AMPONTAN

Japan from the inside out

Posts Tagged ‘Takenaka H.’

Observations on the road to Götterdämmerung

Posted by ampontan on Friday, July 8, 2011

WITH the prime minister steering the ship of state in the general direction of Götterdämmerung — either his own or the nation’s — I’m working on a post that requires more translation, editing, and organizing. Until then, here’s a sampling of what some people are saying.

For the sake of the people, for the sake of the disaster-stricken area, for the sake of the Democratic Party, I want the prime minister to resign quickly, by even a minute or even a second.

Watanabe Kozo, Democratic Party Supreme Advisor

The politics of toadying to voters to win votes in elections is the source of our current confusion.

Gemba Koichiro, Democratic Party Policy Research Committee Chairman

In general, Kan Naoto does not see politics as a battle over policy, but as a fight between stray dogs. He is a politician of whom it is rather difficult to say that he is normal.

– A Democratic Party senior official who wished to remain anonymous

Even the Democratic Party is unable to prevent Prime Minister Kan from turning power into his personal possession.

Nakagawa Hidenao, Liberal Democratic Party lower house MP

Show business has the actor Gekidan Hitori (literally, one-man drama troupe), and now we’ve got a prime minister who is a Naikaku Hitori (one-man Cabinet).

Koike Yuriko, Chairman of the Liberal Democratic Party General Council

Looking at the situation makes me think there’s a systemic inadequacy, because there’s no system for the recall of the prime minister (and Diet members). Considering the national interest, don’t we need a mechanism for recall?

Takenaka Heizo

Executives from the government and the Democratic Party come (to the devastated area) one after another, but they never do anything for us.

– A chief municipal officer in Miyagi, quoted by the Nikkei Shimbun

They talk about a tax increase, but you can’t bring up water by lowering a bucket into a broken well where water doesn’t collect.

Kamei Shizuka, head of junior coalition member People’s New Party

We’ll be in trouble if the Kansai region isn’t revitalized (by turning it into a subsidiary capital). Greater centralization (in Tokyo) would not be welcome. There’s no other city whose daytime population increases (over the night time population) by four million people.

Ishihara Shintaro, Governor of the Tokyo Metropolitan District

*****
Azumi Jun edition

There is no other way to pass difficult legislation than by discussion, including with the LDP and New Komeito. It is truly regrettable that (Prime Minister Kan) has created a situation in which we are unable to negotiate with either of them.

Azumi Jun, Democratic Party Diet Affairs Committee Chairman

I hope he (the prime minister) leaves quickly. This situation is embarassing and I can’t go home to Ishinomaki.

Azumi Jun to reporters, after he was told that he had been considered to replace Matsumoto Ryu as Reconstruction and Recovery Minister because he was from Ishinomaki, Miyagi. Mr. Azumi, a Kan opponent, viewed his consideration for the post only as a Kan strategy to extend the life of his administration.

This is truly a despicable Cabinet. Is there any value in supporting it as a party? I am truly angry. That’s all.

Azumi Jun again, before storming out of a meeting of the Democratic Party’s executive council.

We should make preparations to hold an election for party leader (to replace Kan Naoto) in August.

Kawakami Yoshihiro, Democratic Party upper house member, after Mr. Azumi left the meeting.

If we decide to hold an election, the prime minister will become a lame duck.

Okada Katsuya, Democratic Party secretary-general, objecting to the idea

The Kan administration is already a lame duck. At this rate, the entire Democratic Party will become a lame duck.

Kawakami Yoshihiro’s reply

This is even worse than the power struggles among the extreme leftists. At least the extreme leftists had principles.

Kamei Shizuka again, criticizing Azumi Jun’s criticism

That is his failure as the (DPJ) Diet Affairs head. What sort of guy would complain about the head of the house to outsiders? He should think about how people will view this.

Ishii Hajime, Democratic Party vice-president, criticizing Mr. Azumi’s criticism. Both Mr. Kamei and Mr. Ishii were originally in the Liberal Democratic Party. Readers will note the irony of the unfavorable comparison to the far left with the demand that he follow the party line and not criticize the Dear Leader in public. I used the English “guy” to translate Mr. Ishii’s yatsu, which in this case has a derogatory connotation.

*****
A couple of weeks ago we had a video from Thailand that I thought should rank in the global top ten of unusual music videos. Here’s one to make the other look tame by comparison.

It’s called The Art of Self Defense by Josie Ho, a singer, actress, movie producer, and daughter of casino tycoon Stanley Ho, one of the richest men in Macau.

That means she can afford a plane ticket to Tokyo, where she should try that cake treatment on a certain politician there.

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Posted in Business, finance and the economy, Government, Politics, Quotations | Tagged: , , , , , , , , , , , | Leave a Comment »

Ichigen koji (17)

Posted by ampontan on Thursday, June 9, 2011

一言居士
– A person who has something to say about everything.

“Unfortunately, (the response of) the current government resembles a children’s soccer match. There is nothing functioning as a control tower to point out problems from an elevated perspective. They just shout and swarm on the ball wherever it happens to roll.”

– Takenaka Heizo

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Ichigen Koji (10)

Posted by ampontan on Monday, May 30, 2011

一言居士
– A person who has something to say about everything.

“Replacing the prime minister always depends on the strength of the ruling party, not the opposition party. There has been criticism of the recent annual turnover in prime ministers, but depending on one’s viewpoint, one might say it serves the function of purification within the ruling party. I wonder whether the current ruling party no longer has either the strength or the moral energy to accomplish it.”

– Takenaka Heizo

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Ichigen Koji (3)

Posted by ampontan on Sunday, May 22, 2011

一言居士
– A person who has something to say about everything

“The Kan Cabinet’s disposition of Tokyo Electric is completely in error. Because there will be a net capital deficiency, (they say) it will be necessary for the public sector to intervene and citizens to assume some of the burden (in the form of higher utility rates and the use of tax money). But if they are going to ask citizens to assume the burden, they should clarify the issue of responsibility. The responsibility should be fulfilled by management, the stockholders, and the creditors in that order. Placing the burden on the citizens comes after that. Why won’t they do the same thing (as the Koizumi administration did) when we temporarily nationalized the Ashikaga Bank?”

– Takenaka Heizo, variously the Minister for Economic and Fiscal Policy, Minister for Financial Services, Minister of Internal Affairs and Communications, and Minister for Japan Post Privatization in the cabinets of Koizumi Jun’ichiro. He devised the Takenaka Plan, which is credited with solving Japan’s banking crisis. The nationalization of the Ashikaga Bank began in 2003 during the Koizumi administration and lasted roughly five years.

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

Hammers and sickles

Posted by ampontan on Friday, April 8, 2011

THERE’S AN acid test guaranteed to separate the bogus from the bona fide for those who pass themselves off as Japan hands. It’s easy to apply, too: Anyone who uses the alleged proverb, “The nail that sticks out gets hammered in” to proclaim that the Japanese repress originality is a fraud. That’s a reliable signal to turn the page, change the channel, or click on the next website.

The most important of the several reasons why that test is infallible is that they’ve botched the proverb. The handful of people who cite it and actually know some Japanese assume it is Deru kugi ha (wa) utareru, but that’s a mistake. Instead of kugi, or nail, the word is kui (杭), a post or a stake. And—because a little knowledge is a dangerous thing—they’ve also botched the meaning.

The Japanese employ the concentrated insights of proverbs in speech and writing more often than people in the Anglosphere, and their long political, cultural, and literary history means they have a large supply from which to draw. That also means there are plenty of inexpensive proverb dictionaries available in bookstores, with more examples than anyone will ever be able to use in a lifetime. I have one published by Goto Shoin in 1979 that runs more than 500 pages and has definitions for roughly 10 proverbs a page. The author sources the oldest Japanese proverb as coming from the Kojiki (Record of Ancient Matters), which was completed in the eighth century.

Here’s how the author defines this proverb:

“A post that protrudes too far will be driven in further. In the same way, people who assert their pre-eminence over the general public will be envied and meet with difficulties as a result. There’s nothing wrong with excelling or becoming a prominent figure, but human emotion resists that logic. Indeed, people who push themselves forward despite a lack of talent generally receive no forbearance from others.”

He cites one variation on the proverb as, “The post that sticks out is pounded by the waves.” He finally mentions the variation with the nail at the end of the entry, but dismisses it as a mistake. (In fact, he uses the word “bad” to describe its use.)

Therefore, the adage has nothing to do with enforcing conformity to a rigid social order. Rather, it combines a warning that one shouldn’t get too big for one’s britches with the observation that jealousy can have unpleasant consequences. And we all know that the latter is a universal human phenomenon rather than a Japan-only attribute. After all, the belief of some that the redistribution of wealth by a government through confiscatory taxation is a “progressive” concept didn’t originate here.

It doesn’t take much thought to see what happened. Either a foreigner misheard kui as kugi and jumped to the wrong conclusion, or he was steered in the wrong direction by a Japanese fuzzy on the details himself. That the proverb with the nail mistake circulates in some English-speaking circles shows it is being parroted by foreigners with a parrot’s understanding of what they’re saying. The same thing occurred when people used to believe the myth that Eskimos have an unusually large number of words for snow.

Feffered

The subject comes up because reader Get a Job Son sent in a link to an article by John Feffer in the Huffington Post titled Gambling in Japan. Feffer is described as having lived in Japan in the 90s, though the extent of his stay isn’t mentioned. Considering what little he knows, it couldn’t have been that long. Try this:

“On the outside, Japan appears to be a clean, well-ordered place. The Japanese are, stereotypically, risk-averse. According to the Japanese adage, deru kugi wa utareru: the nail that sticks out will be hammered down. This apparent preference for order and conformity helps explain the patience with which the Japanese have responded to the triple disaster – earthquake, tsunami, and the partial meltdown at the Fukushima nuclear facility – that has afflicted the country.”

Feffer doesn’t explain why a preference for conformity explains the Japanese response to the disaster, or why conformity would be a factor at all. The preference for order is certainly not unique to the Japanese, as few people anywhere are interested in the alternative. And to use one small example, neither order nor conformity explains why Hitachi’s Ibaragi plant, which manufactures generators and gas and steam turbines, resumed post-earthquake operations on 30 March and reached 90% of their productive capacity by 4 April.

Feffer’s point does not rest on a simple, shallow argument, however. It’s not possible to be a convincing public intellectual unless one uses a more complicated shallow argument. That’s why he digs up an irrelevant old anecdote of a 19th century kabuki performer who died because he couldn’t discipline his taste for the potentially poisonous blowfish, and uses it as a metaphor for the country’s mindset:

“Beneath this façade of conformity, however, lies a more interesting reality. Like Mitsugoro Bando VIII, the Japanese have become almost inured to calamity. They’ve accepted – and in some cases courted – extraordinarily risky behavior.

“Consider Japan’s dependence on nuclear energy.”

His discussion of nuclear power plants in Japan, which overlooks the placement of large hydroelectric dams on fault lines in India and China, suggests his agenda is something other than explicating the nature of Japanese behavior. Sure enough:

“Embracing nuclear power isn’t Japan’s only risky behavior. For years, the Japanese government has boasted of a “peace constitution” that restricts the country to a defense-only posture. But this constitution hasn’t prevented Japan from amassing one of the world’s most powerful militaries, confronting China and Korea over disputed islands, cooperating with the United States on a missile defense system that destabilizes the region, and playing host to dozens of U.S. military bases that endanger human lives and the surrounding environment.

“Is there somehow a contradiction between the stereotypical conformity of the average Japanese and this tendency to court disaster in the economic, military, energy, and humanitarian sectors?”

What do you know! A walking, talking strawman!

Hey, why stop at one caricature when you can use several?

“When I lived in Japan in the late 1990s, it wasn’t uncommon late at night to come upon office workers passed out on the street, vomiting in alleyways, or being carried home by their equally inebriated colleagues. Excessive drinking after work was part of the salaryman culture. Indeed, it could be awkward for a businessman to demur from such rituals. When such behavior becomes the norm, then engaging in risky activities becomes just another way of conforming. Of course, it’s only a sector of Japanese society that drinks to excess.”

Feffer doesn’t know anything about salaryman culture, of course, because he wasn’t part of it. (He would have been sure to tell us otherwise). Nor would he know about who does or doesn’t demur from such “rituals”, what is or what isn’t the norm with drinking habits, what is or what isn’t a ritual, who does or who doesn’t conform, and who does or who doesn’t drink to excess.

Many Japanese men drink prodigious amounts of alcohol, regardless of whether they are salarymen, carpenters, or even politicians, including Prime Minister Kan Naoto and the late Nakagawa Shoichi. It has nothing to do with “salaryman culture”, which in any event had already begun to wane in the late 90s when Feffer blew through town. Had he kept his wits about him when writing this piece, it might have occurred to him to blame all the boozing on the stress of conformist behavior to avoid getting pounded in like the nail that sticks out, rather than conforming to “salaryman culture”.

In fact, had he taken the time to do some reading, he would have discovered the many stories of sake-loving divinities in Shinto mythology, created millenia before salarymen existed. The Japanese have always had a taste for the rice. People were singing out of tune and carrying each other home long before the first joint-stock corporation was formed.

But none of that is his real point anyway. He edges up to it here:

“An oligarchy of gamblers holds sway over the majority of cautious Japanese.”

An “oligarchy” controlling a race of conformist, red-nosed lushes too wimpy to express themselves, eh?

The choice of the inappropriate word “oligarchy”, the statement about a mighty Japanese military confronting China and some entity called “Korea”, the claim that a missile defense system is destabilizing, the use of the ruse of environmental concerns (about an endangered species of dugong) to object to American military installations, and the unexplained assertion that Japan is courting disaster in the “humanitarian sector” all point in the direction of a certain worldview.

Once again, Google is our friend. The Huffpo identifies Feffer only as the co-director of Foreign Policy in Focus. The FPIF website announces that they are a “project” of the Institute for Policy Studies. That institute openly identifies itself as a “left-wing think tank”, as even Sidney Blumenthal, the American political version of Sid Vicious, notes with approval. Noam Chomsky is an associate.

A group that so quickly cops to being leftist is sure to have some rather large rocks on their turf to provide cover for some rather slimy worms and ugly slugs. This particular left-wing think tank cooperated with the KGB in planting disinformation in Europe about NATO. A brief scan is enough to discover the usual cast of Bolshies, Reds, Pinks, Crimsons, communitarians, Gramsciites, and the other undifferentiated hairballs who use eco-lunacy, pacifism, and similar counterfeit issues to conceal their real motivations and the sweat-stained Che Guevara t-shirts under their more socially acceptable haberdashery.

Japan is not Feffer’s chosen field of study; North Korean apologistics is. Still floating around unflushed on the web is his justification of Pyeongyang’s 2009 missile launch:

“North Korea is clearly interested in still reaching out, working with, engaging with the international community.”

The Foreign Policy in Focus website informs us that a detailed statement of their positions is contained in the paper, Just Security. Feffer edited the paper, which is found on the IPS website. Here’s one of the planks of their program:

“Start a managed resource transfer from rich to poor countries through climate-friendly global justice, trade, and aid policies. This would involve a border fee on “dirty trade” that would help developing countries shift to clean energy.”

Feffer is not the first to pretend that a brief stay in Japan qualifies him to discuss the nation as if he knew something about it, nor is he the first to unload hearsay misinformation as a way to present himself as a big league thinker. This might be the first time, however, that someone has used the overseas manga edition of the country to promote an agenda that has nothing to do with Japan.

Cococala-mura

It’s curious that some would swallow the idea that the Japanese advocate pounding in posts, nails, or people as a part of everyday life. After all, it wasn’t so long ago that Koizumi Jun’ichiro, no one’s idea of a conformist, spent five successful years as prime minister. The cautious Japanese electorate would love to have that reckless gambling oligarch back tomorrow if they could. They’d be so overjoyed, in fact, they might force each other to get falling down drunk and pass out in the streets. Then again, people of a certain political orientation are loath to portray a man of Mr. Koizumi’s beliefs in a positive light. Calling attention to the Koizumi record of accomplishment would only accentuate the failures of their own heroes.

The people who come to Japan and pay attention to their surroundings soon realize it is almost impossible to get through a day without discovering unpounded posts sticking out all over the place. Just yesterday, for example, I read a newspaper article about private sector efforts to hire people from the Tohoku area who have been put out of work by the disaster. At the end of the piece, the author briefly mentioned that Cococala-mura of Awaji Island would make it a policy to give preference to hiring young people from that region. Accompanying the article was the photo shown here of people working in the Cococala fields.

It was easy to turn up their Japanese language website, which reveals it to be an enterprise that would be in imminent danger of a raid by mallet-bearing thought police were the myth a reality. The project is operated by Pasona, a company specializing in temporary staffing, recruiting, and human resource consulting. Pasona hires as employees young musicians, actors, dancers, and others in the arts to work at local farms or regional businesses while they take courses in business, arts management, and agriculture. The idea seems to be to have them to do something tangibly productive with their time as they learn to become self-supporting professionals.

A company in Japan has come up with a capital idea for nurturing self-reliance and providing the means for success to people in a field in which it is difficult to make a decent living. It’s better in every imaginable way than using public funds for national arts subsidies. Is it a coincidence that Takenaka Heizo, Mr. Koizumi’s privatization guru, is the company’s chairman?

Meanwhile, a political extremist without the slightest interest in Japan is so unwilling to let a crisis go to waste that he parades the Trojan horse of his ignorance as knowledge to disguise the parasitic bacteria inside.

Something would benefit from being pounded in, but Japanese fence posts ain’t it.

*****
My use of the word “pound”, incidentally, is as figurative as that of the Beatles.

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Posted in Agriculture, Foreigners in Japan, Language, Politics, Popular culture, Traditions | Tagged: , , | 10 Comments »

Getting old

Posted by ampontan on Monday, September 20, 2010

MONDAY the 20th is Respect for the Aged Day in Japan, which is a national holiday. One manifestation of the custom of Japanese (and other East Asians) to be deferential to the elderly is that all levels of government provide them with generous welfare services, as well as other gratuities that stretch the role of government beyond its legitimate functions and its means.

The Mainichi Shimbun lamented in an op-ed last week the lack of urgency for the restructuring of the health and welfare system for the aged. Everyone is aware of the critical factors: a population in demographic decline with a birth rate well below replacement level is being asked to subsidize services to older citizens, who constitute a larger part of the overall population than in other countries. That’s part of the reason some politicians and bureaucrats favor the low road of sharp increases in the consumption tax. That’s also part of the reason voters are objecting to those increases.

The government estimates that the large number of baby boomers turning 75 in 2025 will require JPY 30 trillion for their health care. As of last year, health insurance premiums brought in roughly JPY 12 trillion in revenue. To deal with this shortfall, the Liberal Democratic Party government created a new category for health care services and payment for those 75 years of age or older (or the bedridden 65 years of age or older), which total roughly 13 million people. That system took effect on 1 April 2008.

Without going into eye-glazing detail, the objective was to have those elderly able to afford it contribute more to their health care costs (though not by an onerous amount) and to equalize premium payments nationwide. Municipal governments pay for part of the system, and the wealthier governments provided greater financial assistance to their residents. The new system also automatically deducted payments from pensions, rather than have individuals be responsible for their own payments. (Japan’s system of convienient bank account transfers meant this was not a burden to begin with.) The revisions also made it easier for younger people to make the financial contributions to their own health care.

Many of the elderly immediately started complaining as soon as the new system was introduced, whining that it was a “hurry up and die” system. Of course the news media made haste to give them a platform. The opposition parties promised to roll back the reforms, but when the Democratic Party took power in a coalition government, they discovered that local governments and medical institutions didn’t want a return to the status quo ante. The new government was also unable to agree on how to modify the new system. That’s not surprising considering the DPJ’s general incompetence and the coalition partner Social Democrats pulling relentlessly to the left. Thus the system introduced two years ago remains in place.

The taxpayer-funded treats for the elderly extend far beyond health care, however, and some governments, particularly at the municipal level, are finding it difficult to face the facts. Here are two examples.

Shirahama-cho, Wakayama

Located next to the Pacific Ocean, the area is famous as one of the three oldest hot springs resorts in Japan. The Kogyoku Tenno (Emperor) bathed there in 658, and it’s still a popular resort today.

The municipality of Shirahama-cho operates four public baths, but the enterprise as a whole has been losing money. Chief municipal officer Mizumoto Yuzo told the Kii Mimpo newspaper:

I’m going to consult with the town council and the committee with jurisdiction (over the business) to see if there are some measures we can take next fiscal year.

Outdoor bath at Sakinoyu

The four baths are Sakinoyu, Muronoyu, Shirarayu, and Shirasuna. (The “yu” at the end of the first three means hot water, and is often used in public bath names in Japan.) Shirasuna is a sand bath that is open only from May to September.

The municipality’s tourism department says Sakinoyu earned roughly JPY 10 million in profit last year, but the other three are in the red. The aggregate losses for the Shirahama-cho taxpayers total JPY 9 million.

Everyone pays JPY 300 for admission to Sakinoyu. The admission fees at Muronoyu and Shirarayu are JPY 300 for people 12 and older, JPY 130 for children from six to 12, and JPY 70 for children aged five and younger. It costs JPY 100 to take a sand bath at Shirasuna. These fees were set in 1998 and haven’t been raised since.

The tourism department also says they’ve lengthened the operating hours of the baths to respond to public requests—they open earlier in the morning and close later at night—and have cut operating costs and reduced operating staff to a minimum, but they’ve reached the limits of their ability to finance the operation. This has been an ongoing problem for four years, and the lack of funds has caused the town to scrimp on upkeep. One result has been the visible aging and wear of some of the facilities.

Why is Sakinoyu making money and the others losing money? As the photo shows, the former will never have problems attracting customers. The real reason is that admission is free to Muronoyu and Shirarayu for people aged 65 and older. The age threshold was lowered from 70 and older in 1999. An estimated 240,000 people used those two facilities in FY 2009, and of those, 110,000 were old folks who got in for free. The paid admissions to Sakinoyu, meanwhile, totaled 83,000.

So now the politicos of Shirahama-cho have decided they’re going to talk about it. They might raise the fees, and they might start charging the seniors, but they haven’t decided when the changes will take effect.

What’s to talk about? Emperors are the only people who get to bathe for free. Changes to this system are overdue, but they’re still dithering in Shirahama-cho.

While they’re at it, they should come up with a plan for the immediate privatization of the facilities instead of wasting their time adjusting the fee schedule. As long as people aren’t living in mud huts without a modern water supply system, operating bathhouses is not the business of municipal governments, nor is using Other People’s Money (OPM) to foot the bill for the free baths of one age cohort. It’s no surprise that the taxpayers are subsidizing the admission of 45% of the customers at some facilities.

Chiba City

Also dithering are Mayor Kumagai Toshihito and the government of Chiba City. Neighborhood associations in the city hold different events for Respect for the Aged Day, and the Chiba City government provides financial assistance to those associations to pay for the parties. Starting this fiscal year, Mr. Kumagai says that Chiba City will raise the age limit for the per capita contributions to the neighborhood associations from 70 to 75 and lower the amount of the subsidy. He said the municipal government took the step because of an “unprecedented financial crunch”. This will amount to a saving of about JPY 50 million from the previous year’s budget. That’s a lot of ice cream and cake.

Here it is again: The municipal government of Chiba City is abandoning their fiduciary responsibility to all of its citizens by chipping in for the party favors of one group of them. Or, to be more broad-minded, they have an inadequate awareness of that responsibility to begin with. It is not the business of municipal governments to use OPM to show old people a good time.

Yet all Chiba City can manage to do is raise the age limit for the party and reduce the subsidies. What will it take for them to realize they shouldn’t be spending this money at all—municipal bankruptcy?

Suginami Ward

Some local government officials get it, however. Yamada Hiroshi, a former national Diet member and chief municipal office of Suginami Ward in Tokyo, and currently the head of the small Spirit of Japan party, is one of the few who realize the party’s over and is trying to do something about it. He is also one of the few politicians in Japan to preach the importance of personal responsibility.

Mr. Yamada often cites as an example the former practice of Suginami Ward to distribute Japanese confections (red and white manju) to meetings of associations for the elderly. The ward was so deeply in debt one of his first steps to put the government’s finances back on a firm footing was to end the free sweets. (He also cut his salary by 10%.) He was roundly criticized for being “cold” to the elderly, but he used that decision in local meetings as a teaching example to promote his efforts to restore fiscal sanity.

In 1999 Suginami Ward’s debt stood at JPY 95 billion with only JPY 1.9 billion in accessible funds. A decade later, after eliminating or privatizing some programs and reducing the municipal workforce, they were JPY 20 billion in debt with JPY 23 billion in accessible funds—in other words, in the black—and were on schedule to repay all the debt by 2011.

Fiscally responsible governments are possible–when they’re led by politicians who understand fiscal responsibility.

Roundtable Discussion

The monthly magazine Voice presents a roundtable discussion of Japanese fiscal issues in its current (October) issue with four university professors: Takenaka Heizo of Keio University (formerly of the Koizumi Cabinet), Ikeda Nobuo of Jobu University, Doi Takero of Keio University, and Suzuki Wataru of Gakushuin University.

They’re all in general agreement that the system of governmental largesse for the aged has to be reexamined. Prof. Suzuki said that people are not aware of just how generous the system is, and their awareness needs to be raised. Prof. Takenaka suggested that economic incentives are required, and proposed as one measure raising the fees people pay for the treatment of non-life threatening illnesses. He added:

I already know that people will say that human lives can’t be replaced with money, but the situation will soon be of out of control.

Prof. Ikeda said that he discussed the creation of a voucher system (also applicable for education expenses) with a group of DPJ Diet members, but one of them told him:

I understand what you’re saying, but the word “voucher” is taboo with labor unions.

Unions, of course, are the backbone of DPJ support.

Prof. Doi added that people will deliberately create the misunderstanding that such proposals amount to “market fundamentalism”. The idea, he says, is to stop the discussion of the idea by stopping thought.

The realization is growing among the people of the developed countries, if not their governments, that the Bismarkian welfare state funded with OPM (originally intended to head off the desires of a growing middle class for greater democracy) is no longer viable. If Japanese politicians at all levels and the bureaucracy don’t start to seriously examine more practical ways to provide services, and to reexamine their approach to distributing goodies that shouldn’t be free to begin with, before long the working population might get ready to pull the plug on a lot more than confections and the Japanesque bath time.

Afterwords:

Here’s a quick video tour of the Shirahama area, with a scene from the Sakinoyu bath that shows why it is so profitable.

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Posted in Business, finance and the economy, Demography, Government, Holidays | Tagged: , , , , | 5 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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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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Bad ideas that never die

Posted by ampontan on Monday, June 28, 2010

As usual, Prime Minister Kan keeps repeating that the (income) gap is growing because of “excessive market fundamentalism”. As long as he views the problems facing Japan precisely the opposite way (of how he should), the Japanese economy will not recover.
– Ikeda Nobuo

We have so many people who can’t see a fat man standing beside a thin one without coming to the conclusion the fat man got that way by taking advantage of the thin one. So, they’re going to solve all the problems of human misery through government and government planning.
– Ronald Reagan (1964)

ONE CAN almost be sympathetic with the desire of the Japanese left to implement their pet theories now that they’re in control of a government for the first time since the LDP merger of 1955. (Socialist Prime Minister Murayama Tomi’ichi from 1994-1996 doesn’t count; he had to promise not to behave like a socialist before the LDP let him serve as a figurehead.) The American Democrats enjoy playing the song Happy Days Are Here Again at their party conventions; the theme song for the Japanese Democrats inebriate from their first draught of power, however, might well be Happy Days Are Here at Last.

But note that I said almost sympathetic. The average Japanese pol doesn’t pay close attention to what happens overseas, so most of them aren’t tuned in to what’s worked or what hasn’t for economies in other countries. In addition, the average leftist, Japanese or otherwise, doesn’t pay close attention to what works anywhere. Their primary concern is the dogma, even if the citizens wind up living in equally sized dog houses with equally sized, half-empty feed bowls. That was their attitude in 1964, just as it was in 1864 and just as it will remain in 2064. Far better to be politically correct than to be economically correct. Besides, it’s not as if they’ll be the ones to suffer.

That’s why the new DPJ government of Kan Naoto, which represents the older, more leftist DPJ before then-party head Kan Naoto let Ozawa Ichiro join, is pleased as punch to offer as a solution to Japan’s problems the idea of steering the car in the direction of the ditch.

From The Wall Street Journal:

Japan’s new finance minister will push to raise taxes on high earners in an effort to boost revenue and narrow the country’s income inequality, he said in an interview published today.

‘I believe we are at a stage where a little bit of egalitarian thinking should guide our tax policy,’ Yoshihiko Noda told The Wall Street Journal.

“Egalitarian thinking”? A flat tax, perhaps?

‘In that sense, our tax reform will be designed with an eye toward restoring its income-redistribution function,’ he added.

Translation of egalitarian thinking: Pursuing equality of outcome by taking money from the people who carry the water and giving it to those who drink it.

Does Mr. Noda realize that increasing taxes on the wealthy never brings in the revenue people claim it will? (Unlike Barack Obama, who admits that he knows but doesn’t care.) The highest rate in Japan is 40%, down from 75% 30 years ago. Does Mr. Noda understand that beyond 40% is the level at which people start to limit and hide their income?

Do you have to ask?

Prime Minister Naoto Kan’s new administration hopes to revive confidence in Japan by introducing a new era of fiscal discipline and beginning work on reducing the industrialised world’s biggest public debt mountain.

Confidence might already have been revived had he come to those conclusions when he was Deputy Prime Minister/Finance Minister earlier this year, before adding to the fiscal indiscipline and the industrialized world’s biggest public debt mountain. Perhaps he didn’t want to let a crisis go to waste.

*****
Ono Yoshiyasu, Mr. Kan’s home tutor for the study of public finance and economics, appeared on an interview program last week and demonstrated that he doesn’t pay close attention to events overseas, either. He justified greater government intervention in the economy by starting a sentence with the phrase, Minkan ni hottoittara…(Leaving it to the private sector). It’s not possible to convey in a snappy translation the deliberate nuance that he thought leaving affairs to the private sector would be tantamount to criminal negligence.

Instead of the private sector, which provides the greatest prosperity for those willing to work for it through a rational, reality-based system, he would rather entrust matters to the public sector and the tenured academics that never have to pay for their mistakes.

*****
Had they been paying attention, they could have read this from Britain:

It simply demonstrates something that free market economists have always known, namely that, because of the law of dispersed costs and concentrated gains, governments will always find it easier to raise taxes than to cut spending. Not that this concession has appeased Left-wing pundits, who are insisting that the budget is unfair to the poor. It is true, of course, that any spending cuts will necessarily affect net beneficiaries of state expenditure more than net contributors. But is it right to measure the compassion of a society by the size of its welfare budget? Surely the whole purpose of social security should be to draw people out of dependency so that budgets, over time, can fall. By lifting personal allowances, the government is doing its best to facilitate this process. As Art Laffer says, if you pay people to be poor, you’ll never run out of poor people.

Or this from the United States, titled The Keynesian Dead End:

Today’s G-20 meeting has been advertised as a showdown between the U.S. and Europe over more spending “stimulus,” and so it is. But the larger story is the end of the neo-Keynesian economic moment, and perhaps the start of a healthier policy turn.

For going on three years, the developed world’s economic policy has been dominated by the revival of the old idea that vast amounts of public spending could prevent deflation, cure a recession, and ignite a new era of government-led prosperity. It hasn’t turned out that way.

…Now the political and fiscal bills are coming due even as the U.S. and European economies are merely muddling along. The Europeans have had enough and want to swear off the sauce, while the Obama Administration wants to keep running a bar tab. So this would seem to be a good time to examine recent policy history and assess the results.

Like many bad ideas, the current Keynesian revival began under George W. Bush. Larry Summers, then a private economist, told Congress that a “timely, targeted and temporary” spending program of $150 billion was urgently needed to boost consumer “demand.” Democrats who had retaken Congress adopted the idea—they love an excuse to spend—and the politically tapped-out Mr. Bush went along with $168 billion in spending and one-time tax rebates.

The cash did produce a statistical blip in GDP growth in mid-2008, but it didn’t stop the financial panic and second phase of recession. So enter Stimulus II, with Mr. Summers again leading the intellectual charge, this time as President Obama’s adviser and this time suggesting upwards of $500 billion. When Congress was done two months later, in February 2009, the amount was $862 billion. A pair of White House economists famously promised that this spending would keep the unemployment rate below 8%.

Seventeen months later, and despite historically easy monetary policy for that entire period, the jobless rate is still 9.7%.

Or, if income gaps really troubled them, they could have read this from a tax professor:

The gaps in after-tax income between the richest 1% of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007 (the period for which these data are available), according to data the Congressional Budget Office (CBO) issued last week. Taken together with prior research, the new data suggest greater income concentration at the top of the income scale than at any time since 1928.

But:

What (the survey) does not show, and what is not to be automatically inferred from it, is that the poor and the middle-class have gotten poorer. Of course, I fully expect the tax-the-rich types to suggest that very thing. But by doing so they only betray one of their many faulty premises: Namely, that wealth, like energy, is finite and an increase in one individual’s wealth is always be matched by a commensurate decrease in another individual’s wealth.

Or, this question from the comments:

Would it make people happy if they found that the gap had closed but everyone is worse off?

I think we already know how some people would answer that.

*****
One of the few beneficial effects of policies such as those endorsed by the DPJ is that it increases the urgency and sharpens the arguments of those in the opposition. (Barack Obama is demonstrably the best thing to have happened to the small government movement in the U.S. in more than a generation.)

Here’s university professor, author, and blogger Ikeda Nobuo (writing in Japanese):

Another economist influencing Prime Minister Kan is Jinno Naohiko, the head of the panel of experts in the National Tax Commission. He’s the person who came up with the slogan, “Strong economy, robust finances, and strong social welfare”. He (recently) issued an interim summary of the panel’s debate, but it is composed of his personal impressions rather than the response of the commission. He has a unique fiscal theory, and the commission seems to be in turmoil as a result.

Rather, it would be more accurate to say that Mr. Jinno has no fiscal theory at all. That’s because he is a rump Marxist economist…He hasn’t written a thing about economics in this book (no link), but it’s filled with so much abuse of “neo-liberalism” that reading just short excerpts is enough to make one ill.

The idea that that neo-liberalism convincingly preaches spontaneous cooperation such the family or the community is laughable. Neo-liberalism envisions homo economicus, who rationally behaves through the instantaneous calculation of pleasure or hardships. In other words, it is a view of people in which cooperation with others, or sharing, is not possible.

If there is deregulation of the labor market in accordance with the tenets of neo-liberalism, the income distribution in the market will be unequal. If this inequality becomes pronounced, it will cause fissures in society, and social unity will become impossible. Neo-liberalism aims for small government, but it insists on a strong government that oppresses democracy.

Everyone should easily understand that neo-liberalism is a reaction against history. In fact, neo-liberalism does not present a vision for a new age, but sincerely intends to uphold the dominating benefits of destruction.

When the conditions for small government are absent, the tragedy of forcibly maintaining small government is the performance of the poverty and income gap tragedy presented by neo-liberalism. Neo-liberal policies have been forced on Japan since the inauguration of the Nakasone Administration in 1982.

That’s how he repeats the lie that the Koizumi reforms caused the income gap to grow. Jinno also argues for the creation of a robust economy with a strong social welfare component, but the relationship of cause and effect is reversed. Normal economics assumes that social welfare cannot increase unless the economic growth rate rises. The Marxist economists think a planned economy that increases the distribution to the working class will increase the growth rate. Their ideal seems to be a citizen burden of 70% on the order of Sweden. Therefore, they think Japan, where the burden is only 40%, should have a larger government and share the wealth through welfare giveaways.

*****
They also could have read this by Yamaguchi Natsuo, the head of New Komeito, from a speech on the 26th in Chiba:

Prime Minister Kan says the economy will improve even if taxes are raised, as long as the funds are spent properly. But both American and Japanese scholars say that when consumption is frozen, the economy will worsen. We’ve had that experience in the past, with the coalition government of 1997. They raised the consumption tax from 3% to 5%, and the economy got worse. One of the members of that Cabinet was Prime Minister Kan.

See what I mean about ignoring the lessons of the past?

*****
If they were willing to put their policies where their mouth is, they could take up the proposal of Dr. Z at Gendai Business:

There are still some concerns that Prime Minister Kan, Chief Cabinet Secretary Sengoku Yoshito, and party Secretary-General Edano Yukio are all economically tone deaf.

All three have boldly stated outrageous theories in public that would ordinarily be inconceivable. Prime Minister Kan says the economy will improve even with tax increases. Mr. Yoshito says that alleviating the supply and demand imbalance will be bad for the economy. Mr. Edano says the economy will improve if we raise interest rates. The rest of the world will not take seriously public officials who make statements such as these.

Here’s an idea for Mr. Kan: Raise taxes and interest rates, see if the economy improves, leave the supply and demand gap as is, announce that the unemployment rate is fine as it stands now, and then ask the people if they believe you.

*****
Mr. Edano is suggesting again that having Your Party in a coalition after an election would be just dandy, now that it appears the DPJ won’t win an outright majority in the upper house. That would be a good idea, assuming he would listen to party head Watanabe Yoshimi:

Mr. Kan often talks about Greece. We hear him call for raising the consumption tax because the Greeks went bankrupt. But the Greek consumption tax rate when it went bankrupt was 21%. To say that we won’t go bankrupt if we raise the consumption tax is a pack of lies. We must not be fooled by ridiculous economics based on magic charms.

*****
We already know they don’t listen to Nakagawa Hidenao, the unofficial spokesman for the LDP Koizumians:

Mr. Kan said, “The first (areas) to suffer in Greece were pensions and salaries.” The average public sector salary in Greece is 1.5 times that of the average private sector salary. This gap is the largest of the OECD countries. Pensions in Greece are roughly the same as the salaries of the people actually working. In Japan, pensions are only 30%-40% of those salaries. That demonstrates the high level of pensions and public sector salaries in Greece to begin with.

*****
Perhaps they were reading only selected material. One example might have been this recent headline in the International Herald Tribune:

U.K. Tightens Belt Despite Hard Times

“Despite”? Yes, everyone knows that hard times surely require profligate economic measures.

Well, everyone at The New York Times or The Washington Post. That’s where the IHT obtains most of its content.

They might also have been reading the editorials of the major Japanese dailies. On his Japanese language blog, Kishi Hiroyuki, a former aide to Takenaka Heizo when the latter served as Minister of Internal Affairs and Communications under Prime Minister Koizumi, reviews those editorials published after the DPJ released its platform for the upper house election on the 17th.

The Nikkei Shimbun:

Drastic reform of the taxation system, including the consumption tax, is a difficult subject because the LDP administrations kept putting it off. We welcome the prime minister’s decision to reveal his basic thinking about increasing the consumption tax before the upper house election.

The Asahi Shimbun:

The consumption tax rate is not a simple method for rebuilding finances…it is an issue related to the basic design of the country. A multiparty forum should be established immediately after the election to examine the issue and to rapidly determine a course of action.

The Sankei Shimbun:

Prime Minister Kan has broached the subject of dealing with the tax rate and reform proposals, including some reactionary measures. The idea of moving to a course to rebuild the nation’s finances is itself a desirable change.

The Yomiuri Shimbun:

It is a political responsibility to clearly declare the necessity (for a tax increase), even if it is accompanied by some pain for the citizens. We hope to hear some lively debate during the campaign.

The only discouraging word was from The Tokyo Shimbun:

Rather than (raise) the consumption tax, the first step that should be taken is to work together in a multiparty arrangement to eliminate waste from government.

Wrote Mr. Kishi:

What is behind this low level of editorial from Japan’s major newspapers? A plurality of citizens favors raising the consumption tax in polls, but aren’t they bound to make an error in judgment after reading these distorted editorials?

After the cabinet presented its fiscal strategy on the 22nd, the tone of the editorials the following day was that an increase in the consumption tax was required because fiscal reconstruction was difficult. This is nothing but “war correspondent” journalism.

I was well aware of the level of the newspaper media in Japan before this, but I was surprised once again to read the editorials about the increase in the consumption tax. This is no different than (their) rubber-stamping (of) the mistaken policy decisions of the military during the war…If this type of editorial is all they’re capable of, the Japanese newspaper media does not support journalism at all…If they’re going to survive in the Internet age, they’ll have to start by raising the quality of their editorials and articles before they think about reworking their business model.

*****

The DPJ’s thinking is based on the premise that the Koizumi reforms were bad. Some people have decided they can no longer sit still for that one, however. This interview with Shinbo Masaki appeared last week in J-Cast.

Were the Koizumi structural reforms bad? With the privatization of Japan Post and the issue of dispatching workers, policies and the tone of debate that reject the structural reforms have become the mainstream in politics. We interviewed Shinbo Masaki, the managing director of JAIS. He sounds the alarm that Japan is headed for serious decline if it does not again serious consider reform and its concomitant pains, rather than superficially attractive arguments about saving the weak.
—–
In your recent book, Nihon Keizai no Shinjitsu (The Truth about the Japanese Economy, written with younger brother Jiro Shimbo, an executive with Yomiuri TV), you dealt with evaluations of the reforms of former Prime Minister Koizumi Jun’ichiro, such as the privatization of Japan Post. You sharply criticized the oft-heard argument that the Koizumi reforms deprived young people of employment.

That argument is a big lie. Let me say at first that I do not approve of all the reforms of Koizumi and Takenaka. But let’s look at the numbers during the Koizumi administration. While improving the fiscal balance of accounts, stock prices rose, the rate of GDP growth increased, there was a dramatic climb in the rate of hires for new high school graduates, and the unemployment rate fell.

As for the alleged growth in income gaps, the growth rate of the Gini Coefficient, the most frequently used indicator of that gap, slackened compared to the four or five years before he took office, while it expanded in Western countries.

What specifically do you think he did right?

As a starting point, he understood very well the position we were in, that with the globalization of the international economy, companies had to survive international competition. Good or bad, like it or not, those are the cold, hard facts. Japan had become inefficient and had lost competitiveness. To recover that vitality, he identified where the reforms should be implemented, what hardships would have to be endured as a result, and what effects they would have.

It is important to clearly specify the negative aspect of hardships. Politicians before then, and even today, continue to spread the pork to maintain the illusion that they are making everyone happy. They’ve also continued to increase the government’s debt. In this case, the “everyone” they are talking about is today’s “everyone”, while they’re passing the bill on to the “everyone” of the future.

When people think of the Koizumi reforms, they usually think of the privatization of Japan Post. Now, however, we’re on the verge of passing Japan Post reform legislation that would mark a retreat from privatization.

The Japan Post privatization in particular was an issue regarding the postal savings accounts. That symbolized reform because its intention was to create vitality by transferring the funds from the inefficient investments of government to the efficient investments of the private sector. A retreat from this path will accelerate the impoverishment of Japan.

In addition, the Koizumi administration dealt with the problem of the mobility of labor by removing restrictions on the seconding of employees in the manufacturing industry. Mobility should be considered in a form that includes full-time employees, but there are severe restrictions in Japan on laying people off, so companies won’t hire. They made a start by dealing with that tendency.

Just before you said that you didn’t agree with all the Koizumi reforms. What negative aspects did they have?

When they provided mobility to the workforce, they put off paying attention to those people who were laid off. Those people who were laid off needed study and training to improve their skills for moving to the next dynamic company. This required the creation of facilities, subsidies, and the enhancement of the safety net for a specified period until they found new jobs.

After Koizumi left office, a debate should have been held on the best way to provide a safety net, but the trend gradually shifted to tightening regulations to protect employment. Now these regulations have in fact been tightened. Companies are concerned this will have the opposite of the intended effect for Japanese workers. It will create a reality in which people will not be hired in Japan, and they will not be able to hire people overseas. This has already started to happen.

In regard to this problem of government debt and guaranteeing social welfare payments, Prime Minister Kan Naoto indicated that he is resolved to bring up the unpleasant-sounding question of increasing the consumption tax.

A discussion of tax increases is something different than the necessity of a growth strategy that includes structural reform. Until Japan conducts structural reform to become a country that can maintain its competitiveness, it will start a new and gradual decline even with a tax increase to improve the fiscal side. It is important to show a clear growth strategy.

What should voters pay attention to when they compare the growth strategies of all the parties before the upper house election?

Distrust the rose-colored glasses approach and the pie-in-the-sky with no specific numbers. The money is limited. If you devote your attention to one area, you will have to do without in another. Nothing will change with the gradual decline of Japan if we keep dithering and doing the same things we’ve always done. We have to examine how much a specific action will cost, what we will have to give up to implement that action, whether it will require a tax increase, and whether the specific advantages and possible pain have been clearly shown. It is also important to make efforts to alleviate concerns about the future, such as with pensions.

*****
One can almost be sympathetic with the Japanese voters for being swayed by the DPJ claims. They’ve never lived under a serious government of the left before, so they’ve never seen how these programs constitute a willing leap from the frying pan into the fire to ensure that everyone is equally singed. That’s a lesson that every generation in the United States has to relearn.

Let’s hope this generation of Japanese voters learns that lesson before the car winds up in the ditch.

Afterwords:

Once people start using a political catchphrase, it’s not long before they start misusing the term by arbitrarily giving it whatever meaning appeals to them. A recent example is the term neo-liberal. The following are excerpts from an article titled Neoliberalism: The Genesis of a Political Swearword.

(T)he relatively little known Alexander Rüstow delivered the most noticed speech at the (1932) conference, which was later published and republished many times. Until the present day, it is widely regarded as the founding document of neo-liberalism.

The speech was titled ‘Freie Wirtschaft, starker Staat’ (Free Economy, Strong State), and in these four words we can already see Rüstow’s basic economic creed…Rüstow blamed excessive interventionism for the economic crisis. He also warned of burdening the state with the task of correcting all sorts of economic problems. His speech was the clear rejection of a state that gets involved with economic processes. In its place, Rüstow wanted to see a state that set the rules for economic behaviour and enforced compliance with them. It was a limited role for the state, but it required a strong state nonetheless. Apart from this task, however, the state should refrain from getting too engaged in markets. This meant a clear ‘No’ to protectionism, subsidies, cartels—or what today we would call ‘crony capitalism,’ ‘regulatory capture,’ or ‘corporate welfare.’ However, Rüstow also saw a role for a limited interventionism as long as it went ‘in the direction of the market’s laws.’…

Although contemporary supporters of a ‘Third Way’ claim to be fighting neo-liberalism, to Rüstow this very same ‘Third Way’ was neo-liberalism. He called it neo-liberalism to differentiate it from earlier liberalism, for which Rüstow frequently used derogatory terms such as ‘vulgar liberalism,’ ‘Manchester liberalism,’ or ‘paleo-liberalism.’ Rüstow wanted to break with this old liberal tradition to put a new liberalism in its place—hence the prefix ‘neo’….

Rüstow’s differentiation between the state as the guarantor of economic order, as the rule-giver that stands above economic processes, and the failed interventionist state that meddles with economic processes and gets easily captured by special interests, are still valid. It would be worth to rediscover them, especially today….

The discussions about the proper political reactions to the global financial crisis are, sadly, not as nuanced as they could be. For example, when we read Kevin Rudd’s ‘anti-neoliberal’ essay we find some strong language right from the first paragraph where he blames ‘free-market fundamentalism,’ ‘extreme capitalism,’ and ‘excessive greed’ for our economic problems….

Neo-liberalism is a far richer, more thoughtful concept than it is mostly perceived today. First and foremost, it emphasised the importance of sound institutions such as property rights, freedom of contract, open markets, rules of liability, and monetary stability as prerequisites for markets to prosper and thrive. It seems that the global financial crisis has once again demonstrated how important these core insights of neo-liberalism are.

To those criticising neo-liberalism today, the answer may well be just that: We need more of this kind of neo-liberalism, not less. What we would need less of is only the rhetorical abuse of neo-liberalism for political purposes.

Kevin Rudd isn’t the only one who likes to throw around the term “free-market fundamentalism”. Take a look at that quote from Prof. Ikeda at the top of the page again.

Former Financial Services Minister Kamei Shizuka liked it too.

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The race is on

Posted by ampontan on Tuesday, April 27, 2010

IN JUNE 2008, we had this post covering Hiranuma Takeo’s criticism of former Prime Minister Koizumi Jun’ichiro and the financial and privatization specialist in his Cabinet, Takenaka Heizo. Mr. Hiranuma was quoted as saying they would have been burned at the stake in another era. That’s an arresting statement, but it probably revealed more about the role of superstition in Mr. Hiranuma’s thought processes than it did about the accomplishments of Messrs. Koizumi and Takenaka.

Since then, Mr. Hiranuma’s recent launch of the small Sunrise Party with Yosano Kaoru generated more media heat than light among the electorate, while the Koizumian philosophy, either generally or specifically, is being raised as a banner by some of the most popular opposition politicians in Japan.

Part of that post included this prediction by former Labor Minister Murakami Masukuni, who was once in the same LDP faction as Mr. Hiranuma:

In two years the LDP-New Komeito coalition will not be in power. The next election will see a shift in the LDP’s strength relative to the opposition DPJ, resulting in an Ozawa Administration. The DPJ won’t have the numbers to form a government by themselves, but they will ally with Hiranuma’s new party for an anti-LDP, anti-New Komeito government. Once it is out of power for two years, the LDP will break up.

Well, he was right about the change of government, and about the DPJ coalition with a social conservative party, though it turned out to be the party of Kamei Shizuka and not Hiranuma Takeo. Also, no one could have foreseen at the time the scandal that would knock Ozawa Ichiro off his perch.

His last prediction about the LDP falling apart after two years in opposition is also a live possibility. To Mr. Murakami’s prediction, I added this:

Saying that the LDP would break up if it were to spend two years in the opposition is the easy prediction. Here’s the prediction Mr. Murakami won’t make: The Democratic Party of Japan would break up before it spent two years in power.

First, there are too many incompatible groups within the party for it to survive a disposition of the spoils and the determination of a uniform party policy. People have kept their mouths shut until now for the sake of party unity. They’ll stay open loud and long once they’re in a government together.

Second, we have the example of Mr. Ozawa’s previous experience at governing—albeit behind the scenes—with a coalition consisting of eight oil-and-water groups during the Hosokawa-Hata administrations. They lasted a combined total of 10 months.

If either an Ozawa Administration or the DPJ itself sticks around longer than that, chalk it up to the favors of Lady Luck.

June 2008 was also the month that former DPJ president and current Minister of Land, Infrastructure, and Transport Maehara Seiji criticized the behavior and strategy of then DPJ President Ozawa Ichiro in the monthly magazine Gendai. He would continue his criticism of Mr. Ozawa over the next few months in a roundtable discussion in another monthly magazine (in which Yosano Kaoru also participated), and in an article he wrote for a third monthly magazine.

Speculation mounted that Mr. Maehara might bolt the party to form a new group with co-faction leader Edano Yukio and some reformers from the LDP, but he kept a low public profile after that. He was in position to receive an important Cabinet portfolio once the DPJ took power, after all. He did support Okada Katsuya to replace Mr. Ozawa as party president last year, while the latter backed Hatoyama Yukio, but the two men have managed to keep their mutual dislike out of the public eye.

Until now.

When the popular dissatisfaction with the new expressway tolls was brought up in a news conference, Mr. Maehara responded that Mr. Ozawa’s insistence on building roads while simultaneously lowering or removing tolls was “antinomian”, a philosophical term for a contradiction between opposites.

It didn’t take long for the media tattletales to snitch on him to Ozawa Ichiro. When the Big Boss Man heard the story, he said:

What Maehara said or what he did neither concerns me nor interests me in the slightest.

In other words, you and the 20 members of your group can take a hike as far as I’m concerned. I don’t need you anyway.

If Mr. Maehara took the hint, he might not have to look to far for a branch on which to alight. He’s on good terms with the leaders of the new Innovation Party–they’re fellow graduates of the Matsushita Institute–and it turns out he was present when planning for the new party was discussed at a February meeting. He turned down the offer to join because he thought he couldn’t very well leave the Cabinet.

If Mr. Maehara were to switch to the silks of the Innovation Party with some of his group members, it would give the new party an instant voice in the Diet. (That’s not to say it will happen, of course.)

So the race is on. Will the LDP or the DPJ be the first to splinter?

If the summer upper house election doesn’t go well for the DPJ, that race might wind up in a photo finish.

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Takenaka Heizo fires back

Posted by ampontan on Wednesday, December 2, 2009

TAKENAKA HEIZO, the privatization and economics guru during the administration of former Prime Minister Koizumi Jun’ichiro, has been one of the favorite whipping boys of the Democratic Party of Japan, now in control of government. Mr. Takenaka is no shrinking wallflower, however, and gives as good as he gets. This interview appeared in today’s Nishinippon Shimbun.

*****
– How do you view the reevaluation of the Japan Post privatization?

They’re turning back the hands of the clock more than 10 years. I want them to stop all of it. If they go through with it, it will boomerang and the people will wind up paying the bill.

– How will the people pay?

To begin with, it is just unbelievable that 80% of the JPY 200 trillion (about $US 2.3 billion) in deposits in the Japan Post savings accounts is used to purchase government bonds. If the bond price falls, we’re looking at the potential for trillions of yen in losses.

Another problem is the obligation to provide uniform services nationwide apart from the applications of the Bank Law. The government will hold the stock, and the amakudari bureaucrats (i.e., former officials in government ministries) will be in control. It will mean the restoration of the government investment and loan practices of the past, and there will also be a large amount of non-performing debt (held by financial institutions). It’s likely to be oyakata hinomaru management done by halves.

(Note: An oyakata is a master, foreman, gang boss, or head of a sumo stable. Hinomaru is the name commonly used for the flag of Japan with a red circle (sun) on a white background. I think that provides a better idea of the meaning of the phrase than an artificial translation. Mr. Takenaka also used the term chutohampa, meaning “by halves”. The closest English equivalent in meaning to that phrase is “half-assed”, but the Japanese original isn’t as crude.)

– Some say that privatization will cause a decline in services in sparsely populated areas.

There were many advantages in linking the ATMs of Japan Post banks and private sector banks. While there are one or two inconveniences, there were 100 or 200 improvements in convenience.

The typical argument is that postal delivery workers can no longer accept money for savings account deposits. But that rule was put in place because it’s an appropriate service regulation. If (that service) were necessary, it can be provided for a fee.

– Do you think the reevaluation of privatization is the popular will?

Probably. That’s the government the people chose, so now they have to be prepared for their liabilities to increase.

Kamei Shizuka (current Financial Services Minister and Minister for Japan Post Reform) has proclaimed his fiscal policy will be a reversal of the Koizumi-Takenaka course.

It’s not clear what he means. The bill that was finally passed for enhancing SMB financing is different from what Mr. Kamei initially proposed. It’s just an extension and rehash of existing financing measures, and it won’t solve the problem. When I was Financial Services Minister, we also revised the inspection manual to enhance SMB financing.

– What do you think of the Hatoyama Administration’s financial policies?

I don’t understand the overall direction, including how they’re going to establish the growth rate. They’ve got a two-layered Cabinet, with a reformer such as Maehara (Seiji, Minister of Land, Infrastructure, and Transport) on the one hand, and Mr. Kamei on the other. Their National Strategy Office (under Kan Naoto) isn’t functioning. The policies that are needed are the obvious ones—deregulation and a reduction in corporate taxes. Their child-rearing allowance will not contribute to economic growth.

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You decide!

Posted by ampontan on Friday, October 23, 2009

No one from the private sector will accept the position as president of Japan Post (if President Nishikawa is forced out). After President Nishikawa steps down, it is very likely that his replacement will be either someone who was a career bureaucrat, or someone from the private sector who will compromise with the bureaucracy
– Takenaka Heizo, in the September issue of Voice

THERE WERE SEVERAL REASONS why it was important to privatize Japan Post. First, there is no need for the government of an advanced, developed nation to operate a banking system, an insurance system, and a postal system, much less in competition with that nation’s private sector.

In addition, the funds in the banking and insurance system were controlled by Japan’s Finance Ministry, the bureaucratic entity most likely to arrogate a political role for itself. By law, these funds can only be invested in government bonds. Those investments were the lifeblood of the Iron Triangle of big business, bureaucracy, and government (i.e., the Diet) that ran Japan Inc. That was the source of funds for all the corruption and the Bridges to Nowhere.

The privatization of Japan Post was the most important such step since the Japan National Railway was broken up into regional private sector companies during the Nakasone Administration. Former Prime Minister Koizumi Jun’ichiro dissolved the lower house of the Diet and held a special election specifically to take this issue to the people in 2005. The result was the second-largest majority for the governing party in postwar history. In fact, it was a supermajority that allowed the Government to override any defeats in the upper house. Mr. Koizumi’s support when he left office stood at 70%.

The terminally clueless mudboat wing of his party squandered this advantage, however, and in the following election, in August this year, the opposition DPJ nearly reversed those numbers in the lower house. It was clear that the electorate rejected the LDP because it had turned its back on reforms and minimizing the political influence of the bureaucracy. They wanted the DPJ to continue those reforms.

After little more than a month in office, we can now take it as given that the DPJ is, from several perspectives, a party of charlatans. While some members are just as earnest in their desire for reform as the Koizumians, the party itself is controlled by people for whom power is the real objective. Policy is just something that can be replastered to suit the times, in the words of their political puppeteer Ozawa Ichiro.

The intent of the DPJ has been obvious ever since they formed an alliance with the People’s New Party, which consists solely of reactionaries whose only objective was to reverse Japan Post’s privatization.

Any remaining credibility the DPJ had as serious reformers ended yesterday when Saito Jiro was appointed the new head of Japan Post. As Mr. Takenaka predicted, his background is in the bureaucracy. But not just any ministry—it was the Finance Ministry itself, the Big Swinging Dick of Kasumigaseki. And he was not just any bureaucrat. The Asahi referred to him as “the Don of the bureaucratic alumni”. Mr. Saito once held the position of administrative vice-minister of the Finance Ministry.

That was the same position once held by Prime Minister Hatoyama Yukio’s father, Iichiro.

Mr. Saito comes with the added advantage of having had close ties to Ozawa Ichiro since the latter last pulled the strings of the Hosokawa Administration 15 years ago. He was selected by PNP head Kamei Shizuka, who, like all men of low cunning, seems to have been too clever by half.

If nothing else, the selection will give the new government an early lesson in damage control—if it survives the damage. Japanese author, university professor, commentator, and blogger Ikeda Nobuo thinks it’s possible the Cabinet might fall before the Diet is convened, but of course that remains to be seen. A Google news search in Japanese shows there are already more than 500 articles on Mr. Saito’s selection. Every major Japanese newspaper has slammed the pick.

Prime Minister Hatoyama thought it was wonderful, however. He said:

“It’s a very good (selection). A very interesting personnel (choice).”

He seems not to have been intentionally ironical.

Mr. Hatoyama also defended the choice by saying that Mr. Saito had left the bureaucracy 14 years ago. He did not, however, refer to his party’s opposition to Muto Toshiro as the head of the Bank of Japan because of his ties to the Finance Ministry. Mr. Muto had left the bureaucracy only eight years before that.

Referring to that apparent contradiction, Chief Cabinet Minister Hirano Hirofumi said:

“I think any comparison between the two is a little different.”

When pressed by reporters to explain why, he answered,

“I think it’s different. That’s my awareness.”

Fukushima Mizuho, the head of the Social Democratic Party of Japan, a coalition partner, said:

“It was a compromise choice. Rather than whether he was a former bureaucrat, I think they emphasized policy”.

Everyone listening to this statement knew that Ms. Fukushima would have wet her pants in public had the LDP made the same selection.

As usual, the most penetrating observation came from Takenaka Heizo, the man who was more responsible than any for launching Japan Post on the road to full privatization:

(The Hatoyama Cabinet) says it wants to eradicate amakudari (cushy post-retirement jobs in government for retired senior civil servants), but in truth, this is just watari (the repeated hiring of former bureaucrats) under the leadership of the politicians…The idea that they are disassociating themselves from a reliance on the bureaucracy is a falsehood…It is the de facto renationalization of Japan Post”

You get the idea.

I could go on, but as it turns out, I’m going to be away for the weekend and won’t be back until Monday.

Until then, you can take part in the first Ampontan poll, which is shown below. Don’t hesitate to get clicky and make your voice heard. Every vote counts!

See you next week!

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From the frying pan into the fire

Posted by ampontan on Saturday, October 17, 2009

Politicians are interested in signaling goodness, but not interested in doing good.
– Roger Koppl

SOME WESTERN ACADEMICS and commentators have recently wondered in print why Japan doesn’t “punch above its weight” in international affairs, and then did their readers a favor by answering their own question. While the conclusions resonate nicely inside the Ivory Tower, the inaccurate assumptions or pre-existing biases on which most are based render them useless. They should try a close shave with Occam’s razor instead.

The Japanese political class is incapable of punching above its weight in international—or domestic—affairs, because its members are ignorant of the realities of the world outside Nagata-cho and the world outside Japan, are self-satisfied in that ignorance, and are loathe to learn or do anything that would jeopardize their status.

That description could be worn by the slobbering, snorting, overfed cattle that constitute the political class everywhere, but it fits the average Japanese pol like a bespoke suit from a Ginza haberdasher.

Some have been gushing on the web about how the Japanese election was a mandate for change in the same way Americans voted for change and Barack Obama last November. While it is true that the Japanese voted for change, it wasn’t because they were enthralled by the teleprompter-dependent speechery of a man now shown to be dressed in the Emperor’s new clothes. Rather, their choice was determined by the wish to avoid the black hole of the Liberal Democratic Party’s anti-charisma combined with a national sense of faute de mieux.

Where has that leap of faith landed them? From the frying pan into the fire.

Exhibit A

From the Asahi:

Prime Minister Yukio Hatoyama said he will compile a new supplementary budget centered on economic stimulus and employment measures to prevent the economy from faltering again.

“We have to do everything possible to bolster employment,” Hatoyama told reporters during a trip to Beijing. “We also have to allocate money to improve the safety net and stimulate the economy. We’ll need economic measures that double as job measures.”

Mr. Hatoyama has thus declared to the world that he is a receptacle of received misunderstanding—of the nature of economies, governmental stimulus, and the failure of those policies overseas.

The government is expected to finalize the list of programs to be canceled out of the 14 trillion yen first fiscal 2009 extra budget, compiled by the Aso administration, by the end of this week.

All the better to redistribute the pork in ways that fits the cut of the new administration’s jib. To wit:

On Sunday, Chief Cabinet Secretary Hirofumi Hirano said the government plans to begin handing out a child allowance in June.

Where will that money come from?

Well, Minister of Land, Infrastructure, and Transport Maehara Seiji is cancelling more than just dam projects. In Kyushu alone, he nixed the plan to widen to four lanes the Nagasaki Expressway from Nagasaki to Tarami, eliminated the funds for surveying obstacles at the Fukuoka, Nagasaki, Kumamoto, Oita, and Kagoshima airports, stopped the earthquake proofing of buildings at the Civil Aviation College in Miyazaki City, and cut from JPY 10 billion yen to JPY 4.9 billion the expenditures for land preparation to extend the runway at the Kitakyushu Airport.

There doesn’t seem to be any Bridges to Nowhere on that list. Absent expert testimony, some of those projects seem reasonable.

In addition to the Nagasaki expressway, the Government plans to axe all the projects to widen highways in the supplementary budget. There was no word on how the Government plans to deal with the anticipated extra traffic if they ever deliver on their promise to eliminate highway tolls.

The Government also expects recover about JPY 300 billion by cancelling a fund to promote the integration of farmland, but that won’t reduce outlays. They’re just going to shuffle the money from one pile to another by giving it to inefficient individual farmers instead.

The impact of the recession is such that tax revenue for the current fiscal year is forecast to be far below initial expectations.

So don’t spend money you don’t have!

How much don’t they have? The Government expects about JPY 40 trillion in tax revenue, but admits that it might be even less. Meanwhile, the preliminary budget of the party that was going to cut the waste out of government spending comes in at more than JPY 93 trillion–the highest in Japanese history. And a different Asahi report states that the actual amount will rise to as much as JPY 97 trillion due to “unspecified itemized requests” from each ministry.

Who knew double-talk could be so expensive?

Another way they could pry loose some funds is to live up to their platform plank of reducing civil service expenditures by 20%, and do so in a way that doesn’t force local governments to hire the personnel dumped from the national bureaucracy.

But since local government workers’ unions constitute a large part of the party’s campaign foot soldiers, that’s another promise they’re unlikely to keep.

Were the Government’s priority a sound Japanese economy instead of legal vote-buying schemes, it wouldn’t be shifting the money of the mind dreamt up for the previous administration’s stimulus from its left hand to its right, printing it up at the Treasury, or creating it through government debt instruments.

Moreover, the government faces a daunting challenge in its bid to prop up the economy without adding significantly to the country’s huge debt levels.

Finance Minister Hirohisa Fujii said Friday the amount of new government bonds to be issued this fiscal year will be kept at 44 trillion yen–the sum envisioned by the previous government–or lower. But a large second extra budget would make that pledge difficult to honor.

That pledge lasted as long as the fireflies in summer. Chief Cabinet Secretary Hirano Hirofumi admitted that deficit-financing bonds were a possibility for the 2010 budget if there were revenue shortfalls. He was seconded by the prime minister:

Pre-election Hatoyama

“If we increase (the issue of those bonds) we will not be able to maintain the state.”

Post-election Hatoyama

“I don’t think we should issue (those bonds) to begin with, but it is necessary to determine whether or not an unavoidable situation will emerge, while considering a situation in which tax revenues plunge.”

He was right the first time.

These were the same people who thought it would be easy to shake JPY 20 trillion loose from wasteful government spending. There doesn’t seem to be a whole lotta shaking goin’ on, does there?

Incidentally, until Japan Post is fully privatized, all the money in their savings accounts and insurance policies—20% of the nation’s personal financial assets—can only be invested in government bonds, rather than the other instruments private sector banks can invest in.

Is the opposition to Japan Post privatization by the DPJ and the People’s New Party starting to make sense now?

For all their talk about putting the lives of the people first, the DPJ—as well as the LDP mudboat wing—doesn’t seem to care about economic policies that would enrich the lives of the people over the long term. They would rather signal goodness than do good.

Well, then what?

Those who insist that government spending is as good as private sector spending for sustained economic growth and long-term employment increases fail to understand efficient resource allocation. The government is incapable of determining the best way to use capital goods and other resources. Only the market, consisting of millions of independent actors, works that out, over time.

Rather, it spends to salvage inefficient sectors and prevent politically painful economic adjustments. If the sectors receiving the stimulus funds were producing what the consumers want at prices they were willing to pay, a stimulus wouldn’t be necessary.

A government stimulus will not generate the tax revenue needed to pay down the national debt either, if only because the stimulus is just a money reshuffle. No new wealth will be created. To be blunt, it’s just another form of central economic planning, but some people would rather believe their fantasies than their lying eyes.

What to do instead? That question was answered long ago.

  • During the first two years of his term, U.S. President Warren Harding nearly halved federal spending and cut taxes by one-third. Those policies continued under Calvin Coolidge and unemployment fell to 1.6% by 1926. The resulting economic growth from 1920-1929 was phenomenal.
  • Despite the laissez-faire label, Herbert Hoover was a believer in strong federal intervention. During his four-year term, real per capita federal spending rose 82%, falling to 74% during the Roosevelt administration from 1933 to 1940. Unemployment rose sharply after the 1929 stock market crash, but six months later was nearly back to pre-crash levels. It skyrocketed after Hoover’s interventions, and Roosevelt’s policies kept it at that level, including during the double-dip depression of 1937.
  • U.S. President Ronald Reagan cut taxes, spending, and unnecessary regulation and intervention without reshuffling the money, and created a quarter-century of stout economic growth.

It is as if the DPJ believes that national wealth is created by parthenogenesis.

That would be understandable in the case of Hatoyama Yukio, once you’ve seen the family mansion.

Hatoyama family mansion

But neither he nor his party as a group have given the slightest indication that they’ve spent any time thinking about the creation of national wealth.

Exhibit B

The hard-bitten ex-cop and current Financial Services Minister Kamei Shizuka came of age when no one much cared about the Japanese economy other than the Japanese, and the Japanese only cared about achieving First World levels of prosperity even if it took collusion between big business, government, and the bureaucracy to get there.

Life imitates art

Life imitates art

Mr. Kamei has now bitten hard into a philosophy of debt moratorium that calls for a debt repayment holiday for SMEs and injecting public funds into any financial institutions that would suffer as a result. The minister might have had his arm twisted to come up with that last proviso. He’s already said that any banks requiring financial assistance during a debt repayment moratorium are too weak to survive.

Some speculate this grim nonsense stems from a desire for revenge for the bankruptcies of some of his corporate financial backers after last year’s financial crash. Others think he’s doing it just to raise the profile of his splinter party among small businesses.

When he defends these policies, he comes across as a 3-D version of the cartoon character Yosemite Sam plugging away at a room full of varmints:

“There are few people in the LDP now who sing the praises of market fundamentalism…(if) their thinking doesn’t change, it’s possible that one mega-party will be formed in the future.”

He added that this “might take some time”, perhaps after next summer’s upper house election.

While today’s LDP may now know as little as the DPJ about how to lay the tarmac for future prosperity, that’s not the most interesting part of his statement.

In October 1940, the Japanese government sponsored the creation of the Imperial Rule Assistance Association. Many of the organizers intended that it become—well, a mega-party—and some political organizations voluntarily disbanded to join. The objective was to create a “new political structure”. It included the bureaucracy and the military in addition to political parties. The prime minister was automatically the head of the association, which had a nationwide branch network. From June 1942, it assumed control of local governmental units from the national bureaucracy. Weakened by a lack of autonomy, the association was dissolved in June 1945.

In other words, Mr. Kamei looks forward to a political realignment resembling the configuration in place in Imperial Japan during the height of the Second World War.

The minister is also rather spry for a man in his 70s, which is perhaps due to his sixth-dan ranking in aikido. Watch him stoop to sixth-rate demagoguery in this recent conversation with Keidanren head Mitarai Fujio:

“The increase in murders among family members is because (big business) does not treat people as people.”

He also complained that the heads of big businesses no longer share their earnings with small businesses during good economic times, but retain those funds as internal reserves. When Mr. Mitarai asked if he thought that was their responsibility, the minister replied, “You must feel responsible,” in the same language a primary school teacher would use to scold children for a cafeteria food fight.

For his part, Prime Minister Hatoyama Yukio was nonchalant about his Cabinet minister shooting from the lip. He observed, “That sounds like something Mr. Kamei might say…perhaps he was extreme in has language, and was impolite.”

That also sounds like something a prime minister might say when he realizes he stepped in it by choosing that man as a coalition partner and it’s now stuck to his shoe. Then again, Mr. Kamei has been seated prominently at Mr. Hatoyama’s right hand during Cabinet meeting photo ops.

The rebuttal

People here used to say that the most effective political opposition in Japan was the United States government. Now it seems as if the only people willing to put Mr. Kamei in his place are in the overseas media. For a taste of that, plus a devastating critique of Japan’s political class, try this article in the Wall Street Journal:

(A) proposed loan repayment moratorium for small- and medium-sized businesses…is the brainchild of Shizuka Kamei, the new banking and postal-services minister. Mr. Kamei thinks SMEs, the engine of employment for developed economies, need help in the downturn, but not the tough love of competition or—perish the thought—bankruptcy. So he commissioned Kohei Otsuka, a senior vice minister at the Financial Services Agency, to study how the government might force lenders to forgive SME debts. Financial-sector stocks promptly tanked.

And:

Japan may not have a state-owned financial system like China, but it is still state-directed. Japan runs an essentially circular financial system where savers deposit money at domestic banks, the banks buy ever-more worthless government debt, and then the Diet shovels that money back out to favored political constituencies and export industries. The current Democratic Party of Japan-led government, headed by Yukio Hatoyama, plans to tweak this model, but not fundamentally change it: rather than redistribute the public’s money to business, the DPJ wants to give it to families.

The minister’s political ideas may date from the 1940s, but his economic ideas are more up-to-date: Japan from the mid-1950s

Mr. Kamei said late last month “financial inspections should aim at turning around struggling corporate borrowers instead of leading them to go bankrupt.” That’s a recipe to paper over a problem, not fix it.

Without a financial system that efficiently channels money from lenders who have it to borrowers who need it, Japan will have a hard time growing its moribund economy…The last time Japan tried to paper over a growing pile of bad loans, bail out failing lenders and businesses and pay off political constituencies, the world’s second-largest economy sunk into a lost decade of growth. Then again, maybe it never really escaped.

Except for skipping over the successes of former Prime Minister Koizumi Jun’ichiro and his financial jack-of-all-trades Takenaka Heizo—which the rest of the country’s political class and media are trying to paper over—this brief piece contains more honesty and common sense than anything I’ve run across in the Japanese print media.

Other than Takenaka Heizo’s magazine articles.

Who’s in charge here? (1)

There are enough loose cannons in Fort Kamei to frag an entire platoon of junior officers. The Hatoyama Administration is barely a month old, and already he’s angrily told off the Finance Minister, the Chief Cabinet Secretary, and the Internal Affairs Minister for daring to express opinions about policies he considers to be in his bailiwick. Yet he’s not shy about butting into matters that aren’t part of his portfolios. At a press conference earlier this week, he wondered aloud if all the American military forces in Japan were absolutely necessary. He cited as an example the Yokota air base near Tokyo.

At the same press conference, he sounded off about Justice Minister Chiba Keiko’s proposal to allow Japanese women to keep their maiden names after marriage. Said Mr. Kamei:

“I don’t understand the psychology behind the idea that family names must be different. The husband, wife, and children will have different names. That would turn the home into something like an apartment house. Would it be a good idea for all the nameplates (on the front of the house) to be different?”

That was during the afternoon. At another press conference in the same place on the same morning, Fukushima Mizuho, the Minister in Charge of Womanhood, Motherhood, Shop Till You Drop, and Tossing Her Mini-Party a Lollipop—who kept her own maiden name after marriage—supported the same proposal.

Exhibit C

They are the people who believe all conflict stems from avoidable misunderstanding. Who think that the world’s evils spring from technologies, systems, complexes…and everything else except from the hearts of men, where love abides. Who mistake wishes for possibilities. Who put a higher premium on their own moral intentions than on the efficacy of their actions. Who champion education as the solution, whatever the problem. Above all, the Goodists are the people who like to be seen to be good.
– Bret Stephens

Many Japanese metaphorically slapped their heads when they realized that Prime Minister Hatoyama was serious about his goofy vision of yuai (fraternity), more suitable as a topic for a middle school public speaking contest than the pragmatic business of international statecraft.

But he’s not alone. Foreign Minister Okada Katsuya—like his boss, a boyish-looking bon-bon from a fabulously well-to-do family rich enough to let its scions play at politics—paid a surprise visit to President Hamid Karzai of Afghanistan in Kabul.

They politely avoided talking about Japan’s looming suspension of its refueling mission for NATO forces in the Indian Ocean. What they discussed instead was the Japanese offer to provide job training for the Taliban—you in the back row, stop that snickering!—as well as their living expenses during the training. Mr. Karzai said it would be difficult but possible. Now why would the president blow his chance at free money from overseas by laughing out loud?

Injecting some adulthood into the discussion was Foreign Minister Rangin Spanta, who asked that Japan continue funding Afghani police salaries because maintaining public safety was also important.

It’s a good thing he didn’t ask for help from the Japanese police. Some in the ruling coalition would have thrown a fit because the policemen would have to behave like policemen and carry weapons.

One wonders, however, what job training—I know, it is hard to keep a straight face—Mr. Okada is talking about. For example, when they were in power, the Taliban banned:

…pork, pig, pig oil, anything made from human hair, satellite dishes, cinematography, equipment that produces music, pool tables, chess, masks, alcohol, tapes, computers, VCRs, television, anything that propagates sex, wine, lobster, nail polish, firecrackers, statues, sewing catalogs, Christmas cards, employment, education and sports for women, movies, music, dancing, hanging pictures in homes, clapping during sports events, kite flying, and beard trimming.

Well, that pretty much leaves out any employment that involves electricity. Unless it’s used to wire the dynamite for blowing up the Buddhist statues at Bamiyan.

It doesn’t seem to have occured to either the prime minister or the foreign minister that the Taliban really aren’t interested in the modern world. From the horse’s mouth:

“(E)lections are incompatible with Sharia and therefore we reject them…We want to live a life like the Prophet lived 1400 years ago and jihad is our right. We want to recreate the time of the Prophet.”

But then a Goodist isn’t going to let practical considerations get in the way of demonstrating his Goodism.

Mr. Okada has also said in regard to Afghanistan:

“I don’t think that support means just sending the military.”

Leaving aside the question of what he would know about military support, he’s right, of course.

The other support becomes effective, however, only when the military goals have mostly been achieved. But understanding that requires an understanding of the objectives and the application of military force.

It also requires the knowledge that the Taliban have become a real danger to the government again. Vocational school is unlikely to solve that problem.

Who’s in charge here? (2)

Mr. Okada later chose to expound on the East Asian rhapsody that Mr. Hatoyama is so enthralled with. He said the entity might include Japan, China, South Korea, the ASEAN nations, India, Australia, and New Zealand.

People noticed that the United States was left off the list. True, it isn’t part of East Asia, but then neither is India. But any move away from the U.S., real or imagined, is exaggerated after the brouhaha that erupted following the appearance in the New York Times of Mr. Hatoyama’s translated magazine article.

When asked his opinion, Chief Cabinet Secretary Hirano Hirofumi did some paperhanging of his own:

“I haven’t heard yet from the foreign minister whether the U.S. would be included or excluded.”

Mr. Hirano also added that the bilateral relationship is the basis of Japanese foreign policy.

The Japanese media took this to be backtracking from the foreign minister’s comment, and a statement that the government hasn’t made a decision yet. Considering the range of opinions inside the party and the absence of any pressing need to pursue the issue, that decision might get made on the 12th of Never.

Is it too much to ask of this lot to synchronize their policies?

Exhibit D

Who needs an opposition party when anyone in the Cabinet is happy to serve in that role, depending on the issue, the time of day, and the phase of the moon.

One of the main planks of the DPJ election campaign was the payment of a cash allowance to families with children in lieu of a tax deduction. Their platform called for the national government to make all the payments.

After a month in office, it finally dawned on the Government that what everyone—including their supporters—had been saying for the past two years was right on the money: Namely, they didn’t have the money to do it. (It will require JPY 5.3 trillion every year when fully implemented.)

That’s when Health, Labor, and Welfare Minister Nagatsuma Akira, who is starting to look as if he’s in over his head on any issue that doesn’t involve national pensions, floated the idea of local governments and private-sector companies kicking in some money too.

It seems as if we’ve got another 21st century supporter of the Imperial Rule Assistance Association here.

Local governments in Japan, already pushed to the point of insolvency, are so inflamed over unfunded mandates and the financial liabilities forced on them by the national government that Mr. Nagatsuma’s idea will be enough to cause serious problems with chief executives and assembly delegates in prefectural capitals around the nation.

And requiring companies to pay? That socialism isn’t creeping—it’s galloping. Then again, some Japanese are already suggesting the DPJ is just a socialist party in everything but name.

Mr. Nagatsuma also wanted to save money by freezing the provisions of the Aso Administration’s supplemental budget that would provide financial support to children aged 3-5.

It didn’t take long for the Cabinet to round the wagons into a circle and start firing on themselves instead of the Indians.

Who’s in charge here? (3)

Internal Affairs and Communications Minister Haraguchi Kazuhiro was opposed to ditching the Aso plan because the money was already in the pipeline and local governments had made the preparations to spend it.

“This government must not have desktop (i.e., impractical) debates that ignore conditions on the ground.”

But Mr. Nagatsuma ended the measure anyway. They need the money for their other programs.

The Internal Affairs Minister was even blunter when addressing the funding for the family subsidies:

“If we’re going to change the political platform, which says the national government will pay for everything, then we should call another election and ask the people what they think.”

That comment would be praiseworthy under any circumstances, but it’s a doubleplusgood display of spine coming from Mr. Haraguchi, who is viewed by some as having the principles of a weathervane that ends up pointing in whatever direction the Ozawa breeze is blowing.

Exhibit D

Policy for Ozawa is just like candy (for the people).
– Kamei Shizuka

Some are trying to paper over the growing concerns about the coalition government pulling in several directions at once by reassuring everyone that things will change once the DPJ wins an outright majority in the upper house and no longer needs the excess baggage of the SDPJ and the PNP.

But party Secretary-General and Shadow Shogun Ozawa Ichiro has just punched a hole in their paper. Speaking about the next upper house election at a press conference, he said, “Of course the goal of every party is a majority.”

And added:

“The SDPJ and the PNP worked with us during the lower house election and it turned out well, so I want to maintain that cooperative relationship in the future.”

At a meeting before the press conference, he said:

“The DPJ does not have a majority in the upper house. That does not mean we will reject a coalition with the SDPJ and the PNP. They are our compatriots with whom we worked together, so we will continue to work together in the future.”

It looks like we might be stuck with the marginal Mr. Kamei and Ms. Fukushima in government for longer than we hoped.

It’s also time for an encore from the start of this post:

“The Japanese political class is incapable of punching above its weight in international—or domestic—affairs, because its members are ignorant of the realities of the world outside Nagata-cho and the world outside Japan, are self-satisfied in that ignorance, and are loathe to learn or do anything to jeopardize their status.”

That’s not going to change anytime soon. Mr. Ozawa has given instructions to the party’s first-term MPs that their primary job is to get reelected instead of worrying their heads about the workings of government.

I’ve said it before: this has the potential to get really ugly.

We’re starting to get there.

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Japan’s political kaleidoscope (4): Too many cooks, too many crooks, and too many kooks

Posted by ampontan on Monday, September 21, 2009

The devil’s greatest achievement was to have persuaded so many people that he doesn’t exist.
– Baudelaire

Never attribute to malice that which can be adequately explained by stupidity–but don’t rule out malice.
– attributed to Albert Einstein

The essence of the Democratic Party of Japan now is a three-tiered structure of the Finance Ministry, Party Secretary-General Ozawa’s troops, and public sector labor unions. It will be impossible to maintain this structure without tax increases.
– Nakagawa Hidenao

THE NEW JAPANESE COALITION GOVERNMENT led by the Democratic Party of Japan—with the People’s New Party and the Socialists Democratic Party of Japan invited to hop in the jalopy to buy their upper house votes and relieve the DPJ of the chore of conducting serious negotiations with more responsible legislators—faces a minefield of potential problems as they embark on their magnificent adventure.

Their most serious obstacle is a lack of internal unity. Many in Japan are calling this a “mosaic government” in reference to the incongruent philosophies of the DPJ’s constituent groups, and that doesn’t begin to account for the polar opposite philosophies of their coalition partners. The glue that held the DPJ together this long was the dream of taking control of the government. Now that they’ve reached their version of the promised land, they’re behaving like the crew that tore down the house but still has to figure out how the plumbing and electricity works. And rather than hit the ground running, they’ve hit the ground after running into each other.

The government was in power for just two days before squabbles broke out among Cabinet ministers, and the junior coalition partners began complaining that the DPJ is blowing them off.

Referring to their disagreements with the DPJ, SDPJ Secretary-General Shigeno Yasumasa told a group of reporters gathered in the Diet building, “We’re not on the same page.” PNP head and Cabinet member Kamei Shizuka complained directly to DPJ bigwig Kan Naoto on an NHK TV broadcast yesterday that the minor parties were being shut out of policy decisions.

Meanwhile, the Government must also overcome the skepticism of both the public and the news media that they are competent enough to be trusted with the nation’s car keys, and that they are committed enough to do what they’ve promised to do. That promise is to take the first steps on what the public thinks as their most important mission—wresting control of policy from the nation’s bureaucracy and strengthening local government.

That the public is skeptical is not in doubt. Skepticism might seem odd considering the party’s lopsided lower house majority and their receipt of about 56% of the popular vote nationwide. But an Asahi Shimbun survey published on 2 September shows otherwise. When asked whether they thought the DPJ victory was the result of voter support for their policies, here’s how the respondents answered:

No: 52%
Yes: 38%

Moving on to specific policies….

Wait! Enough! Screw that for a lark. I refuse to go along with the conspiracy of silence from those who primly cop a responsible commentator pose while ignoring that the launch of the new government has combined the slapstick of third-rate provincial vaudeville, leftover LDP hackery refried to hide the odor and slapped with a different label, and enough hypocrisy to choke a televangelist.

Yes, the Liberal Democratic Party had it coming, but it’s not what the Japanese people had coming. I wrote recently that based on past performance, a DPJ-led government had the potential to have more rings than the Ringling Bros., but no one could have predicted that Nagata-cho would turn into the world’s biggest Big Top.

Here’s the short version: Japan’s new government has too many cooks, too many crooks, and too many kooks—and some of them are the same people!

The Cooks…

The Chef de Cuisine

Sometimes called the executive chef, the chef de cuisine is the man whose name is on the menu. But he’s just as likely to spend his time visiting other restaurants or writing cookbooks.

Japan’s new executive chef is Prime Minister Hatoyama Yukio, who says he intends to reorient the government to make it Cabinet-directed, and who doesn’t say he is continuing a process begun by Koizumi Jun’ichiro and interrupted by his successors.

His position alone makes him a center of power both in the government and his party. One of the DPJ’s founding members and the head of his own faction/group, he used his substantial family fortune to keep the party afloat for several years. What could be more natural than assuming that he is the primary actor in the Government?

Well, there’s this: During the party’s six-day election campaign in the spring to select a new leader when Ozawa Ichiro resigned after his chief aide was arrested for accepting illegal contributions, one Japanese weekly reported that a secret document was circulated to the party’s MPs, who had the exclusive right to vote in the election. The document was said to have been a full frontal attack on Mr. Hatoyama’s opponent, Okada Katsuya, for his weakness during his previous tenure and his responsibility for the party’s rout in the 2005 lower house elections. The debacle, it asserted, was partly due to Mr. Okada’s lack of a spine. It claimed that the party would be much stronger with the “soft” Mr. Hatoyama as the front man and the “hard” Mr. Ozawa wielding a billy club behind the scenes.

So who’s the boss?

The Sous Chef

Nominally the second in command to the Chef de Cuisine, the sous chef often runs the kitchen and creates and cooks the food to be served, and you already know who I’m talking about before I type his name. So does the rest of Japan. Typical of recent reporting was this headline in the Shukan Post:

Ozawa Ichiro Controls the New Government—and Japan!

The new DPJ secretary-general (i.e., party head) will be the Shadow Shogun himself, Ozawa Ichiro, the man for whom an apt comparison would be the kuroko of joruri puppet theater. The kuroko manipulate the puppets in full view of the audience, but are dressed in black and masked to create the collective fiction of invisibility.

Mr. Ozawa is the kuroko who taught the DPJ how to win elections—mostly using all the Tammany techniques and political jiu-jitsu picked up from his mentor Tanaka Kakuei during his days in the LDP. He was also the kuroko of the short-lived Hosokawa and Hata administrations, the only other non-LDP governments since 1955 and another unwieldy amalgamation of incompatible elements.

After leaving center stage, Mr. Ozawa embarked a task more suited to his abilities–non-stop nationwide campaigning and canvassing in local election districts. As a result, an estimated 130-150 of the 308 DPJ members in the lower house and nearly one-third of the full membership now owe their seats to him. In practical terms, that means he has more command over their loyalty than does the party.

Everyone knows he is capable of picking up his ball and taking his team to start a new game elsewhere, as he threatened to do so nearly two years ago when the rest of the DPJ top brass blew their collective top over his proposed coalition with the LDP under Fukuda Yasuo. The Faustian bargain between Mr. Ozawa and the veterans who predate him in the party has allowed him to create a second center of power on which the nominal head, Hatoyama Yukio, must depend. During the DPJ election campaign, it was stressed that a vote for Hatoyama was a vote for party unity. Many saw in that slogan an implied threat that a vote for Okada as party leader meant that Mr. Ozawa would walk.

Money talks, and we all know what walks

The Shukan Bunshun reported that Prime Minister Hatoyama wanted to keep Mr. Ozawa in his position as acting president and Okada Katsuya as party secretary-general.

When word reached the puppet master, he exploded: “Hatoyama and the people around him are clueless.” Another acting party president, Koshi’ishi Azuma, said to have developed close ties with Mr. Ozawa, had to intervene on his behalf with Mr. Hatoyama.

Why the insistence on the position of party secretary-general? Because money talks. In that position, he has control of JPY 17.3 billion (about $U.S. 190 million) in 2010 in government subsidies for the party, a substantial rise from this year’s total of JPY 11.8 billion. He’s just following the literally golden rule of Tanaka Kakuei: Politics is numbers, numbers are power, and power is money.

The new prime minister has no illusions about whom he’s dealing with. Here’s Mr. Hatoyama quoted in the 25 February 1999 Yukan Fuji:

“Mr. Ozawa fled the LDP five years ago only because he lost in a power struggle in his faction and in the party. He’s raised the banner of governmental reform to prevent the people from realizing that.”

And we all know what they say about politics making for strange bedfellows.

Chief Kan Opener

Long-time DPJ stalwart and former party president Kan Naoto is in the Cabinet as both Deputy Prime Minister and the head of a new group called the National Strategy Bureau. What the national strategy will be, and what the bureau will do exactly, we don’t know—and neither does he—but he’s going to be in charge of it. It’s Standard Operating Procedure for the DPJ to come up with a policy or an idea and then figure out what to do with it only when it’s time to do the work.

Kamei Shizuka of the People’s New Party made a phone call to Mr. Kan to find out more about the bureau. Here’s how one newspaper reported it:

Kamei: What will you do at this National Strategy Bureau?
Kan: I don’t really know. There are several things I’d like to do, but for now, I can only grope my way forward.

The DPJ party platform says: “The National Strategy Bureau will create a national vision for the new era, and formulate the budget framework under political direction.” It’s supposed to consist of about 20 people. As is par for the DPJ course, there’s no mention of what its specific authority will be, whether “the national vision” will have anything to do with foreign policy, and how it will be involved with budget formulation. For all we know, it might turn out to be a political salon allowing the rookies and the rank and file to do some coffeehousing while the heavyweights take care of business somewhere else.

It is nearly axiomatic that everything the DPJ says is subject to change at any time, and sure enough, Mr. Hatoyama explained this week that the NSB will handle the framework of the budget while the Ministry of Finance will handle the details.

The foundation document for the party’s platform is their Index of Policies 2009, last modified in July. It’s on the party website, but only in Japanese. Here’s what it says about the budget:

民主党政権では、国民を代表する政治家が自ら予算を編成します…官邸に各省の大臣などを集め、予算編成の基本方針を決定し、省庁ごとに政治家が主導で予算を編成します。
Under a DPJ administration, politicians representing the people will formulate budgets. The Cabinet ministers will meet in the Prime Minister’s office, determine the basic policies for the budget, and then politicians will direct the budget formulation for each ministry.

But, you protest, key to civil service reform is to keep the MOF at arm’s length from that process. The MOF is notorious for being the bureaucracy’s worst offender at policy meddling. Takenaka Heizo, the man who directed fiscal policy and reform in the Koizumi Administration, fought a five-year running battle with the ministry and warned in December 2007 that the zombies had returned under Yasuda Fukuo. The DPJ promised to put an end to that for good by putting the civil servants in their place.

And just like Brutus, the DPJ are honorable men and women all.

Some think that Mr. Kan has ambitions of his own. If he decides that he would make a jolly good successor to Prime Minister Hatoyama, the National Strategy Bureau would make a jolly good launching pad. Meanwhile, moves are already underway in Okayama, Fukui, and Mie to establish local strategy bureaus in the party at the prefectural and municipal level. No one knows what their strategies will be either, but roughing out the framework for the central government’s budget won’t be one of them. Their efforts, which are partly designed to create stronger local party organizations, will likely be coordinated on some level with the Cabinet-level body.

And mark Mr. Kan down as being a bit miffed at Hatoyama Yukio. It’s reported that when he found out decisions for Cabinet posts had been made without his input, he quickly called the prime minister, incredulous that he wasn’t asked for advice.

Short-Order Cooks

Need flapjacks, a Philly cheese steak, or legislation made to order? Last weekend, the Nihon Keizai Shimbun reported that the DPJ had decided to create yet another new organization, tentatively called the Party Leaders’ Council, referring to DPJ senior executives. The council will consist of five members, including Messrs. Hatoyama and Ozawa, and will determine party strategy for the Diet. While decisions about Diet business have to be made somewhere in the Government, there was no explanation why that requires another new organization, and whether it will limit its purview to the Diet. One has to wonder at this point if the party leadership is dominated by the type of people who would rather draw up attractive menus than do any actual cooking behind a stove.

Chefs de Partie

These cooks, also called line chefs, are responsible for organizing and managing a small team of workers to ensure the restaurant’s work area is under control. Who better to keep the workers in line than the many DPJ members who started out in life by organizing workers, particularly those in the Japanese Teachers’ Union and the All-Japan Prefectural and Municipal Workers Union? They provide the foot soldiers and the muscle for the party’s election campaigns.

That’s no surprise for a party with more than a few ex-Socialists, both in the Diet and in executive positions at party HQ. In fact, says Tsujimoto Kiyomi of the Socialists Democratic Party of Japan, the DPJ is now more dependent on labor unions than was the Socialist Party itself. (The SDPJ added the second word in their name after the Berlin Wall fell for protective coloration.) Before the recent election, the number of DPJ Diet members with ties to the old Socialists was estimated to be just under 30, and they also brought many aides and staffers with them when they left the party in 1996.

The DPJ claims it’s committed to the devolution of governmental authority to local governments and reducing the number of civil servants. We’ll see how long that commitment lasts now that the public sector employees’ union helped put them in power.

How close is the party leadership to the unions? The first order of business for both Mr. Hatoyama and Mr. Ozawa the day after the general election was to visit union rallies in Tokyo to thank them for their help.

The Journeyman C(r)ook and the Apprentice Chef

The inherently unstable DPJ—more of a coalition itself than a party—organized a ruling coalition with two mini-parties from the opposite ends of the political spectrum, the PNP and the SPJ, supposedly because they need their votes to get bills passed in the upper house.

A Study in Body Language, or, Why a picture is worth a thousand words

A Study in Body Language, or, Why a picture is worth a thousand words

The three parties finally agreed on the terms for a coalition government last week. Here, the word “agree” means that the DPJ generally acceded to the demands of the two smaller parties after negotiations, though it’s a mystery why they wouldn’t have known what those demands would have been months ago and worked them out in advance.

What did the two microparties demand? The creation of yet another power center. The DPJ caved in to their insistence for forming—you guessed it—a new council consisting of the three party heads to function as a separate group within the Cabinet, even though both PNP head Kamei Shizuka and SDP head Fukushima Mizuho were awarded Cabinet posts.

Mr. Kamei’s accusation on NHK that the DPJ was cutting them out of the policy loop is a reference to the ruling party making policy decisions outside this council.

The Journeyman C(r)ook

The PNP is a splinter group of ex-LDP oldtimers who want to halt postal privatization, the most important governmental reform of the past 20 years. One of the reform’s objectives was to prevent the bureaucrats from diverting the funds in the postal savings and life insurance accounts to build all those bridges and roads to nowhere.

You know—putting the bureaucracy in its place.

The DPJ has always known exactly what the PNP wants to do, yet their platform clearly states that Japan Post will not return to being a state-operated enterprise. Their initial proposal in the coalition talks was to “consider” freezing the sale of government-held stock and reorganizing the enterprise. The PNP, however, demanded—and got—a firmer commitment to freeze the process without specifying what they intend the future form of it to be.

Party boss Kamei Shizuka has already served time in the Cabinet during his LDP career, most notably as Construction Minister in the days when there was enough pork on the hoof to start a new Commodities Exchange.

Mr. Kamei wanted to head the Defense Ministry, but settled for the Financial Services portfolio and Minister in Charge of Bloviating about Japan Post. The DPJ may already be regretting that decision, however. It turns out his party’s knowledge of economics seems stuck in the era when there was actually a need for postmen to hand deliver all the mail. Like most everyone else in the country, the DPJ probably didn’t read their website.

Here are some of their proposed solutions:

Solution 1: Shut down the Osaka Nikkei 225 Futures Market
Problem with Solution 1:
This Osaka market accounts for 59% of the country’s stock price index futures trading and nearly 100% of the options trading. Stock futures trading often performs its function of price discovery more rapidly than the stock market itself. Though the October 1987 stock market crash in U.S. was blamed on the fall of stock index futures, it was actually an early warning of the crash rather than the cause.

Solution 2: Eliminating mark-to-market accounting
Problem with Solution 2:
Bankers and their advocates hate this accounting method, while accountants, investor advocates, and banking analysts love it. It forces financial institutions to value their assets at true market prices, which could make them swallow huge losses during a market downturn. In other words, eliminating the practice enables them to hide those losses. The banking industry would rather value the assets based on future cash flow, and no, they have no idea what that will be either. Beth Brooke, global vice chair at Ernst & Young LLP, has said, “Suspending mark-to-market accounting, in essence, suspends reality.”

The idea was floated by some in the LDP in 2003, but Takenaka Heizo and the Koizumi Administration successfully resisted the suggestion. The man who proposed it was Aso Taro.

Solution 3: Eliminating capital adequacy requirements for banks
Problem with Solution 3:
These requirements determine how much money a bank can lend, but some think they can cause a credit crunch because banks will cut down on their loans to meet the requirements. The danger of elimination is obvious—a lending institution has to have something to back up its loans. But even Mr. Takenaka thought it was important for the requirements to be flexible.

This solution is being proposed as the discussion in the rest of the world is moving in the direction of raising capital adequacy requirements.

Solution 4: Issuing JPY 200 trillion in non-interest bearing government bonds (About $US 2.2 billion)
Problem with Solution 4:
Bonds of this type are sold at a discount to par value rather than with coupons, and the intention here is to fund the deficit. The problems involve the greater provision of central bank money, the potential for raising the fiscal premium, and damaging the credibility of the currency.

Solution 5: From Mr. Kamei himself—a three-year moratorium on debt repayments by small businesses, and the injection of public funds into banks that become financially strapped by the lack of income due to the moratorium.

Isn’t it fascinating that a man whose party’s website inveigles against the “strong eating the weak” is ready to have taxpayers bail out banks as one leg of his Rube Goldberg economics? Mr. Kamei says the SDPJ is for it too, and he wants to get it done by the end of the year.

I thought I told all you whippersnappers to sit down and shut up!

I thought I told all you whippersnappers to sit down and shut up!

The Mainichi Shimbun editorializes that these loans, combined with home mortgages, total JPY 300 trillion nationwide and account for 70% all bank loan portfolios. They worry the moratorium could cause bank failures among regional banks in particular. Mr. Kamei’s suggestion has already started a sell-off of bank stocks.

Finance Minister Fujii Hirohisa says nothing has been decided, and told reporters, “If the economy was really that bad, it would be one possibility to consider, but the Bank of Japan has not said that’s the situation we’re in.”

But Mr. Kamei insists it’s settled. He also said that he’d listen to Mr. Fujii’s opinions, but, “It won’t be discussed. It isn’t a matter that we’ll decide after discussion.”

The Finance Minister backed down.

Are Cabinet ministers in this administration to act as feudal lords, with the ministries as their personal fiefdoms? Where’s Prime Minister Hatoyama when you really need him? Where are all those newly created government policy bodies when you really need them? When it comes to that, where are all those Finance Ministry bureaucrats when you really need them?

Then again, Bloomberg quoted Prime Minister Hatoyama as saying that “he’ll avoid more bond sales, so new spending will depend on his success in shrinking the bureaucracy and public works programs”.

Richard Daughty, the COO of a financial advisory services company in the U.S., writes financial commentary under the name of The Mogambo Guru. He referred to Mr. Hatoyama’s claim as “Standard Political Crapola (SPC)”.

Though Mr. Kamei’s been in office less than a week, it was enough time for him to also cross swords with Haraguchi Kazuhiro, the new Internal Affairs and Communications minister. Mr. Haraguchi floated a plan for the reorganization of Japan Post into three independent companies rather than four companies under the aegis of a holding company. Said Mr. Kamei:

“I’m responsible for Japan Post, and I’ll take the responsibility and decide.”

The chastened Mr. Haraguchi explained, “It was just an illustrative example”.

The Apprentice Chef

Meanwhile, the other coalition partner, the SDPJ, has an agenda of its own. One of their goals is to eliminate the American military presence in Japan. Rather than support a greater Japanese defensive capability in its place, however, they also believe that people shouldn’t use weapons to defend themselves. (We’ll get to more of that later.) This is just what Mr. Hatoyama doesn’t need with the Americans wondering about his intentions after the translation of his goofy article from Voice magazine appeared in the New York Times, but hey, these are the people his party wants in government.

During the negotiations to create the coalition, the SDPJ declared:

“The proposal of amendments to the Japan-U.S. Status-of-Forces Agreement should be made from the perspective of minimizing the burden on the people of Okinawa, and the approach to the reorganization of American forces (in Japan) and their bases should be reconsidered.”

The DPJ balked, and the negotiations grew unpleasant. At one point DPJ representative and now Foreign Minister Okada Katsuya got so fed up with SDPJ head Fukushima Mizuho that he stormed out of the room. He charged that the DPJ wasn’t offering concrete proposals but delivering political lectures instead. Once a Socialist, always a Socialist.

Ms. Fukushima merely responded by going over his head and calling Hatoyama Yukio. And then going over his head by calling Ozawa Ichiro.

The DPJ finally compromised by changing the language to, “move in the direction of” reevaluating the agreements. They suggested the language be softened to create good relations with the Obama Administration in the U.S. Ms. Fukushima was delighted, and was shown crowing about it on TV to the other 11 members of her party with Diet seats.

Ms. Fukushima was angling for the Environmental Ministry portfolio, because, as she noted, they have a larger staff. Instead she settled for the new Consumer Affairs Ministry, which makes one suspect someone in the DPJ has a sense of humor. That’s just the sort of pretend-important Cabinet post the LDP once awarded to their female politicians as apprentice chefs to give them some experience in the political kitchen while using them as tokens to convince female voters they take them seriously. It’s surprising that Ms. Fukushima, who began her professional career as a radical feminist attorney, fell for it. But then a seat at the table of power is enough to trump principle for most leftists.

Who’s in charge here?

Before the recent election, the DPJ had 114 members in the lower house. They now have 308, for a net gain of 194 seats. The PNP had five; they now have three. The SDPJ stayed even at seven, but now have three directly elected MPs instead of only one. The reason for that increase was not due to greater popular support, but the DPJ’s choice to abstain from fielding a candidate in those districts.

The DPJ has far more than the 241 votes it needs for a lower house majority. Yet, in the upcoming administration, the handful of MPs from the formal coalition partners, and particularly their two party heads, will have a greater influence and say on the direction of the government than the 194 new DPJ members, who represent the popular will today.

That the DPJ created a coalition which includes the PNP and the SDP makes it difficult to avoid the accusation that their Government is a distortion of the democratic process and inimical to the expression of the popular will.

…The Crooks…

The reason I referred to Kamei Shizuka as a journeyman c(r)ook was recently explained in this Japanese-language blog post by Ikeda Nobuo. Mr. Kamei seems to have a knack for making money from shady deals with shady companies with a yakuza presence lurking in the background. One incident mentioned is described in a 1989 Yomiuri Shimbun article, which reports he made profits of JPY 400 million (about $US 4.18 million) in excess of market valuation in a 1987 stock sale that an official termed “an unnatural transaction.”

Perhaps that explains why he doesn’t like mark-to-market accounting.

It’s bad enough that a single-issue splinter party has an influence on policy far out of proportion with its numerical strength. It’s even worse that a man who might be mobbed-up is now in the Cabinet and punching far above his weight. But the DPJ put him there.

Suzuki Muneo

Meet former LDP lower house rep from Hokkaido Suzuki Muneo, the postwar record holder for jail time for a national legislator: 437 days, for bribery. Two of his top aides were also nailed. Mr. Suzuki had carved out a minor suzerainty in the Foreign Ministry. Though he had no official position, he had enormous influence over senior bureaucrats on policy and overseas aid projects.

After his release from prison, he became an advocate for decentralizing government, albeit under centralized control and direction, and an economic demagogue in the style of Kamei Shizuka. He was reelected to the Diet as head of a vanity party.

He was also sentenced to another two-year term for bribery in 2004 and has lost every subsequent appeal. The case is now before the Japanese Supreme Court. The next loss means another jail term and a five-year ban on public office.

But Mr. Suzuki is a pal of Ozawa Ichiro, and has influence among the voters in Hokkaido, where the carnage for the LDP was particularly gruesome this past election.

So the DPJ appointed the ex-con whose name is synonymous with lying and being on the take to chair the lower house Foreign Affairs Committee.

…And The Kooks

More troubling than the number of cooks and crooks in the governmental kitchen is that many of the people involved are not part of the reality-based community. The problem is best described by British novelist, journalist, and commentator James Delingpole, who recently published a book titled, Welcome To Obamaland: I’ve Seen Your Future And It Doesn’t Work. He says:

“In it, I warned the U.S. of the ‘smorgasbord of scuzzballs, incompetents, time servers, Communists, class warriors, eco-loons, single-issue rabble-rousers, malcontents and losers who always rise to the surface during a left-liberal administration….it becomes a problem – as you’re about to discover, if you haven’t already – when your ruling administration consists of nothing but these people. No longer do they qualify as light relief. They become your daily nightmare…. Making these predictions was a no-brainer because it’s exactly the same process as we’ve witnessed in Britain these last twelve years under New Labour.'”

He might just as well have been talking about Japan. We’ve already seen that the PNP is the Government’s version of a “single-issue rabble-rouser”, but there are even worse. Much worse.

Japan Teachers’ Union

No group is more committed to putting ideological blather and self-interest before the public good.
– Jonah Goldberg, on teachers’ unions

The goals of the Japan Teachers’ Union include improving the Japanese educational system so that it more closely resembles the systems in the United States and Great Britain. The California public school teachers appreciate those improvements so much that 25% of them now send their children to private schools.

They share the same disdain for individual achievement as their overseas cousins, as they want to do away with competitive examinations. Political indoctrination of the students starts early and focuses on the supposed sins of Japan rather than its achievements and opportunities. Former Chief Cabinet Secretary Machimura Nobutaka once said that the LDP would have been open to more detailed discussions of Japanese wartime responsibility in schools had there not been so many Marxists among the faculty.

The JTU recently cleaned up its website, most likely in anticipation of a successful election result. Once upon a time, it featured amateurishly drawn cartoons that revealed both their politics and the arrested development of their sense of humor. But tools are available to retrieve erased pages. Here’s an example of one of their eliminated cartoons featuring a likeness of what apparently is supposed to represent former Prime Minister Abe Shinzo.

JTU cartoon 1

For another taste of their junior hi humor combined with their “resistance”, try this article in Great Britain’s Guardian from three years ago describing the antics of school teachers who dislike Kimi ga Yo, Japan’s national anthem, and the imperial system:

Japanese who object to being forced to sing their country’s national anthem have a secret weapon: the English language. Kiss Me, an English parody of the Kimigayo, has spread through the internet and was sung by teachers and pupils at recent school entrance and graduation ceremonies, local media reported yesterday.

“Teachers and pupils”? See what I mean about indoctrination beginning early? The 11-year-old wise guys are indoctrinating the teachers in pre-adolescent spitballery.

Leftwing teachers unions regard Kimigayo, which is based on an ancient poem wishing the emperor a “thousand years of happy reign”, as a symbol of Japan’s militarist past.

When they say ancient, they mean more than a millennium. Though Kimi ga Yo was not officially adopted until about 10 years ago, it has been the de facto anthem for much longer.

Here are the complete lyrics:

May your reign
Continue for a thousand, eight thousand generations,
Until the pebbles
Grow into boulders
Lush with moss

Grab yer firin’ iron! Them’s fightin’ words!

Did some Japanese manipulate national symbols for their own ends during an ugly period of the nation’s history? Yes, as has every other nation in the world. But one reason children are sent to school is to learn the national narrative. The agenda of “leftwing teachers”, other than those in Soviet bloc-type countries, is to denigrate the national narrative by poisoning the minds of the students. The full Japanese national narrative is not defined by one gruesome chapter, nor is it an unending tale of imperialism! capitalism! racism! sexism! war-mongering! These people so dislike their country one is forced to wonder if the real object of their dislike is themselves.

Then again, perhaps they’re not used to tradition in matters such as these. Sergei Mikhalkov wound up writing three sets of lyrics to the Soviet/Russian anthem from 1943 to 2000. The first version was in praise of Stalin, the second version was Stalin Who?, and the third version is in praise of the Fatherland. Keeping the same tradition for more than 1,000 years? How conservative and L7 can you get!

The Japanese in this camp loudly proclaim that they are defenders of the Constitution, i.e., Article 9, the peace clause. Very few fall for it, however, because if they were true defenders of the Constitution, they wouldn’t hold in such contempt the first sentence of Article 1:

The Emperor shall be the symbol of the state and of the unity of the people…

Those who watched the Japanese election returns on TV saw JTU alumnus and Acting DPJ President Koshi’ishi Azuma preening on stage with the other party leaders after their big victory. He’s already said more than once this year that education without a political element is not possible (despite being against Japanese law). Everyone knows what political element he has in mind. Mr. Koshi’ishi’s pre-election position in the party was equivalent to that of Ozawa Ichiro and Kan Naoto, and he retains that influence. But even the DPJ wasn’t dumb enough to put him in the Cabinet and make him a sitting duck. He’ll just roll up his sleeves and go to work out of the public view.

DPJ

Here are some excerpts from the DPJ website in English:

We do not seek a panacea either in the free market or in the welfare state. Rather, we shall build a new road of the democratic center toward a society in which self-reliant individuals can mutually coexist and the government’s role is limited to building the necessary systems.

Does that not fairly scream of Third Way nonsense without writing the actual words? Saying that one is a believer in the Third Way is similar to some of those who call themselves bisexuals. The former is just a leftist who knows better than to parade on May Day carrying a red flag, while the latter have sesquicentennial encounters with the opposite sex to avoid coming all the way out of the closet and admit being gay.

And note the false equivalence between the free market and the welfare state. Pavarotti and Johnny Rotten were both singers, but that didn’t make them equals.

We shall restructure the centralized government from the perspective of devolution toward citizens, markets, and local governments.

They plan to do that by making direct government payments to parents for child rearing in lieu of tax deductions, by making direct government payments to families for high school tuition, and by making direct government payments to individual farmers.

The real DPJ political platform is the Index of Policies, on which the so-called Manifesto is based and then cleaned up for public consumption.

Unlike the Manifesto, the Index—which was last revised in July—is not in English. It’s also recently been tucked away on the party website under the Manifesto section, whereas before it was in full view. Some Japanese have said they find the language in the Index “peculiar”, and they have a point. I haven’t been through all of it—it’s long and packed with boilerplate and platitudes—but it does have some peculiar ideas for a party that claims to be devoted to citizens, markets, and local government.

Such as:

“We will proceed with consideration of an International Solidarity Tax that taxes specified economic activities across national borders, and which will be used as the funding source for international organizations to conquer poverty and support developing countries.”

What we have here is a policy with a retro-Bolshie name to levy an unjustifiable and ill-defined tax to fund an enterprise that anyone who goes through life awake knows will fail. Looks like all the highway signs on the DPJ Third Way read Merge Left.

According to the Index, they also want to maintain the inheritance tax to “Return part of (a person’s) wealth to society”. And here I thought that a person’s wealth was already a part of social wealth. Japan’s inheritance tax was 70% in 2005, which means that a lot of people spent a lot of time and trouble finding ways to get around it.

The party wants to establish a Permanent Peace Study Bureau in the Diet Library. One has to admit that does have potential as a job creation scheme. They’ll need a full janitorial staff to deal with all those cobwebs.

They also want to prevent suicide by spending a lot of money on analysis and studies for suicide prevention. They intend to make it an obligation of publishers to produce textbooks that children with weak eyesight can read. They want to levy stiffer taxes on stiffer drinks to promote health, which is sure to please those taxpayers who have one or two stiff drinks a month and are in excellent health, but will pay the same rate as the lushes.

Perhaps the most peculiar of word choices is found in the section that discusses the party’s stance against North Korea. Their approach comes across as somewhat hardline. But the section is titled, “The core development of diplomatic relations with North Korea”, or in Japanese, 北朝鮮外交の主体的展開.

This part – 主体的 – which corresponds to “core”, is seldom used in Japanese, and it has no bearing on the explanation that follows. But the word is used quite frequently in North Korea. There it’s pronounced juche, and it’s the ruling philosophy of the North Korean government.

The arrested development of their sense of humor is a more widespread malady than I thought.

The Socialists Democratic Party of Japan

In most Western countries, the socialists and the social democrats are the girly men of the left, unable to bring themselves to the truly whacked position of the remaining Communist poseurs. Perhaps that’s because they realize they would lose their opportunities for making money in the stock market and real estate investments under a true Red regime.

In Japan, those relative positions are reversed. The SDPJ are the vicious, vaporous, anti-life, and anti-reality bunch, while the JCP is better behaved and actually has some integrity.

Consider: The North Koreans attempted to assassinate then-South Korean President Chun Doo-hwan during a 1983 visit to Rangoon by detonating three bombs by remote control. The president was not killed, but 21 people were, including three South Korean Cabinet ministers and four Burmese.

The Chinese government criticized the North Korean government in the state media and broke off official contact with Pyeongyang for several months. Japan’s Communist Party also condemned it, saying that terrorism had no part in their movement. Japan’s Socialists?

North Korea was unconnected with the incident in any way because it was not beneficial to them.

For years they claimed that it was impossible for the North Korean government to have abducted Japanese citizens. When Kim Jong-il finally fessed up, their successors in the SDPJ excused the abductions by saying it didn’t compare in any way to Japanese behavior on the Korean Peninsula during the war.

The party’s website is not in English, but it does proudly proclaim that boss Fukushima Mizuho attended the Socialist International conference this year. It’s adorned with a few of the global-standard Socialist illustrations of a rose held aloft in a fist. Their environmental policies—cap’n’trade, anti-nuclear power, anti global “warming”—are the usual blast of hot air one expects from watermelons, so-called because they are green on the outside and red on the inside. Then again, the SPDJ has never bothered to hide its crimson exterior.

The DPJ voluntarily chose the SDPJ as their coalition partners and gave the party head a seat in the Cabinet. They helped boost the party’s chances in the recent election by refraining from running a candidate in districts with prominent SDPJ members. That’s how they picked up two directly elected seats in the lower house.

Fukushima Mizuho

The SDPJ boss hasn’t always been so chummy with the DPJ. She once said, “The LDP and the DPJ are only as different as curry rice and rice curry.” Now that she’s part of the government headed by the latter, it would seem that she has developed a more discriminating palate.

She and husband Kaido Yuichi are both attorneys. Ms. Fukushima has focused on radical feminist causes, and she’s written three books on sexual harassment and domestic violence. She’s also written another called Konna Otoko to ha Zettai Kekkon Suru na! (Under No Circumstances Marry a Man of This Type!). She and her husband have frequently associated with people linked to the Chukaku-ha, or Japan Revolutionary Communist League, and defended them in court trials.

They must have had plenty of work. From the late 60s to the early 90s, Chukaku-ha led or was involved in numerous open battles with police, sabotaged the railroad in 33 Tokyo and Osaka locations when it being privatized, attacked LDP headquarters with a flamethrower mounted on a truck, conducted fatal arson and bombing attacks, and fought bloody battles with two other groups on the ultra-left, resulting in an estimated 100 fatalities. Their slogan is “Workers of the world unite under the banner of anti-imperialism and anti-Stalinism!” That presumably means they were down with K. Marx, Lenin, Trotsky, and Mao.

In May 1991, Chukaku-ha changed course and decided to focus its efforts within trade unions and mainstream left-wing movements. One of those efforts was a petition drive to prevent Japan’s use of military force in the event of a foreign invasion. Ms. Fukushima signed it.

Registered as an attorney in 1987, Ms. Fukushima first won election to the Diet in 1998, though it is only a proportional representation seat in the upper house. She is one of the few party leaders in Japanese postwar history who have been unable to win a Diet seat in a direct election, or unwilling to try.

Let’s have Madame Chairman speak for herself. Here’s a brief transcript from her 2005 appearance on the TV show Asa Made (Until Morning), being interviewed by Tahara Soichiro.

Fukushima: I am absolutely opposed to the use of sidearms by police officers. For one thing, even perpetrators of crimes have their rights. The police must not be allowed to injure criminals at all. Even if it is a brutal criminal with a lethal weapon, the police should approach the arrest unarmed.
Tahara: And what happens if a police officer does that and is killed?
Fukushima: Well, that’s the job of police officers…(Shocked sound from the people in the studio. Showing irritation at the response, she continues)…Besides, if a criminal puts up that much resistance, there’s no need to go to all that trouble to arrest him. There’s no problem with letting him escape.
Tahara: But what if the criminal who runs away kills someone else at a different location?
Fukushima: That’s a separate problem…

Here’s an excerpt from a recent Diet debate about the possible interception of an incoming North Korean missile.

Fukushima: If the intercepting missile hits the target, debris will fall. If it misses, it will fly outside the country. Can you say there won’t be any harm caused to the citizens either in Japan or in other countries?
(Then) Foreign Minister Nakasone Hirofumi: If it presents a danger of damage to the lives and property of our people, that missile should be intercepted as a matter of course.
(Then) Defense Minister Hamada Yasukazu: But there would be more damage if the missile would be allowed to fall. If it’s intercepted in space, most of the debris would burn up and not fall to earth. It’s important to destroy the missile first and minimize (its potential for harm).
Fukushima: If we miss, it will harm the national interest, and if we hit it, what happens if it turns out to have been just a satellite?

There was laughter at this remark from opposition benches for some reason, but then we’ve already found out about the sense of humor of the Japanese left.

The DPJ thought she would make a dandy Minister of State for Consumer Affairs and Food Safety, Social Affairs, and Gender Equality in the new coalition government, and so appointed her to that position.

Tsujimoto Kiyomi

Currently the SDPJ’s head of Diet strategy, Tsujimoto Kiyomi came up with the idea for taking cruises on a Peace Boat to the countries that Japan invaded during the war when she was a Waseda undergraduate in 1983. It’s not easy for a spunky coed to organize a project on that scale, regardless of her commitment or idealism, so she needed some help.

She received that help from Kitakawa Akira, who later became what is described as her common-law husband, and Oda Makoto.

After the collapse of the Soviet Union and intelligence service archives became available, it was discovered that Mr. Oda had been a KGB agent. Mr. Kitakawa was a member of the Japanese Red Army, a revolutionary terrorist group formed in 1971 that was responsible for bombings, airplane hijackings, and armed attacks throughout the world. One member was caught with explosives on the New Jersey Turnpike in the 1980s and spent time in an American jail. Several members were granted asylum in North Korea, and the Japanese government is trying to extradite them. It remains an obstacle to the normalization of relations.

Though vicious, the group’s membership was always small, and they immediately had problems finding the money to survive. It was provided by Palestinians starting in 1972.

Join me in solidarity to smash the country and make the world safe for large purple vibrators

Join me in solidarity to smash the country and make the world safe for large purple vibrators

The Peace Boat, meanwhile, expanded the range of its voyages and visited the Middle East. Cruise members met several times with Yasser Arafat, perhaps to thank him for his money and ask for more. It was eventually awarded Special Consultative Status with the Economic and Social Council of the United Nations. That is an honor they share with Pat Robertson’s American Center for Law and Justice (he speaks in tongues on television), the Brazilian Federation of LGBT Groups (Associação Brasileira de Gays, Lésbicas e Transgêneros, ABGLT), the Advisory Commission of the Evangelical Church in Germany, The American Civil Liberties Union, The Association for the Advancement of Psychological Understanding of Human Nature, The Centre for Women the Earth the Divine, The Italian Confederation of Labour, Conscience and Peace Tax International, Fraternite Notre Dame, Inc., and the International Academy of Architecture. That would suggest the designation is as easy to obtain as a package of free tissues outside any large train station in Japan.

Mr. Kitakawa was responsible for JRA activities in Europe, and he was eventually deported from Sweden. Back in Japan, he founded the Daisansha publishing company, which has released six of Ms. Tsujimoto’s books.

She was recruited by former Socialist Party leader Doi Takako to run for the Diet, and she won her first election in 1996. A few years later, Shigenobu Fusako, the founder of the Japanese Red Army was arrested in Takatsuki, Osaka, Ms. Tsujimoto’s home district. She was in the company of Yoshida Mamoru, a member of Tsujimoto’s staff in Takatsuki.

As an MP, she started receiving national exposure in the early years of the Koizumi Administration with her semi-hysterical challenges of the prime minister during question time. She does have spunk, however, and it was great television, so a star was quickly born.

It just as quickly faded after her success went to her head and she accused the aforementioned Suzuki Muneo during his questioning in the Diet of being a “trading house for suspicion”. Mr. Suzuki, semi-hysterical himself, blew up in a memorable rant.

Those of you who enjoy interesting coincidences will be delighted to know that not long afterwards, investigators just happened to discover that she had been raking off funds from the money that was supposed to be paid to her political aides. It was suspected that she gave some of the money to Mr. Kitakawa. She was sentenced to two years in jail with a five-year stay of execution.

Ms. Tsujimoto resigned her Diet seat, but Japanese voters can be a forgiving lot, and she’s back, though keeping a much lower profile.

Again, let’s let the lady speak for herself. Here’s one:

“It’s not possible that the peace-loving North Koreans would abduct anyone.”

Golly, where have we heard that before?

She has a strange conception of loyalty for a Diet member:

“I don’t want to be a Japanese. I want to be an international person.”

Perhaps I should have spelled that “internationale”.

Indeed, she has been so internationale in general, and pro-North Korean in particular, that some Japanese have wondered if she is a naturalized Korean with family roots in the northern part of the peninsula.

Here’s how she views her duties as a national legislator. She was speaking informally to a person she didn’t realize was a reporter:

“They say a Diet member should protect the lives and property of the citizens, but that is not my intention. My role is as a ‘national destroyer’ MP who will try somehow to destroy the framework of the state.”

There’s a bit lost in the translation, as Ms. Tsujimoto is making a pun. The word for Diet member is 国会議員 (kokkai gi-in). She replaced the first two characters with the homonym 国壊 (kokkai), which means “national destruction”.

She also has a unique sense of fun. During a feminist conference sponsored by the owner of a shop for sex toys, the amusingly named Love Piece Club, she autographed a large purple vibrator for an auction.

Now nobody objects to the ways people choose to get their kicks, but one would expect a Diet member to show some discretion at a public event.

Sidebar

The Love Piece Club has a website. One of the pages is here, which displays the nude snapshots a photographer took of the “Buy Vibe Girls” at the Yasukuni Shinto shrine bright and early one morning. Ordinarily, it’s standard Internet practice to warn of photos that aren’t work safe, but any work supervisor who caught you looking at these is more likely to feel sorry for you than angry at you.

The title of the page, by the way, is Nobody Knows I’m Lesbian. Come on, Mina, who are you trying to kid? All anyone has to do is look at your picture.

Now, former combatants and ex-cons Tsujimoto Kiyomi and Suzuki Muneo are part of the ruling coalition, proving beyond doubt that politics makes for the strangest of bedfellows.

One wonders which one brought the large purple vibrator.

Ms. Tsujimoto, a politician convicted of skimming public funds, who pals around with terrorists, who would rather be known as the national destroyer than a Japanese, and who has vowed to wreck the framework of the state, was appointed by the ruling DPJ to serve as Vice-Minister for the Ministry of Land, Infrastructure, and Transport. That ministry is responsible for the national infrastructure and dealing with disasters.

Here’s the best part: No one in her party likes the idea at all. Ms. Tsujimoto’s own initial reaction was:

やだ、やだ、やだ、やだ!

That’s what a four-year old throwing a tantrum might say when told to take some unpleasant medicine—No, no, no, no!

She gave in after being told that party head Fukushima Mizuho signed off on it. But then Ms. Fukushima claimed she didn’t sign off on it. But then she admitted that she did.

With Ms. Fukushima occupied by her make-work duties in the Cabinet, Ms. Tsujimoto was being counted on by the party to be the face of their campaign in next year’s upper house election. Those with a Machiavellian turn of mind might wonder if the DPJ purposely wanted to give her some make-work duties of her own in the bureaucracy. That would prevent her from being the poster girl of the SDPJ campaign, making it easier for the DPJ to take them out in the election and form a government without their help.

It’s a wrap!

I have nothing but the deepest sympathy for those Japanese who were so fed up with LDP rule that they felt compelled to vote for the DPJ and its coalition of too many cooks, too many crooks, and too many kooks in the hope they would receive clean government, real reform, and responsible political behavior.

If we’re lucky, perhaps they’ll manage to achieve some of their promised reforms during their administration, particularly shutting off the entry of bureaucrats into public sector jobs. They might yet reinsert the jackhammer into the foundation of the structure of interests that holds the country back. Maybe their conduct will spur the rejuvenation of a sharp opposition party, regardless of label, whose members will be decisive enough to ditch the mudboaters before refloating their political ship.

Credit where credit is due

Foreign Minister Okada Katsuya

Mr. Okada has opened attendance at his press conferences to all members of the Japanese news media, ending the kisha club monopoly in which only certain outlets get direct access to the politicians. Now the weekly magazines, Internet publications, and sports newspapers (some of their political reporting is better than you think) can attend. This development was not reported by the Asahi Shimbun, the Yomiuri Shimbun, or the Nikkei Shimbun, which constitute Japan’s press monopoly. Perhaps they’ve taken lessons from the New York Times, the Washington Post, and most of the American TV networks.

I’ve said before that the DPJ always carries banana peels in its back pocket for pratfall practice, and this time Prime Minister Hatoyama showed off his best Buster Keaton form. Before the election, he promised that he would open up his press conferences too. The reporters asked if he would put that in the party platform. He said no, it wasn’t necessary to go that far.

The only reporters allowed at Mr. Hatoyama’s first press conference were those in the kisha club.

Maehara Seiji

The new Minister of Land, Infrastructure, and Transport, Mr. Maehara is often criticized by the party’s left wing and DPJ hacks because he (a) is not left-wing, (b) believes in a strong national defense, (c) intensely dislikes Ozawa Ichiro and his presence in the party, and (d) is capable of apostasy by working with the Koizumian reformers of the LDP, including rebel Watanabe Yoshimi. If there’s anything the left hates more than common sense, it’s a traitor.

One of his first announcements as MLIT chief was the suspension of the Yamba Dam project in Gunma. This was immediately hailed by all those anxious to end the ties between construction industry pork and the government once and for all.

But they couldn’t even get this one right. The governments of the six prefectures that will be affected by the decision were not at all pleased. Tokyo in particular is concerned about the water supply for the exploding population in some areas of its jurisdiction. Mr. Maehara is going to visit Gunma later this week and talk to local officials. Some are so upset they say they won’t attend if the decision is not changed.

Also opposed to the decision is the Gunma governor–who is affiliated with the DPJ. The governor was miffed that the prefectural government wasn’t consulted before the MLIT announced the decision.

In other words, the party that promised to decentralize government and devolve authority to local governments made an arbitrary central government decision without any input from local government and a governor on their own team.

Finance Minister Fujii Hirohisa said no final decision had been made, but the MLIT is behaving as if they’re going to shut it down. Mr. Fujii deferred to Mr. Maehara.

Except Mr. Maehara spun around again and deferred to the locals. He’s now said the legal procedures to halt the project won’t begin until the “understanding” of the six prefectures is obtained.

Now you know why some charge the DPJ wasn’t ready to assume control of the government. All of this, including discussions with the local governments, should have been worked out long ago. Mr. Maehara says he is merely executing one of the planks in the DPJ platform. That was the same platform the party kept revising after its initial release just last month.

Kawabata Tatsuo

Mr. Kawabata was named Education Minister, much to the relief of those who were apprehensive about Koshi’ishi Azuma winding up with that job. The JTU wants to roll back the education reforms of the Abe administration, particularly the new teacher certification requirements. But at his initial press conference, Mr. Kawabata said that would be only one of several options examined over the next four years. Those experienced at reading bureaucratic tea leaves think that means the JTU might not be getting carte blanche in the new Government after all, though they warn that Mr. Koshi’ishi has yet to be heard from.

Unfortunately, Mr. Kawabata talked up a proposal for extending teacher training to six years—the same amount of classroom time as a Japanese medical doctor. But then classroom instruction is hardly brain surgery. Every extra minute seated in a classroom staring out the window while some teacher drones on about classroom teaching is a minute wasted. If the objective is to improve classroom instruction, that time would be better spent being actively involved with life as it’s actually lived.

Afterwords:

Sorry for not keeping my promise. The last post said the next one would be “tomorrow”, but that turned into two weeks. I had some work to do, and wading through the sheer deluge of information related to today’s topic took some time.

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Campaign slogan or Freudian slip?

Posted by ampontan on Wednesday, June 10, 2009

AGREE OR DISAGREE, it’s always worth reading the opinions of Takenaka Heizo, the economics and privatization guru for former Prime Minister Koizumi Jun’ichiro. I usually agree, so it was satisfying to see him present in the first paragraph of a recent article in the Sankei an argument I’ve had half-written for this site for two months. Here’s my quick translation of that paragraph. I left one Japanese expression untranslated for a reason. Stick with me for a little bit and the reason will become apparent later.

Mr. Takenaka is speaking of the Democratic Party of Japan, the primary opposition party.

“In essence, seiken kotai must ultimately be just a method. Emphasizing seiken kotai is a channel for clearly identifying and achieving whatever policy one has. Certainly, the DPJ is offering a fresh perspective on the conduct of governmental affairs, including eliminating (excessive) bureaucratic (influence), but the content of the policies they want to achieve isn’t clear at all. That’s precisely why the rate of support for the DPJ is lower than one might expect. If (the upcoming election) is simply to be a negative choice in which the voter thinks that, well, at least they’re better than today’s Liberal Democratic Party, they will be immediately met with powerful opposition as soon as they take power. The DPJ has a responsibility to clearly present solid policies for the sound development of Japan’s economy and society.”

No sooner had I begun congratulating myself for having come up with the same idea than this quote from Prime Minister Aso Taro floated up:

Seiken kotai is a method, not an objective. The issue is what you want to do after seiken kotai, and what sort of policies you will implement.”

He’s right, of course, but that’s sure starting to sound like the LDP message of the day, isn’t it? Why would Mr. Takenaka would feel compelled to coordinate his message with that of the prime minister, whom no one would mistake for his intellectual soulmate? But we’ll leave that for another day, if it ever happens again.

My enthusiasm was further dampened by this commentary, also in the Sankei:

“The prime minister’s interest is a manifestation of his dread of the expression seiken kotai. No matter how the ruling party criticizes the individual DPJ policies, the DPJ can always counter by telling the people that they won’t know for sure unless they’re given a chance to form a government”.

Is the LDP afraid of what the expression represents, or are they disdainful of it? I suspect it’s a combination of both.

It’s not unusual that so many people would notice it, however—that’s all they talk about. It’s as if they sing it to themselves in the bathtub at night. Mr. Aso was correct when he noted that seiken kotai is the DPJ objective. He’s only repeating what they constantly say themselves.

Here’s the new DPJ head Hatoyama Yukio earlier this year when the DPJ drama queens were stressing out over Ozawa Ichiro’s scandal:

Our objective is ultimately seiken kotai. I’ve said that (Ozawa Ichiro) and I will share the same fate….If we think it will be difficult to achieve seiken kotai, we will both take responsibility (and step down).

How’s that for a revealing quote? It shows the ultimate DPJ objective, what Hatoyama Yukio means by taking responsibility, and whether he can be trusted to keep his word.

This is from Okada Katsuya, Mr. Hatoyama’s opponent in the recent DPJ presidential election, from about the same time:

I understand that with (the people) unable to comprehend (the campaign finance scandal), we will not be able to achieve seiken kotai.

It’s no exaggeration to call it the party line; even Mr. Ozawa’s DPJ opponents spout it. Here’s Komiyama Yoko, the Education Minister in the party’s Shadow Cabinet and a member of the Maehara/Edano group, at a press conference during the crisis:

“The priority is to take an approach for seiken kotai. At this point, he really should withdraw. I do not think we can win a difficult election with apologies and excuses.”

The DPJ clearly thinks the phrase is critical, and the LDP just as clearly thinks it’s worth using as a line of attack. Now there are suggestions that the DPJ will use it as their slogan for the upcoming election. So what does the phrase mean in English?

It literally means alternation of government; in other words, a system in which the two major parties alternate power rather than power being exclusively in the hands of the LDP, as has usually been the case since 1955.

The DPJ themselves translate it as a “change of government” on their English-language website. Some have translated it as “regime change”, but that’s not a good idea. Joseph Stalin had a regime. Pol Pot had a regime. Saddam Hussein had a regime. Kim Jong-il has one now. Great Britain has governments and America has administrations, but free market democracies do not have “regimes”.

Mr. Takenaka makes an excellent point when he reminds us that the DPJ has a lower support rating than one would expect with the LDP’s backsliding from reform and the demonstrated lack of a rudder on their mudboat.

Is it that the phrase does not resonate with the public in the same way that the word “change” has for many years in American politics? Since I’m not a native speaker of Japanese, I’m not qualified to say with certainty. It’s worth noting, however, that the phrase is a four kanji compound, which the Japanese have long used for national sloganeering (and the Chinese for even longer). The impact might be greater than I realize.

But even though I’m not a native speaker, I do believe this: the DPJ’s choice of that expression demonstrates why it’s been so difficult for the party to get traction with the electorate even though the voters are clearly fed up with the recent conduct of the LDP. Further, the party’s behavior has prevented the people from taking their use of the expression seriously.

It didn’t have to be that way, and to see why, one need look no further than Mr. Koizumi and two governors who champion reform, Higashikokubaru Hideo of Miyazaki and Hashimoto Toru of Osaka. The reason the three of them have maintained sky-high popularity ratings for a period of time almost unheard of in politics is that they put citizen-centered reform first. There’s no better example than Mr. Koizumi ignoring his party’s advice and calling for a lower house election to let the public decide the issue of postal privatization. Both his party’s mudboat wing and the DPJ were opposed, but he was rewarded with one of the most decisive mandates in Japanese political history.

Why haven’t the DPJ gotten the same political love, despite their desperate chanting of the mantra of reform?

It’s the slogan, stupid. Citizen-centered reform is not the first thing they mention. For them, it’s all about seiken kotai…Is that two-party government? Change of government?

No. The voters know what that expression really means to the DPJ.

Our objective is to take power.

From the people’s perspective, what they’re saying is that they want to be part of the problem, rather than the solution. That’s why it’s taken so long for the electorate to even think about taking them seriously.

Even worse for the dim bulbs of the DPJ is that their actions have spoken louder than their words, especially after they gained control of the upper house in 2007. Rather than present coherent policy alternatives and use the new platform as a bully pulpit for the discussion and debate of those alternatives, they chose to behave as a teenager behind the wheel of a new muscle car with a six-pack on the passenger seat. Many people share the sentiments of the LDP’s Nakagawa Hidenao:

“They should dispense with this philosophy of making political crises a priority and compete on citizen-centered reform.”

The way to the Japanese electorate’s heart is easier to see than a neon-festooned pachinko parlor on the outskirts of a country town on Sunday night. Mr. Koizumi certainly saw it, as well as the two governors. Of course they’re ambitious—they wouldn’t be politicians otherwise—but they made sure to put citizen-centered reform first, or at least do a believable job of faking it. They’ve made themselves answerable to the people.

The castrati in the DPJ, on the other hand, have made themselves answerable only to the cynical calculator Ozawa Ichiro, not out of a sense of conviction for his principles—whatever those are this month—but out of the fear that he’ll split and deprive them of their chance to take power.

Forget about walking the walk—they can’t even talk the talk. What was that Mr. Hatoyama said about accepting responsibility if Ozawa Ichiro had to step down? And what was the reason he and Mr. Ozawa gave for stepping down? To apologize for the arrests over campaign financing? To demonstrate the sincerity of their claims of being the clean party? To honor their own sense of decency?

No. The reason they gave is that the scandal would prevent them achieving their objective of seiken kotai: Taking power.

Mr. Hatoyama should make a dandy prime minister.

It doesn’t take much insight to know exactly why the party’s rates of support are lower than common sense says they should be. The DPJ has done nothing to make people feel good about voting for them. That’s why Mr. Takenaka’s observation about the party confronting enormous opposition on taking power is likely to be dead on. And since they’ve done nothing to win the goodwill of the people—indeed, they’ve done everything to ignore it—any honeymoon period is likely to be very short.

If the party succeeds in forming a government this year, their first problem will be illustrated by the old story of the barking dog that forever chases the family car. What will the dog do when it finally catches the car?

Don’t ask the DPJ. They haven’t figured it out themselves. After all, their objective is to take power.

But they’d better start thinking fast. When you’re the party in power, words really do mean things.

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