GlobalTalk 21

Memo on the Consumption Tax

2011-12-31T08:46:00.000+09:00

Nothing says Happy New Year like talk of a (consumption) tax hike. Noda got the DPJ to go along by pushing the initial raise to 8% back six months from the original proposal to April 2014, and what’s a few months this way or that, no? Ozawa’s Plan A must be to get acquitted in time to mount a challenge in the DPR leadership election next September against a weakened Noda. Must get busy now; in the meantime, the following is a memo that I wrote a little over a week ago around the issue. I hope that you find it relevant. Finally, I wish you all nothing but happiness and joy in the year to come and thereafter.

1. A majority of the Japanese public believes that a consumption tax hike is inevitable. The 1988 introduction of the consumption tax was highly unpopular with the Japanese public.
2. Big business generally supports a consumption tax hike. There is no overt opposition from SMEs, who, like big business, a) do not like the government's idea of shifting the growing burden of the social safety net on the shoulders of businesses (pushing 20-30 hour workweek employees into the Kosei Nenkin hurts big and small business alike) and b) would like to see the corporate tax instead. The 1988 introduction of the consumption tax was fiercely opposed by SMEs and many other businesses
3. The MSM generally supports a consumption tax hike. The MSM was split in 1988.
4. The LDP has supported a consumption tax hike. The opposition parties were strongly opposed in 1988.
5. Public disgust over the Recruit scandal that contaminated virtually the entire LDP leadership likely had some effect on the1990 election results. Besides, the 1986 election results were exceptional, making the 1990 results look worse that it is in a historical context. The 3% to 5% hike did not keep Hashimoto and the LDP from winning in the 1996 election, already well into the post-bubble decade.

So what's the problem?
1. Public mistrust of the conventional political class. The lack of political leadership and policy consistency has sapped the credibility of both major parties in asking the public to pony up. (That is why the largely symbolic (in fiscal terms) value of a notional downsized Diet is taking on significance.) The DPJ has had a longer distance to fall, which they did because only a small fraction of the promised savings materialized in its first three years in power. (There were of course Hatoyama's Futenma debacle and incoherence and Kan's inability to articulate and execute. Noda has so far proved (sic) pedestrian, though his persistence should prove useful in getting a compromise on the consumption tax.)
2. Poor economy. The argument is that this is not the time to put the brakes on consumption. That's a reasonable argument, although a trigger for 2013, BTW the more likely arrangement, should take care of it. (Economists and analysts argue over the effect on consumption and savings. I'm not competent to go into that; suffice to say that opponents bring up this argument and many of them no doubt believe it.)
3. The battle for the periphery. The DPJ won the (upper house) 2007 and 2009 elections in part by capturing seats in the periphery, many in districts in traditional LDP strongholds--with low-income, elderly demographics, who will feel relatively more pain from the tax hike. (To be fair, the DPJ also win in the metropolitan districts.) The LDP wants those voters back in their fold, while DPJ parliamentarians with insecure seats (presumably skewed heavily toward Ozawa allies and dependents) will be tempted to vote for their constituents' purses.

2012 should be a good year for the economy, while economists largely agree that it will be less so in 2013. Arguably, it's now or never for the Noda administration. But it can't do anything about the mistrust. But neither can the LDP. Public perception that the LDP is opposing a tax hike--and that's only if they actually manage to cohere around a clear position in opposition--for purely tactical reasons will cause significant damage to the LDP as well. One possibility lies in ganging up on the smaller parties and place the bulk of the consequences of downsizing on the proportional seats, make a compromise on a trigger-equipped consumption tax bill, then let Diet members vote their conscience. There is a huge upside/downside risk here, though. The likelihood of lopsided results become much higher with a smaller proportional-seat cushion. And voting their conscience may only delay the onset of thoroughgoing realignment. Also militating against the compromise that I suggest would be the LDP-Komeito campaign alliance, which the LDP would be loath to give up.

Those are my thoughts as of now. I know there is no convincingly overriding scenario here; all I'm sure of is that the LDP can't let Noda have his consumption tax and declare victory, nor can Noda drop the consumption tax hike and go on as if the whole series of events had never happened.

My Thoughts around the Nine Defectors and Beyond

2011-12-28T22:24:00.002+09:00

It was more like minutes than hours, wasn’t it? So what kind of people bolted the DPJ today over the prospective consumption tax hike to form a new party? Mainly proportional-only candidates, most of whose prospects of reelection in anything but a landslide by the DPJ are nil, that’s who*. For these people, their best chances would lie in running as bi-candidates in a new party and hope that the new party wins enough votes (and they lose by small enough margins) to allow them to make it back as zombies.

Beyond that, my guesstimate says that the DPJ could win 180 out of the 304 first-past-the-post districts—the DPJ won 227 in 2009—and the DPJ’s 45 proportional-only incumbents would still be in danger of being wiped out**. It’s not a good time to be a DPJ Diet member who doesn’t have a single-seat district to hedge his/her bet and be eligible to compete with all the other bi-candidates for zombie status. But running in a single-seat district will cost you, so it’s not a viable option unless you’re deep-pocketed or willing to bet the farm.

There was another DPJ defector today, but that’s more the subject of comedy. I might go back to it tomorrow.

* Akira Uchiyama(3rd term) South Kanto ranked 1st, among DPJ proportionals; lost Chiba 7th; Ozawa group
Koichiro Wtanabe (2nd) Tokyo 29th among DPJ proportionals, of whom 23rd-29th got in; Ozawa; habitual loser
Juntaro Toyoda (2nd) Kinki 51st, 45th-52nd; Ozawa; repeat loser (one win in 1993)
Mitsuji Ishida (1st) South Kanto 37th, 37-39th; Ozawa; one-time prefectural assembly election loser
Masae Kobayashi (1st) Tokai 39th; 34th-41st; Ozawa; mayoral election loser
Yoshinori Saito (1st) (斎藤恭紀〈１〉（宮城２区）鳩山
Atsushi Chugo (1st) South Kanto 1st , lost Chiba 12th; Ozawa; two-time municipal assembly winner
Nobuki Miwa (1st) Tokai 38th, 34th-41st; Ozawa; four-time prefectural assembly winner
Yoshihiko Watanabe (1st) Kinki 48th, 45th-52nd; Ozawa; two-time loser, hid bankruptcy procedures to remain on DPJ list
** There are ways to develop more detailed estimates, but I’m not sure it’s worth my time unless I’m getting paid for it.

Who Will Jump the DPJ Ship over a Consumption Tax Hike?

2011-12-28T10:08:00.003+09:00

For now, only a couple of handfuls, if the Asahi is to be believed. We’ll know in a matter of hours, if not days, but in the meantime, here are a few thoughts around the report that may be useful beyond the immediate future.

So far, prospective defectors are small in number and are mainly (but not exclusively) first-term Ozawa children (Miwa is a ripe old 69) in the lower house representing the urban expanse between the true outback and the Tokyo/Nagoya/Osaka metropolitan. No upper house names have emerged.

How will they fare in a snap election? Intuitively, not so good. They will have to share the anti-consumption tax hike vote with Your Party, who will also be able to 1) run candidates in more districts, which will help it gather proportional votes, and 2) position itself as the reformist alternative. There are many other factors to be considered, some positive (Yasunori Saito, who has local celebrity status, will rake in votes outside his district; people like Nobuaki Miwa, who have independent political capital, maybe able to wrest away a larger part of the local DPJ chapter than otherwise possible), some negative (political novice rookies may not be able to take much of the local DPJ party machine away with him). All things considered, expect a few other multi-term Diet members as well a rookie or two that have strong local assembly backgrounds to make the leap, calculating that, at worst, they can slip back in on the proportional tickets. Conversely, pure political rookies will not jump ship unless Ozawa jumps with them.

From My Email: Pop Culture, and a Discovery about AKB 48 (What Else?)

2011-12-02T22:10:00.001+09:00

A couple of people and I got to talking about W. David Marx and Cool Japan, which got me to thinking about Japanese pop culture. The following is the relevant part of an email, uncensored, with one word corrected, one punctuation mark removed, font changed, and, oh yes, a hyperlink added. Otherwise, RAW. I think that I’ve picked up on something that no one, anywhere, has noticed.

Also, I’m seriously thinking about posting something mean-spirited about Ronald Dore. What do you think?

The best way to kill off One Piece (which I never liked BTW) would be to have the MEXT political team do a public announcement endorsing it. (On the other hand, PM Noda is a dead ringer for Komawari-kun, if they ever get around to doing a live-action version...)

Speaking of popular culture, look at the following list of AKB 48 members who have finished in the top 10 in voting, with their top finishes.

O Ohshima Yuko 大島優子 1
O Maeda Atsuko 前田敦子 1
O Shinoda Mariko 篠田麻里子 3
O Itano Tomomi 板野友美 4
C Watanabe Mayu 渡辺麻夕 4
C Takahashi Minami 高橋みなみ 5
C Kojima Haruna 小嶋陽菜 6
C Satoh Amina 佐藤亜美菜 8
VO Miyazawa Sae 宮澤佐江 9
O Kasai Tomomi 河西智美 10

"O" as in old-fashioned, "C" as in contemporary, "VO" as in...very old. Old-fashioned means that they would have been the kind of names that were predominant as I was growing up. Let me also note that "Tomomi" is gender-free (岩倉具視, haha）, although most three-syllable "-mi" names are more likely to be conferred on females. Contemporary means the kind of names that girls in their teens and twenties typically have. Very old means Meiji-, Taisho-old. As further proof of how name preferences have changed, there is only one other "-ko" in the whole bunch. (To be fair, her top finish so far has been 38. Next AKB member to bare all?) In fact, beyond these nine most popular members, contemporary names ~~pre~~dominate the list. Is this all just coincidence? I think not.

Finally, as an example of: Japan Cool (not Cool Japan) influence .

Personally, I miss the old version . I must be growing old.

Have a nice weekend.

Message Management Missing in Noda’s Honolulu Trade Initiative

2011-11-13T20:30:00.001+09:00

I’d been telling everyone who would listen that Noda would take Japan into the Trans Pacific Partnership (TPP) FTA negotiations if only because there was no way that he could back down without becoming the third lame-duck prime minister in the first three years of the Democratic Party of Japan’s hold on power. He made me a little nervous with his one-day delay of the announcement, but he did came through and the threat of secession from DPJ dissidents proved to be a bluff…for now. The TPP negotiations should take another year or more, which means that Noda does not have any related legislative action to worry about during the 2012 regular Diet session. However, the opposition will have a couple of matters with which it will test the prime minister to see if they can erode public trust in his governance. And his DPJ opponents will not be happy about them either.

First, he reportedly gave favorable notice regarding Japanese import restrictions on U.S. beef. Actually I’ve been bewildered by recent talk regarding the Noda administration’s willingness to revisit this issue, specifically to raise the import eligibility of U.C. cattle from 20 months old to 30. Leaving aside my personal views on the issue itself, it seemed odd to me that the Noda administration would make a valuable concession even before the TPP negotiations had started. I can think of no other explanation than that it was an “omiyage,” a present, to make the Noda-Obama go smoothly. Maybe it helped, maybe it didn’t, who knows. I’ve always believed that this tactic, long favored by the Japanese authorities, is demeaning and serves mainly to keep the Japanese political masters happy—whee, I got a lot of applause when I addressed the plenary!, President So-and-So shook my hand! that kind of thing—but that’s beside the point. The problem here is that the Noda administration has so far given no official indication that the beef issue is in play. In fact, the news that Noda notified Obama took the Japanese media by surprise. There’s a good political, if unscientific, reason that Japan is one of the few countries to maintain a 30-month age limit on properly processed U.S. beef. The Japanese public was scared out of its wits by the mad cow disease breakout and the Ministry of Agriculture, Forestry and Fisheries had to go well beyond what the science around the issue required. (In our defense, we are no more (or less) irrational than our American/British/Chinese/…Luxembourgian/…/South Korean/…/Zimbabwean friends. It’s just that we each care insanely about different things. Okay, maybe Luxembourgers don’t, though who knows…) This will cause problems. After all, this is a food safety issue. It has obvious international ramifications, but first and foremost, it’s a matter of domestic regulation. I think that Noda got it ass backwards, and the media, the opposition and his DPJ opponents are going to (rightfully in my opinion) take him to task for it.

Second, the White House announced that President Obama “welcomed Prime Minister Noda's statement that he would put all goods, as well as services, on the negotiating table for trade liberalization.” Now this may seem to you mere recognition of reality. After all, if Noda had said that agriculture, or anything else for that matter, was off the table, his bid to take Japan into the TPP negotiations would have collapsed on the dry dock. However, lobbies and Congress feed off trade issues, so the White House in its press secretary readout obviously did what it could to ensure smooth sailings as far as officially accepting Japan as a TPP negotiating member with as few domestic strings as possible. (A negotiator always looks to expand his/her mandate.) The Japanese side, incredibly, not only failed to anticipate the White House spin but did not put out any statement regarding the bilateral meeting except a bland, all-points-covered summary from the Ministry of Foreign Affairs (MOFA). The prime minister’s team—Kantei?—missing in action. (See if you can find anything at the Kantei website.) It wound up issuing a denial that Noda had said any such thing. Bad for relations with the White House, and fodder for opposition guns when the Diet resumes operations on the Prime Minister’s return from Honolulu.

Rumble at the Yomiuri Giants and Most (But Definitely Not All) of the Media Goes Bananas

2011-11-11T17:37:00.001+09:00

…It’s about time, so why not reboot here…

You know that anyone who's looking for proof of Japanese media bias need only look at the Yomiuri sports pages and how they basically serve as the baseball powerhouse Yomiuri Giants’ fanzine. (Actually, I welcome media bias because it takes less time to go through them when you more or less know where they are coming from. They also give you media-driven baselines from which to make guesses at how public opinion will be trending, particularly on those rare moments—say, Kim Jong Il's admissions regarding the abductees—when Yomiuri and Asahi angles converge.) Well today, there was an incredible diatribe released by the representative/GM of the Yomiuri Giants (a former Yomiuri reporter proving that not all amakudari’s are necessarily handpuppets), who, if his lengthy statement (full text starts here is to be believed, apparently refused a bribe from powermonger and all-around meddler Tsuneo Watanabe in the form of more power and a promise of eventual elevation to CEO in exchange for going along with Watanabe's lies—not the rep/GMs words, but there’s no other way to put it—around his attempt to overturn Giants personnel decisions to which he had already given consent.

The late afternoon-early evening news broadcasts all appear to be featuring the story prominently—all, that is, except Nippon TV. I’ll give you one guess which media group owns Nippon TV.

But what am I doing watching TV when the rest of the Japanese world is working? Actually, this is relevant to my line of work, as it should spell the end of Watanabe's role as political fixer—anything fixer, really. If Ichiro Ozawa had held any hope that Watanabe could reprise anything like his 2007 role as go-between for an aborted deal between Ozawa and then Prime Minister Yasuo Fukuda for a Grand Coalition, it’s gone now. This diminishes the LDP's old guard as well, since Ozawa was their most familiar and likeminded interlocutor. An era is passing, and this incident is part of it.

Let’s see what if literally anything tomorrow’s Yomiuri has to say about this.

Are Japan’s Days of Overseas Adventures Over?

2011-05-16T09:39:00.001+09:00

The following is my email response to an inquiry from a friend in the academia, verbatim but with personal details edited out.

[F]:

Foreign relations in the abstract are of little concern to most voters. Instead, they respond to specific issues such as the North Korean abductions or a mad cow disease breakout in a beef exporting country. Politicians as well as the MSM are inclined to think differently, since statecraft is a far more amusing endeavor than making sure that the private sector keeps the trains running on time, i.e. leaving them alone as much as possible. Still, in a democracy, it is a luxury to be indulged in at one’s peril unless one has dotted and crossed all the more significant I’s and T’s at home. Specifically in Japan’s case, it does not have geopolitical interests that diverge significantly from those of the United States (and to a lesser extent the EU). This means that Japan can largely free-ride on global public goods (and to a lesser extent regional public goods) that the United provides for the rest of the world (including China, though the Chinese authorities would be loathe to admit it).

Much attention was given in the mid-90 and early 2000s to the LDP regime’s interest in permanent UNSC membership and a larger international profile for the Japanese military, propelled in the latter case by the perception of humiliation on the occasion of the Gulf War. However, the first floundered because of the lack of support from non-permanent members that were not part of the push for inclusion in the Council and ill-concealed antipathy from China; the second was always destined to be limited because of fiscal constraints. Meanwhile, on the economic front, the Doha Round is now in its death throes while post-Kyoto Protocol climate change talks are going nowhere fast, leaving little room—or need—for Japanese authorities to spend whatever political capital it has on the issues. The triple disaster has certainly forced the Kan administration to take its eyes off the rest of the world, but, as you say, it only accelerated, albeit dramatically, a trend that had already been in the making.

What will happen when the Japanese economy recovers from the disasters? First of all, the fiscal circumstances will continue to demand the attention of the Japanese government and its constituencies. That means that there will be little political room for expensive overseas adventures excepting FTAs and other economically advantageous undertakings. (Prime Minister Kan gave lip service to foreign ambassadors in Tokyo by promising that the 100 billion yen cut that Japanese ODA took to finance the relief and recovery efforts would be restored many times over. But that’s a canard, really, since the cuts will last only a couple of years—fingers crossed—while Japanese ODA will last many decades beyond that, if significant numbers of developing countries remain just that: developing.) And that leads to my second point: Japan needs socioeconomic reform. This will demand most of the Japanese government’s attention, as well as the expenditure of considerable political capital for more sweeping FTAs with Japan’s major trading partners. Any efforts outside of support for socioeconomic reform will be largely reactive, responding to events and circumstances as they unfold. (A violent endgame on the Korean Peninsula would be a good example.) Third and finally, Japan will emerge out of the disasters’ aftermath older and, in relative terms, economically diminished if BRICS and other developing countries maintain their most recent historical growth trends. This will diminish further the Japanese government’s ability to act proactively on the regional and global theater and the willingness of the Japanese public to support any such adventures.

There is anecdotal evidence to suggest that the younger post-online generation has a different outlook on the rest of the world, domestic and overseas, than their elders. The drift away from hardcopy print media to the less judgmental visual media and the vastly more fragmented online sources of information and public (for want of a better word) discourse could be a contributory cause. The consequences of a post-industrial society—the difficulties that the less skilled have in finding secure, well-paid jobs; complacency settling in with general affluence; aging demographics creating a societal background that discourages risk-taking across the board—could also be behind what I suspect is a more global phenomenon. 35 would be as good a point as any to find an Internet-driven divergence if there is one. But all this is speculation on my part and is not based on personal observation. The Japanese under 35 generally do not speak to me.

I hope that helps. And congratulations on your [book] contract. I understand that any academic career will be well-served by that hardcopy publication.

Jun

PS: The following are fragments of an earlier attempt at responding. They don’t quite fit into the main narrative, but I include them here since they might add more substance to my arguments there.

“The last point is true of all democratic nations (and, over the long run, in all others as well) but particularly so in Japan. I see two reasons for this. First, Japan is not one of the main protagonists in any regional issue that has existential consequences. This means that regional issues will only be in the forefront of voters’ minds in the case of an acute incident—which will be of electoral consequence only if it changes voters’ perception of the administration’s competence. Second, Japan’s interests regarding global issues are mostly consonant with the countries in that of the United States, ROK, and to a somewhat lesser extent with the EU. This creates massive incentives for any conventional administration to ride the US hegemony’s wake to the maximum possible, i.e. do the moistest with the leastest. You have heard of the Yoshida Doctrine?

“So unless there are specific issues that demand political attention—to give two examples, 1) DPRK developing nuclear weapons and firing ballistic missiles in our direction and 2) the US pushing us to do more to provide regional and/or global public goods—an administration is well advised to…”

Kruel Kan Going after TEPCO Pensioners? So Surprise Me

2011-05-14T10:26:00.000+09:00

I’ve been getting a few inquiries on the government’s (so far) successful decision to essentially force TEPCO’s private-sector stakeholders—employees, shareholders, creditors, sister regional (de facto) monopolies, and yes, consumers—to foot the entire bill while remaining for the time being for practical purposes the guarantor of TEPCO’s solvency and viability. The following is my written response, unedited, to an email that refers to a Nikkei report that Prime Minister Kan is asking TEPCO pensioners to join the rest of the stakeholders lining up for haircuts. I relied solely on my memory to write it and I’m not a lawyer, so some of the facts being used may be a little off, but I’m pretty confident that the overall narrative is pretty sound. I’ll also add here, as I told one of the inquirers on the phone, that the SOB that (I think) he is, he puts policy ahead of politics, not the other way around as more conservative parts of the Japanese mainstream media suggests.

I’ll meet you half way. I agree that Kan is an SOB. Anecdotes in the media and on the grapevine suggest that he’s been that way all along. But “political” SOB? I’m not so sure, at least in this case. True, TEPCO pensioners are not legally responsible for the mess barring the individual TEPCO pensioner whose individual contributory negligence is proven. However, if the government does not step in beyond the 120 billion yen and keep TEPCO solvent, creditors (or TEPCO) would have no recourse but to enter into one of the bankruptcy procedures and take significant haircuts. The no-doubt very generous discretionary portion (上乗せ部分) of the corporate pension plan will be in jeopardy, as TEPCO payments into the pension fund will be slashed, affecting TEPCO pensioners present and future. So, if it’s not unreasonable to demand that if the government is going to step in to save TEPCO, all stakeholders—and that includes the sister regional monopolies if you think about it—must chip in with a portion of their potential losses in the event of bankruptcy, then it’s not unreasonable to demand that TEPCO pensioners pitch in too. If this story sounds familiar, it is. It’s the parable of the JAL pensioners.

So much for Kan’s jerkhood. Or is it? Are we carrying strict liability too far? After all, one of the concessions that the government made to convince Chubu Electric Power to stop its one currently operating nuclear unit was to agree that CEP had done nothing wrong and was shutting the unit down purely as a matter of government policy. Now TEPCO stakeholders must be wondering: What does CEP have that TEPCO doesn’t? One journalist reminded me, “The accident.” True. And the Nuclear Power Indemnification Act (NPIA) demands strict liability. But Chief Cabinet Secretary Edano has on at least one occasion stated that TEPCO and the government are jointly and separately liable (不真性連帯責任), and a couple days after that the responsibility was a 50-50 split. Legally, that means that TEPCO can sue the government to shoulder its prorated-for-responsibility part of the damages. Moreover, there’s a plausible case to be made—I won’t bother with my reasoning here—that Article 3, paragraph 1, of NPIA should be invoked, putting the entire damages squarely on the government’s shoulders and the government’s alone.

The government has been doing a pretty good job of bluffing TEPCO into submission, and the TEPCO board of directors would have to move to the Caymans or someplace else where right-wing megaphone vans and firebombs cannot reach their dwellings before they could make a stand. Still, there’s no reason to believe that overseas shareholders and creditors—say, some hedge fund in Connecticut that happened to have been holding a chunk of TEPCO shares before the tsunami inundated Fukushima 1 might have reason to bring a shareholders suit on behalf of TEPCO against the government—it would be an administrative lawsuit in the case of Article 3, paragraph 1 and a civil lawsuit in the case of recovery of prorated damages—or TEPCO board members for damages.

In fact, the alternative that I present here would be a very real one if this occurred in a different socio-political environment. (Say, Delaware?) So, barring the odd US hedge fund—and there’s probably a legal minimum proportional holding required to bring shareholder lawsuits; you can look it up—the saga is likely to unfold more or less according to the government’s storyline,although there will be political bumps along the road. But no one seems to have a better alternative, and no one appears willing to contemplate an formal bankruptcy whose ramifications for the immediate stakeholders and more broadly the Japanese economy itself are unknown. In the meantime, though, it is only fair in my view that TEPCO pensioners, like any other group of stakeholders, shoulder its proportional share of the full financial burden.

BTW it is useful to keep in mind that TEPCO is likely to be allowed to more or less pass on the 1 trillion yen/yr in extra fuel costs and the write-down for at least four nuclear power units, and all the regional monopolies should also be allowed to include their payments into the newly proposed sinking fund in calculating their tariffs. So we the electricity consumers will also be sharing the costs of the disaster.

My Take on the Asahi/Wikileaks, Mostly Focused on the Nuclear Disaster

2011-05-05T16:34:00.000+09:00

Another stateside friend New York tossed this NYT report my way. The following is my response, lightly edited here with a sentence tacked on at the end.

The bits and pieces mostly jibe with what we've been seeing and hearing in the media since the DPJ took over. That's what's remarkable about the US wikileaks in general. It's like, tell me something we hadn't known or suspected. That said:

..."Compartmentalization and risk aversion within the bureaucracy, however, could increase Japan's vulnerability to threats for which it is less prepared,"

Bureaucratic decision making has been cited as a factor in Japan's lack of preparedness, almost exactly three years later, for the record-breaking tsunami that crippled the Fukushima Daiichi Nuclear Power Station and set off the worst nuclear disaster since Chernobyl. While the cable offers few specifics about the weaknesses in Japan's disaster planning, it does go on to warn that a blow that disables the country could have catastrophic consequences for global trade and finance.

Note that the first sentence appears to refer to the response to a threat for which it has not prepared for, while the subsequent paragraph appears to be referring to the lack of preparedness itself. These are two connected but logically distinct propositions. Confuse the two, and you get a narrative that is literally nonsense. A bureaucracy, of course, is by nature compartmentalized and risk-averse, so, left to its own resources, will always respond poorly to the unforeseen. Case in point: Hurricane Katrina. That is why leadership is so important. Case in point: Hurricane Katrina. And leadership is where the Japanese public is pinning the blame on. In my conversations on this subject, I've insisted that the typical response under the LDP regime to a nuclear disaster--any disaster--would have been to put the administrative deputy chief cabinet secretary in charge of crack bureaucrats assembled from the responsible ministries, team him up with a parliamentary DCCS, and have chief cabinet secretary preside over the entire process. The CCS could share the chores of public communications with the prime minister. Basically, put the people who know how the parts work, to minimize on-the-job learning. Instead, Kan approached the task as if a car broke down in the middle of the road, tried to repair it himself, then ignored the manual and started asking passers-by for advice.

That said, I suspect that most of the things that came to pass were driven by science and engineering and that most of the mistakes came in the public communications process. Note, though, that the human response to any nuclear disaster tends to be deeply irrational, unscientific, and apocalyptic. This means that the margin of error for managing the figurative—if not the physical—fallout is very small compared to other disasters, such as massive toxic chemical spills—or the tsunami itself.

More on My Take on TEPCO’s Post-Nuclear Disaster Liability

2011-05-05T15:30:00.002+09:00

A friend of mine wrote in to tell me that according to a media report, plans are afoot for a 50/50 split between TEPCO and the government for liability stemming from the nuclear disaster under Article 16 of the Act on Compensation for Nuclear Damage. However, he’s looked at the TEPCO website and thinks that it’s still looking to be absolved altogether somewhere down the line under Article 3, paragraph 1 of the Act. The following is my response, lightly edited. I left a couple of embarrassing details visibly edits because I thought it was funny that I’d totally forgotten that I’d blogged it. At least I didn’t imagine it all in the still of the night.

It’s about time.

I made the argument early on—the SSJ Forum, where predictably no one picked up on it—that TEPCO directors could face shareholder lawsuits if they did not pursue the Article 3.1 route. And if I were a hedge fund holding TEPCO shares, I would be afraid of being sued by my investors if I didn't file that lawsuit against the TEPCO directors. Now, if I were a shareholder of that little old bank in Illinois that had put some of its money in that hedge fund... Remember how those little old banks would hold the entire deal in ransom during the 90s bailout negotiations?

As for the 50/50 split, it's been at least a ~~couple of~~ weeks since Chief Cabinet Secretary Edano said that the government and TEPCO were jointly and severally liable (I think that's essentially what he meant by 真正連帯債務) and maybe a ~~week~~[couple of days] (ed. HAHA I’d forgotten that I’d blogged it two nights ago) since he mentioned, almost in passing, that it would be a 50/50 split. I was surprised on both occasions when the media failed to take note. It's probably hard for people who don't go to the source to realize that the power utility that everyone loves to vilify is facing strict liability. It would be difficult IMHO to prove negligence, since TEPCO had jumped all the legal hoops up to the Fukushima disaster. Government negligence should be easier to prove, since it was the one who decided not to require more precautions despite some expert opinion to the contrary. With power comes responsibility. But 50/50? I wonder where that came from. Surprising to hear a lawyer—Edano—make that concession before the inevitable negotiations with TEPCO. I wonder if the fix is already in.

All in all, I'd go for Article 3, paragraph 1; it heals you, whereas Article 16 only keeps you alive, and who wants to be on life support for the next 20 years…Oh, Dr. Kerkevorian...

The Japanese Government’s Liability around the Nuclear Disaster: or, Edano Got Game

2011-05-04T03:02:00.001+09:00

Chief Cabinet Secretary Yukio Edano has quietly but firmly made it clear that the Japanese government is jointly and severally liable (he apparently invented what appears to be a retronym—真正連帯債務—to emphasize the point) for damages arising from the Fukushima nuclear disaster. Yesterday (? Monday), he went on record as saying that the government and Tepco would be responsible for half each of the (according to the latest estimates) 4 trillion yen tab. When everybody is finding it convenient to dump on Tepco, he’s injecting a little lawyerly reality into the process without being called a Tepco lackey. That’s quite a feat.

The Ebb and Flow of the Anti-Kan Forces

2011-05-01T18:11:00.002+09:00

Some headlines from the online Yomiuiri:

23 April: “Diet Members Aligned with Ozawa to Step Up Efforts to ‘Depose Kan’ When New Week Begins (小沢系議員、週明けから「菅降ろし」本格化)”
26 April: “Prime Minister: ‘Must Be Candid in Admitting Loss’ in [Nationwide] Local Elections (統一選「率直に敗北と認めざるを得ない」…首相)”
27 April: “60 [Diet Members Show Up] at Study Group to ‘Depose Kan’…Heavy Ozawa Influence (民主「菅降ろし」勉強会に６０人…濃い小沢色)”
29 April: “[National Labor Union] Rengo Chairman Koga: ‘Ceaseless Conflict within DPJ Regrettable(連合・古賀会長「民主党の絶えぬ対立は遺憾」)”
01 May: “Will Refrain from Efforts to Depose Kan for the Time Being…Ozawa, Hatoyama Agree菅降ろし、当面控える…小沢・鳩山両氏が一致)”

In the meantime, on 29 April, the DPJ, LDP and Komeito—but no PNP, which fact being totally ignored in the MSM—come to an agreement on the first supplemental budget that allows the Kan administration to finance it mostly with “buried treasures” initially allocated in the FY2011 budget to subsidize the national pension fund. The reallocation as well as the child allowance and toll-free highways—two items in the DPJ manifesto that are being scaled back to finance the supplemental budget—and other expenditure items will be revisited when the second supplemental budget is formulated. This will be the basis on which the three parties will work to formulate and enact the FY2011 deficit bond authorization bill.

The MSM is still taking at face value the LDP and Komeito’s claim that they want Kan out. But I think that my assessment in my previous post (29 April) makes more sense in the light of this sequence of events. Note also that Ozawa’s bark as passed along by mostly anonymous associates and illustrated by the poor attendance at his anti-Kan rally is proving to be worse than his bite.

Let’s Be Nice to Our Prime Minister; It’s a National Holiday, for God’s Sake

2011-04-29T16:26:00.001+09:00

Kaoto Kan, currently Japan’s prime minister, is not exactly my favorite politician, but surely he deserves some credit for what he is trying to do. He does have a policy agenda that is relatively coherent and more consonant with the pre-Ozawa manifesto as well as the post-3.11 realities. Moreover, the opposition parties as well as Ozawa’s allies in the DPJ are not well-positioned to force him out. That doesn’t mean that he’s in the clear until the DPJ leadership election in 2012, but I think that reports of his imminent demise are very much premature. If you’re interested, please read on.

He continues to push ahead on social safety network reform coupled to a consumption tax hike despite last year’s upper house election setback. This is a reversion to the DPJ’s pre-Ozawa manifesto. Scaling back the child allowance also brings it more in line with the pre-Ozawa manifesto. Add the reduction in scope for agricultural income subsidies—remember that the DPJ linked the money to trade liberalization—and it’s pretty clear that Kan is trying to pull the DPJ back toward the urban orientation of its pre-Ozawa/Hatoyama days. From this perspective, I see no reason to think that he won’t revive his TPP initiative, once the relief and recovery process is fully on track and the nuclear situation is stabilized so he won’t look like he’s kicking the Tohoku and Kanto farmers while they’re down. Toll-free highways—another big ticket item—had already been scaled back substantially by Seiji Maehara as Minister of Land, Infrastructure, Transport and Tourism when he was forced to cough up gasoline tax revenue to finance Ozawa’s old-school politics road-building plans, but the majority of the Japanese public won’t be sorry to see that experiment die.

So Kan certainly does have a policy program, though it is poorly articulated. Perhaps that is by design; he doesn’t want to completely alienate the DPJ’s pro-Ozawa wing, which has pretty much been frozen out of the policymaking process and is using the manifesto as a rallying cry. There’s also the matter of his surprising—to me at least—lack of communication instincts judging from his performance as prime minister. Still, if you look beyond the headlines in the media and the criticism from his DPJ detractors, his policy agenda in my view is both more coherent and more consonant with the PDJ policy agenda before Ozawa altered it, likely for electoral purposes.

But what are his political prospects? A few things to keep in mind. First, the LDP calls for Kan’s resignation are not to be believed. The last thing that they want is to go into an election against a DPJ under rejuvenated leadership. Second, Komeito does not want to lean on the Sokagakkai troops again so soon after the “nationwide” local elections. Besides, it currently has enormous leverage over the DPJ now because of its ability to deliver an upper house majority by itself. Komeito can marginally increase its leverage through a lower house election if it results in a near-equal DPJ-LDP split, allowing Komeito to give a lower house majority to either of the two major parties. I say “marginally” because choosing the LDP would mean that the administration would have to work with an upper house minority. Why upset the political cart for a new lower house configuration that could trigger further political realignment? On this side of the aisle, the SDP has lost just about every general election since it sold its pacifist soul to buy the prime minister’s office for Tomiichi Murayama. There is no reason to believe that the next election will be any different. And the formal coalition partner PNP is what it is. The DPJ loses one seat and there goes the DPJ-PNP-SDP’s joint lower house supermajority, and with it what remains of the PNP’s (and SDP’s) leverage. As for Ozawa’s DPJ allies, if they manage to secure enough breakaways to pass a lower house vote of no confidence in the Kan cabinet, their lower house members will have to fight a three- or four-way battle against the DPJ, LDP, and Your Party. And many of them are first-termers, who will surely be at least as vulnerable as the Koizumi Kids. All this does not mean that

This does not mean that Kan’s path leading up to (but not including) the 2012 DPJ leadership election is clear. There is always the chance that the opposition parties and Ozawa’s allies will wind up pushing Kan too hard, with results that at least some of them do not want at all. Wars have been started that way. More plausibly, if Kan looks so bad that his DPJ supporters start abandoning him, that’s the end for him. He may be stubborn, he may have a massive ego, but he’s not so selfish that he’ll take the DPJ down with him by calling a snap election. He’ll step down, leaving it to someone more articulate and telegenic to lead that charge. Don’t even rule out Ozawa’s arch DPJ nemesis Yukio Edano in that case; politics makes strange bedfellows.

And beyond all the politics, there is the matter of genuine policy differences. Kan does have a policy agenda that is significantly at odds with what Ozawa and his DPJ allies profess, never mind their motives. This chasm also exists within the LDP as well. And reform is afoot in the upper house, although the next election there is not due until 2013. Feel free to make your own inferences here.

Kan’s Second Week Speech to the Nation and My Expectations for Media Coverage

2011-03-25T18:36:00.001+09:00

Here’s my snap reaction to Prime Minister Kan’s 7:30PM speech to mark the passing of two weeks since the earthquake and tsunami.

Speech: Somber to the point of flat and boring, designed mostly to make sure that he touched on all the important points.

Q&A: Four questions from the media about the Fukushima end game, the escalation in the government evacuation recommendations, the discrepancy between the overseas reaction and the government’s own (20-39km vs. 80km), and four stock, non sequitur answers.

I think that the print media is going to pan it. Kan definitely does not have what it takes to front a band IYKWIAS.

Associate Companies, Pus the Twit of the Day

2011-03-25T14:33:00.001+09:00

From my outbox, lightly edited, plus some supplemental, inappropriate material…

I’ve been telling people that not all the heroes at Fukushima I were TEPCO employees (or JSDF soldiers or Tokyo Metropolitan firefighters for that matter) but were actually employees—possibly even temps—of “associate companies.” Well yesterday (24th), radioactive material was detected on three men working the site, of whom two were hospitalized for treatment. None of them showed any “external damage.” (Some of you will have read that they suffered “radiation burns.” No one has confirmed that, but Japanese media outlets explicitly mention that there was no “external damage.” For another MSM case of adding heaps of sizzle to an already pretty juicy steak, see this report. No, I’m not really following the foreign media; it’s all I can do to keep an eye on what the Japanese media is reporting. But it seems like there’s a lot of that going on. That makes it all the more important that the Japanese government (and TEPCO) get the information out there in English quickly and clearly—which I know for a fact that they are working very hard to do. Many of the people covering the case know nothing about nuclear power or have been flown in or in some cases both. But that’s the government’s problem, not theirs.) They’d been wearing ankle-high shoes in a space whose floor was drenched in water, while the other workers had knee-high rubber boots on. Am I surprised that the three had been dispatched by an “associate company”?

And now for the Twit of the Day:

Seiji Matsumoto, one of Naoto Kan’s former political aides is an assemblyman in the city of Musashino. Japanese netizens mopped the virtual floor with Matsumoto’s name because he had issued a flyer report where he noted that TEPCO’s Musashino office had notified him that the urban areas of Musashino, hospitals, and Group 1 areas would be excluded the like and that “Seiji Matsumoto’s requests have been answered.” Matsumoto denied any malicious intent and stated on his Twitter account yesterday that he is “sorry if part of the text has been the cause of misunderstanding.”

Yes, we Japanese have also mastered the art of apologizing for the stupidity of the offended. But that’s not end of it, because this story is going to be out there in cyberspace to be plucked till time and times are done, like Paris Hilton’s sex tapes and Sarah Ferguson’s toe-sucking rendezvous and…well you get the idea. So, are we all going to become more careful when we put stuff out there? Somehow, I don’t think so. Instead, we will become more shameless. It’ll be like, “Yeah, that’s me and my boy/girl friend at the time. Yeah, I’ve put on a little weight since them.” “Hey, but I was only fifteen then. Wanna see me now?” And he/she points you to his/her Facebook account, by which time Facebook has long since become a misnomer IMHO IMHO. And everyone will say whatever they think and won’t even stop to say they’re sorry you don’t get it and every conversation will be straight out of Overheard in New York.

Mike Smitka and Earthquake/Tsunami Economics 101

2011-03-20T19:28:00.002+09:00

Mike Smitka mentioned in passing that he had blogs so I went to take a look. This post must be about as good a summary of the scale of the problem and the issues as there is out there. Eurasia Group has a more policy- and politics-oriented Note, distributed to its clients, that happens to broadly share the same understanding.

TEPCO (and JSDF) Employees Not the Only Heroes at Fukushima 1; Plus Sidebar to Minami-Sanriku Tragedy

2011-03-20T17:09:00.001+09:00

TEPCO has been catching most of the flak for allegedly mishandling the response to the nuclear crisis at its Fukushima 1 Nuclear Power Plant but its 50 or so employees who have been putting their lives at risk to contain the danger there have been rightly hailed as heroes. Now the Sunday papers remind us that they are not the only ones. According to this Yomiuri report, of the 160-man team who have been braving high-level radiation to connect the four at-risk generators to the grid in an attempt to revive their cooling systems, 50 have been dispatched by a kyōryoku kigyō, or “associate company.” If “associate company” sounds suspiciously like the “associates” in America—as far as I’m aware, business-speak to make employees feel more valued without having to pay them accordingly—you’re right. They’re the shitauke kigyō, or the subcontractors of old, who typically carried out the more kitsui, kitanai, and kiken—“Dirty, Dangerous and Demanding”—work at lower pay and with less job security. The report is not even clear whether all the operators dispatched by the associate company are its regular employees. There are several directions in which I could take this story—it’s actually of professional interest to me because the regular/irregular employee distinction is the most important part of the labor reform debate—but I have to break off for now.

Another Yomiuri report says that Minami-Sanrikuchō, the township where 8,000 out of 17,000 inhabitants remain unaccounted for one week into the crisis, appears to have had its entire family registry database wiped out by the tsunami. The backup files at the sub-regional offices of the Ministry of Justice were also lost in the deluge. So how are the survivors going to open bank accounts, obtain passports, and do all those other things that require a copy from the family registry? It’s a very small story within the national tragedy, and legacy systems yadyada but I can’t really find any excuse for a national system that’s still being siloed locally when storage is dirt-cheap and getting cheaper and e-government is now taking a hard look at cloud computing.

How Can TEPCO Be Able to Avoid Blackouts by the End of April?

2011-03-19T19:35:00.002+09:00

A Vice President of TEPCO—Japanese corporate vice presidents are more important than the typical American VP—said that the blackouts could be over some time in April but would likely have to return in peak-demand summer. That did seem like a very quick turnaround, so I speculated about the reasons for this optimism. Essentially, I guessed that TEPCO had a pretty good idea of how quickly the fossil fuel power plants that had gone offline could be brought back but was limited by the resources available—and of course would likely be offering a conservative estimate just to be on the safe side. Professor Michael Smitka pointed out that there would be a spring dip in demand, between the need for winter heating and summer cooling. The following is essentially a copy of a follow-up email. It turns out, there’s more. I’m sure that the public would welcome anyone with the means to create credible scenarios as a first step to quantifying economic impact. If you do that or find anything out there on this, drop me a notice and I’ll be happy to kink to it, or otherwise take note here and elsewhere. Thanks.

And yes, I am conserving energy by not producing original material for the blog.

I've had this thing sitting on my PC most of the day, and I've run out of energy to do the subject justice. finish it. So I'm sending it out on the Earthquake list, to which I've added people who might be interested in following up on their own, as well as some people who have been kind enough to express their concern (who may find my earlier messages amusing. Or not).

Oh, and the ads on the trains have taken a huge dip, and the self-generated, space-eater ads have come back this week. And thanks again for the lunch, DS. OJ

**********

From media reports, a couple of pieces of information regarding the economic impact:

(Mar 18) Keidanren asked TEPCO on Mar.17 to reconsider the current arrangement because 1) factories could not know beforehand when it might have to shut down (note: Yesterday, I think, TEPCO posted a weekly schedule here http://www.tepco.co.jp/cc/press/betu11_j/images/110317g.pdf--although the most detailed publicly available information from my municipal government says only that my neighborhood is a Group 2-Group 4 mixed one); and b) factories that required lengthy adjustments could not cope with daily 3-hour shutdowns. Settling into a routine turns out not to be sufficient. So the question is: Can TEPCO prioritize and make individualized arrangements for specific businesses? Industrial customers can, if I remember correctly, cut specific deals regarding security of supply, but can they be accommodated within a rolling blackout? I suspect that it's easier to deny reduce supply to specific customers in an emergency than to maintain that supply during a general supply denial.

(Mar 18) TEPCO announced on March 17 that it would install multiple 30MW gas turbine power generators in time for the summertime surge in demand. (The Philippines also installed such generators under President Ramos and wound up surprising visitors who went there expecting blackouts and saw Xmas lighting everywhere.) TEPCO would also a) raise operation rates at existing fossil fuel power plants (but would not reactivate the idle reactors at Kashiwazaki); b) increase purchase from IPPs; c) reactivate Higashi Ogishma (2GW) and Kashima (4.4GW) by the first ten days of April (上旬 for those of you who can read Japanese)., and d) reactivate old idle fossil fuel generators. TEPCO is currently down to 34GW and had been expecting the Mar18 peak load (18:00-19:00) to reach 40GW but would now be only 37GW due to the weather, household self-restraint, and the most recent round of train schedule reductions (which hit JR Kanto, the Tokyo metro system, and some private railways. Anyway,

Now TEPCO's historical peak-load summer and winter highs are 64.3GW (24 July 2000) and 55.0GW (23 January 2008) winter (http://www.tepco.co.jp/company/corp-com/annai/shiryou/suuhyou/pdf/suh02-j.pdf) while its total pre-earthquake capacity was 78.1GW (TEPCO capacity 65.0GW; net purchased capacity 13.1GW http://www.tepco.co.jp/company/corp-com/annai/shiryou/suuhyou/pdf/suh03-j.pdf). Keep digging around for more detailed information, and an experienced analyst could probably come up with a range of scenarios for the Tokyo energy situation and its impact on the Japanese economy. Of course there's rest of Japan, most significantly EPCO and the Tohoku region. Long-term, many people must be working on the global energy situation, where the future of the nuclear buildout in the emerging economies will be crucial.

Meanwhile, Life Goes on.

2011-03-16T19:49:00.000+09:00

(Regular blogging to resume. But not now, sorry.)

TV programming has returned to normal. Cable never wavered from their regular fare—no choice, unless they went off the air completely—satellite TV I think depended on the channel and hour, but now, UHF and VHF are back to the usual evening fare. So now you on Tokyo MX you get Ranma 1/2 instead of Governor Ishihara ragging Renho—a la Magic/Michael/Ichiro IMHO—and the cub reporters who cover the Tokyo beat, the other local UHF channels are back to their own animes and teleshopping programs and the national channels feature what appears to be their usual 7PM slapstick variety shows and the like. NHK alone continues earthquake coverage, which is only sensible given their mandatory fee charging privilege.

This trend was evident yesterday, but some networks had held back then. Also expect earthquake/tsunami coverage to come back with a vengeance during cheap, daytime coverage. But the trend is clear.

There’s nothing wrong with this. It’s only human. I’m just taking note of this for the sake of posterity. And now, the Emperor has spoken. I think all this means that whatever happens in Fukushima, it’s our 8.15 and we have to move on.

And speaking of posterity, those of you living in Tokyo, have you noticed how the advertising in trains had changed the last month or so before 3.11? There were still artfully disguised gaps, but there is little the of self-generated advertisement—you know, the space-eating stuff from subsidiaries and sister companies within those railway-centric chaebols—covering the revenue shortage. That is something to keep an eye on going forward.

SOTU: I Don’t See England, I don’t see France

2011-01-27T11:33:00.003+09:00

But I do see Europe.

Yesterday, Paul Sracic emailed me his quick response to President Obama’ State of Union address, which included the following take on Japan:

No one in the U.S. will care about this, but Obama mentioned China, India, and South Korea several times -- but never Japan. Do you think that the Japanese people will care/notice this?

Sure enough, the story showed up later that day on the Yomiuri and Sankei websites (and this morning in the Yomiuri and I sure Asahi hardcopy versions). Paul is an expert on US politics (he’s quoted on the SOTU itself in a Reuters wire), but he obviously figured out how the Japanese mind works while he was in Japan on his ~~Council of Foreign Affairs fellowship~~ Fulbright Scholarship. The headlines say it all:

Yomiuri: “Japan” Goes Unmentioned This Year Too: exhibits the strengths of South Korea, China (hardcopy version)
Sankei: Country Names Mentioned in Obama Speech: South Korea Most Often, at Five; Japan Zero (online version)

Sankei does the whole SOTU BRICs count: China four times, India three times, Russia twice, and Brazil once. (Ian Bremmer believes that Russia isn’t a real BRIC, but that’s another story.)

If this sounds familiar to you, you’re right. We went through this during the 2008 presidential primaries, when many people here gave John McCain the thumbs-up over Hillary Clinton in the Foreign Affairs essays contest because McCain issued a paean to the US-Japan relationship while Clinton mentioned China more often than Japan. Note, though, that Clinton’s essay was more about the foreign policy and security challenges that the United States faced, and how she would deal with them. Obama is naming names mainly as countries that are doing things that the United States should emulate at home. And no, as the Sankei count shows, England and France don’t show up either. But Europe does, as in: “Countries in Europe and Russia invest more in their roads and railways than we do.”

The silver lining for Japan is that this wakeup call is good news for people here who are pushing reform.

Giving Kan Some Credit (though He Hasn’t Really Earned It)

2011-01-25T19:46:00.001+09:00

Prime Minister Kan is trying to take the DPJ back to its reformist roots. His two most important policy initiatives:

1) putting the social safety net on a sound footing by raising the consumption tax rate; and
2) pushing economic reform by re-linking agricultural subsidies to FTAs—I’m talking about his bid to have Japan join the US initiative on an expanded Trans-Pacific partnership

revive the arguably two most important policy goals that Ichiro Ozawa threw under the bus when he beat Kan in the 2006 DPJ leadership election. His efforts to sideline Ozawa and his minions point to another key element of what the DPJ stood for until its fateful merger with the Ozawa forces—no more politics as usual. So why isn’t anyone giving Kan any credit for this? Or at least taking note? Could it be the reflection of an anti-DPJ bias in the MSM, which some political scientists (SR, JC, etc.) whom I know and respect claim exists?

I lay the blame squarely at the doorsteps of the prime minister’s office. Circumstances aside, it’s due to Kan’s inability to project a coherent political message and stick to it. In fact, if there’s one thing that the Founding Fathers of the ultimately successful anti-LDP movement—Ozawa, Kan, Hatoyama—it’s their inability to articulate what they stand for (something that has surprised me in Kan’s case) and give the appearance of staying on message. Another common thread that binds them, though, is their stubbornness. And that is what keeps their clocks ticking, even Hatoyama’s, who has decided that he is indispensable to Japanese politics after all. And keeps Kan plugging away, to turn the clock back to the future, the future that the DPJ saw, before it lent the eaves to Ozawa and almost lost the house.

Give Kan credit though; he isn’t giving up any time soon, like some beta version of the first-generation Terminator.

The Difference between the LDP and Komeito…Why It’s premature to Write Off the Kan Administration Just Yet…Plus My Pick for Kan’s Replacement

2011-01-23T22:40:00.005+09:00

Opinion polls show the Kan cabinet dropping to near-last gasp Hatoyama lows and the DPJ falling behind the LDP for the first time in what seems like ages—when you are going through five prime ministers in four years, time seems to go by rather swiftly. So, is it time for a quick Kan write-off and a turn to a freshly recycled... Okay, not so great an idea, which may be one reason why nobody, not even an Ozawa surrogate, is willing to mount a leadership challenge. Still, with an opposition majority in the upper house, the April local elections (mayors, prefectural and municipal assemblies) looming, fragging from Ozawa and other discontents, and the media eager to promote major political upheaval, the Kan administration’s immediate prospects look dim. Or do they?

It is no secret that the DPJ is pining for Komeito, the one party—other than the LDP, which doesn’t count—that can ensure an upper house majority and erase the need for sucking up to the tiny SPD, former coalition member on the fringe-left, which can secure a lower house supermajority to force legislation past upper house opposition vetoes. (The problem with lower house overrides is that they will greatly increase the likelihood that the DPJ comes tumbling down in the next general election.) But conventional wisdom says that because of the April elections, the Ozawa smell test, and the sheer political inertia of the LDP-Komeito coalition years, Komeito is finding it difficult to provide assistance to the beleaguered DPJ, Kan or non-Kan, despite the shared urban, centrist leanings that would otherwise make the two parties natural allies. So it must be a relief to DPJ strategists to see that Komeito telegraphing its intent: We will fight the DPJ in the upcoming Diet session, but we will not push it over the brink and force a lower house snap election that the Soka-gakkai does not want.

For those of you who can’t read Japanese, Katsuya Okada, Kan’s second-in-command who runs the DPJ political operations, reiterated the Kan administration’s willingness to accommodate the opposition in order to avoid gridlock in the upcoming Diet session on the FY2011 budget, a turn of events that would doom the Kan administration and significantly raise the probability of a politically dangerous snap election. The opposition’s response?

LDP whip: We must create a political situation at the fiscal year’s end [March 31] where [budget-]related legislative bills will be voted down in the upper house.
Komeito whip: (The budget bill) has an extremely large number of problems, and [we] oppose it.

In last year’s extraordinary Diet session, Kometio voted against the supplementary (stimulus) budget but voted for the budget-related bills. Barring political failure of catastrophic dimensions, this means that Kan will survive the upcoming Diet session, which makes him an odds-on favorite to survive until the 2012 DPJ leadership election, when my money will be on a run-off victory by the top challenger, who will then call a snap election and win a new mandate for the DPJ.

Which begs the question: Which challenger? Good question, and the main reason, if some experts are to be believed, that the DPJ cannot afford to ditch Kan just yet. My pick: Goshi Hosono. He’s only 39, only in his fourth term as a lower house member in a society where seniority still matters, and has never served as a cabinet member. But neither did Shinji Tarudoko, who made a credible show of challenging Kan in the DPJ’s last leadership election despite similar shortcomings. Which brings me to what I think is the clincher. Hosono has something that none of the other telegenic, articulate policy wonks has: he’s on good terms with all the main actors, from Seiji Maehara to Ichiro Ozawa. That’s like playing for both national sides in the Japan-South Korea Asia Cup semi-finals. Go Blue Samurai!

My thanks go out to the people who have asked me why I haven’t been blogging recently.

Chinese Fishing Boat, Your Coast Guard; Welcome to the Club, ROK

2010-12-18T22:48:00.003+09:00

Sorry I haven’t responded to comments on the Senkaku issue, but is this (highly unsuccessful) ramming of a South Korean Coast Guard vessel by a Chinese fishing boat Chinese government subterfuge, a copycat incident, gangster-like behavior by a historically rowdy occupational category, or a symptom of a larger Chinese breakdown in civility, most prominently evidenced in the tens of thousands of violent protests on the mainland?

Case against Coast Guard Officer Not Air-Tight

2010-11-11T19:01:00.001+09:00

More bad news for the Kan administration, according to the evening edition of the hardcopy Yomiuri. My translation, plus comments.

Katsuyuki Nishikawa, the Director-General of the Criminal Bureau of the Ministry of Justice testified in the Judiciary Committee of the House of Councilors regarding the leak of the video of the Chinese fishing boat collision*, “We are not treating [the leaked video] as documents or articles of evidence, but since we received it as material for investigation, it will obviously a document related to a trial as prescribed in (the Code of Criminal Procedure,) Article 47.”

The Code of Criminal Procedure, Article 47 stipulates, “No document relating to the trial shall be made public prior to the commencement of the trial” unless “it is necessary for the public interest or other reasons” [and this testimony] expresses the view that it is strongly suspected that the leak is a violation of the National Public Service Act (obligation to preserve secrecy).

This testimony exposes two problems. First, it could be argued that it is no longer a document related to a trial. The Chinese captain was released under reservation of disposition, which means that as a matter of pure logic, he could still be charged and brought to trial. However, because of the political considerations explicitly stated by the public prosecutors in Okinawa on his release to the Chinese authorities with the obvious understanding that he would be returned to China, where he would be placed beyond the long arm of Japanese law, there is good reason to believe that the Public Prosecutors Office has given up any possibility of prosecuting him at any point in the future. Hence, no trial for the document to be “relating to” pending “commencement of the trial.”

Second, the document can be made public without violating Article 47 “if it is necessary for the public interest or other reasons.” Now I’ve used the quasi-official translation here, but “necessary” does not extend to “other reasons” in the Japanese text. In other words, if there is a valid reason for the disclosure, or rather, a valid reason not to apply the Article 47 restriction to a case of disclosure, then it could be a “document relating to [a] trial” and still not be prosecutable. And what better “other reasons” could there be than the fact that there is no longer a real possibility of a trial?

Note also that a criminal prosecution is a serious encroachment by the state on the individual. There is also the public’s right to know. These are good reasons for the Public Prosecutors Office to exercise restraint in actually proceeding with the case, and the courts are likely to take them into consideration in taking up my two preceding points.

I don’t know if the courts will accept all of these arguments, but don’t you think they’re pretty sound? At a minimum, unless the Coast Guard officer is willing to do the Japanese version of nolo contendere, his lawyers will surely raise them, and his Coast Guard colleagues and retired officers as well as volunteer groups politically motivated or otherwise are sure to pitch in financially for the legal ordeal.

My point is that the Kan administration is looking at a prolonged legal battle that it has little control over but will become intimately tied to in part because of Chief Cabinet Secretary Yoshito Sengoku’s intemperate and misguided statement equating it with the monstrosity of evidence tampering by a public prosecutor to buttress a weak case and subsequent alleged cover-up by his superiors. And that is bad. Ex-Prime Minister Hatoyama’s similarly bombastic and erroneous description of an administrative coup d’état hasn’t helped either.

To Conspiracy Theorists: Need a House?

2010-11-11T18:34:00.000+09:00

I’ve consistently maintained that there was no conspiracy and that it was a rogue Coast Guard officer, not anyone from the Public Prosecutors Office, and it looks increasingly like it. In fact, I'll bet the house that it’s not an institutional operation. At most, one accomplice, who slipped him the video. Of course the DPJ is trying to dump it all on the Coast Guard, and as an administrative issue, it's right, there's absolutely no way new MLIT Minister Mabuchi can be held responsible for it—or for that matter his predecessor and now Foreign Affairs Minister Seiji Maehara—unless his predecessors are willing to share the blame for decades of neglect that allowed the Coast Guard to operate with such carelessness that an officer in Kobe could get hold of an unauthorized copy.

You know, there’s something to be said for the complaint that I often hear from John Campbell, Professor Emeritus at the University of Michigan, who now resides in Tokyo, that the LDP continues to spit at the heavens (my words, not his) and the media is giving it a free ride. But is there an anti-DPJ bias? Stephen Reid at Chuo University also has something to say about that. I’m not so sure about that though. I’m inclined to look at all the other factors that go into the bad press for the incumbents and the neglect towards the opposition, though it’s certainly something that should be explored systematically—if someone isn’t already doing it.

Why the DPJ Claims about the Leak Are So Wrong and My Fears over a Weakened Kan Administration

2010-11-11T17:24:00.004+09:00

Far less coherent than I’d thought when I wrote it as an email, so I’ve edited it extensively. Still not completely sound, but life is short, so here it is.

The video leak is a serious problem for the Kan administration, but there’s more than this and they are accumulating on Chief Cabinet Secretary (CCS) Yoshito Sengoku’s doorsteps. In this particular instant, making the legally unsound statement that equated it with a group of public prosecutors allegedly involved in the fabrication of evidence to buttress a weak criminal charge and the subsequent cover-up when the fabrication came to light in an attempt to put all the blame on the bureaucracy—which, ironically, it mostly should properly be placed—is going to backfire on him. He has a tendency to wing it in the spotlight—which is really not what the CCS should be doing, though I can't blame him much, given that Kan has turned out not to be a good communicator as prime minister, which fact has been a surprise to me—and have to walk it back, apologize, bluff his way though, whatever. That’s not good. Now let’s look at how his statement is ill-considered.

A) One is a criminal offense by an agent of the state against an individual, while the other is a piece of administrative malfeasance and only possibly a criminal offense by an agent of the state against the state. The latter can, yes, go all the way up to insurrection, but I'm sure that a leak that has little practical effect than to confirm the allegations of the Japanese government pales in comparison to an attempt to sustain an unsound indictment by tampering with the evidence (and entrap the defendant), casting a heavy pall on the entire prosecution process.

B) The evident contrast between the politically motivated release of the Chinese fisherman and the harsh treatment of the Japanese Coast Guard officer, assuming that the officer is indicted, will be all too painful, while the Kan administration will look utterly foolish if the official is not.

C) My guess is that the video was passed around among the officers like a Paris Hilton home movie, and the guy in Kobe got so mad that he went and posted his copy on YouTube. That, Mr. Hatoyama, is administrative failure, not a coup. (Yes, ex-Prime Minister called it a “coup d’état by members of the government.” And ex-MIAC Minister Kazuhiro Haraguchi used the word “insurrection against the state.”

Okay, C) is more of an aside, but my point is that bombastic misstatements from Hatoyama, Sengoku and the like indicate how seriously the DPJ is taking this as a threat to the long-term survival of the DPJ regime. This and Ozawa's lie-in—refusal to testify in the Diet—are playing havoc with the legislative schedule in this extraordinary session as well as with public opinion*, and jeopardizing prospects of expanding alliances, most plausibly with Komeito. Meanwhile, Kamei is yapping about the Japan Post and worker dispatching agency bills. Ozawa is likely to continue to dig in, so that issue will linger well into the regular Diet session, which overlaps with the consolidated local elections in April. As a Japanese voter, I'm beginning to worry that Kan will be too weakened to push the debates on consumption taxation and Trans-Pacific Partnership negotiations, facing down opponents with the threat of a snap election if necessary.

* The near-universal public outcry in Japan reminds me albeit in very low-key form of the way Kim Jong Il’s revelations over the abductees blew up in Prime Minister Junichiro Koizumi’s face (though to be fair, he showed a remarkable stick-to-it-iveness through his second trip to North Korea and beyond).

Impressed by William D. O’Neill’s Commentary on Senkaku Collision

2010-11-11T16:42:00.001+09:00

There must be more than enough opinions from the informed, less informed, uninformed, and of course the ill-informed to last a lifetime of reading. There’s one that’s really impressed me, though, and it’s this one from William D. O’Neill explaining that the Chinese fishing boat initiated the collisions. Now I have no way of verifying (or refuting for that matter) his claims except to turn to another nautical expert (and the claim-counterclaim may not be of that much importance to people who think that the islands belong to China and that’s all there is to it), but a forensic, if cursory, examination from someone who’s been there, done that, is a welcome addition to a debate that has been overwhelmingly dominated by social science and lawyer types—like me. It’s a breath of fresh air, really.

That said, I will soon inflict on you some of my ruminations on the subject that I don’t see reflected out there, at least as far as I’m aware. They are my comments in discussions with my friends at Eurasia Group—social science types, most of them—lightly edited for public consumption.

Just for Fun, Trivia of Sorts around the Senkaku Incident

2010-11-05T22:57:00.001+09:00

The search for The Source begins. In the meantime, an edited version of a memo that I sent out in response to suspicions of a high-level, politically motivated leak to my Asia practice friends at Eurasia Group that will never find its way to its clients:

This Jiji Tsushin wire, which identifies the video as a version edited by the Japan Coast Guard station in Ishigaki and this Sankei report, conjointly support my conjecture that a relatively junior JCG official engineered the leak. FYI, I happened to receive a secondhand report on the JCG dismay just after the Chinese boat captain's release by the public prosecutors. The prosecutors have always been at odds with the regular police. Now, they and the Kan administration have managed to piss off the Coast Guard.

There’s an important lesson here for the Chinese authorities.

Hu’s Coming to Dinner?

2010-11-01T18:00:00.004+09:00

Yes, he will. At least that’s what I think. There’s been much speculation in Japan whether Hu Jintao, the Chinese President, will actually show up to sup with his fellow heads of state and government at the upcoming APEC summit in Yokohama. The last-minute unilateral cancellation of a meeting on the sidelines of the ASEAN summit between Prime Ministers Naoto Kan and Wen Jiabao by the Chinese side—accompanied by a tirade from the Chinese Foreign Deputy Minister—had put the matter in further doubt. The Japanese authorities pointed out that a key part of the denunciation—the last straw if you will—was the result of an erroneous AFP report*. On the heels of this dust-up, though, Foreign Minister Seiji Maehara, for whom the Chinese netizens appear to harbor particular enmity, announced that the two prime ministers had indeed subsequently held a ten minute chat, where Wen reportedly expressed his regret that their meeting had to be canceled. I wondered how that story would be carried in the Chinese media. Now, I know. Yesterday (Sunday, Oct. 31), the answer came in 法制晩報 (Evening Legal Report: my translation), one of many semi-official publications operating out of Beijing, according to Damien Ma** at Eurasia Group. The Evening Legal Report, according to a Kyodo Tsushin wire by way of among others the Sankei, gave a matter-of-fact report of a ten-minute meeting and characterized it as a “coincidental” “reenactment of corridor diplomacy.” It does not appear to have referred to the Japanese claim about Wen’s regrets. In the meantime, the Chinese side appears to be putting the blame on attempts by national security conservative Foreign Minister Maehara and other hawkish elements in the Kan administration to repair the damage under the Hatoyama administration to the Japan-US bilateral relationship, according to the somewhat more authoritative—am I right, Damien?—環球時報 (Global Times) indicated today (Nov.1) in a bylined report.

Leaving aside guesswork on Chinese motives, I think that the first report is a sign that the Chinese authorities want to limit their reputation risk abroad while containing discontent at home—the demonstrations have all occurred in the less prosperous interior provinces (and Chongqing, a special city in the interior), the most recent ones spilling over into domestic complaints—which means that Hu will show, the only suspense surrounding the status of a bilateral that should take place on the sidelines. The second report? A reminder that the US is the other big dog in the neighborhood, as well as possibly a manifestation of the Chinese authorities’ desire to localize if not completely isolate in the minds of the Chinese public the undesired elements of the Japanese political establishment. There is no mention of the near-universal if low-key Japanese aversion to Chinese actions around the latest Senkaku incdident***.

(Addendum) More to the point, this Global Times editorial puts the blame squarely on Maehara’s shoulders. Note also that Maehara has risen to the top of the preferred politicians in Japan according to the latest Nikkei-TV Tokyo public opinion poll. I don’t think that this is a delayed recognition for his JAL bankruptcy workout efforts, or his less commendable work on the Yamba Dam project.

* Is it just me, or is AFP generally less reliable than, say, Reuters?

** Damien, you will remember, blogs at the Atlantic website, a considerably more prestigious piece of virtual real estate than my more modest efforts. Little known fact: Damien played lead guitar for Johnny Cash’s studio recordings in the country legend’s last years. He is also quickly becoming an authority on rare earth elements. True story.

*** The Chinese belligerence took the Japanese public by surprise and captured its attention in a way that reminded me of the national response to the revelations of the North Korean abduction of Japanese citizen albeit in a much more low-key way. So many people in Japan, including those who had shown little to no interest in Japan’s international relations, or politics for that matter, woke up and took note.

Let’s Hope Mr. Fukuyama Has Worked Out His Announcement with His Chinese Counterpart

2010-10-30T18:52:00.002+09:00

According to this Sankei report, Prime Ministers Kan and Wen did have a chat around the ASEAN summitries in Hanoi after all. Tetsuro Fukuyama, the Japanese Deputy Chief Cabinet Secretary, the two prime ministers held a ten minute chat in the waiting room for heads of state/government this morning (October 30), less than 24 hours after the Chinese Deputy Foreign Minister Hu Zhengyue unilaterally announced that China was cancelling the eagerly awaited post-Senkaku bilateral meeting between the two and delivered a blistering tirade against the most recent Japanese actions surrounding the Senkaku Islands and the South China Sea gas fields. Fukuyama reportedly told the media that the two heads of government shared a common understanding that they:

a) regret that the summit meeting did not occur this time;
b) appreciate the resumption of the private sector exchange between Japan and China;
c) will strive to promote the strategic mutually beneficial relationship; and
d) will create an opportunity in the future to talk at their leisure.

I hope that Fukuyama has worked out his latest statement with his Chinese counterpart—the Japanese announcement of the bilateral meeting reportedly was marred by conflicting reports by government officials about a Chinese cancellation, which turned out to be true—so that it will not be followed yet another dressing-down by the Chinese deputy foreign minister or worse. After all, Wen (if, yet again, reports are to be believed) is under some pressure from hardliners for his more conciliatory policy regarding China’s relations with Japan. To look at this from a different angle, if Fukuyama is not directly contradicted by the Chinese authorities, that would be strong indication that the fix is in, and that the Chinese authorities are really serious about rapprochement.

Note that the Chinese gripe about the gas field announcement appears to have been the result of an erroneous AFP wire that was subsequently corrected after a Japanese MOFA protest. Does this give enough wiggle room to Wen? Hard to believe; it sounds too trivial. But you never know. It’s certainly not encouraging to know that the Chinese side didn’t bother to confirm the wire service report before acting.

Is the Happiness Realization Party Newsworthy If It Manages to Mobilize 2,600 Happy Science Followers in Tokyo to Protest Chinese Action around the...

2010-10-16T23:45:00.002+09:00

There’s some commotion out there on a discussion forum about the Japanese media’s treatment, or lack thereof, of a October 3 event in Shibuya featuring “about 2,600, which apparently included ordinary people, not just right-wing thugs” raging against a Chinese incursion into the territorial waters of the Senkaku Islands. But if this claim by the Happiness Realization Party, the political arm of the Happy Science—does it have a special Hell for economists?—~~cult~~religious movement, is true, it was an event staged by the HRP itself, a party that won 0.39% of the proportional representation vote, 0.50% of the prefectural vote, and zero seats in the July 11 upper house election.

The HRP did somewhat better today (October 16) in its demonstration in front of the Chinese Embassy, as it attracted Toshio Tamogami, the former Chief of the Sir Defense General Staff who was prematurely retired during the Aso(!) administration for publicly challenging the government’s long-held and highly restrictive views on the constitutionality of collective defense (read:coming to the aid of the US military protecting Japan). In case you wondered, the HRP has been canoodling with Tamogami of late.

The Sankei group is the only MSM outlet that appears to be taking the event seriously.

So, are the MSM correct to make light of the two occasions? Yes and no. On one hand, they were not expressions of the genuine and general if low-key Japanese outrage but events manufactured by fringe movements that represent a tiny fraction of the Japanese public. On the other hand, they appear to have touched off a much larger and sporadically violent set of protests in China—okay, they do outnumber us 10 to 1—timed to coincide with the second event. The Japanese MSM probably should have used the Japanese events as lead-in to what would have been a useful meditation on the contrast between the two nations whenever one or other incident like this one pops up.

Why Is the DPJ Getting Such Bad Press? Why Is the LDP’s Policy Message—Such as It Is—Not Getting Across?

2010-10-13T20:49:00.001+09:00

Questions, questions…

I was with a group of mostly foreign academics engaged in Japan studies (and one fellow blogger), when one of the two elders stated that the media was holding the DPJ up to much higher standards than it did with the LDP when the latter was in power. I wasn’t aware of this, but all the others in the group who had opinions on this matter agreed, so I’m inclined to believe that they were on to something. The LDP would be happy to tell you that the DPJ is merely being hoisted on its own petards—though it’s hard to listen to LDP Diet members without laughing when they preface their questions for the DPJ ministers with qualifiers to the effect that “the LDP may have been guilty of these sins itself, but…”—but I think that there’s also a structural explanation to this, and I said as much at that session. The following is a substantially revised, expanded version of my off-the-cuff comments on this point.

MSM reporters have been covering the LDP at its headquarters—where they have a “reporters’ club*”—since 1955. They have doing likewise with the DPJ only since 1996 (or 1998 depending on your preferred year of DPJ birth). The daily interaction under the reporters’ club system—there was a time when ambitious LDP politicians literally fed and watered the reporters on their beat—inevitably creates a measure of rapport between the reporters and their subjects. Now, the reporters are rotated in and out from their assignments at fairly short intervals—two years on average would be a reasonable guess—so this should be less of a problem theoretically. However, those rotations are likely to include turns at any of a large number of reporters’ clubs at the Prime Minister’s Office and ministries and agencies, where until September 2009 the LDP had with only a brief interruption monopolized or dominated ministerial and subcabinet assignments. Thus, there would have been plenty of time to develop the kind of relationships that could have delivered more favorable press to the LDP administrations than otherwise would have been the case. By contrast, even a large opposition party would be covered by its own reporters’ club and little more**. The devil you know, perhaps?

This also likely provides a good answer to another complaint at the group session: the lack of coverage where LDP policy ideas, such as they are, are concerned. Now, the only reporters’ club covering the LDP regularly is the LDP reporters’ club—which has traditionally focused on the political, not the policy, side of the LDP., since the ministry/agency/BOJ reporters’ club took care of the policy side. I can’t see the LDP reporters’ club changing its coat any time soon. Thus, now with a vastly smaller number of reporters covering the LDP in exile and institutionally inclined to focus on the political game, it stands to reason that the LDP’s policy pronouncements will be shortchanged. This also explains the preponderance, also noted at the group session, of youthful, articulate, telegenic figures in the LDP’s new shadow cabinet. With low expectations for help from the reporters’ club, the LDP is obviously courting the broadcasting networks’ attention, which also provides newspaper fodder for the morning edition the next day.

* In case anyone is wondering, a reporters club is a self-governing organization of mainstream reporters covering an institution who receive office space and access to regular briefing in return for agreeing to respect embargoes and other rules imposed by the club itself. The effect is an information cartel, or trust with the institution at the core. The DPJ regime has gone a long way in eroding the collusive arrangement.

** In fact, any added attention would most likely be unwelcome, since it would near-certainly come from the national beat, which covers crime, scandals and human interest stories. Guess which ones it’ll be coming after when it converges on politicians.

So Much for the Fourth International…

2010-10-04T21:36:00.002+09:00

The Japanese Communist Party has come out with its official response to the Senkaku Islands incident, and you only need to know the title of the document to understand where the JCP’s sentiments lie:

The Senkaku Islands Issue: Japan Territorial Possession Is Justified Both Historically and Under International Law[so there!]

So I guess my question is: Will Sapio print the document word for word?*

Oh well, so much for the Fourth International.

Yes, I’m aware that the fraternal animosity goes back some ways. That said, note also that the subtitle of the latest JCP outburst contains the word 大義, or “Noble Cause,” a word with historic resonance, a word that reminds me of the less democratic times of the period after the Meiji Restoration and the unconditional surrender in WW II. The appeal to nationalism draws an interesting parallel to China’s more elaborate and effective efforts.

* According to Sankei, in what must be a first for the conservative news group to approvingly reference the JCP, the JCP is going to translate its statement and pass out copies to the foreign embassies in Tokyo.

The Chinese and Japanese Authorities Want to Wind It Down, but Democracy Gets in the Way

2010-10-04T14:49:00.002+09:00

In a clear sign that the Chinese leadership wants to move on from the Senkaku Islands incident, China’s Foreign Ministry spokeswoman has been toning down the rhetoric dramatically in recent days. It appears to be sending signals on the domestic front to cease and desist, too, as anecdotes surface of the Chinese bureaucracy resuming work on shipment papers for rare earth exports to Japan and dropping some of the administrative nuisance imposed on Japanese businesses in China exporting to Japan. In fact, the Japanese Coast Guard folks are the good guys, did you know, helping save sick Chinese sailors, according to this reportfrom Xinhua, China’s state wire service.

The feeling is mutual at the leadership level; the Kan administration also wants to get this issue out of the way before the fallout worsens. However, in Japan, public opinion in general, most of the mainstream media, much of the political opposition, and even some DPJ members are driving driving the domestic political cycle in the opposite direction. You have not, will not, see the kind of government action and very little of the private sector bandwagonning that was evident in China, but the issue will remain in the public domain for a while, not when, for instance, the latest Yomiuri opinion poll (October 1-3) is showing overwhelming negatives for China and the Kan administration around the issue and support for the Kan administration fell from the post-Ozawa euphoria of 66% (September 17-18) to a still above-the-waterline 53%. It’ll be a while before the two sides can kiss, discreetly at first, and make up, as they eventually will—until the next flare-up.

Coming Up for Air after My First PowerPoint Production

2010-09-26T18:52:00.002+09:00

Not very fun weekend, as I have just finished (hopefully) my first PowerPoint for presentation, on Tuesday…on a webcast. It’s in ugly black-and-white—except the tables, which the software automatically colored my tables and I couldn’t figure out how to turn that function off. Two days, in fact, which brings the hourly rate for the speaking fee to… wait, I’m not going to let the thought spoil my after-work hours, when I’m getting my drink on and then breaking off to cook dinner. In fact, I’ll probably won’t even be going back to my most recent posts until after I’ve made the presentation; there’s other work when the weekday dawns too.

That said, I can’t help mentioning how godawful the Kan administration’s response to the Senkaku Islands crisis was. No, I couldn’t have done any better—I am the last person that you want to turn to for crisis management (just ask my old METI friends)—but would you believe me, I actually foresaw a similar issue there and featured it in a piece of work that I was doing some time back? And you’d think that the government would have had a crisis management plan in place for such contingencies, don’t you?

Never mind, let’s see if an emboldened Chinese government sees fit to actively challenge Japan’s effective control over the islands. I think that this has emerged as a real, if still small, possibility.

I’m signing off for the day. I generally check my email, even when I’m dead drunk, so that’s where to find me if you’re in a hurry, okay?

Is Anybody Watching Straight Talk Tomorrow?

2010-09-23T20:40:00.001+09:00

On CNBC, at 7:30PM Tokyo Time? Just sayin’.

Okay, back to my deadline work, for multiple clients. And liquor. There’s always liquor.

Maeda, Meet Nifong; Nifong…

2010-09-21T23:01:00.002+09:00

Sheesh. I can’t find a good word for it, since I don’t want to disrespect “shit,” a perfectly respectable word that is now having hard times the last few centuries. FYI Maeda’s arrest is the first arrest that the Supreme Prosecutors Office has ever made on its own, according to a media report.

Silver lining? Gives the lie to big bad conspiracy theories about the Japanese bureaucracy and the public prosecutors. Hey, you take what you can get.

Chinese Authorities Escalate and My Dialogue with Sun Bin Continues

2010-09-20T11:07:00.000+09:00

The Chinese government made front-page headline news in Japan as it upped the ante on the Japanese government’s refusal to give up the fishing boat captain without a trial, announcing its unilateral suspension of ministerial-level exchanges, suspension of bilateral consultations on increasing airline routes between Japan and China, and postponement of the Japan-China Comprehensive Conference concerning Coal. It has already postponed scheduled high-level talks on the joint development of the East China gas fields and the dispatch of a National People’s Congress delegation.

By going public with these measures and accompanying them with belligerent language, the Chinese government is making it even more impractical politically for the Japanese government to coax the Public Prosecutors Office to give up the fishing boat captain without taking the criminal case to court, as it is in the PPO’s discretion to do (somewhat adulterated by a legal amendment that allows the Committee of Inquest for Prosecution the authority to force prosecution against the PPO’s will, but this is irrelevant for all practical purposes in this case).

The saving grace here is that the Chinese side is not taking any action to challenge the effective control itself of the territorial waters by the Japanese government. It actually appears to be keeping Chinese vessels from launching expeditions to the Senkakus. Also significantly, as Sun Bin notes in our ongoing dialogue, criminal prosecution sets precedence of a legal shading, an undesirable development from the Chinese perspective, at least in the court of public opinion.

Anybody Still Interested in the Chinese Fishing Boat?

2010-09-19T12:08:00.002+09:00

If so, there is a dialogue between Sun Bin and me in the comments here that you might want to look into.

And Finally, One of the Most Beautiful C&W Songs Ever Written…

2010-09-18T21:07:00.001+09:00

…and mostly forgotten. Reid Jamieson—no, he’s not George Clooney’s evil, underfed brother—presenting Is It So Strange as an Elvis Presley tribute.

May, Schmay, Might, Schmight… Could, Schmould? But You Get the Idea

2010-09-18T20:52:00.001+09:00

I shouldn’t be saying bad things about the MSM; my livelihood depends in part on their interest in what I have to say. Still, this Newsweek headline:

Murkowski May Launch Write-In Bid, but It Might Not Change Election's Outcome

is pretty obscene. Yes, and:

“The Cow May Jump over the Moon, but the Fork Might Not Run Away with the Spoon…

A more honest headline would read:

I Don’t Know If Murkowsky Will Launch a Write-In Bid, and I Don’t Know If She’ll Win If She Does

One of my favorite putdowns is that “it’s not even wrong.” This one doubles down with a may-might compound hedge.

Kaieda Shows Roots in Pushing Zero-Interest Government Bonds

2010-09-18T19:30:00.001+09:00

Banri Kaieda, the new State Minister for Fiscal and Economic Policy, is promoting zero-interest, estate tax-free government bonds as a cheap means to finance the public deficit. This is an idea that was already advocated by notable economic gurus Shizuka Kamei (most publicly when he held the Financial Services and Postal Reform cabinet portfolios) and Ichiro Ozawa (during the DPJ leadership campaign). This Yomiuri report states without further comment:

“The objective [of the zero-interest bonds] is to sop up tansu yokin (ed. ”Tansu yokin” is the Japanese equivalent of “mattress money”) and other assets that are lying about unused in households with government bonds and put the [funds] to good use.”

This is rubbish. Most people in Japan do not keep their savings in their bureaus (or their mattresses). Instead, they put the money into better use as financial assets, bank deposits, mutual funds, and the like. And guess what those banks (and Japan Post Office), fund managers, and the like purchase with the money…

So what’s the point of it all? Japanese inheritance tax law gives us the answer. The first 50 million yen of an estate is tax-free and there’s a 10 million deduction for each legal heir, so there’s a minimum 60 million tax-free to begin with. (There are other deductions that vastly complicate the picture, but let’s keep it simple. Besides, I’m not a tax attorney.) Beyond that, the marginal tax rate is highly progressive, beginning at 10% for the first 10 million but rising quickly to peak at 50% for anything over 300 million. At its simplest, the inheritance tax-free bond would result in massive windfalls for the heirs of the rich and elderly while the government avoids modest interest payments over the lifetime of the bonds. You don’t need to do the math to see that the government will be the big loser in terms of present value, while accepting more volatility in its long-term cash flow (interest payments being more predictable than mortality profiles of the eventual bond purchasers). It’s boondoggle, that’s what it is.

Then why are these politicians advocating the zero-interest, inheritance tax-free bonds? Well, Kamei and Ozawa are old men who have accumulated plenty of personal assets over their lifetimes. It is conceivable that they have a personal interest in pushing the measure. More likely, though, is the input that they get from the company they keep. As conservative political leaders with an ironclad grip on their Diet seats, their most important constituency consists of the rich, i.e. the members of the moneyed class who find vicarious pleasure in sponsoring their favorite politicians, much in the way that they might spend money on racehorses or professional sumo wrestlers.

I suspect that the reason for Kaieda’s support for the bonds is somewhat different, although it’s still represents doing favors for the rich. Before he became a politician, he had built up something of a reputation as an economic analyst. However, it appears that it was not as just any kind of analyst. A look through his bibliography shows that he was essentially a personal finance guru, more Suze Orman than Paul Krugman, Kazuyo Katsuma than Heizo Takenaka. And if an inheritance tax-free bond isn’t a personal finance advisor’s dream, I don’t know what is.

Case closed.

This does not, of course, bode well for economic policymaking under the Kan administration. It also does not speak kindly of the MSM in terms of economic literacy. On the other hand, this kind of nonsense gives me material for this blog, and in a very roundabout way helps put food on my table. So who’s complaining?

Ozawa as Warlord-Oracle

2010-09-16T14:56:00.002+09:00

From a well-earned, long lunch-break spent on the Internet, where still I’m unable to drift too far off the reservation.

Sankei, if not always the firstest among the MSM outlets, for sure posts the mostest on its media website. And here it is, reporting on the blame-game among the Ozawa forces, where the fingers point to: The Four Heavenly Kings, the keepers of the world, keeping, according to the complaints in the report, the world from the Dharma. (Confession: To show you how little I actually know, I wasn’t even aware that Ozawa had “Four Heavenly Kings” surrounding him.)Then there is, of course, majordomo Kenji Yamaoka, who led the election campaign for Ozawa and kept issuing cheerful “Imperial General Headquarters announcements” till the bitter end that only served to aggravate the anguish of defeat.

It’s the identities of the Four Kings that intrigued me though. Two of them, Koji Sato and Kazumasa Okajima are second-generation Diet members, sons of Ozawa allies who now dwell in that Great Big Diet Building in the Sky. If you’re dead, then there’s no danger of the falling out that plagues ever other associate sooner or later, is there*? Another King, Takeshi Hidaka, left his day job early in his professional career and joined the horde of Ozawa aides**. A few years later, he married one of the daughters of a Diet member and—you guessed it—Ozawa ally, and a very trusted one too, before he retired. There is something visceral and atavistic about these relationships, casting on Ozawa an aura of a feudal warlord. The fourth King, Kenko Matsuki, the only one without such clear ties, started out with the LDP, where his father was the head of a small local chapter, but his career only took off after he joined the Ozawa camp.

All this is in sharp contrast to the popular image of men and women accomplished in their respective professions making a mid-career shift in response to DPJ solicitations, and comes across as more the product of old-school conservative politics typical of the LDP, now making a painful shift to the public solicitation process and limitations on heirloom candidates***. You wonder how many of the new breed will be inclined to follow the 68 year old Ozawa into the wilderness if he decides to pull up stakes and leave.

* Actually, Okajima’s father did leave Ozawa’s party, but later lost his Diet seat and died while plotting a comeback, having returned to Ozawa’s wing, after the appropriate apologies.

** You may remember his name from the recent Ozawa financial scandals, where Tomohiro Ishikawa, the main defendant, implicated him in the cover-up.

*** Yamaoka is, unlike the other four, Ozawa’s generational cohort who left the LDP with him to form the Japan Renewal Party.

While I’m on Ozawa’s throwback tendencies, let me mention that I wasn’t the only one who was surprised to see the New Ozawa, the one full of smiles and handshakes and emotional speeches, and opening himself up to the press, any press, when the campaign started. That Ozawa may have been one of those Terminator robots from the future (or is it the other way around?), though, because the smiles and open access vanished in a political instant when the September 14 election ceremonies ended. Leaving the conference room, Ozawa stared down the throng of journalists waiting for his comments and left without a word for public consumption. Words leaked out from that night’s gathering, including his vow to return to “one common foot-soldier to work for the party” (according to media report a phrase known to be use by Ozawa to express the equivalent of “you’ll have to pull all my teeth with a pair of pliers to see if I cooperate with the bastard”). This has been Ozawa’s usual Oracular mode of communication; he seems to have reverted immediately to type.

Sorry if I’m boring you with Ozawa trivia, but for me, it’s a welcome diversion from an assortment of Kan admin stuff that I’m working on. And Ozawa is a fascinating diversion.

Scattered Thoughts on and around the DPJ Election

2010-09-15T16:11:00.001+09:00

All the suspense went out of the process when they announced the party member/official supporter voting results 249 – 51, giving Kan an insurmountable lead. And the 206 – 200 Diet member split (412 – 400 for the point count) that gave Kan the victory in a 3 – 0 unanimous decision (60 – 40 for the municipal and prefectural assemblymen vote) has symbolic value. More significant, though, is the fact that nearly half of DPJ Diet members and two-fifths of the party-faithful preferred someone who had to give up control over the party coffers and party assignments due to political financing scandals that may result in his criminal prosecution as early as next month. That’s not exactly a vote of confidence for Kan.

I do not think that Ozawa is going to try to engineer a split any time soon, if only because a mere fraction of the 201 is likely to follow him into penurious exile. There will be much greater temptation to foment rebellion as the August 2013 deadline for the next general Lower House election approaches, but my money is on a strong challenge from one or more candidates—not Ozawa—in July 2012, when Kan comes up for reelection as DPJ chief. At that point, temptation will be strong to elect a new leader, who can call a snap election before the afterglow dies off. The DPJ can worry about the 2013 Upper House election later. There’s also a good chance of switching party allegiances and maybe even major realignment just before the Lower House election. If Ozawa is going to make a move, it’s most likely to happen then.

Kan did well in the metropolitan areas, while Ozawa did well in the periphery. I think that this reflects real, substantive differences that were evident even if many of Ozawa’s major policy pronouncements were opportunistic and ill-thought out. Can the DPJ forge a coherent set of policies that makes sense for the long-term wellbeing of the Japanese economy while satisfying both ends of the political geography?

Is Chief Cabinet Secretary Yoshito Sengoku Prime Minister Kan’s Masaharu Gotoda? He sees to have the intellect and some of the moxy of Prime Minister Yasuhiro Nakasone’s majordomo, and also manages to cloak his personal ambitions, if any (Gotoda was biologically too old and politically too junior to have any), for higher office. Of course any analogy breaks down at the Kan/ Nakasone level…

Forging an official bicameral majority that shares cabinet and sub-cabinet posts seems next to impossible to me. (I happen to think that, contrary to the majority view, it would have been even more unlikely under Ozawa. But we’ll almost surely never know.) However, flexible, multiple, issue-oriented alliances are eminently doable; if you don’t believe that, look at the substantial, if diminished, amount of legislation that got done without resort to a Lower House override after the LDP-Komeito coalition government lost its Upper House majority in the 2007 election. I’m going to explore this angle and others in a talk that I’ll be giving in a couple of weeks and getting paid for! I may dribble some of my thoughts out over the coming days or, more likely (I’m a terrible procrastinator), present them after the event.

Diplomatic Process Enters Home Stretch on Chinese Fishing Boat and Crew

2010-09-13T19:18:00.002+09:00

“State Councillor Dai Bingguo Urgently Summons Japanese Ambassador to China regarding Japan’s Illegal Seizure of Chinese Fishing Boat in the Waters around Diaoyu Islands” was the September 12 headline news item on the Chinese Foreign Ministry Website. Let me try my hand at a translation of the rest of the Chinese MOFA post:

In the pre-dawn hours of September 12*, State Councillor Dai Bingguo urgently summoned Uichiro Niwa, Japanese Ambassador to China, regarding the illegal seizure of a Chinese fishing boat and its crew in the waters around the Diaoyu Islands, gravely expressed the Chinese government’s serious concern and stringent position, and urged the Japanese side not to misjudge the situation but to make a wise political decision and immediately return the Chinese fishermen and fishing boat.

Ambassador Niwa stated that he would take this Chinese position and report it immediately and accurately to his home government**.

On one hand, the Chinese message contained nothing new: there were no or-else threats, and the Chinese challenge of the legality of the “seizure” was included in the post but not in Dao’s comments. On the other hand, a past-midnight summons to an ambassador plenipotentiary seemed pretty heavyhanded. And with the extraordinary State Councillor card now on the table, the only recourse left to the Chinese authorities would be a Wen (but heavens not Hu)-to-Kan hotline call.

The events of today (September 13) show that the fix indeed was in. The crew (but not the captain) returned to China on an aircraft chartered by the Chinese side and flight arrangements obviously expedited, perfectly legal and according to Japanese criminal procedure law; the Japanese authorities expressed their displeasure at the insult of the late-night summons; and the Chinese MOFA spokeswoman—why do I think that we have heard the last of the State Councillor?—demanded the release of the captain. The Japanese legal process will most likely grind on. How about a plea of guilty from the Chinese captain including an expression of remorse—to be retracted immediately on his return to China?—for not showing proper civility to the Japanese authorities while avoiding any explicit recognition of Japanese sovereignty over the Senkakus, a request from the Public Prosecutors Office for a suspended sentence expeditiously granted by the bench, and deportation as soon as the deadline for appeals passes?

A question lingers in my mind though. I might be imagining things, but these maritime incidents seem to be occurring just as the DPJ is having problems managing the Japan-Us relationship. It’s as if they were designed to drive Japan back into Uncle Sam’s arms when the DPJ leadership might—just might—have been inclined to turn more decisively towards China’s way. I would not have these thoughts but for parallel reports of the verbal altercation between Japanese and Chinese research vessels this side of the EEZ median line (this Sankei report predictably being the most alarmist among them). If there’s a fatal accident, or an exchange of fire between a Chinese research/observation vessel and a Japanese Coast Guard vessel, all bets are off.

* The first online MSM report in Japan came from ASAHI, with a 3:48AM byline (most likely following an immediate briefing for the Japanese media by the Ambassador or his spokesman), so it was more of a post-midnight summons. More significant, of course, is that this fourth summons came from the State Councillor in charge of foreign policy.

** If anyone is wondering, Ambassador Niwa talked back to the State Councillor to the effect that Japan remained unchanged in its position regarding the legal status of the Senkakus and that it would properly deal with the incident according to Japanese law, according to the Japanese media—which fact, if true, the Chinese MOFA chose to ignore in its press release.

This AP wire had the most useful factual account of the facts as of this posting. I want to flag that.

Question to the Internet-Savvy Regarding Spamposts

2010-09-11T18:15:00.000+09:00

Has someone invented a spam-posting program that enables spammers to post on your blog in a way that the blogger can’t delete it because it doesn’t appear on his/her browser or what? Someone using the names of actresses has been posting the following message on my old posts according to Blogspot notices but the spamposts don’t appear on my browser. If anyone knows anything about this phenomenon and ways to get rid of the garbage, I’ll be very much obliged.

EARN GLOBAL MONEY gives you instant access to a dynamic, scalable, dedicated and responsible development program - a committed to meeting the highest standards, committed to delivering on promises, and committed to ensuring every program success.

China Finds a Dodge from the Senkaku Incident (I Think)

2010-09-11T17:26:00.002+09:00

RS: Some warm-up exercises for the real thing.

On September 7, a Japanese Coast Guard patrol boat tried to board and inspect a Chinese fishing boat in the territorial waters around the Senkaku (Diaoyu to China and Taiwan) Islands. A collision ensued as the fishing boat tried to escape. The patrol boat chased down the fishing boat in the adjacent EEZ*, arresting the captain for the crime of obstruction of performing a public duty. The rest of its crew were taken together with the boat for questioning to Ishigakijima, the nearest well-populated island in Okinawa.

I was curious to see how the Chinese side would react. The diplomatic response seemed par for the course: protests and claims of sovereignty over the uninhabited islands as well as demands for the release of the fishing boat and its crew, issued from the Chinese MOFA spokesman and ambassador in Tokyo and through the Japanese ambassador in Beijing. Meanwhile, the Chinese public also reportedly went into its usual routine consisting of angry media reports, public protests in front of the Japanese embassy, burning rage in chatrooms and the like. What occupied my thoughts were the possibility of boycotts of Japanese products and assaults on Japanese embassies and consulates and their personnel, and further actions that the Chinese authorities would take to keep such threats of civil unrest to a minimum.

The first and more alarming Chinese act was the September 9 announcement of the dispatch of a fishing observation vessel belonging to the Ministry of Agriculture to the Senkaku waters to protect Chinese fishing boats. Such an action may be standard practice for the Chinese authorities**, but it would set the two sides up for a clash the first time a Japanese patrol boat tries to board and inspect a Chinese fishing boat—one news report provides an estimate of 160 such boats plying the disputed waters at any time—and the Chinese observation vessel intervenes. Necessary for domestic consumption perhaps, but the Senkaku Islands are under the effective control of Japan, much the way the Northern Territories and Takashima are held by Russia and South Korea respectively. What happened to possession as nine points of the law? Oddly, Minister of Defense Hiromi Kitazawa stated during a press conference the following morning (September 10) that the Chinese observation vessel had already left the nearby waters. What gives?

I suspect that the answer to the second question lies in the Chinese announcement the following day (September 11) that China was unilaterally postponing the bureau director-general level talks for a East China Sea gas field joint development treaty, scheduled during the second ten days of this month. Note that this is an issue on which the Chinese authorities have been dragging their feet forever, partly because of the highly negative response to the concession—largely illusory, as I have pointed out before on this blog, but Chinese netizens are not among my most avid readers—from the Chinese public. Thus, the announcement should play well with the Chinese public. The reaction from the Japanese public is less of a concern; collectively, they lack the nationalist fervor of their East Asia counterparts. Moreover, the Japanese authorities, at least a DPJ administration, could let the issue remain without closure and not suffer any political consequences as long as the Chinese side does not unilaterally begin commercial production on their side of the median line (at least if I understand the underlying economics correctly). So, if my reasoning is sound, the Chinese side has found the optimum solution to the conundrum: appease the Chinese public and government hardliners while minimizing the risk of escalation—you can be sure that the Japanese authorities do not have another tat for the Chinese tit—that could arise from Chinese action in waters controlled by the Japanese authorities.

That said, the large and growing number of Chinese fishing boats meeting the demands of an increasingly affluent domestic population is bound to increase the chances of similar incidents. And if any one of them results in a casualty, all bets are off.

* According to my recollection, one media report, which I cannot find, mentioned that a Maritime Self-Defense Force aircraft assisted in tracking the fishing boat. Some people are making calls for closer coordination between the civil-service Coast Guard and the “military” JSDF to meet such threats to Japanese sovereignty.

** According to media reports, the Chinese MOA observation vessels vary in size, at least one of them over 4000 tons, and are often armed. They have been active around the South China Sea and beyond, where China has aggressively pushed its territorial claims against several ASEAN member states, sometimes with military force.

Ozawa and the Sokagakkai Effect; Plus No-D Kan as Placeholder

2010-09-09T22:53:00.005+09:00

Remember my caveat regarding the Sokagakkai effect, i.e. the reluctance to disclose one’s true preference for a socially controversial choice, a phenomenon that could result in undercounting the Ozawa vote? I now have some corroborating evidence.

The hard-copy version of this Yomiuri survey, conducted on September 8, says that of the 411 DPJ Diet members (305 Upper House, 106 Lower House; one Diet member no longer has voting rights since he left the DPJ in the wake of the conviction of one of his political operatives), 262 (202 LH, 60 UH) responded to the Yomiuri questionnaire. Based on the questionnaire and other information, Yomiuri concludes that Kan has secured support from 168 Diet members (127 LH, 41 UH) while Ozawa has 171 (127 LH, 44 LH). But does this mean that Kan has closed the gap among Diet members, despite the low marks everyone seems to be giving to his campaigning? I’m not so sure. This Yomiuri report gives the list of Diet members who agreed to allow their names to be disclosed. Of the 168 Kan supporters, 113 (87 UH, 26 UH) agreed to disclose their names for a disclosure rate of 67.3%, but only 86 Ozawa supporters (68 LH, 18 UH) were willing to reveal their preferences for a disclosure rate of 50.3%. Clearly, Ozawa supporters are more reluctant to declare publicly for their candidate of choice. I suspect that this reluctance carries over to the remainder, that Ozawa leads Kan among the 52 (411 – 168- 171) “stealth” members whose preferences not even “other information” would indicate.

The first Yomiuri report continues to give 60~70% of the 300 party member-supporter vote and the 100 assemblymen vote to Kan. But the Sokagakkai effect may be in play here as well. I still think that a Kan victory is a sure thing, but the tally will be closer than the raw numbers currently indicate.

Incidentally, much of Kan’s inability to shake the publicly unpopular Ozawa is attributable to his sheer ineptitude as a campaigner. This flaw has come as a surprise to seasoned insiders. Kan has come across throughout his career as an effective debater, but he was always on the offensive then. Now, he is utterly incapable of projecting himself as an effectively leader as Ozawa attacks him at will. There is no D in Naoto Kan and it shows. That will not be good going forward. Even odds, I’d bet against Kan surviving the next DPJ leadership election (2012) or the next Lower House general election (no later than 2013), whichever comes first. This means, of course, that the DPJ has another crack at choosing a new party head to lead them into the next Lower House general election. If I were a DPJ election strategist, I would ask myself, Why would I want to waste political capital now by picking a new prime minister with all his PR baggage plus his proven ability to generate enemies and alienate allies, when I can always go into the next general election, possibly a double election, without the downside of either one of the two current contestants? From this perspective, Kan is at worst the better placeholder.

Everything Has a Price, Even South Korean Fishing Boats

2010-09-07T23:46:00.001+09:00

“North Korea to free seven fishermen detained last month”. Would you believe it; they’re returning the boat too? While the United States is still waiting for the Pueblo…

The move comes at a time of a slight thaw in tense relations on the peninsula. South Korea announced last week that its Red Cross would donate $8.4 million to help with flood aid in the North.

Oh.

The DPJ Leadership Election: It’s Kan’s Race to Lose

2010-09-06T21:40:00.001+09:00

If the Mainichi report giving Ozawa a tentative 185 to 164 lead over Kan (with 63 not showing any preference) in support among the 416 DPJ Diet members is to believed, then the odds against an Ozawa victory appear to be insurmountably long. Barring an unforeseen disaster for Kan—a deeply wounding personal scandal might do the trick—or an as-yet undetected Sokagakkai effect of significant proportions, Kan will prevail in the overall vote on 14 September. I think that Ozawa has seen the writing on the wall. That might be the real reason why he looks so cheerful on the hustings; he knows he won’t have to be prime minister after all.

Anyway, here’s my arithmetic.

(The Diet member vote)
Let’s assume that none of the 185 + 164 already indicating their preferences changes his/her mind and that the remaining 63 Diet members break out in the same 185:164 ratio. This gives Ozawa and Kan 33.4 and 29.6 more Diet members respectively. Since each Diet member has two votes, Ozawa receives 436.8 votes and Kan 387.2. I’m giving Ozawa the benefit of the doubt here, since nothing is happening to make these fence-sitters jump to Ozawa’s side. To the contrary, subsequent opinion polls paint a bleak picture for Ozawa, as the Kan administration’s approval ratings have been shooting well above pre-election levels even as Ozawa’s deeply negative numbers show no sign of a turnaround.

(Official party members and supporters)

Early estimates put support for Kan and Ozawa in the 60-70% and 20% neighborhood respectively. More specifically, media reports put Ozawa ahead in only his home prefecture Iwate and no-to-US-military Okinawa. But let’s be improbably generous to Ozawa and give him 40%, or 120 of the 300 votes available and Kan only takes 60%, or 180.

( Local assemblymen)
Media reports say that Kan hold an edge here, but let’s be generous to Ozawa and split the 100 votes evenly, giving Ozawa and Kan 50 votes each.

(Total)
Kan : 387.2 + 180 + 50 = 617.2 votes
Ozawa: 436.8 + 120 + 50 = 606.8 votes
Kan wins!

Okay, that’s only a ten-vote difference. But look at the heroic assumptions that I’ve had to make to enable Ozawa to come close. Of course there’s another week to go, during which something unexpected might come up such as, say, 16 seconds of uncomfortable silence from Kan while looks for appropriate bullets from his crib sheet or an unexpectedly early, clean, and unequivocal bill of health (and I mean clean and unequivocal) for Ozawa from the committee investigating his political financing criminal case). But likely? Not.

The one factor that keeps me from betting the house on Kan is what I call the Sokagakkai Effect. Let me explain.

Komeito routinely outperforms public opinion polls by wide margins when it comes to actual election results. In fact, the margins are so wide that they cannot be explained away by extremely high turnout from its core support base, i.e. the members of the laic Buddhist organization Sokagakkai. The reasons for this can only be guessed at by this resource-poor blogger, but I suspect that it has a lot to do with the old social stigma attached to the cultish reputation that plagued Sokagakkai’s in its earlier decades of proselytizing through its faith-healing, marriage-saving, business-enhancing messages. I suspect that supporters don’t want to telegraph their Sokagakkai affiliation, not even to opinion poll canvassers at the other end of the telephone wire. (These polls only cover fixed line households.) Could the same think be going on with Ozawa admirers? Could they be too embarrassed to tell media reporters in the face of near-relentless criticism that they actually prefer that formidable old politico, political warts and all? More to the point, could there be enough such Kakure Ozawarians to deliver an unexpected victory to him come 14 September? For that one day, it’s surely as likely as if not more so than—the next Great Kanto Earthquake, the one event that the insurance companies refuse to offer a policy for my house.

Kan must of course also be careful around the media’s vested interest in keeping this a race.

The DPJ Leadership Election: Mainichi’s Remarkable Headcount

2010-09-06T12:20:00.017+09:00

Mainichi canvassed all the DPJ Diet members to see where they stood on the Kan-Ozawa showdown. Adding information regarding their respective groups as well as the labor unions—(many DPJ Diet members rely to varying degrees on support from the labor unions), it has come up with a prospective breakdown of the votes. The resources of the local bureaus are being put to good use*, I see.

	Kan	Ozawa	undecided	total
Upper House	35	46	25	106
Lower House	129	139	38	306
LH rookies	55	65	23	143
total	164	185	63	412

Other bits and pieces of information:

1. Although Ozawa leads Kan 185 to 164 in total support, the two are tied at 122 each in firm votes; the others are merely leaning towards one or the other and presumably could be swayed.

2. Of the lower house rookies, Ozawa leads handily 22 to 8 (with 5 undecided) among those who ran solely on the regional proportional ticket, but Kan leads 47 to 43 (with 18 undecided) among those elected from single-seat districts and those who ran on both tickets and got by on the regional proportional ticket. Take out the pure proportionals, i.e. Ozawa’s truly handpicked candidates, and the “Ozawa Children” look remarkably like the rest of the DPJ’s lower house members.

3. Mainichi attributes Ozawa’s upper house lead to the preponderance of labor union affiliates there.

4. The single biggest factor that has the potential to affect the numbers in the near-term is the collective intent (if any) of the 30 or so members of the old Social Democratic Party group. Media reports say that they are likely to make up their minds early in the week. One weekend report said the group would be opting on Monday (today) to support Kan**.

* Yomiuri carried a similar report, but I could not find it online. One of the more remarkable points in the Yomiuri report was that a few Ozawa group members intended to vote for Ozawa, while the Kan group also had its share of Ozawa supporters.

** Even if the ex-DSPers don’t reach a collective decision, I am now more confident that my call of a Kan victory is the correct one. More about that later.

In case anyone hasn’t noticed, the Wall Street Journal seems as good a place as any for a daily fix on the DPJ leadership election—if you can’t read Japanese. Just punch in a keyword or two and you should be able to pick up more WSJ and non-WSJ media links than is probably healthy for you. And if your interest in Japan is broader than that, you could probably do worse than using its Japan Real Time blog as a portal. Still, I don’t think that you’ll find the Mainichi report there, and it’s not often that you’ll find these kinds of numbers, so I thought I’d let you know.

The DPJ Leadership Election: Ozawa’s Charm Offensive Only Skin Deep

2010-09-05T23:03:00.002+09:00

The other Ichiro is opening himself up to the media or what? He’s been flashing his million yen smile through most of the obligatory photo-ops as well as the open-air, shades-of-Lincoln-Douglas, head-to-heads against Kan. Which only reminds me of his boast in a fairly recent book of his that he campaigned like hell when he ran successfully for the Iwate lower house seat that had been held by his father until his untimely death but never had to personally campaign in subsequent elections. Here’s definitely a guy who wouldn’t be kissing babies and eating rubber chickens if he could help it.

But how about his direct dealings with the media? According to the headline for this Yomiuri report: “Regular Press Conferences If I Become Prime Minister,” he’s willing to make himself accessible—not. Here again, the new Ozawa is really the old Ozawa. In the text, he is quoted, “I think it would be better to do regular press conferences, rather than those ‘cling-ons.’ The prime minister should do press conferences as often as possible, once a month or twice a month.” Longtime followers of the Japanese political scene will remember that Prime Minister Abe tried to cut back the customary twice-each-weekday, cling-on sound-bite briefings to one a day and caught hell from the mainstream media. And you wonder why Ozawa gets such bad press.

The DPJ Leadership Election: The Ozawa Referendum

2010-09-04T15:38:00.002+09:00

The first of what I hope will be several observations about the upcoming DPJ leadership election, where Ichiro Ozawa is making what is surely his last (and first, when you come to think about it) bid for the prime minister’s office, against incumbent Naoto Kan:

The Kan administration has looked good in the public’s eye recently, bouncing back in the media polls from the mediocre (but not disastrous) 40%-plus counts around the upper house election to make it over the 50% threshold. DPJ local assemblymen* and party members and official supporters* obviously have their ears to the ground, and are leaning heavily toward incumbent, according to this Yomiuri report. Then why is someone who, just three months ago, resigned from his secretary-general post, giving up control over party coffers and appointments, and whose main support comes from Yukio Hatoyama, who took him down with him when he resigned as prime minister, running neck and neck with Kan for support among the 412 DPJ Diet members*?

Kan has proven to be singularly uninspiring. His pre-upper house election message on an eventual consumption tax hike not only proved to be politically ill-advised, but came across as muddled and equivocating, the very qualities that had proved disastrous to his predecessor Hatoyama. This almost all by itself precipitated the political equivalent of the Narita divorce, or at least chased enough votes away from the DPJ in the July upper house election to prevent it from capitalizing on the still-considerable lead that it held over the LDP and the rest of the field. The public’s recovering support, such as it is, remains at best lukewarm. Only a small fraction of the positive respondents in the polls give his policies or his leadership qualities as the reason for their support. Instead, the majority think that it’s too soon to ditch a second DPJ prime minister in just one year, after going through three new LDP prime ministers in just so many years. The voices of his Diet member colleagues reflect this; METI Minister Naoshima, for instance, says, “I have been thinking about this for some time, and I intend to support Mr. Kan, since it is my role to execute the policies that I have developed as a member of the cabinet,” not exactly a ringing endorsement of the prime minister’s leadership or his program, such as there is.

However, these supportive colleagues of his have been more forthcoming about Ozawa’s failings—his political financing issues and holes in his broad-stroke and sometimes alarmingly off-the-cuff policy pronouncements—if the media reports are to be believed. And that is as good an indication of what this leadership election is all about. It’s really a referendum on Ozawa, and what he stands for. And the DPJ Diet members are being forced to take a stand.

I still believe that Kan will win, and that the DPJ will not fall apart as a result. However, Kan does not seem to be the poster child for the new DPJ, if that is what it is going to be. It seems more and more likely that the current configuration of the DPJ will last at most until the dust settles on the next lower house election and that Kan will not be the last man standing then.

* The assemblymen, the official party members and supporters, and the Diet members account for 100, 300, and 824 votes respectively. That’s a total of 1224 votes. The assemblymen votes are allocated among the candidates according to the proportional D’Hondt method, while the official party members and supporters cast their ballots in their respective lower house single-seat districts, with the vote for each going to the top vote-getter first-past-the-post style. Each of the 412 Diet members receives two votes.

Janne: I think that we’ve come closer to a meeting of minds on Apple with your latest comment on my previous post. I intend to get back to that next week. But for now, it’s a subject that is well beyond my area of expertise, such as there is, so I need a little time to put my thoughts together as tightly as your comments typical demand, okay?

Good News, Walkman Beats iPod…

2010-09-01T20:33:00.001+09:00

According to BCS, near-realtime provider of ITC and digital home appliances sales data, the Walkman—yes, the brand lives—beat the ubiquitous iPod in retail sales last month for the first time since BCS began keeping score almost nine months ago, in 2001 November. Bad news? The real winner was the iPhone, which appears to have cannibalized iPod sales. Plus, iPod is about to launch new models.

Never mind the new iPod models, how’s the Xperia doing?

In Kan’s Words…

2010-08-31T19:21:00.001+09:00

Here’s Kan’s press briefing. Same no saido-type message.

Kan Refused

2010-08-31T18:57:00.002+09:00

Here is Ozawa’s this-is-it statement announcing his candidacy. It appears that Kan was the one who refused to adopt the one-for-all, all-for-one Kyoto icchi taisei that presumably would have staved off an Ozawa run in a power-sharing arrangement. According to Ozawa, Kan had second thoughts after sleeping on it. An immediate post-election split does seem to be off the table.

Good, Ozawa Is In the Race After All

2010-08-31T18:22:00.000+09:00

So Hatoyama’s doings are likely to end up promoting…what? Maybe the no saido thing, “no side” being the rugby expression for the game’s end that has entered the Japanese lexicon as as an expression for the notion that all animosity is/should be dropped between the two antagonists in a show of sportsmanship. In fact, it appears to be one of the fractious DPJ’s favorite metaphors. Kan and Hatoyama seem to like it a lot.

“Byzantine”? On Bizarro World?

2010-08-31T15:48:00.003+09:00

“The process is appropriately Byzantine for the notoriously murky Japanese politics. So much so that it has rarely been used. The last time the party held a leadership election using the full system was September 2002, when Yukio Hatoyama beat three others, including Mr. Kan.”
from “Kan v. Ozawa: Who Decides?” Yuka Hayashi, WSJ,, 27 August 2010

Definition of BYZANTINE
a : of, relating to, or characterized by a devious and usually surreptitious manner of operation [a Byzantine power struggle]
b : intricately involved : labyrinthine [rules of Byzantine complexity]

What’s so “devious and…surreptitious” or “intricately involved” about a secret-vote election rule that has three clearly defined and identifiable sets of differently weighted voters? Obviously, the writer has never heard of the infinitely more byzantine US process aka presidential primaries, with its random-walk, hodge-podge of rules including an assortment of “caucuses,” which sometimes consist of nothing more than a bunch of hyper-motivated people braving snowstorms to huddle in various spots on an auditorium floor and beseech each other to come over to their side like some friendly version of touch-kabaddi. And don’t get me started on their “super-delegates.” The DPJ system by comparison is quite straightforward, simple, and transparent.

More importantly, the DPJ voting system of giving by far the largest share of votes per head to the Diet members—let’s call them hyper-delegates—the next largest share of votes per head to assemblypersons—super-delegates—and by far the smallest share to the rank-and-file makes constitutional sense. The Diet, which is supposed to elect the Prime Minister, is in turn elected by the Japanese public. To allow the party-rank-and-file, a mere fraction of the voters who voted for the DPJ, would disenfranchise the far more numerous voters-at-large and arguably make a travesty of the Japanese Constitution. The word seito (political party) never appears in the Constitution; like it or not, Japan is a representative democracy. There is also a good, though less convincing case to be made that the assemblyhumans, too, merit special consideration because they in turn have mandates from their constituencies by virtue of their elective offices. These are obviously not absolutes, and the DPJ way is not the only way the system could conceivably have been constructed. (The LDP for instance does not have the assemblyhomosapien super-delegate second tier.) The DPJ could revisit the allocation of the votes between the three tiers in view of the much larger number of parliamentarians now extant. But the system itself is very straightforward, simple, and transparent. At least much more so than the US primaries. As for the relative lack of use of the full process, she immediately provides her own answer: in seven out of the nine elections that she refers to, the DPJ chose the simple Diet members-only election process to choose the leader to serve out the remainder of their predecessors’ terms in mid-term elections, as explicitly allowed by the rules. In the other two cases, only one candidate stood for election. That does carry the stench of backroom smoke, but don’t blame the rules.

Okay, I actually think the US primaries are a lot of fun, and get a lot of people engaged politically that otherwise mightn’t have been. But Hayashi’s claim just doesn’t make sense.

More significant perhaps to the public interest, just because Kan raised the consumption tax issue doesn’t mean that he has become a "”fiscal conservative.” He’s a tax-and-spend social democrat without the stomach for Scandinavian labor laws until proven otherwise.

I’ve mostly stopped going after the media, but I thought that it would be a shame to confine to my outbox my response to an email that I’d received, especially since I could adapt its contents with little effort as a blog post. In Hayashi’s defense, she generally comes across as a competent journalist.

”It’s My Party”

2010-08-31T09:52:00.006+09:00

At least that’s the impression I get from Yukio Hatoyama’s “troika” efforts that look likely to result in a brokered power-sharing deal between Prime Minister Naoto Kan, Ichiro Ozawa, Yukio Hatyama, and upper house don and fourth tricycle wheel Azuma Koshiishi--before the election. Does Hatoyama (and Kan? Really?) think that it’s that important to abandon any pretense that it’s about policy to prevent Ozawa from taking at most four, five dozen Diet members—a Japan scholar whom I very much respect is willing to take the under in an over-under 20—with him into the wilderness when the DPJ doesn’t have an upper house majority or a lower house supermajority in the first place? I hope against hope that it won’t turn out exactly like what it appears to be: the three (four?) self-appointed founding fathers—they’re 63, 68, 63, and 74 years old respectively, for Christ’s sake—abandoning any pretence of policy differences and getting together to stave off the brave new world for at least another election cycle. But let’s wait and see what Kan and Ozawa have to talk about.

BYW I wonder if Hatoyama and his pals throwing the “troika” word around know exactly where the troika reference initially came from. That’s not all. The term, you may recall, more recently graced the popular political lexicon specifically to describe a certain power-sharing arrangement between Georgy Molotov, Laverntyi Beria, and Vyacheslav Malenkov. And we all know how that one turned out.

(Confession: I’ve been calling a brokered deal, but one before the actual election will be professionally inconvenient.)

Incidentally, the Japanese rendering of troika (トロイカ=toroika) can also mean something else. And I’m not talking about fatty squid. Just sayin’.

Let Them Name You… and They will Come?

2010-08-29T20:03:00.003+09:00

Down and out Yubari, the bankrupt Hokkaido city immortalized by NYT elegist Normitsu Onishi, is selling naming rights left and right. First came the municipal civic center (most likely a lightly used composite of a concert hall and smaller meeting rooms) and…public toilets? Whatever.* According to this Asahi piece, Yubari is extending the idea to the local baseball field and other athletic facilities**. But why stop there? Why not SELL THE NAMING RIGHTS TO YUBARI?

Seriously. It’s not as if precedent is lacking. The city of Toyota was named in 1959 for Toyota Motors, not the other way around. And Toyota (the Motors, not the city) didn’t pay a yen. Likewise, the city of Tenri got its name in 1954 as the stronghold of Tenri-kyo, a pseudo-Shinto religion that has its origins during the late Edo era—over the less demonstrative Yamabe, the Tenri-ko’s choice. And, of course, Boston gets its name from the Boston Celtics.

Look, Hyundai, if you have the wherewithal to drop billions of US dollars worth on North Korea with little to show in return, you surely have the billions of Japanese yen—you really need just a fraction of that—to spare so that you can call a Japanese city, I don’t know, Chosun’s My Daddy? I’m Your Bitch, Korea? The possibilities are limitless.

Think about it, Hyundai.

* Dave Barry does have a sewage-lifting station named after him. A far as I can gather, he did not pay for this honor either.

** Between the public toilets and the baseball field, the Yubari authorities obviously have a sequencing problem.

Ozawa Stands for Election and Realignment Draws Nearer

2010-08-26T19:40:00.001+09:00

Who’d a-thunk. With former Prime Minister Hatoyama’s surprise (okay, so much for my predictive powers) full-throated support, Ichiro Ozawa is running against Prime Minister Kan in the 14 September DPJ presidential election. Support for Kan appears to be at best of the lesser of two evils variety, but the case against Ozawa remains strong as ever. I refuse to believe that a majority of the 411 Diet members will of their own volition vote for a candidate that is disapproved by an overwhelming majority in opinion polls—by contrast, although the Kan cabinet is beset by negative ratings, a healthy majority still wants to give Prime Minister Kan a second chance—and withstand the heavy and constant media beating that will follow an Ozawa victory. The rookies in particular have to worry about 2013. However, roughly one third of the voters will be cast by local party members and assemblymen, an factor that had largely remained off the radar till now. But from here on, they will matter, for two reasons. First and most obviously, they can be the deciding factor in a close Diet membership vote. Second, they can influence their local Diet members in their voting, especially in the case of fence-sitting parliamentarians. It has been unusual but by no means rare in party presidential elections for Diet members to explicitly vote according to the wishes of their local chapters, and broader if more subtle interactions must also happen. It would be surprising if similar thing did not happen in the upcoming DPJ election. Third, the national voting trends among the eligible supporters and assemblymen are likely to affect the overall voting behavior of the Diet members. Remember that Junichiro Koizumi’s surprise local victories in the 2001 LDP election over overwhelming favorite Ryutaro Hashimoto precipitated a landslide victory in the Diet member vote. True, the DPJ local votes will not be counted until the Diet members have voted, precisely to avoid such a happenstance. However, nothing will stop the national media to sic their local bureaus to provide day-to-day coverage on the intentions of the DPJ voters in the provinces. Expect everyone to know the approximate outcome of the local voting before the Diet members vote in Tokyo on 14 September.

Now most people seem to believe that Ozawa has something of an edge out there, given his formidable political machine and its extensive outreach into the provinces, including plenty of handholding, sewage cover-stomping, and rice paddy-wading on behalf of associate and/or political-newbie candidates past—a lot of political chits to redeem. However, the local eligibles in turn talk to the rest of the locals. And they will all access the media, and be influenced accordingly. It’s a dynamic process, is all I can say right now. I expect the majority to be what I consider to be rational and take the path of least public resistance, which is to reelect Kan, but what do I know?

Whatever the outcome, the election will most likely draw an indelible and permanent line between the pro- and anti-Ozawa forces, with the rest of the DPJ getting back up and sitting, uneasily, on the fence. I expect a Kan victory to be somewhat more reassuring to the markets, largely because of main street support for continuity and rejection of Ozawa’s likely revival of the more costly elements of the 2009 election manifesto. Either way, the two sides will shake hands and pretend to make up, and the winner will make the minimum concessions on cabinet, subcabinet, and political assignments to keep the other side from bolting. (Ozawa won’t want to, but that must be the minimal price of Hatoyama’s support.) However, I doubt that unity will be long-lived. The widening political fissures will threaten to erupt at moments of political adversity, which will surely come, on the economy, Okinawa, and any number of those incidents expected or not of varying consequences that cumulatively sap the political capital of administrations or even manage somehow to morph into major political crises on their own. In other words, schism is in the air, and none of the significant opposition parties, not the LDP, certainly not Your Party (I still fail to understand the logic behind expectations that it would join hands with the DPJ and kill its own brand before it even graduates the phenom stage), not even the New Komeito, the only meaningful party that, through its near-captive constituency, could withstand the curse of an alliance with what is likely than not to be a deeply unpopular DPJ. It looks increasingly as if the moment realignment has drawn closer, if still beyond the horizon—that is a long-term plus for governance in Japan. From that perspective, a Kan victory followed by an Ozawa prosecution would actually be a negative in that it would postpone the day of reckoning and more coherent policymaking.

Long Hot Summer for Kan, Ozawa and DPJ Coming to an Early End?

2010-08-25T13:00:00.002+09:00

The following is a memo that I dashed off in response to this WSJ report that an esteemed colleague sent me. Its shelf-life might wind up being as short as a couple of days, or even counted in hours, so I thought that I’d share it publicly. For the record, I edited it slightly.

More an essay than an op-ed, the WSJ is a good encapsulation of the situation. A few comments:

I still find it hard to think that Ozawa is going to stand, or win if he does. In fact, there’s a growing possibility that Kan will win by acclamation.

For Ozawa, there’s the risk that he will actually win. He is personally unfit to be the head of government in a democracy, what with the highly public grilling in Diet sessions and press conferences (which he could mostly skip when he was merely party chief), and he is surely aware of that. And he’ll be held responsible for policy decisions.

For the DPJ, an Ozawa victory invites a near-unanimously negative media coverage—Nikkan Gendai, the antiestablishment tabloid, a rare exception among widely circulated dailies—as well as the very real possibility that Ozawa will have no choice but to resign if the prosecution review commission forces the Public Prosecutors Office to prosecute him. (Even a one-step downgrade that allows the PPO not to prosecute is likely to lead to a media campaign against Ozawa that will hound him out of office before long.)

But can he win in the first place? I’ve always been skeptical of the 130~150-member Ozawa group headcount that we regularly see in the media. The estimates appear to include up to 2/3rds of the DPJ’s 150 or so first-term Diet members. Yes, those kind of numbers showed up when Ozawa made his annual pilgrimage to Bejing, and appear to show face when they hear the dog whistle. But will they rally for Ozawa when it’s time to vote? Remember, it’s a secret vote, not a show of hands. Besides, last week, when Hatoyama held his annual Karuizawa bash—God, it’s great to have money, even if it’s not quite Goldman Sachs money—up to 100 Ozawa supporters showed up. (There were 150 participants in all, of which up to 50 could have been Hatoyama group members, plus Koshiishi the Upper House don and others including one Kan flunky.) Subtract the core Ozawa supporters (up to 50) and maybe a third of the DPJ rookies. I don’t think Ozawa (more accurately Ozawa’s kitchen cabinet) has the numbers.

Note that all the other likely suspects are back-peddling like hell. Never-ready-for-primetime Kaieda has all but abandoned his non-candidacy; Tarudoko, who fronted the Ozawa group in the June election, says once is enough for now; and the Kan cabinet’s resident otaku Kazuhiro Haraguchi (he himself spells it Haraguti, and how more otaku can you get than that?) says he enjoys his job too much to run.

I think Kan realizes all this, and is appropriately keeping his head down.

Hatoyama will eventually throw his support behind Kan. Hatoyama’s conditions for his support, according to one of his top flunkies, Yoshikatsu Nakayama, local sovereignty, the New Public Interest, the East Asia Community, Hatoyama’s GHG commitment, and one other that I cannot remember. They are expansive and explicit but highly conceptual, so they are easy to accept. The GHG commitment, of course, is only as serious as the extent to which the Japanese government is going to go to fulfill it, a matter which was already seriously in doubt under Hatoyama after Obama and the Democrats—a nice name for a 50s throwback doo-wop group FWIW; do you think Sarah and the Republikettes works?—dropped the idea of any serious US efforts. (And of course there’s always China.) Ozawa keeps bringing up the 2009 Manifesto, but how seriously did the Hatoyama-Ozawa odd-couple take it when they were in control?

The big story, then, is what Kan is going to pull out of his economic tool kit once his summer vacation is over. The last couple of weeks brought a sea change in public opinion. Mainstream editorials, reflecting rising main street voices, have been calling for intervention in the currency market in the face of skepticism over the utility of a unilateral intervention. Meanwhile, Kan is still sticking to what is surely the MOF story of a modest 1.7 trillion yen stimulus package consisting of near equal amounts of emergency funds in the FY2010 budget and unexpected carryovers from the FY2009 budget—No New Money. I’d say that the possibility of intervention, though still less than likely, has risen considerably. Also, I look for a considerable stimulus package, likely including an extension in one form or another of the quick-release eco-point system and some new business tax cuts.

That said, there is one wild card, which I’m surprised to hear nothing about lately: the DPJ local yokel vote. The local chapters and assemblyhumans are allocated 400 points (300 go to the local chapters while the remaining 100 are pro rated among the local legislators), while the 412 Diet members get two votes each. It’s a secret vote, whose results are not to be revealed until the Diet members have voted, but do you think that the media is not going to canvas the local voters as they always do on these occasions? I thought so. And Ozawa is rumored to have a strong following out there because of all the legwork and money he and his henchpersons put in over the years right up to the eve of the July election.

Is Koizumi a “Nationalist”?

2010-08-23T14:27:00.002+09:00

You may already be aware that I think that the conventional wisdom that puts former Prime Minister Koizumi in the same nationalist camp as Shinzo Abe and the deceased Shoichi Nakagawa is completely misguided. This led to an on-going exchange in the SSJ Forum which should appear by and by in its archives, and a Q&A with Steve Martin, a post-graduate student at the School of Oriental and African Studies (SOAS), University of London. Steve is working on a dissertation concerning “Prime Minister Koizumi's visits to the Yasukuni Shrine, their effect on Sino-Japanese relations, as well as the motivation behind the visits.” Copied below with Steve’s consent is the Q&A.

Good luck, Steve, with your dissertation. And long live your blog on “Japanese politics to Asian cinema, book reviews, photography and (not least) the Hanshin Tigers.”

You wrote that Koizumi did 'everything right' on the SSJ forum- endorsed the Murayama statement, condemned the war criminals, adopted guerilla tactics, and although he projected force this was more to do with political circumstances that a coherent 'nationalist vision' for Japan. Paul Midford replied that Koizumi was a "nationalist with guts", and Abe one without.

That is, "guerrilla tactics" regarding his visits to Yasukuni, doing the deed with minimum fanfare, avoiding 15 August and other symbolic dates. And if avoiding Yasukuni as prime minister were the measure of "guts," Hashimoto, and Aso would also be gutless, and Nakasone, who backed off after his first visit when the Chinese complained, would be a spineless wimp. But it was Abe who made an assault on post-war education and took a stab at constitutional reform including a revision of the government's interpretation regarding collective defense. I could have said all this and more with regard to Abe, but that was so obviously outrageous that I didn't feel the need to refute it and continued to focus on the conventional wisdom regarding Koizumi.

In my dissertation, which is partly about how bilateral ties were affected by the visits and partly about motives, I suggest that Koizumi was motivated by his own personal, intuitive logic in visiting the Shrine, and needing to affirm meaning to the lives lost in war.

I have no idea what went on in Koizumi’s mind as he visited Yasukuni, but my understanding is that he made a promise to the Izokukai (association of the families of the fallen soldiers) to do so during his successful LDP presidential campaign and was determined to keep it. And what could be more important than that? As far as I can gather, he was never associated with Yasukuni before his successful run.

At the same time, he recognised the political utility of the symbolism of the visits, and benefit from them, e.g. 2001 LDP presidential election, 2002 distraction from a number of financial scandals (Tanaka, Kato Koichi).

The connection between the 2001 election and Koizumi’s visits is obvious as I mentioned above. I'm not aware of any connection between that and any political financing scandals. I can't see a net upside for a prime minister in a Yasukuni visit and the inevitable rupture in relations with China and Japan as far as overall public support, which is where the scandals hit, is concerned. Yasukuni counts only with a specific constituency.

I thus argue they were not part of a larger articulation of a 'nationalist vision' in foreign policy, mainly because Koizumi wasn't interested in foreign policy. Similarly support in Iraq was more to do with what Uchiyama has described as a "Pavlovian response" to U.S. requests for aid, than a desire to remilitarise Japan. I was wondering what you think of this argument as to Koizumi's motivations.

I agree with what you say here; I’m not sure that he was interested in domestic policy either, at least not in a way that Nakasone or Hashimoto cared. Koizumi appears to have been as political an animal as Ozawa, which is saying a lot.

Secondly, I was wondering what, if anything changed in Koizumi's manner and/or S-J relations vis-a-vis Yasukuni visits when Hu Jintao took over from Jiang Zemin in 2003.

Hu appears to have decided to wait it out, likely reasoning that, as with all nightmares and democratic leaders, the head of Japanese government would not outlive the CCP leadership. It must have helped that Hu appears to have been prone to much less of a visceral response than Jiang. I can think of three reasons for this: one, Hu did not have Jiang's sense of personal betrayal at the hands of Koizumi; two, Hu's more phlegmatic personal makeup; and three, Hu’s upbringing as a member of the post-war generation that missed both the personal effects of the war and the 80s intensification of the use of Japan as a ready foil in the CCP’s founding fathers myth. (A similar phenomenon has also been reported in 80s Singapore).

Finally, I have mentioned the utility of the 2001 and 2002 visits, but I was wondering if you could see any (short-term?) utility of the 2003, 2004, 2005 and 2006 visits. I think I need to strengthen my argument here.

I think that it’s more a matter of the disutility of backing down. Koizumi couldn’t stop. He’d lose face, and face the scorn of the considerable conservative base. He must have seen a much larger domestic downside politically to that than anything he would have gained from appearing to be nice to China. That said, he did do his best to minimize the diplomatic fallout, so he definitely was aware of a domestic downside. But I do not see any short-term, in the sense of immediate political issues, utility in 2003-2006 as well as 2001 and 2002. And don't forget that the economic relationship remained on course, both day-to-day and for crisis management.

South Korean Probe Unlikely to Settle Dispute over Warship Sinking: Really?

2010-08-19T01:09:00.004+09:00

The government's preliminary findings released in May were attacked as amateurish and crude by some South Korean–born scientists concerned that flawed science could be used to escalate tensions on the Korean peninsula.

Oh wow. But wait:

”To me, this challenges the integrity of science,” Seung-Hun Lee, a physicist at the University of Virginia, tells TIME. “They say they reached these conclusions that have enormous consequences on the political and international stage. As a scientist and scholar, I felt it was my duty to check their conclusion.” Lee says bluntly that the government's conclusions are “absurd.”

But whatTIME fails to tell us is that Professor Lee’s area of expertise is solid state physics. He’s an expert “on strongly correlated materials such as non-conventional high temperature superconductors, quantum magnets, frustrated spin systems, magnetic molecules, and multiferroics,” not a “physicist” in the popular sense, that is, someone who is used to thinking about things that make big bangs or what happens to stuff around them when they do. In other words, nothing in his background suggests that he has anything meaningful to say about the case, which point being obvious from the next citation:

The residues that the governments say were caused by the blast “have nothing to do with the explosion, but are just aluminum hydroxide that can be naturally formed by corrosion when aluminum is exposed to water for a long time,” Lee says. He adds that he doesn't know why Seoul and Washington would invent such a scenario to explain the sinking. “That's a political thing that's beyond me,” he says.

This means that the aluminum hydroxide could have been formed naturally by corrosion, but why can he be so sure that it has “nothing to do with the explosion”? After all, aluminum hydroxide is only one of the pieces of evidence that the South Koreans produced. But at least Professor Lee is a “scientist.”

J.J. Suh, a professor and director of Korea Studies at Johns Hopkins University's Paul H. Nitze School of Advanced International Studies in Washington, D.C., also doesn't believe the government's story.

What TIME fails to tell us is that Associate Professor Suh is a political scientist and is a strong advocate of the Sunshine Policy that current President Lee Myung-bak rejected.

Of course the South Korean probe is unlikely to settle the dispute over the warship sinking. In that respect, “it certainly has echoes of conspiracy theories like those surrounding the 1963 assassination of President John F. Kennedy.” And the moon landing. And the Holocaust. And the Nanjing Massacre… the list goes on. So I guess my question is: Are things that desparate at TIME magazine?

Actually, I’m giving Professor Lee the benefit of the doubt and willing to assume that he has more to say on this. And he’d better, because there are a good number of real experts whose integrity he has maligned. (Assistant Professor Suh doesn’t count; he’s not a real scientist.)

Addendum (August 19): My heartfelt apologies to Professor Seung-Hun Lee and TIME magazine. I should not have posted at all, or better, should have followed my usual procedure when I come across any interesting anomaly and gone to the source. Here, by Lee, and here, coauthored by Lee and Panseok Yang, are two papers that cast strong doubt on a key part of the evidence in the South Korean government’s yet-to-be-published report on the sinking of the Cheonan. Specifically, they point to serious discrepancies between the data for material taken from the ship and the torpedo on one hand and the data from material taken from a test explosion on the other as well as that undermine

But his logic is sound throughout, and any errors in his science should be easily refutable (or verified) by his peers and, where required, more tests. He also acknowledges that his argument do not disprove the South Korean government’s conclusion that a North Korean torpedo sank the Cheonan. However, it would knock out a significant piece of evidence behind the claim. I look forward to the release of the report, which should be forthcoming soon.

Again, my apologies. This is not the first time I’ve done such a thing, and it won’t be my last. But it’s been a good lesson. In the meantime I was prompted to read a couple of fascinating investigative documents, and that is a good thing in itself.

Addendum II (August 19): Now that I have time to elaborate on my mea culpa, let me state that I do agree with Janne’s comment about a scientist’s expertise extending his specific area of expertise, but only up to a point. For example, I would not take Professor Lee’s word over those of, say, experts on underwater explosions on the macrcophysical consequences of the event such as the dispersion pattern of fragments of the ship and its equipment and the possibility of some parts of the torpedo surviving the blast fairly intact. An explosion is an uneven and in many ways unique event: not the sort of phenomenon that a solid state physicist is likely to be very familiar with. This weakness actually shows in the experiment that he performed (see the second paper), substituting fine crystalline aluminum powder and 40 minutes of exposure to high-temperature for substantial aluminum pieces subjected to the extreme heat and pressure of a split-second explosion. This is a point that Lee’s detractors are sure to point to. But my focus in on his first document, where he uses the tools of his trade and his specific expertise to expose what appears to be serious shortcomings in the reports claims. And I have to see the full report. (The official announcement was only five pages long).

And yes, Paxy, I had been inclined to believe the South Korean government—for two reasons. First, I thought that there were too many people involved in the incident and the report to maintain a conspiracy in a democratic state. Second, the survey brought in overseas experts, making a cover-up even more difficult. But Lee’s papers have sown the seeds of doubt in my mind. So I’m looking forward to the report.

Mor on the Missing Centenarians

2010-08-17T21:31:00.002+09:00

The 111 year old mummy has spawned a number of ill-thought out stories on the plight of the Japanese elderly. Here’s one that uses it to jumpstart a mostly unrelated story on Japanese singles living with their parents. Among other things, the headline takes the one mummy, clones it, and does a whackjob worthy of The Weekly World News. Also, the writer fails to give any evidence that this is unique to Japan, or that Japan is any more advanced in this direction, and if anything provides her own counterargument.

Talk about “hanging a sheep's head and selling dog meat.”

Meanwhile, Martin Fackler isn’t doing too badly. He fails to do the arithmetic, but then, the entire Japanese media seem to have missed the point. And he manages to stick to the point.

What about the Pension Checks for People Who Were Born 80-100 Years Ago?

2010-08-17T20:03:00.004+09:00

A check on the “centenarians” who hadn’t received care under the Long-Term Care Insurance System has turned up more than 240 missing. It doesn’t look like many more will turn up, so it’s probably safe to say that the government failed to account for the deaths or exit from Japan of less than 0.001% of the 40 million people give or take a few million residents who were born between 100-127 years ago. I’ll leave it at that and hope that others will figure out how that compares with other countries. One of the implications of the figures is that there must be upwards of a couple of hundred people born between 80-100 years ago who are dead or have left Japan without such fact being duly recorded in the appropriate registries. It’s also safe to assume that some of them are drawing on the pensions of parents who have gone missing. So I guess my question is: Have they found good excuses for the occasion of a visit from the authorities inquiring about the well-being of their newly centenarian parents?

Notice: There’s a long and thoughtful comment from Jobi-One Kenobi on “The Apologies” here. I’ve tried to respond in kind.

Who Knew that Asia Consisted of China, South Korea, and Australia (and Japan)?

2010-08-16T00:01:00.001+09:00

Oh wait, European and American colonies don’t count, except when they’ve exterminated the locals. (Sorry, my Australian friend, I just couldn’t let the irony go by without mentioning it.)

If You Think China Has a Problem with Japan…

2010-08-15T23:07:00.002+09:00

On August 12, Genron NPO, a respectable Japanese advocacy thinktank, and the China Daily group released its annual report on its joint opinion poll on the attitudes of the two nations toward each other. 55.9% of the Chinese responders were unfavorably disposed toward Japan. Not good. But 72% of the Japanese responders felt the same way toward China. Worse. For the Chinese, it’s essentially about the past. Specifically, of the unfavorably disposed, 69.9% chose the war as the reason while 53.4% found that the Japanese didn’t have the correct understanding of the war of invasion. For the Japanese, it’s the here and now. 71.7% chose the Chinese government’s improper response to food safety problems and the like, 40.4% chose China’s selfishness in securing resources, energy and food, and 21.7% chose China’s military buildup.

Does either side make sense? Depends on what you mean by sense, and then only partly, but I’ll leave that question for another occasion. Many Western pundits like to say that Asia (which is actually sloppy shorthand for China and South Korea) will never fully accept Japan unless—you know the rest of the mantra. My point is that it works both ways. And you do want to know what the rest of the Asia nations think as well.

Incidentally, this is by no means a condemnation of China or its people. I suspect that the proportion of the Chinese people who do not trust its government’s response to food safety and other issues that negatively impact their daily lives is higher than 71.1%. China does tend to turn a blind eye to nuclear proliferation and human rights concerns when it comes to securing resources, but that must be understood in the context of a late market entry with 1.3 billion people to look after. And China has been careful to avoid border incidents around the Senkaku Islands and it has avoided commercial exploitation on the Japanese side on the median line in the East China Sea. China is essentially a status quo power. But China’s size means that its natural growth by itself changes the status quo. So what could be normal arm-flexing by the military, for instance, sets off alarms elsewhere. (Seriously, who cares if Singapore buys F35s?)

More on the “111 Year Old” Mummy

2010-08-14T09:34:00.002+09:00

Janne in Osaka has a long and thoughtful comment on a previous post. I responded there to the technical and administrative points. I didn’t have anything useful to add to the broader issue that he raised: in short, How much do we want Big Brother to be our keeper? As Janne says, that’s a social and cultural issue.

Also, Anonymous kindly reminds me that 15 September used to be Respect for the Elderly Day (敬老の日), which the government celebrates by giving new centenarians gifts. In 2004, the national holiday was switched to the third Monday of September, but I suppose that it still makes some sense if only to retain the old date for making year to year comparisons.

Damien Ma, on The Atlantic Website

2010-08-14T00:52:00.002+09:00

Eurasia Group’s own Damien Ma is now moonlighting on The Atlantic website, no doubt to help meet his Manhattan rent. If you think that Damien looks like an Indies rocker on YouTube, you’re not that far off; he plays the guitar, plugged and un-. In fact, I have it on good authority that he matched up well against Jimi Hendrix when Jimi was still alive and kicking.

Kan Looks More Like a Survivor with Every Passing Day

2010-08-13T16:01:00.001+09:00

There’s exactly one month to go before the DPJ presidential election, which perforce determines Japan’s prime minister and Banri Kaieda, a 61 year old moderately famous freelance economist turned politician who never made his way into the DPJ’s top leadership circles, is the only one who appears to be actively looking to challenge Naoto Kan. And that, only if he can manage to secure Ichiro Ozawa’s blessing. Ozawa capo Kenji Yamaoka is trying to whip up anti-Kan sentiment in the DPJ, particularly among the vulnerable lower house rookies, but is not securing too many followers. No one moves until Ozawa moves. Meanwhile, Kan has been keeping a low profile, and making nice with the opposition to the point of near-obsequiousness. The media does like this, but it keeps the own goals at a minimum. And the Japanese electorate has little stomach for a new administration or, heaven forbid, a snap election.

Go figure.

What the “111 Year Old” Mummy Doesn’t Tell Us

2010-08-13T15:27:00.002+09:00

As I have stepped up my professional tracking of Japanese issues overall, I have been paying less attention to overseas media coverage of those same matters. I have been doing much less blogging and consequently have not been taking up media foibles. Just too distracted. But the missing centenarians story was irresistible.

The macabre story of the “111 year old” Tokyoite who turned out to have been dead for some 30 years while his family continued to receive his deceased wife’s public pension payments for the last six years (some English-language reports claim that they were receiving his pension payments but one Japanese story has some details that contradict this take) quickly morphed into a much bigger story about handwringing over social neglect and government incompetence as a search for the “oldest” Tokyo resident, a “113 year old” woman, ended at an empty fenced-in lot. By the end of the August 5 workday, a nationwide effort to track down the 40,399 centenarians living in Japan had uncovered 71 missing individuals. This CNN video clip picked up on the social angle—the deterioration of family and neighborhood ties—while this WaPo report carried a touch of both. But the numbers fail to tell us anything of the sort. There’s some truth to the incompetence angle, but not much. Let me explain.

The final national numbers are not in, but the city of Osaka, with 809 residents on its registries* who are or will be centenarians as of September 15**, give us a fair-sized sample. Of the 809, the Osaka municipal government decided to check on the 108 who had not received Long-Term Care Insurance benefits during the last two years, which they properly considered good cause for suspecting that those individuals may no longer resided at their places of registry, and wound up failing to locate 64, of whom 19 were foreign nationals. Now does that mean that Osaka failed to keep track of 64 out of 108, or 59.3%, of its centenarians? But that assumes that a similar proportion of the remaining 701 would, if nothing goes corrected, be suffering the same fate as the missing 64. It seems far-fetched that these 200 year old residents (give or take a couple) who left tracks in the national healthcare system in the last couple of years will somehow go missing as they move to another municipality or to that Big Nursing Home in the sky without the fact being duly recorded in the Osaka registries. Is the ultimate leakage then more like 64 out of 809, or 7.9%? Not so. Remember that there were a lot more of their age cohorts when they came into this world. That means that most of their age cohorts in Osaka had their deaths or relocations duly registered in the municipal records. To save hours of time tracking down the actual numbers, let’s take the available most recent number of Osaka newborns, 22,892 in 2007 as a surrogate. Is 0.28% (64 over 22,892) still unacceptably high? Perhaps. But this is patently wrong. The oldest missing Osaka centenarian clocked in at 127. So the fail rate for the system is actually 64 over 22,892x(27+1), or, 0.01%. And we are not accounting for the over-127 crowd, who apparently managed to be captured by the registry system on their way out, so to speak.

Are we there yet? Not quite, for there’s an interesting twist to the Osaka numbers. 45 out of the 64 missing centenarians are registered in Nishinari Ward. This should ring a bell for any self-respecting Japanese journalist, for Nishinari Ward represents the fringes of the post-WW II Japanese economy. Specifically, like Sanya, its Tokyo counterpart, it served as the place where day laborers and welfare recipients congregated in crowded, often unsanitary hostels. It was exactly the kind of place where down-and-out forty-, fifty-, sixty somethings who had lost their connections with family and friends back in the day, smack dab in the age group where people who would show up as missing centenarians today would show up. Take them out as mostly a local phenomenon and we are down to 0.03% for the percentage of the Osaka population.

But that’s not end of it. It is unlikely that the 45 Nishinarians, given their harsh living conditions, had survived nearly to the end of their first century, let alone beyond it. (For example, lethal tuberculosis thrived long after it had been brought under control in the rest of Japan.) More likely, they must have died and slipped unnoticed through the cracks in the underbelly of the registry system decades ago. Ironically, the municipal welfare authorities became aware of 48 (out of the 64) missing Osakites, including the 45 Nishinarians, when they conducted a survey when the national Long-Term Care Insurance system was launched in 2000. However, they had failed to notify the registry authorities of the fact. Embarrassing? Certainly. Administrative malfeasance? Surely. But not exactly the kind of administrative neglect towards the elderly that the reports suggest.

Going back to the social angle, the “111 year old” mummy had been in the family for over 30 years. The Nishinari examples suggest that many if not most of the other cases also go back decades. If something went wrong in Japan, it happened a long time ago. And Japanese society (and local bureaucracies) still cares enough that almost all deaths—at least in contrast to what the media reporting suggests—go duly recorded in the public records. Note also that the daughter of the “113 year old” woman had continued paying her mother’s national healthcare insurance premiums in the hopes that she would some day return.

Now I happen to suspect that there is something to be said for the conventional wisdom about the fading of family and neighborhood connections in Japan. But it is not supported by the issue of the missing centenarians. The best media stories use facts to illuminate; too often, they merely illustrate. In this case, they actually mislead.

* There are two types of residency registries in Japan, one for Japanese and another for foreigners. They are administered by cities, townships, villages and, in the case of the major cities, wards. The two sets will be merged no later than 15 July 2012.

** I don’t know why Osaka picked this date. The national census opts for zero hour October 1.

Luke Harangody=Biff? You Be the Judge

2010-08-12T23:32:00.001+09:00

Luke , meet Biff. Biff, meet Luke.

I’m surprised that no one has noticed…

… oh wait…

Ever Wonder What Happened to Akira Nagatsuma?

2010-08-12T22:11:00.001+09:00

I thought so. Unless you can read Japanese, you won’t have heard anything of the LeBron James of the pre-Hatoyama administration DPJ who is looking more like a Captain Queeg version of Gerald Green (oxymoron?)—until the case of the missing centenarians. There’s more than good reason for Nagatsuma being pushed out of the Kan administration after the September battle for the DPJ leadership (which Prime Minister Kan is increasingly likely to survive), but I’d rather talk about the way the media misinterpreted the case of the missing centenarians when it portrayed it as a sad example of the deterioration of Japanese communities and (extended) families. (It’s in the same vein as the “criminality” of the US military in Japan.) If anyone wants to hear, let me know, and I’ll do my best to pick it up later in the week.

I Watch Movie End Credits Too

2010-08-11T21:14:00.003+09:00

Some thoughts on reading this report:

Watch Japanese anime credits and you wonder where all those Latin American animators who replaced their more expensive Japanese competitors dozens of year ago went. Japanese animators are back with a vengeance, now more often than not in collaboration with their South Korean (and some) Chinese counterparts. What happened to Japan’s anime labor force? Technology? The lost decade(s)? Ghibli? Japan Cool?

Watch American movie credits and you’ll see very few names identifiable as obviously African-American, the Chaunceys and DeShawns (and its multiple spelling variations) and Tawana and the like. Instead, you’ll see fully European names, plus a good number of Korean, Chinese, Indian and Japanese surnames. I suspect that liner notes (or whatever they have on CDs or on iTune these days) sport very different looks.

Kan Statement on Japan’s Recent Past on the Korean Peninsula

2010-08-11T19:47:00.002+09:00

The Kan Statement on the eve of the 100th anniversary of Imperial Japan’s annexation of the Korean peninsula has passed the Yomiuri test—which means that it will go down with the populist-nationalist wing of the Japanese political center. Sankei is coming out fiercely against it, but its smaller print circulation gurantees that active opposition will represent no more than a small minority of the national vote.

That said, it will only be success diplomacy if the Japanese authorities are able to put an end to apologies once and for all and south Korea to accept the latest one for what it’s worth. An apology repeated is an apology not accepted. That should be obvious to anyone.

Upper House Long Straw Saves LDP

2010-08-11T19:23:00.000+09:00

People not plugged into the Japanese-language media will likely miss this, so I’m reporting it. Today, Hirofumi Nakasone drew the long straw for the upper house LDP’s chairmanship in a tiebreaker against his favored opponent Shuzen Tanigawa. There are some caveats. Mild mannered Nakasone is the son of former Prime Minister Nakasone, but he never bothered to make the switch to the lower house, a distinctive display of a lack of political ambition. (Wanted: prime minister. Only upper house members need apply.) He is twelve years younger than his opponent, but at 64, the heritage politician more symbolizes the past than future of the LDP.)

Nakasone’s real significance lies in his improbable role as the anti-establishment, Koizumian candidate. The 21 upper house members who put their names on his official supporters list include Ichita Yamamoto, Satsuki Katayama, Yosuke Yoshiie, Yosuke Tsuruho and other younger and more policy-oriented and independent parliamentarians. By contrast, Tanigawa received the endorsement of three major (“major” is, here, also a relative term) factions, which had easily made him the initial favorite.

Yes, it’s the lower house where they play for keeps. Still, the luck of the draw for the upper house leadership position fans the hopes of the LDP’ young (relative term) and restless (absolute term). That is good for LDP cohesion, and generational turnover. It poses a setback for Ichiro Ozawa’s hopes of splitting the LDP and also increases the potential for negative fallout from his well-advertised poaching efforts.

Kan could Still Lose in the September DPJ Leadership Election If Multiple Candidates Emerge

2010-08-04T21:09:00.003+09:00

What are the chances of Prime Minister Kan surviving the September election for the DPJ leadership? Still good, though I now see a plausible scenario in which another person emerges to replace him. However…

Ichiro Ozawa is not going to challenge Kan directly. There’s no upside for him. If he loses, which would be by far the likely outcome, he’ll be finished as a central political force. If he wins—it’s highly unlikely, but the possibility cannot be dismissed—he’ll have to serve as prime minister. Case closed.

Would an Ozawa surrogate succeed? No. Everybody not in thrall to Ozawa (or owe him one, the two are not mutually exclusive) will fear the mass media implications of a strong, public association with him.

This leaves the chances of a multiple-candidate challenge that leaves the non-Ozawa vote divided between multiple candidates, with Kan being only one of several of his peers. As the voting results come in, Kan will have no choice but to resign, leaving the door open for one of the non-Ozawa candidates to emerge as the majority candidate over the Ozawa surrogate. (If Kan can’t make it on the first round, he’s almost surely a dead, not lame, duck.) Of course there’s always the possibility that the Ozawa candidate will make such a strong showing that the DPJ has no choice but to select him/her. The equivalent of an exit poll for the 400 local votes (in addition to the two per-Diet member votes) could also influence DPJ Diet members and grease the way for one of Kan’s challengers to take over.

It’s R-E-S-P-E-C-T with Shaq

2010-08-04T20:19:00.002+09:00

Conventional wisdom has it that the causes of Shaquille O’Neil having a problem with finding a team for the upcoming season other than a chance at another NBA championship are money and playing time. Really? I haven’t exactly seen reports of Shaq declaring bankruptcy anytime soon. And if he can’t secure significant playing time competing against the likes of Miami Heat centers Jamaal Magloire, Zydrunas Ilgauskus, Joel Anthony (who?), and Dexter Pittman (who?)…

As important as if not more so than the material pleasures they bring, money and playing time are measures of your alpha-maleness. In Miami, Shaq would merely be a sideshow to the LeBron-Wade-Bosh AAU All-Star Tour. Boston may not be able to offer the money. And when Kendrick Perkins comes back, his minutes are likely to shrink dramatically, since he cannot slide to the four spot. But the Celtics can offer dignity. Everyone, from the aging future hall-of-famers to the towel waver at the end of the bench (and Brian Scalabrine on the bench) is treated right—by Danny Ainge, Doc, teammates, the fans, the Boston media…

Boston will not shell out the big money, Boston does not offer good prospects for serious playing time. But the Celtics will give its players respect. Speaking as a guy, it makes sense for Shaq.

I just learned that Shaq is working toward his PhD. Do I hear R-E-S-P-E-C-T?

Who Needs a Coalition for an Upper House Majority?

2010-08-02T15:05:00.003+09:00

An email exchange with a financial analyst reminded me that ’s a lot of apprehension out there over the policy prospects of a minority DPJ—let’s face it, the PNP no longer counts—government. Far be it for me to say that gridlock is good, but there’s a case to be made that within the context of a fractious opposition including Komeito—demonstrably flexible and similarly urban, middle class, social spenders domestically and pacifist overseas—a series of flexible issues-oriented alliances will be more consonant with the implementation of a coherent policy agenda than an official coalition. A minority partner will inevitably secure policy concessions that do not match up with the majority partner’s overall policy agenda. It will also be able to exercise control over its cabinet assignments as a virtual enclave, further sapping coherence. Case in point: the Hatoyama administration.

Of course if the opposition ever got its act together, it will be hell for the DPJ. But I don’t think that’s going to happen, when everybody has an eye on a possible, more extensive political reshuffle down the line, most likely sometime after the next lower house general election.

PNP, SDP Tries to Sell DPJ on Lower House Supermajority

2010-07-30T17:21:00.001+09:00

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?

2010-07-30T13:18:00.002+09:00

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.

Incumbents a Problem for a DPJ-Komeito Coalition

2010-07-28T18:16:00.001+09:00

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.

Looking Back on My Pre-Election Thoughts

2010-07-25T13:04:00.001+09:00

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

2010-07-25T12:12:00.001+09:00

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

2010-07-25T10:06:00.002+09:00

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.

Final Thoughts? Really? More Appropriate for Twitter?

2010-07-12T00:01:00.002+09:00

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

Also, an LDP ~~guy~~ candidate is ~~elected~~reelected in Okinawa. Go figure.

The Tabloids Called It First, Sorta

2010-07-11T23:13:00.001+09:00

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

2010-07-11T19:57:00.002+09:00

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.

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

2010-07-10T14:17:00.002+09:00

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.

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

2010-07-09T15:46:00.004+09:00

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

2010-07-09T00:59:00.001+09:00

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.

The Upper House Election and Some Political Implications

2010-07-05T21:52:00.001+09:00

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?

2010-07-05T19:40:00.001+09:00

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.

Why Would Obama Want to Fire McChrystal?

2010-06-24T00:54:00.000+09:00

This article all but shout out the lack of judgment/discretion on his—and far more materially his staff—but military officers saying rude things about their civilian overlords? How different is this in substance from what employees are likely to say about hard-ass/blowhard bosses in any firm? I say they make up, and McChrystal goes back to Afghanistan; it’s what he wants to do.

Sorry, I’ll get back to Japan later in the week..

Could DenominationRedenomination* Be the Answer to Japan’s Economic Woes?

2010-06-19T17:51:00.002+09:00

* Thank you, Anonymous.

Back in the day, my hopes for Japan’s future diminished every time otherwise serious politicians—I think PM Fukuda Pere was one—suggested denomination as a means to boost Japan’s economic performance. I mean, seriously…But I’m much older now yet no wiser, so my faith in human wisdom is not what it used to be. Now, Daniel Ariely, one of my favorite people that I don’t know personally, has this to say about the irrational hold that numbers have on us. Now, I’m not so sure it won’t have Read the whole piece, and, if you liked it, go look up his other stuff.

A Quarter of South Korean Households with TVs Watch Late-Night Japan-Cameroon Match

2010-06-16T19:59:00.001+09:00

According to this Kyodo report courtesy of the Japanese tabloid Sponichi, the South Korean equivalent of the Nielsen TV ratings reached 24.1%* for the 14 June Japan-Cameroon game in the World Cup in South Africa—a match that began at 11PM Seoul (and Tokyo) Time. Two questions came to mind: First, what was the percentage of the Japanese TV audience that watched South Korea thrash Greece? Second, what was the percentage of the South Korean audience that rooted for the Japanese side?

That is about as good a snapshot of the asymmetry in the cross-straits relationship as there is.

* It peaked in Tokyo at 49.1%, just before the match eneded.

Legea Is Not Planning to Sell Any Sportswear in Japan Any Time Soon

2010-06-12T19:10:00.002+09:00

Oh…kay… Legea has also signed up the Zimbabwean and Iranian national teams as well, according to this Yomiuri report.

So I guess my question is, what do they have that Myanmar doesn’t? Explain it to me, Legea.

My Two Yen(=0.018182 Euros) on the BP Spill

2010-06-11T00:13:00.001+09:00

I was talking to a business strategy consultant today when talk turned to communication strategy, which reminded me of BP and its continuous oil spill. That is, how can BP, pump so much obvious money into corporate branding, then fail so badly when the shit hits the fan? Haven’t they heard of Yukijirushi? Okay, Enron? And every other corporation whose media minders and top executives put stuff out that was likely to be contradicted later for no visible motive other than to snatch a short reprieve from public scrutiny?

It’s cold comfort to know that we in Japan are not alone.

Even more surprising, though, is the amateurish look of the effort to stop the oil spill. They look like a ten year-old kid and his friends, coming over while his parents went out, who set the kitchen on fire; they’re doing their best to put it out before the parents come home—but they’re ten year-old kids!

Re Mark’s Wish List for Realignment

2010-06-10T18:50:00.002+09:00

Blogger.com says that the following response to Mark’s comment is too long, so I’m posting it here. Sorry I don’t have time to post on the ongoing chicken race between Kamei and the DPJ. Will Kan call Kamei’s bluff? Stay tuned.

Mark:

As a typical floater voter, I have my own set of wishes, but my aunts stubbornly refuse to turn into teacarts. So you’ll have to content yourself with what I think is likely/unlikely as per my current line of work, and I’m not going in the policy implications:

Now that it seems likely Japan will realign its political parties, I thought I’d weigh in with some suggestions.

I’d like to see the SDP and the JCP merge. This new party would focus on providing social security, child care, health care, and education. It would support government spending in those areas, but not necessarily in public works. It would try and raise taxes on the rich (particularly the capital gains tax). It would oppose raising the sales tax. It would try to reduce defense spending and it would do its best to uphold Article 9. It would call for a reduction in U.S. forces in Japan. It would also call for strong regulations for industry.

Policy-wise, a merger makes sense. It won’t happen. There’s too much history behind them. Besides, the remainder of the old Socialists that form the SDP are too unruly a group—reminds you a bit of the US Democratic Party—to be able to submerge themselves in the orderly, disciplined world of the JCP.

I’d like to see the Ozawa faction split off from Minshuto and form a new party called the Rural Revival Party. This party would be a sort of pork barrel politics party, focused on spending money in rural areas to win votes. It would, of course, oppose redistricting. I think Kokumin Shinto should get merged into this new party, as the new party would try to boost Japan Post and its affiliates, particularly in rural areas. This party would also oppose raising the sales tax. It would support infrastructure projects.

Makes a lot of sense. And don’t rule out the possibility of likeminded friends in the LDP joining them. Think big, Mark.

I’d like to see Your Party merged into what’s left of Minshuto. Yoshimi Watanabe, Yukio Edano, Seiji Maehara, Katsuya Okada, and Renho would be in this party. This party would focus on transparency, accountability, and the control of the bureaucracy by the politicians. This party would focus on reducing wasteful government spending, particularly public works spending.

What do you mean, “what’s left of Minshuto”? I’m willing to take under 100 in the over/under on the number of Diet members that Ozawa will be able to take with him if he decides to split. That said, your “New Party” does make sense—in the mid- to long-term. I don’t think that will happen before the next lower house election though; The post-boomers in Your Party has to see how far they can take its current configuration before they decide to submerge its identity in a bigger whole.

I’d like to see Shinzo Abe, Shigeru Ishiba, and Yuriko Koike move over to Tachiagare Nippon. This party would focus on international affairs. It might call for revising Article 9. It might call for increasing the ODA budget. It would call for reducing social welfare spending and public works spending. It would try to balance the budget.

Did you say Tachigare Nippon? Kidding. No. they are not a good fit.

What’s left of the LDP can form a new party called Kanryoto. This party would include Shinjiro Koizumi, Tadamori Oshima, and Taro Aso. This party would let the bureaucrats do what they want while the politicians did their political theater.

Doesn’t make sense, and that’s not what they are about, individually.

I don’t think it’s necessary for Japanese parties to have different trade policies. Japan already has low tariffs, which means making trade deals makes sense for Japan. The only thing Japan has to protect is its agriculture sector. Given that Japan only produces 40% of the food it consumes, I don’t think it makes sense for Japan to reduce protection in that industry.

But we could have a more rational agricultural policy, which would call for a different trade policy.

I don’t think immigration should be a focus of the new parties. I don’t think Japanese voters want a substantial increase in immigration and I don’t think it makes sense for Japan to do that. There aren’t many politicians who want that anyways. Hopefully, in the next election, Hidenao Nakagawa will lose and go away.

Don’t worry, it won’t be. Not yet.

As for the other parties, I’d break them up and have their members join the remaining parties.

That’s possible only when (if?) Daisaku Ikeda passes away.