and enforce those rules then they dictate the market.

    And no, even with bonuses the salary is about the same as bus drivers.

  5. toadold said

    Hmmm, looks like public sector unions with collective bargaining are losing support all over the place. We’ve had several more states become “Right to Work” states and the pressure is on to end public sector unions at the federal level.
    The thing that really ticks me off is that there are a lot to scientific and technological break outs possible but governments have ruined and scared the capitol away from developing them.
    Union “leadership” and politicians all over want to play the protectionist game. Consumers in the US aren’t supposed to be able to buy cheap tires from China and Japanese consumers have to pay exorbitant prices for rice for example.
    Used to the US knew how to play the carrot and stick game with belligerent powers, now we offer moldy carrots and wave a limp noodle.

  6. yankdownunder said

    Drunken Sailor Watch.

    Japan may partly shoulder costs of Tinian base.

    “….Washington is demanding Tokyo increase this amount to 4 billion dollars (330 billion yen) by removing the ceiling from the agreement.”

    The Japanese government can only say no to the Japanese people. Anyone else, they just ask
    “how much do you want?”


    Hashimoto doesn’t want to restart the nuclear reactors! Why? This is not the kind of leader Japan needs.

  7. toadold said

    One problem is that the technological changes in the way people earn their livings has changed faster than the governing systems and economic theories. Hard core Islamic countries for instance can’t seem to make the transition and as the economist Fernando de Soto points out, the weak private property rules inherited from Portugal and Spain have crippled capital formation and industrialization in South America. Another for instance is that some economists still speak of “workers” and “management” but now days the actual amount of labor on a manufactured item in the US is about 20%. The rest is goes to office workers at the plant, then the distribution pipeline. In the US you also have the tax at the point of sale, and the drag of various equality rules, pollution rules, and other job making rules for State and Federal employees.
    It is telling that a number of Democrat governors are turning on the public sector unions because there is just not enough revenue to support their bloated wages and pensions.

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