Wednesday, January 14, 2009

Beginning of the End for LDP to Come after Election, Not Before; Other Speculations about the LDP’s Immediate Future

I believe that, barring an unforeseen collapse, the DPJ will emerge from the Lower House general election as the number one party in both Houses. It has won more proportional Lower House seats than the LDP before—in 2003 when a more popular Prime Minister (Koizumi) was in power. This time, it is fielding more single-seat candidates and its leadership appears to be exercising much greater quality control over the aspirants. Moreover, the Communist Party is abandoning its practice of contesting every single-seat district, which bring more dissatisfied voters into play for the DPJ. But it remains to be seen whether the DPJ can surpass the LDP-New Komeito coalition and perhaps even gain an outright majority.

All this will complicate the possible post-election combinations under the current party configurations not to mention the multiple divergences arising from realignments large and small that I am unable to narrow down the range of immediate post-election scenarios in any meaningful way. In the meantime, I’ll do my best to keep posting on matters that I think are guessable. And the first of that is the title of this post. More specifically, barring an unforeseen DPJ catastrophe, few LDP Diet members will follow Yoshimi Watanabe’s example and walk out of the LDP before the election. Instead, defections will occur after the election, mostly if not completely within the Koizumi-reform wing.

First, on the lack of overt support for Yoshimi Watanabe. Watanabe is known as something of a policy wonk and his outspoken style plays well with the media, but has never been considered a leader even in comparison to his somewhat power-shy 50-something cohorts. He may be in the right place, but is surely the wrong man at the wrong time.

Speaking of timing, the battle lines have hardened over the past week. Koichi Kato and Taku Yamazaki, two LDP heavyweights seen cavorting with the likes of DPJ co-deputies Naoto Kan and NPP co-leader Shizuka Kamei, have been backtracking lately. In fact, Yamazaki has come out strongly against Watanabe’s one-man rebellion. Hidenao Nakagawa is the remaining wild card, but he hasn’t said that he will vote against government tax legislation that commits to a consumption tax increase three years down the line. Never say never, but my money is on abstention, which will earn him a wrist slap at most. (Unless of course, a highly unlikely massive defection denies the Aso administration the supermajority in the all but inevitable Lower House revote.) This turn of events has convinced me that there will be no serious break before the election. Which begs the question: Why?

There is one important factor that dictates against premature self-ejection: money.

It is useful to remember in this case that the most vulnerable segment of the LDP Diet Lower House members, the first-termers, often deeply in debt, who have not had the time build up the financial and institutional support system of their seniors, are even more heavily handicapped by the fact that, courtesy of Prime Minister Koizumi, a larger than usual portion of their ranks are non-heirloom adventurers. Perhaps things would be different if they had an experienced and well-endowed leader. But their most prominent champion, Junichiro Koizumi, is leaving the building, acting out of character by bequeathing his seat to his (by available reports) least talented son; Hidenao Nakagawa, the remaining dog with the biggest bite, has all but ruled out a pre-electoral break for himself..

The Political Party Subsidization Act has helped opposition parties put their finances on a more solid footing, but it also helps the LDP’s non-heirloom newbies, who must build their electoral and fundraising machines while paying back the debt they racked up getting elected. This conspires with the technicalities of the subsidization scheme to dictate against a breakout between now and the next election.

Let’s explore the technicalities to some detail. Half of the subsidy in any given calendar year is allocated on the basis of the number of seats that each party holds as of 1 January that year, and another 1/4th is allocated on the basis of the results of the most recent Lower House general election. In other words, this year, approximately 3/4th of the money is being allocated on the basis of the LDP’s 2005 landslide victory in the Lower House when then-Prime Minister Koizumi basically campaigned against the LDP while running on behalf of it. The money is disbursed in equal amounts in April, July, October and December. That means that leaving the LDP before the April disbursement—and all signs are pointing to an election in the new fiscal year (April 1-), not before—will impose a substantial financial penalty on the defector. This will become less of a problem after the election, when financial needs subside for the moment.

What about Kan’s warning that LDP defectors will be less welcome after the election? If the DPJ wins an outright majority, sure. But if it needs their cooperation to form an effective majority, their leverage will be enhanced enormously. The “after the election” argument cuts both ways.

JThe potential conflict with DPJ candidates will also be a serious issue. DPJ leaders are letting it be known that the DPJ may be willing to have some of their candidates step down to give pre-election rebels a better chance of winning. But they are talking about people who have put a hold on their careers, suspended their private lives and often gone into debt to finance their campaigns. It will be a chore to convince them to abandon their ambitions. Besides, the negative press from such a Machiavellian move is likely to further disillusion the public with the Ozawa DPJ. I’ll believe it when someone in the DPJ is actually willing to put their weight behind the idea. The DPJ is not fielding a candidate against Watanabe, but a challenge would have been futile in the first place against an heirloom candidate with great electoral strength.

Of course all this would mean little if leaving the LDP would greatly increase your electoral prospects. But there is no assurance that the DPJ brand with it diminished luster would be much help to an opportunistic defector. There is no reason to believe that staying in the LDP and vowing reform from within is any worse as election tactics. Moreover, you must always be mindful of the possibility of losing anyway. Being a loser without strong institutional backing does not exactly enhance your chances for a rematch.

Finally, why the reformist wing? First of all, the LDP reformists are closer to the DPJ than the rest of the LDP Diet members are in their openness to drastic changes in the domestic status quo. Post Office privatization, which reformists continue to favor, is the one major exception, but the DPJ’s current position is very much the result of a marriage of convenience with the micro-parties. It will be easier for the DPJ to find common cause with reformist breakaways than to reconcile the proto-LDP views of the People’s New Party and the old-left protest instincts of the Social Democrats with its own policy agenda.

Second, the reformists are heavily weighted towards electorally vulnerable first-term Diet members, i.e. the Koizumi Children. It is likely that their numbers will be diminished after the election, further limiting their clout within the LDP. That is when the incentive to make a break reaches its peak.

What happens next? My best guess at this point is that the most vulnerable candidates with the greatest distance from the Aso administration policy-wise, i.e. junior reformists, and their leaders, i.e. Nakagawa, Tsutomu Takebe and their like, will play a hedging game by running a loyal opposition campaign against the LDP status quo, and take their chances post-election. It is quite possible that l will be amending this outlook as events unfold, even to the point of eating post-election crow. But I thought it important to stake out my position on this now, since it could be tested empirically against the actual events that unfold over the coming months.

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