The media are now reporting that the DPJ/Noda administration and LDP-Komeito have officially cut a deal to authorize the issue of deficit bonds to meet the revenue shortfall in the annual regular budgets through FY2015, which also happens to be the year that the second phase of the consumption tax hike is supposed to kick in. The DPJ/Noda administration has already telegraphed its willingness to go the minimalist, five-up, five-down route with the House of Representatives to bypass the constitution question road bump and leave the reduction of the regional proportional seats for another occasion. The LDP is now willing to nominate members for the tax and social security reform commission, the third item on Prime Minister Noda’s legacy Make-a-Wish list. The two sides have even thrown in a kicker and decided to account for (in a half-assed way) the effects of disinflation on public pension payments, whose postponement is costing the national treasury an extra trillion yen per year. All this before Prime Minister discloses a snap election schedule, but all that stands between the Diet and an early call for a snap election is DPJ Secretary-General Azuma Koshiishi if the media and their reading of Noda words between the lines are to be believed.
So what gives? Why is everyone suddenly acting so reasonable and accommodating? Because if they all play hardball and let the Japanese treasury go off the fiscal cliff, they would be running the danger of being dragged off with it themselves, that’s why. Toru Hashimoto, and now Shintaro Ishihara, along with Your Party and the Nagoya/Aichi folks, are encountering their own problems getting their Third Force acts together, but at a minimum, they would be well-positioned to cash in on voter dissatisfaction. A quick snap election works in favor of established parties since it will also make the task of lining up credible candidates difficult for the Third Force movements.
I’ll be personally gratified if the election occurs by the end of the year as some media outlets are intimating that Noda intends to do so—I did make a call for two climaxes, one near the year’s end and another around the turn of the fiscal year, and got paid for doing it—but I’ll only believe it when I really see it, since DPJ members who do not see any chance of getting reelected in any case will try to postpone the day of reckoning as long as possible, a desire that Koshiishi appears to be doing his utmost to accommodate. Moreover, the DPJ has a significant pecuniary interest in postponing the matter until the year’s end because the 2013 subsidy for political parties will be calculated on the basis of the turn of events up to New Year’s Day.