Setting Up Japan For Defeat

21 Nov

Everyone agrees the Democratic Party of Japan is set to lose elections on December 16, and it’s a bigger deal than even the Liberal Democrats realize.

The Japanese electorate has for years told the political class what it wants very clearly, and held them responsible when they don’t listen. They went big for small government, privatization, and reform in the 2005 Koizumi landslide. When the LDP turned its back on the Koizumi path, the exasperated public gave the opposition DPJ power in the 2009 landslide. Within months they were exposed as inept charlatans, and now all that land will slide on them.

You wouldn’t know it by reading the Anglosphere media, but voters in Japan spontaneously created their own combination Tea Party and Hope and Change movement long before either arose in the United States, both more ruthless than their American counterparts. They are quick to support the people who say what they want to hear, and just as quick to withdraw that support when they don’t walk the walk.

It’s a funny old world. All eyes were on the American presidential election this month, and few eyes will be on the Japanese election next month. The vote in Japan is of much greater interest, however. It will be a more compelling display of democracy in action than the one held in the United States.

The money is all a-flutter about the prospect of a game-changing Japanese government.

And then beyond that, the Japanese election features one candidate — former PM Shinzo Abe of the Liberal Democratic Party — who is running on an explicitly pro-QE, pro-inflation platform that is unusual.

We’ve been talking about this a lot the last couple of days, as an aggressive pro-inflation stance has the potential to break the back of the uber-strong yen, and finally unburden domestic Japanese manufacturers. Also, the Bank of Japan is considered to have a bad track record (when it comes to stimulating growth and beating deflation) so it will be an interesting experiment for the world to watch to see if a much more aggressive posture changes the game.

Not that I’m uninterested in greed – or just a good political revenge – but Abe is not the messiah.

Opinion polls suggest that the DPJ will lose its majority and the LDP will return with the largest number of seats in the lower house, the more powerful of the two houses of Japan’s parliament. Yet the LDP may not win enough seats to form government on its own and it will be again difficult to reach policy consensus within any subsequent coalition. Moreover, an LDP-led government with Shinzo Abe as prime minister is likely to be very problematic.

Abe was Japan’s prime minister from 2006-2007, and he was unremarkable. Public disapproval soared as a result of his failures to fix pension records that affected some 50 million people. Four of his ministers resigned and one committed suicide after political scandals were made public. Obviously, he had poor political judgement. He carries with him the heavy symbol of several policy failures and he resigned abruptly citing poor health.

However, there were other push factors at work, including his party’s poor performance at the 2007 upper house elections and mounting pressure from within his own party to resign.

To be fair to Abe, he did try to improve relations with China. These had become frosty due to his predecessor’s visits to the controversial Yasukuni Shrine, where thousands of war dead are buried and which both China and South Korea regard as offensive, The visits reinforced perceptions that Japan refuses to properly face to the responsibilities that flow from its war in Asia.

Abe shunned visiting the shrine and made a trip to China to mend relations but his idea of revising the peace constitution and forming a quadrilateral framework consisting of Japan, India, Australia and the United States – followed by his statement that there was no evidence of forced sex slaves during the war – again raised eyebrows in Beijing and Seoul.

I’m not that concerned by Seoul’s and Beijing’s bitchiness about Yasukuni or the Constitution. I’m also skeptical of the “pivot to Asia”. It just seems every year or so, Japan and the world get hopeful that THIS YEAR will be the year Tokyo gets its act in gear. And, every year, it’s the same parties and the same retreads. How many iterations of Abe will come and go before Japanese voters, like American voters, look for deeper structural reforms over quick electoral fixes? Change comes only from the majority.

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