Friday, July 30, 2010

PNP, SDP Tries to Sell DPJ on Lower House Supermajority

The Odd Couple are doing the nasty again. Shizuka Kamei’s People’s New Party and Mizuho Fukushima’s Social Democratic Party, both devastated in the July 11 lower house election*, agreed to join forces to push the three postal “reform” bill (Kamei’s pet project, which will keep the Japan Post group under government control and expand its massive savings deposit and life insurance businesses) and the worker dispatching regulation bill (reverses much of the deregulation of the worker dispatching business (broadly similar to temp agencies) under LDP administrations, its effect on dispatched workers as a class and employment in general is hotly disputed). Prime Minister Kan agreed to work with them to expeditiously introduce the bills. But will they pass in their current form? And will the cabinet raise the ceilings for the Japan Post’s savings and life insurance businesses, if and when the Diet passes the bills?

The DPJ and PNP, which is still in the coalition, have 110 upper house seats between them**. The SDP has four, which gives the group 113 votes. They can probably count on one independent to vote with them. Let’s say that Hiranuma’s Stand Up Japan adds its three votes to the tally. That still leaves them at 114—eight votes short of the 122 votes to ensure a majority, assuming none of the 242 upper house members fails to cast a valid vote for or against the bills. The idea, then, is to throw the bills back to the lower house, where the three parties have between them 318 seats (DPJ 307, PNP four, and SDP seven). Add the two members in the Hiranuma group there, and they have 320 votes, just enough to cross the 319-vote*** threshold for a supermajority. But can the DPJ afford to do that?

Remember how sparingly the LDP-Komeito coalition was in exercising its supermajority after it lost the upper house majority in the 2007 election. If anything, it would bend over backward to accommodate the DPJ on legislative bills, or even abandon them altogether for all but the barest necessities. It did this as a concession to media pressure in line with the perception that the LDP would not be able to regain its public mandate until it faced another lower house election. Likewise the post-7.11 DPJ. It must be looking beyond the two bills. And it must be aware that a supermajority override at the first opportunity after the Upper House election is an effective way of killing any immediate prospects of building a workable upper house coalition or, more likely, fluid issue-based alliances. Besides, there is no assurance that the SDP (and Hiranuma’s friends for that matter) will vote with the coalition on future override attempts (or for that matter that Kamei won’t continue to be the camel that refuses to be housebroken)

A lower house override on the postal “reform” bills will cause immediate and specific harm to the DPJ, since the mainstream media will oppose resubmission in their current form. The DPJ will in essence take a hit on the massive floating vote, with questionable political returns from the postal office electoral machine. It is useful here to remember that the DPJ originally wanted to reduce the Japan Post’s financial operations by half and sell off all of what remained in a public offering. It only reversed its position as part of a broader attempt to destroy the LDP altogether by taking away its special interest support. However, the election showed the waning influence of the postal office vote machine—PNP wipeout!—and, more broadly, special interest politics in general.

The workers dispatching bill should have a more mixed media response, and big labor, which now gives much of its support to the DPJ, supports it, so I expect it to fare better. However, with the SDP out of the coalition and in disarray, there is now a very good chance that the bill will revert to the original business-big labor compromise, rejecting the even tighter restrictions that the SDP and PNP forced on an unwilling DPJ. Here again, though, I can’t be sure that the DPJ is willing to pay the political price of an early lower house override, if it comes to that. Even if the Japan Communist Party pitches in with its six upper house seats, the alliance will still be a couple of seats short there—and that’s assuming that Stand Up Japan will not vote against it or abstain. I’m now leaning toward a scenario—there are other possibilities—where the DPJ will accept an amendment, possibly in the upper house, to secure passage without resorting to the lower house supermajority override.

Those are my immediate thoughts on the initial steps beyond the September election for the DPJ leadership. I still think that Kan will survive an Ozawa-inspired challenge, but his troubles then will only have begun.
* The PNP went in three upper house seats at stake and was wiped out, leaving it with the remaining three, which will be up for grabs in the next, 2013 election. The SDP ironically beat out PNP to keep two out of three, leaving it with four upper house seats, but could not stop the long, steady in voter support. The SDP could still implode, as Kiyomi Tujimoto, one of its few stars took her lower house seat and defected, touching off a blame game/power struggle among the remaining Diet member. Tsujimoto is likely to eventually caucus with the DPJ, vastly more instrumental than the SDP in her election.

** 108 seats if you exclude the upper house president, who by parliamentary custom is nominally an independent and normally withholds his vote. Likewise the vice president, who hails from the LDP, so the two cancel each other out.

*** This is not a typo. Two of the 480 lower house seats are currently vacant, so there are currently only 478 members there. Note that if the president and vice president of the lower house follow custom and abstain, there will be 466 votes. This would bring the supermajority threshold down to 318, in which case the Hiranuma group’s votes will be unnecessary. This may be consequential to the worker dispatching bill.

How Useful Is the Lower House Predominance on Budget Bills?

Not much, it turns out.

In the Japanese Diet, it takes a supermajority of two-thirds in the lower house to override an upper house rejection of a legislative bill. However, in the case of a budget bill, the decision of the lower house by a simple majority prevails if the two houses disagree. This is obviously designed to allow the business of government to continue in the case of a standoff. But it doesn’t quite work out like that in real life.

There are two categories of legislative bills submitted by the cabinet: budget-related and non-budget-related. Budget-related bills are bills that are necessary to execute parts of the budget*. Some of the budgetary links are tenuous and no doubt can be worked around with ease**. However, others are harder to do without. One major example is the plethora of business tax breaks, which collectively keep the effective corporate tax rate well below the nominal cumulative effect of the national and local corporate income taxes and other major business taxes. Must such tax breaks have relatively short time limits. Thus, they will disappear unless the Diet passes legislative bills that extend them or convert them into other forms***.

Now, some anti-businesses will say, good for them. But even unreconstructed socialists will balk at the thought of the government going bankrupt well before the end of the fiscal year. And that is exactly what will happen to the cash-strapped Japanese government unless the Diet passes the mother of all budget-related legislative bills.

Under the Public Finance Act, the government can only issue bonds to cover expenditures for public works, funding****, or lending. Therefore, each fiscal year since 1994, the Diet has passed a special dispensation bill that authorizes the government to issue deficit bonds to cover the projected revenue shortfall in the general account budget. In FY 2010, the shortfall is projected to be 44 trillion yen out of the projected revenue of 92 trillion yen*****. Things are unlikely to get any better in FY2011. Without a special dispensation act, my guess is that the government will literally run out of money by the end of calendar year 2011.

As a practical matter, the budgetary prerogative of the lower house is worth squat without a supermajority. In that sense, the Japanese national budget is no different from laws. Think about that when you consider the need, and prospects, for the Kan administration, or any other administration for that matter, for a meaningful coalition or, more likely, fluid issue-oriented alliances.
* Budget-related bills are submitted before the non-budget-related bills, so they have a much better chance of being passed before the Diet session expires. The Cabinet Legislative Bureau has final say within the bureaucracy on determining the nature of any bill. The distinction is sometimes unclear, and bureaucrats strive mightily to draft their bills to hook them up to the budget in ways that will convince the CLB to concur.

** Preferential lending rates from public financial institutions for specific policy objectives is the example that first comes to mind. Also, most subsidies other than tax breaks.

*** Most of the tax breaks are put together in a single law that covers special tax measures (including surcharges), and are dealt with en masse in an omnibus amendment bill during the annual regular Diet session.

**** Think, equity holdings.

***** The special dispensation acts are also used to dig up “buried treasures.” The FY2010 act, in addition to the authorization for deficit bonds, authorizes the transfer of funds from the FOREX, FILP, and Food Stabilization special accounts to the general account.

Wednesday, July 28, 2010

Incumbents a Problem for a DPJ-Komeito Coalition

There are so many scenarios in the immediate future of Japanese politics, but you have to start somewhere. Here are some base-case thoughts of mine on an important question concerning Komeito’s future.

Komeito, with its 19 upper house seats, is the only other than the LDP that can ensure an upper house majority by itself in a coalition with the DPJ (not to mention hat would then become a superfluous lower house majority). The policy inclinations of Komeito’s urban, increasingly middle-class Soka Gakkai constituency is relatively easy to accommodate within the DPJ’s policy agenda. So expect a lot of flirting and dancing to go on between the two; otherwise, government will grind to a stop*. But this does not mean that the two parties will be in a position to enter into a formal relationship in the near future.
* Note that the DPJ can pass the budget by itself, but it won’t be able to account for half of it unless it can muster enough votes in the upper house (or a supermajority in the lower house to override its weaker counterpart) so that it can pass the authorization legislation for the multitrillion JGBs needed to cover the revenue shortfall.
Komeito went into the 2009 lower house election with 31 seats and came out with only 21. The loss of all eight incumbents in single-member districts to DPJ or DPJ-supported candidates was particularly keenly felt, since it wiped out the Komeito lower house leadership; not one of the incumbents had been placed on the corresponding regional district list as insurance against a loss in the single-member election. Getting those seats back will the most important part of the asking price—there’s also the upper house and local elections and, yes, policy issues—for a formal coalition.

To accommodate (my hypothetical) Komeito demands, the DPJ would have to force the incumbents (seven DPJ members and Yasuo Tanaka, the maverick New Party Nippon chief) to step down. It might be able to placate its own by putting them at the top of their respective regional tickets, but that would put its own regional district incumbents in peril. These are people who put successful careers on hold, or abandoned them altogether, to cast their lot with the DPJ; they will not go gently into that good night. My guess is that it will take at least another lower house election for the Komeito-LDP relationship to fully unwind—and the DPJ to take Komeito home—if the DPJ and LDP remain in their current configurations if not exact dimensions.

Sunday, July 25, 2010

Looking Back on My Pre-Election Thoughts

At least one of my predictions sort of came true: a brief post-election Diet session for purely housekeeping purposes. I say sort of because a couple of minor non-partisan bills submitted by Diet members (bills submitted by the cabinet are far more common and usually more substantial, particularly in their fiscal consequences) are likely to be adopted without going through the usual formalities. The reason for this is that an Upper House majority is difficult to muster on short notice in the aftermath of the election. (My apologies to Climate Morio, who put the question to me here for being so tardy in replying.) And yes, it is increasingly likely that there will be no coalition until the September DPJ election (and for some time after that only case-by-case, floating alliances). However, I’ve changed my mind slightly on Kan’s prospects of remaining in power in that situation. I now he’s more likely to prevail. I’m going over this point, and coalition/alliance prospects, in more detail in a memo that I’m producing for a paying customer. I’ll see if I’ll be able to publicly share at least part of that.

Good thing I avoided making an explicit, last-minute read on the outcome, instead wimping out by referring to media reports. Seriously, I should have paid more attention to the tabloids.

A Mrs. Kan Addendum, Plus Komeito/LDP/DPJ Commentary Lite

I just finished watching a 1 hour, 45 minute Sunday news show (Asahi TV) that I watched regularly. It gave Mrs. Kan’s book at most 5 minutes in a lightly humorous vein, more than the news clips that preceded it, but less than the 15 minutes for the following segment on zoos, 25 minutes for a three-piece set of political stories using two guests from the DPJ and Your Party, and the 30 minutes for an investigative piece on Komeito and electoral collaboration between Komeito and the LDP. It’s only one example, but I think it puts the story in proper perspective.

The last piece was of interest, because it shed light on an important obstacle to full-fledged collaboration between the DPJ and Komeito. Now, the program regulars were of the view that it didn’t work for Komeito on the proportional ballot, where it received help from LDP local chapters in exchange for the Sokagakkai vote for the LDP’s local prefectural district candidate (the same kind of collaboration that has gone on in previous elections, this time without the usual official sanction from party headquarters in Tokyo), since it lost on the proportional vote more than 100,000 votes and one seat from the last Upper House election. I wonder. After all, the LDP lost about 2.5 million proportional votes. Either the LDP bled itself dry for the Komeito proportional ballot, or it hadn’t made good on its promises before. Now, all that Komeito has to do is check the number of local votes against the Sokagakkai members to figure it out. And if the LDP help had been ineffectual in previous eletions, the Komeito/Sokagakkai authorities would have known.

Mrs. Kan Disses Mr. Kan. Not

A seasoned Asianist sends without commentary this news report headlined “My husband Naoto Kan the PM of Japan: a lightweight with no dress sense,” a straight-faced account of Prime Minister Kan’s latest embarrassment, a book full of unremitting criticism from his wife… or is it? For context is everything—everything that is missing from this report. Let me explain.

The fearless lion in the workplace who turns out to be a docile lamb at home is a popular archetype in Japanese culture, with some foundation in fact. Foreigners often marvel at the control that the typical Japanese fulltime housewife exercises over family finances.

Modesty, and humility, pays in Japan. We’ve mastered the art of the backhanded insult; this book is a prime example, no doubt helped by Mrs. Kan’s reputation as an acerbic, politics-first personality. Tellingly, and typically for her generation, she does not have a political career of her own. Go figure.

The book has admittedly taken the archetype/humility ploy to a new level, a tactic that was not totally without risk. However, that risk is mitigated by the fact that in Japan, what happens in the family tends to stay in the family. Revelations of Hatoyama’s youthful affair with and subsequent marriage to the wife of a friend became tabloid fodder after he became prime minister, but did not have any effect on his popularity (or lack thereof) as prime minister; likewise, the first lady’s wacky New Age persona.

Since the mainstream print media tend to underplay these items, I rely on newsstand and newsprint ads for tabloid and weeklies to get a better feel of how things are going down. My impression is that Mrs. Kan's efforts will be mildly successful at best, sink with little trace at worst.

The writer is the Daily Telegraph’s “Showbusiness Editor.” Seriously. I’m looking forward to her next piece on Shakespeare, where she offers a critique on Marc Antony’s eulogy as a Julius Caesar takedown.

Monday, July 12, 2010

Final Thoughts? Really? More Appropriate for Twitter?

The next 24 hours are crucial to the Kan administration’s survival.

Also, an LDP guy candidate is electedreelected in Okinawa. Go figure.

Sunday, July 11, 2010

The Tabloids Called It First, Sorta

I have some thoughts about why tabloids are able to report this kind of stuff. Remind me to talk about it later.

I remember walking past a Kiosk a week ago give or take a couple of days and seeing a headline screaming 45 seat debacle for the DPJ. Still, no one in the mainstream media saw an LDP plurality—knock on wood, Sadakazu Tanigaki—coming. Two immediate consequences of the unexpected DPJ loss: a) All policy initiatives are off the table until the September DPJ presidential election and b) the LDP surge and the poor showing by Ozawa’s candidates diminishes the chances of an outright Ozawa-led split. Point b) is what good news there is for Prime Minister Kan. Right now, I think that it will very difficult to cobble together a workable coalition, but I am stunned—and smashed.

One final point (for now): Floater voters trump special interest electoral machines.

Good night y’all.

Some Thoughts around the Upper House Election, Plus Shoutout

There are 29 one-seat districts, 12 two-seat districts, 5 three-seat member districts, and 1 five-seat districts*. Several observations:
* I am using the conventional and convenient terminology that refers to the number of Upper House seats that are up for election every three years in each prefecture, and not the actual number of seats allocated to the prefecture, which is double that number. This is significant, as we shall see later.
The last surveys showed the DPJ dominating in the one-seat districts to the northeast and the LDP prevailing in the southwest. The historical contrast between the poorer, more radical north and the wealthier, more conservative south continues to resonate in the battle between the two top vote-getters. Not that I’m ready to read anything of long-term significance into this, but I do know that I have to rethink my comment about the periphery.

The two-seat districts are basically a wash between the DPJ and the LDP. No wonder, when a party needs twice the votes of your closest opponent plus a comfortable cushion (unless you could somehow engineer a perfect 1:1 split of the votes, a feat not even the Sokagakkai could accomplish) to take both. Under a two-party system, the two-seat districts matter mostly as a source of votes for the national proportional election, nothing more. And you don’t want to give up a good day job to stand as the non-incumbent on the prefectural ticket unless you can earn a good chance of being placed on the House of Representatives ticket the next time around—or if the incumbent is somehow very vulnerable. Otherwise, you’re little more than a stalking horse for the candidates on the national ticket.

Of the five three-seat districts, three (Chiba, Saitama, and Kanagawa; the others are Aichi and Osaka) are the Kanto prefectures closest to Tokyo. (By contrast, a couple of more distant Kanto prefectures, Tochigi and Gunma, dropped from two seats to one each in the 2007 election. Each of the two now has three Councillors in the Upper House and will drop to two after this election.) Add Tokyo’s five, and we have as good an index of Tokyo-centricity as there is. There are many, often interrelated, reasons for this, but I’d say natural geography (Kanto is huge and relatively flat), the choice of Edo, later Tokyo, as Japan’s capital, and the post-war explosion in public transport are the three major factors.

I mentioned in passing that Gunma and Tochigi Prefectures are being downsized from four seats in the House of Councillors to two through the 2007 and 2010 elections. They talk about overrepresentation of the peripheral in the Diet, particularly in the Upper House, where each prefecture must be represented by at least one member per triennial election. But the Gunma and Tochigi examples show that the one per election requirement can create wrenching changes in representation in the peripheral as well. What will the prefectural districts look like in twenty years under current rules if current demographic trends continue? The DPJ and LDP are in an unspoken conspiracy to shake out the smaller parties in the name of sacrifice by the political class by cutting back on the national proportional seats. I don’t have a position on that, but I think that a revision of the a-seat-in-every-election rule should come first. More fundamentally, the place of prefectures in the Japanese body politics needs to be revisited.

I went and cast my two typical floater ballots today, which may account for my unusually prescriptive comments today. I took along an American political scientist along for a look-see and had a long conversation with him after that, which may also be affecting me. Incidentally, the election officials were nice about the presence of an uninvited observer, but did not allow the academic to take photos. And the guy—the professor, not the election official—wants to see you, Jake, before he goes back to the States. Hope you can find the time for him. Hope you come Friday too.

Saturday, July 10, 2010

Why Is the DPJ Catching All the Flak on the Consumption Tax Hike Issue?

Here is my response, rearticulated as a blogpost, to an issue raised on an Upper House election-themed mailing list.

It actually overlaps with yesterday’s post. Namely: Why is the Japanese electorate, according to the Japanese media, taking it out on the DPJ for Prime Minister Kan’s enthusiasm for a consumption tax hike, but not on the LDP, who broached the subject in the first place by putting a five percentage point hike in its election manifesto? Well, the LDP isn’t exactly gaining traction as far as overall voter sentiment is concerned—it’s the single-seat races where it’s surging in the surveys*—and I’m not a mind reader and do not have the benefit of a newspaper or grant to cover the costs of a survey, but here are a few observations/conjectures.

First, higher taxes are never popular, so there’ll be a temptation to shoot the messenger under the best of circumstances. In fact, the consumption tax in its various permutations has been the third rail of Japanese politics since the days of Prime Minister Ohira, so it would have been doubly prudent to have crafted a game plan before touching it. Instead, Prime Minister Kan threw out ideas about the tax rate, timeline, and exemptions as if he were engaged in a brainstorming session. We saw another case of analogous, if far more trivial, competence issues causing damage to the Fukuda administration during the rollout of the Late-Term Medical Case Insurance system.

Second, there’s the arithmetic. Which is more likely, pro-tax hike people who were inclined to vote for the LDP changing their minds and opting for the DPJ because Kan got religion, or anti-tax folks abandoning the DPJ and voting for a third party or abstaining altogether?

Third, this election is a referendum on the DPJ, not the LDP. The LDP would like to have as many of those floater voters coming its way as possible, but it’ll be okay if they stay away come 11 July or even throw in their lot to Your Party, as long as they don’t put the names of DPJ candidates on their prefectural district ballots.

What’s interesting is that the outcome—assuming the media surveys are correct—will make the LDP more of a party of the peripheral. That’s the other side of winning in the singe-seaters. Given demographic trends, i.e. concentration in the large metropolitan areas, which will continue to be reflected in the periodic census-based reallocation, it can’t be happy about that, as I’ve mentioned before.
* There’s a pattern here that highlights the north-east/south-west political divide. I can’t say more about this now since I don’t want to give away anything that Aurelia George Mulgan might be posting later on the SSJ Forum (it’s a useful site, I recommend that you subscribe if you aren’t subscribed already) regarding an interesting finding of hers.

Friday, July 09, 2010

Some More Thoughts on the DPJ Slippage. Plus, a Kan Story

The flap over Shizuka Kamei’s resignation from his cabinet post in protest over the Kan administration’s decision not to pass the postal reform bills during the regular Diet session* did not help. But mostly, it appears to be Prime Minister Kan’s handling of the consumption tax issue that is responsible for the precipitous fall in the DPJ’s electoral fortunes.
* The DPJ’s promise to do it ASAP when the Diet reconvenes after the election and Kamei’s replacement by his PNP cohort Shozaburo Jimi give the impression that it was more of a pre-election stunt than a show of genuine dismay.
Three days ago, on our way home from a talk given by the esteemed Professor Koichi Hamada, a journalist raised the question: If the majority of the Japanese public favors a consumption tax hike, why were Kan and the DPJ catching so much flak? My short answer in essence was that they alienated the entire anti-hike crowd while they had to share support from the pro-hike folks with the LDP, so they ended up getting bad marks from a majority of the whole*. That’s broadly what the subsequent polls are revealing in painful (to the DPJ) detail. And it’s also true that the consumption tax has always been the third rail of Japanese politics—just ask Prime Ministers Ohira, Nakasone, Takeshita, Hosokawa, and Hashimoto. There was the added stigma of the DPJ’s failure to come up with the massive savings that it had appeared to promise the Japanese electorate in the 2009 election. So there were caution lights everywhere calling for a very careful rollout plan. Instead, he seems to have had only the haziest of game plans if any, tossing out ideas about tax rates and timelines and exemptions as if he was engaging in a brainstorming session.
* So I can’t understand what we’re hearing from the media, that Kan and his associates intended to take away the issue from the LDP, which is advocating a 5 percentage point hike, to 10%. This isn’t rocket science; it’s really simple fractions.
One other takeaway: If the election plays out like the media surveys say that it’s trending, the DPJ will have to add a half dozen seats or so after the election for a simple majority (and, for a coalition majority, make up for the loss of two, perhaps all three, PNP seats at stake). Finding LDP defectors is the preferred option, but the low-hanging fruit have already been picked. One or two more perhaps, but half a dozen? That looks like part of a broader realignment, and only the DPJ can kick-start that process. The big bang, of course, is Ozawa’s game, but so is cherry picking. Kan and his team do not have the contacts and the expertise.

Coalition partners? The LDP? Ozawa came close to engineering a grand coalition in 2007 after the Upper House election that year. But is the cabinet large enough to share? Would the LDP want to? Both Komeito and most likely Your Party will each have enough seats to bridge the gap without the PNP’s help—good-bye postal reform bills?—but it will be a hard sell right after the Upper House election. Komeito is better equipped to enter a coalition, as I’ve explained here before, but media reports on the campaigning tell us that there has been substantial Komeito-LDP cooperation going on at the prefecture-chapter level.

I suspect that it’s going to take time to craft a stable DPJ-led regime. In the meantime, the extraordinary Diet session right after the election is likely to be limited to taking care of housekeeping matter such as committee assignments, so the postal reform bills will have to wait, perhaps substantially reengineered. And if all the opposition parties hold out long enough, Kan will be very vulnerable in the September election for the DPJ presidency.

Finally, an anecdote from Professor Hamada’s talk. During the Q&A, Kazuyo Katsuma, a do-it-all consultant (from personal finance to management and everything in between) and high-profile talking head, claimed that she briefed Kan and found that he didn’t know the difference between nominal and real interest rates. This comes on the heels of another piece of information that I gathered last previous week. During a conversation only tangentially related to the Kan administration, an unimpeachable source told me that Kan hadn’t known about the multiplier effect when he became Finance Minister. For someone with such limited economic literacy—RS tells me that Dick Cheney for one showed similar ignorance as Vice President, which I guess should be reassuring—Kan shows uncommon conviction in the righteousness of his big government approach.

Addendum: Anonymous reminds me that the multiplier mishap Finance Minister is “very old news.” So true.

DPJ Slipping, LDP Entrenching Itself on the Periphery

The most recent media surveys (6-8 July; polls and legwork) on the 11 July Upper House election put the DPJ around 50 and the LDP in the mid 40s. The DPJ continues to kick ass in the national proportional ballot, but the LDP is coming on strong in the prefectural districts. Specifically, it’s the one-seaters. Sankei’s 7 July district-by-district survey has the DPJ and LDP leading in 9 and 16 respectively, and the two neck-and-neck in 4. The LDP is becoming the party of the peripheral, of ura-Nihon—don’t use this word in polite company, it has been politically incorrect for some years—Shikoku, and Kyushu (it even leads in Okinawa).

If this trend will plays itself out on 11 July—there still are a lot of undecideds out there, though that factor has to be discounted by the prospects of their sitting it out—there will be a multitude of implications, short-term and long-, politics and policy, that require analysis. A lot of work to do.

Monday, July 05, 2010

The Upper House Election and Some Political Implications

If media reports on the upcoming Upper House election are to be believed, the DPJ is sure to post some gains but is likely to fall short of an outright majority. Media estimates based on proprietary polls and old-fashioned legwork suggest that the DPJ will do well in the national proportional ballot but will not achieve the near-sweep that it made in the 29 one-seat (per election, every three years) districts in the 2007 provincial ballots. The lack of an outright majority not only will have a significant impact on policy issues but will also likely affect the political game; Prime Minister Kan needs an outright DPJ majority to make sure that Ichiro Ozawa does not attempt to engineer a DPJ split and a broader, parliamentarian realignment around the September election for the DPJ leadership.

The same estimates indicate that the LDP will more or less break even in the national proportional ballot (12 seats up for reelection) but will claw back some seats in the one-seat districts. This will make it lean even more heavily towards provincial interests, which is not where you want to bet the future of your political viability as a national party. Your Party is likely to place a distant third and will represent free-market reformist interests in the march to the next Lower House election, to be held no later than 2013.

The SDP and PNP will wind up losing most of their leverage over the DPJ. Specifically, the SDP will end up continuing its slow but inexorable slide to oblivion, picking up 1—with great luck 2—seats (3 seats up for reelection). Every time that the 1955 Socialists cozied up to the powers that be, they have lost that much more of their political cachet as the safe haven for the protest vote; this election looks to be no exception. I suspect that we’ve seen the last of the SDP as a member of any coalition government. The PNP has three incumbents whose terms end this year, two in prefectural districts and one proportional; it is likely to end up with none. (It does have three seats, up for election in 2013.) That’ll be two more seats that the DPJ will have to cover just to maintain a coalition majority. More significantly, the roar of the postal-office electoral machine appears to be mightier than its bite. Is it really worth catering to at the expense of alienating floater voters?

Last but not least, on what is likely to be a slightly diminished Komeito. Barring an outright DPJ majority—still a real possibility—expect a draen out courtship of the Komeito by the DPJ to forge a manageable coalition—first base, second base...

Incidentally, I find it interesting if not surprising that the two most obvious causes of Hatoyama’s fall—Futenma Air Station and the political financing scandals—figure very little in the election. Instead, it appears to be Kan’s handling of the consumption tax—the casualness with which he has been throwing words around regarding tax rates, exemptions and rebates—that has been the biggest drag on the DPJ. Careless words regarding a make-or-break policy question, plus the embarrassment over Kamei’s fit and resignation over the postponement of the postal reform bills to the post-election Diet session, and you have a situation looking somewhat like that under Prime Minister Hatoyama.

Will the DPJ win a simple majority in the Upper House in the July 11 Upper House election?

Will the DPJ win a simple majority in the Upper House in the July 11 Upper House election? This is a very important for policymaking because a bicameral majority will enable the DPJ to 1) pass any bill short of a constitutional amendment on its own and, just as significant politically, 2) claim a renewed mandate from the electorate. It will also help snuff out any prospects of a September rebellion by Ichiro Ozawa and his minions. The media reports suggest that a simple majority is unlikely, but a couple of people whose reading of the political winds I respect say otherwise, so keep an open mind about it. In the meantime…

The eventual outcome turns on the extent to which a) undecided voters will break for the DPJ in the two-seat (one elected every three years to a six-year term) provincial districts and b) Sokagakkai voters help LDP candidates there.

On the first point, the most recent media polls show the DPJ trailing the LDP in convincing its “supporters” to actually vote for it. Given what must be the relative softness of this support and the presence of Your Party as the New Charice, this indicates the DPJ’s difficulty in convincing large numbers of undecided floater voters to opt for its candidates on the provincial ballot. The voting procedure does not help the DPJ if I remember correctly. First, the voter receives the national proportional ballot, in which he must write in the name of a party or a specific candidate. (Japan for all practical purposes has a literacy test.) After he puts the ballot in the ballot box, he receives another ballot on which he is expected to write the name of his choice from the list of provincial district candidates. Most two-seat districts will be contested between DPJ and LDP candidates, but there will be other candidates, Communist and otherwise, available. Specifically, I have a hard time imagining many people explicitly voting against the DPJ on the proportional ballot then turning around and choosing the DPJ candidate on the provincial ballot. My guess is that the average voter would behave differently if the ballots were given out in the opposite order. (This is something that could be confirmed in a behavioral psychology experiment. Any takers?)

Addendum 6 July: I was dead wrong on the voting order, as you will see if you go through the comments. That said, the importance of choice architecture (a term that I just learned a few days ago) in this election should be explored by a combination of exit polls and controlled experiments.

On the second point, media reports show in a large number of provincial districts 6/10th of Komeito supporters leaning towards LDP candidates. Some remain at 5/10th while others reach 7/10th and 8/10th. (There is one district in which it only reaches 2/10th, a sign of some very bad history, no doubt.) The LDP-Komeito coalition is battered, but is obviously not dead.