Tuesday, May 20, 2008

Meandering from Opinion Polls to the State of the Economy

The latest Yomiuri poll (May 17-18) has come out, as the excitement whipped up by the Late-Term Elderly Medical Care Insurance rollout and the gasoline tax reinstatement has worn off and talk has turned to trimming some of its rougher edges or reverting to the old insurance system (the opposition); [ and divvying the gas money between roads and other objectives or simply getting rid of the surcharge and making up the difference for local governments from the national budget (the opposition)]. The results show a slow but steady slide in public esteem for the Fukuda administration and the LDP-Komeito coalition. The changes appear to be within or near the margin of error. But when all the numbers trend in the same direction, they’re harder to explain away.

If you really want to get a good view of the Fukuda/coalition dip-DPJ lift right after the gasoline tax surcharge reinstatement and the subsequent fallback, there’s no better place to go than the weekly Fuji TV polls and compare the numbers for the past four weeks. I hope you’re not a coalition fan though, because the DPJ has consistently been beating the LDP-DPJ numbers for some time. The silver lining if you are is that your trend-lines appear to have steadied since February despite taking more major hits in the form of the insurance rollout and the gasoline tax surcharge reinstatement.

Where diplomacy is concerned, the poll also confirms that Hu Jintao’s visit had little effect on the Japanese public—no surprise, what with no visible breakthrough on the East China Sea gas fields and the 2millon-dollar price tag on the giant panda “gifts (according to unofficial reports—neither side has actually mentioned it). Looking ahead, beyond the polls, there’s no downside for the Prime Minister in the July G-8 Summit in Hokkaido. On the other hand, there’s not much upside to what has become over the years something of a giant photo-op. (Are they going to dress up in kimonos? Better than the clown suits that Jiang Zeming gave his colleagues. ) The Fukuda administration and the ruling coalition should not expect anything more than a small, momentary blip in popularity. Be thankful, instead, that botching the LTEMCI rollout and reinstating the unpopular gas tax surcharge have done limited damage.

Which brings us to the real political issue—the fiscal reform package, coming to us this autumn. You know that I have grave doubts on this about both sides. Now Ross approaches this from a different angle. He believes that an LDP loss, any LDP loss, will break the stranglehold that vested interests have on policy making, and that Ichiro Ozawa knows this and is willing to do anything to make it happen. The trillion-yen price tags on the DPJ promises are worth it.

I dunno, Ross, here’s hoping: You’re right, I’m wrong.

PS: And yes, there is the economy. There’s precious little that the Fukuda administration can do on its own in the event of a serious economic downturn. And if it’s really serious about fiscal reform , it will come up with a big tax bill. But I don’t think that the Japanese public trusts the DPJ with economic management either.


ross said...

That's stated a bit differently than I would state it. I'd say that the probability that the stranglehold vested interests have on the Japanese government declines much more significantly if the LDP loses than if the LDP wins. That is true regardless of how much Ozawa promises the public as he tries to unseat the LDP in the lower house.

Jun Okumura said...

So Ozawa takes over, the checks bounce, and the DPJ goes down as well—at that point, reformists from both houses break free and form the next enduring majority? That would be nice.

Perhaps there’s a generational aspect to this fault-line. Of the former DPJ leaders, Katsuya Okada and Seiji Maehara joined Sentaku, while Naoto Kan and Yukio Hatoyama did not. It’s far less evident in the LDP, where the only U-60 ex-leader, Shinzo Abe, has priorities that cut along different lines. Still, Nobuteru Ishihara and Yoshihide Suga are Sentaku members; that should count for something.

ross said...

The DPJ may or may not go down as well, but the key is regularizing alternation in control of government. Only then do parties choose policies in ways that constrain themselves, because they are also interested in constraining the other party. Barbara Geddes wrote a book on the argument, covering mostly Latin America. But the notion has been tested beyond that region.

You see, I am not making an argument in favor of one party or the other. I am simply thinking through the implications of the LDP losing complete control of government which looks, for the first time, quite plausible. That represents a long term upside for people interested in investing in Japan. There is much inefficiency in the domestically focused Japanese economy. To the extent that is loosened up, there is real room for growth.

Jun Okumura said...

Thanks, I’ll have to go look up that book. I need to think more, too, about how that works out in the Japanese situation.