Gazing into the Crystal Ball as Fukuda Numbers Settle at Late-Abe Levels

The Fuji TV network conducts a weekly telephone poll, where the first two questions are always the same. I’ve chosen the results from 2007 July 19 poll, taken three days before the House of Councillors election where the LDP-Komeito coalition went down in a devastating defeat under the Abe administration, and the 2008 May 29 poll, the latest available for the Fukuda administration. Take a look:

Q1: Which party do you want to vote for in the next House of Representatives election?

2007 July 19:
LDP 17.8%, DPJ 25.8%, Komeito 6.0%, JCP 3.2%, SDP – 1.0%, PNP – 0.2%, NPN – 0.0%, independent or other – 1.2%, abstain – 1.2%, undecided – 43.6%

2008 May 29:
LDP 17.4%, DPJ 26.8%, Komeito 3.8%, JCP 2.4%, SDP – 0.4%, PNP – 0.2%, NPN – 0.0%, independent or other – 1.2%, abstain – 0.6%, undecided – 47.2%
LDP – Liberal Democratic Party of Japan, DPJ – The Democratic Party of Japan, Komeito – New Komeito, JCP – Japan Communist Party, SDP – Social Democratic Party, PNP – People’s New Party, NPN – New Party Nippon.

Q2: Do you support the Abe/Fukuda Cabinet?

2007 July 19:
Yes – 29.4%, No – 60.8%, other/don’t know – 9.8%

2008 May 29:
Yes – 22.8%, No – 68.6%, other/don’t know – 8.6%

I could probably switch the numbers between the two poll results and if you came back a day later, you wouldn’t notice the difference. The numbers sometimes fluctuate from month to month, sometimes for no specific reasons, but the trend is clear: The Fukuda administration in recent months has been as unpopular as the Abe administration at its worst, and the LDP-Komeito coalition is seeing a similar fate.

What can Prime Minister Fukuda do to regain momentum? He could use one of the two main prerogatives of a Prime Minister, a Cabinet overhaul. (The other, more nuclear option, a snap election, is most inopportune at this moment.) When Prime Minister Abe undertook a wholesale makeover including the LDP leadership—also within his rights as party president—his administration received a 10.2% percentage point bump from 24.6% to 34.4% (negatives down from 64.6% to 57.6%) between the 2007 August 23 and August 30 polls. This was no statistical fluke; all the other polls at the time registered similar gains for the Abe administration. Unfortunately, most of this gain was gone the following week, as was Mr. Abe for all practical purposes in another. More significant to the current situation, it did nothing for the LDP-Komeito coalition.

Of course the Fukuda administration could always try to win on policy. But I don’t think that sweating the small stuff, such as tinkering with the Late-Term Elderly Medical Care Insurance system, is going to have a major impact. I don’t believe that the Hokkaido SG-8 Summit and a squishy agreement on greenhouse gases or any other combination of diplomatic or national security issues are going to be winners either. That leaves the autumn fiscal reform package, including a likely decision on a consumption tax hike, usually a loser. However, I think that the Japanese public is ready to bite the bullet on that one and move out of the none-of-the-above category and away from DPJ, which, under Ichiro Ozawa, is increasingly looking like the not-the-LDP, Socialist Party of old, on steroids. But to gain public acceptance, the authorities must impose the kind of budget cuts that could be coupled with a consumption tax hike to bridge projected revenue shortfalls in the national welfare system and to begin crawling out from under the huge public debt overhang. As part of any deal, they must deal with the unpopular gasoline tax surcharge. The civil service reform package notwithstanding, Mr. Fukuda and/or his associates have so far been unable to show the leadership and vision that would be necessary to carry out this daunting task. More likely is continuation of the across-the-board annual budget cuts with some allowance for the most popular items such as education and healthcare—the surcharge revenue will come in handy here—and possibly a substantial reduction in civil service salaries and severance pay. As popular as civil service bashing appears to be, this does not look like a recipe for a coalition victory in the next House of Representatives election.

As far as the political game is concerned, the coalition—the LDP to be more precise—can take an even more drastic route than Mr. Fukuda by replacing him with a new Prime Minister. This should bring more long-term relief than a Cabinet reshuffle. A Koizumi might counterattack with a snap election in that situation, but Mr. Fukuda does not appear likely to do that, and Taro Aso, the frontrunner and popular campaigner—if prone to verbal gaffes—is positioning himself to take over if given the chance. However, neither Mr. Aso nor any of his putative rivals appear capable of doing the kind of drastic overhaul that the LDP can sell to the public, much less wield the raw political power necessary to push Mr. Fukuda over the edge in case he is unwilling to leave of his own volition.

Thus, I’ve been coming around to the view that the opposition has a good chance of denying the LDP-Komeito coalition a majority, and doing so just by not losing. However, having made all those pricey promises to be financed by vaguely (if at all) identified budget cuts and money stashes and lacking a “twisted” Diet as an excuse for not fulfilling them, the DPJ is likely to encounter serious difficulties maintaining credibility when leading a coalition regime of its own. It’s a given that the DPJ will need a coalition partner or two, since it does not have a majority in the House of Counselors. That will complicate efforts to draw up a coherent policy manifest and see it through. Another post-HR election possibility is the beginning of a bidding war between the LDP and the DPJ for the services of the minor and micro parties. In fact, anything less than a robust victory for the LDP-Komeito coalition should result in a period of political instability whose practical consequences I cannot make out, until the dust settles on a major realignment along more coherent lines policy-wise.