Tuesday, November 18, 2014

Technical Recession, and the Coalition Still Wins

The Japanese economy against all expectations—and lowered ones at that—is in technical recession, the worst backdrop imaginable for the Abe administration in postponing a consumption tax hike (no longer as a choice but out of necessity) and going to the polls for a renewed mandate. And there’s still not much chance for the opposition to deny the LDP a lower house majority and absolutely no path in sight blocking the LDP-Komeito from securing one. Imagine that.

That’s how bad the opposition looks, with just under four weeks to go before the prospective December 14 election. Over time, it is possible, even likely, that large chunks of the Your Party and the Japan Innovation Party will get together with most of the DPJ to form a viable alternative. But for now, the best that those three parties can hope for is to overcome their respective internal differences—YP for one is running the risk of a formal split, while the Hashimoto wing and the rest of the JIP have agreed to disagree on collaboration with the DPJ—and eliminate most of their overlapping candidacies in the single-seat districts to improve their chances of prevailing over the LDP/Komeito candidates. The irony is that this task is made much easier by the fact that the DPJ will have a hard enough time finding enough candidates to contest just half of the single-seat districts.

All this intra- and inter-party maneuvering is making it difficult for the opposition to put together coherent policy messages, especially since there is not that much in policy terms separating the ruling coalition and the opposition parties in the first place.(The DPJ for instance voted for the tax hike and is now supporting a postponement.) In fact, going negative is the only meaningful election tactic available to the opposition: “White flag goes up on three year-failure Abenomics (remember, the Abe administration is postponing a tax hike not now but one year from now).” In a stroke of luck, the technical recession combined with the postponement is providing it with a strong tailwind. There’s no way it will come near to carrying it over the finish line in victory, but it’s certain to put a crimp in the Abe administration’s already cramped-to-be legislative schedule come January, when the Diet convenes for its regular session.

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