Mr. Fukuda’s Rising Popularity before His Resignation

As an answer to my plea, Ross has sent me a NIKKEI graph-and-table that shows Prime Minster Fukuda’s poll numbers making a steady climb after April except for the precipitous drop after the post-Cabinet reshuffle. (Longtime readers with long memories will remember that this was something that I had predicted for 2008. It came months later than I had expected; I plead extenuating circumstances.) But bump itself was anomalous and very much out of line with other media polls. If you take that unscheduled poll out of the equation, Mr. Fukuda’s numbers were improving up until the very end. Ross believes that this disproves any theory that links Mr. Fukuda’s resignation to deteriorating poll numbers. I agree with this, and I don’t have a better answer than his assessment that “it was the uselessness of pushing ahead in the legislative arena that drove his decision.”


Ross poses a couple of interesting questions here: Why did the media miss this? And why didn’t the Prime Minister’s handlers identify the improvement and play it up? I have no answer to the first question, having missed it myself. As for the second one, an insider close to Junichiro Koizumi expressed strong dissatisfaction with the current Prime Minister’s office. So maybe incompetence? Mr. Fukuda’s aversion to self-promotion—I saw it once, up close, while he was out of office—couldn't have helped either.

New Komeito in the Equation: Some Structural Points, the Unpopularity of Ichiro Ozawa, and Unsolicited Advice for the DPJ

Most of my thoughts on the new Fukuda Cabinet and LDP leadership, and now the economic stimulus package, have been exhausted by a couple of for-clients-only reports, and I may have to do something on the latest dramatic turn of events—the announcement that Mr. Fukuda would be resigning as Prime Minister. (You can bet the house that Taro Aso will be taking over and calling a snap election after the extraordinary Diet session.) They help pay the bill, but definitely stand in the way of my bloglust in terms of both content and energy—I have only so many thoughts and so much time for Japanese politics. Here are a few technical thoughts, though, that will most likely not find their way into any moneymaking reports. Plus, some unsolicited advice for the DPJ.

The New Komeito, depending on actual turnout and incidental factors, draws 12-14% of the votes for the 180 proportional seats up for grabs in a Lower House election. The New Komeito throws the bulk of these mainly Sokagakkai voters to LDP candidates in most of the 300 single-seat districts, while the LDP throws its support to the New Komeito candidates in the remainder. It is more difficult to fine-tune this synergy in Upper House elections. This is a structural factor that works in favor of the ruling coalition in the Lower House. The higher representation of metropolitan areas in the Lower House presumably works against the more rurally-oriented LDP. It should be possible to get a better handle on these effects by a district-by-district analysis of voter behavior.

The one new structural factor in the upcoming Lower House election is the Communist Party’s decision to abandon its long-time policy of fielding candidates in every single-seat district. Any district where the Communist candidate is likely to gain less than the threshold of 10% of the effective votes for forfeiting the 3 million yen deposit can be subjected to this treatment. It is unclear how many of these disenfranchised Communist voters will throw their support to the DPJ candidates in single-seat districts, though a carefully designed public opinion poll should be able to tease out plausible guesstimates.

In sum, the LDP starts with somewhere around a 10 percentage-point handicap over the DPJ in a Lower House election, of which a few percentage points will be canceled out by voters who otherwise would be voting for Communist candidates.

A couple of other significant differences in contrast to the last Upper House election, which ended in a landslide victory for the DPJ, are the following:

Prime Minister Fukuda has been almost as unpopular as Prime Minister Abe was, but his antagonist Ichiro Ozawa, the DPJ leader, is now as unpopular, if not more so. In fact, a recent Asahi telephone poll (12-13 August) had Mr. Fukuda beating Mr. Ozawa 37% to 28% head-to-head with 35% undecided as the one more fit to be Prime Minister. Taro Aso, Mr. poised to take over from Mr. Fukuda, has also significantly outpolled Mr. Ozawa in public opinion polls.

The bloom is off the DPJ phenomenon; the media are increasingly seeing its decision-making as being driven mainly by electoral considerations. This is affecting their reporting. Mr. Ozawa is being depicted as the face of this political drift.

So, if I'm right, if a Prime Minister Aso can keep his foot-in-mouth under control and his Cabinet choices—assuming he does a makeover—do a reasonably good job of staying scandal-free, an Ozawa-led DPJ will have a formidable job ahead to wrest control of the Lower House from the current ruling coalition by itself.

If I were advising the DPJ leadership, I would advise it to go easy on the New Komeito and stop going after Daisaku Ikeda*. After all, even if the DPJ wins the most seats in the Lower House election—quite possible if not probable—it will be likely that it will be able to form a government only with the help of the New Komeito. The DPJ’s relationship with the New Komeito is bad enough with Mr. Ozawa at the helm—the enmity goes back to the breakup of the New Progress Party and the events leading up to it. It doesn’t need nakedly political, strong-arm tactics that destroy any possibility of prying a post-election New Komeito away from the LDP’s clutches.

MAFF Minister Oota: First, His Mouth, Now His Books

I haven’t had the time or energy to do a real think piece recently. I’ll satisfy my bloglust with a brief thing piece instead.

I’ve had an eye on Seiichi Oota, the new Minister of Agriculture, Forestry and Fisheries, as the owner of a pair of loquacious but loose lips who could help bring down the Fukuda administration and possibly the LDP-Komeito coalition. It appears that I had underestimated his destructive powers.

One of MAFF Minister Oota’s political support groups, the Oota Seiichi Daigishi wo Sodateru Kai (Association to Raise Diet Member Seiichi Oota), registered the Tokyo home address of Mr. Oota’s political secretary as its address and filed 23.45 million yen in costs there during 2005-2006, all this under the Political Finance Regulation Act, which is the other side of the coin of the Political Parties Subsidies Act, under which political parties receive government money, roughly based on the number of Diet seat they have, in exchange for meeting certain criteria. The Japan Communist Party is the only party that has refused to accept subsidies. It turned out that Oota Seiichi Daigishi wo Sodateru Kai never actually pay the rent.

This is particularly haunting to a MAFF Minister because similar infractions ended up with two of his recent predecessors, Toshikatsu Matsuoka (26 September 2006-28 May 2007) and Norihiko Akagi (1 June 2007-1 August 2007), losing their jobs and, in the case of Mr. Matsuoka, life—to be fair, it is likely that the threat of bribery charges being brought against Mr. Matsuoka in a separate case was the main factor in his suicide. These and other similar incidents, a non-partisan epidemic actually, were a major contributory factor in the ruling coalition’s landslide defeat in the 2007 July Upper House election and the subsequent demise of the Abe administration.*

You would think that the LDP would have hired a team of competent CPAs to supervise an examination of the books of all its political organizations subject to reporting requirements and cleansed them of all infractions in one fell swoop. Or the Fukuda Cabinet could have at least undertaken a physical check of all the Cabinet Minister candidates. But they obviously did neither.

Mr. Oota may be an answer to the DPJ’s prayers, but the LDP has served him on a platter.

* This also was the main reason why Masatoshi ended assuming MAFF Minister duties three times—of which once pro tem—in a little over three months, between 28 May and 4 September 2007.

Polls Show Reshuffle Bump Almost Gone; Public Wants Action Now

According to a couple of recent polls, the Fuji TV poll (Greater Metropolitan Tokyo, weekly, telephone) and the Yomiuri poll (national, monthly, interview), show that the modest bump from Prime Minister Fukuda’s cabinet-LDP leadership reshuffle is mostly gone but hints that the effect of Taro Aso’s return as party Secretary-General has been more substantial. This may be the first time in LDP history that a party-leadership switch turned out to be the most effective public relations move in the reshuffle. That is bad news for the Prime Minister.

The August 7 Fuji TV poll shows both the Fukuda Cabinet and the LDP (candidates in next Lower House election) dead even with their most recent pre-reshuffles selves in the July 17 poll at 27.2% and 21.4% support respectively. The “do not support” figure for the Fukuda Cabinet went up slightly, from 66.6% to 68.4%. Support for DPJ candidates was down slightly from 29.6% to 28.0%. All this should be within any meaningful margin of error.

The August 9-10 Yomiuri poll has support for the Fukuda Cabinet at 28.3%, up slightly from 26.6% in the July 12-13 poll and the “do not support” figure down slightly to 59.7% from 61.3%. More interesting are the Yomiuri figures for the LDP, whose public support has gone up 3.3 percentage points to 30.5%, while the DPJ stood almost unchanged at 18.7% (down 0.1 pp). Moreover, when the responders were asked which party they intended to vote for in the Lower House proportional districts, the LDP scored 31.3% (up 6pp), putting it ahead of the DPJ, which scored 25.1% (down 2pp), for the first time since May.

Only two week-after polls so far, so I’ll keep my eyes open, but it looks like the LDP is doing better that the Fukuda Cabinet and I can think of only one reason for this: Mr. Aso’s appointment. This must be giving both LDP Diet members and the rank-and-file ideas.

As I’ve told you before, procedurally, it’s not easy to depose a sitting President of the LDP. Besides, Mr. Fukuda is pretty stubborn once he makes his mind up, and he gives the impression of a guy that is determined to stay around for a while at least. However, RS and I have been tossing scenarios—more like plotlines—back and forth, and we (mostly he) came up with the idea that the Prime Minister Fukuda might do the delinking of the gasoline tax money from road development and maintenance—fundamental reform of the tax system, i.e. making the decision to raise the consumption tax rate looks increasingly doomed—and the re-extension of the Indian Ocean refueling operations and toss the scepter of power to the person-in-waiting, who’ll take the LDP-Komeito coalition into the next Lower House election.

This actually follows an oft-scripted Japanese narrative. The tragic hero that fulfills his duty against all odds then falls on his sword—or spills his guts, since this is Japan—is a familiar figure in Japanese folklore and popular drama. The cause he espouses matters only tangentially; the important thing is the self-sacrifice. Then all is forgiven. On a slightly different plane, the LDP rode Prime Minister Ohira’s untimely death during the campaign for the 1980 Upper-House-Lower House double election to an otherwise inexplicable landslide victory. Mr. Fukuda can only die a metaphorical death; not quite the real thing, but it’s better than nothing. For Mr. Fukuda, it beats leading the LDP into a bloodbath, then resigning, and it gives him the satisfaction of becoming a party martyr of sorts.

All this has everything to do with the political game and not much to do with statecraft. For that, we turn again to one of the questions in the Yomiuri poll, which asks:

If there are issues that you want the Fukuda Cabinet to take up on a priority basis, please give as many as you like.

The Yomiuri gave responders 17 examples to choose from. The numbers were down on 15, with the environment taking the biggest hit (22.9%←30.6%; note that the Fukuda Cabinet with the complicity of the media was touting its role in pushing the global warming agenda at the Hokkaido Summit), with North Korea (20.6%←27.5%) and food safety (32.0%←37.9%) also taking a tumble in the electorate’s priorities. Self-defense/national security showed a statistically insignificant 0.3 percentage-point rise (9.2%←8.9%). The only real gainer? “Economic and employment countermeasures”, at 63.2%, up 5.6 percentage points from 57.6%. We want economic stimulus, and more jobs. “Reform of the social security system including pensions and medical care” clocks in at 60.2% down 2.8 percentage points. Nothing else comes close.

The economy has even overtaken all the scandals over the social safety net and its long-term solvency worries in the minds of the Japanese public. This doesn't mean that the LDP can take its eyes off them; they have their own constituencies. But I do believe that most long-term, structural issues will be taking a backseat to more immediate concerns over the economy in the mass media. That is where the main thrust of what passes for statecraft is going to be directed for the time being.

Loquacious MAFF Minister Gagging on Chinese Dumplings; MOFA Minister Going to Beijing for Same

The print media are all over Agriculture, Forestry and Fisheries Minister Seiichi Oota for allegedly dissing consumers on NHK, the national broadcasting company, yesterday. Let me do a full translation of the Asahi online article:

On an NHK program on the 10th, Agriculture, Forestry and Fisheries Minister Oota said with regard to domestic measures for food safety in response to the made-in-China frozen gyoza poisoning incident, “It’s safe in Japan but we will take through measures since consumers, the public, are noisy (やかましい).

MAFF Minister Oota emphasized the difference between Japan and China regarding food safety. He said that “(in Japan,) when the public as consumers say this and that noisily, we must respond to it”, and that “it is different from a country like socialist China, where you can hide undesirable things when they happen and don’t have to think about the consumers.” He further went on to point out that “we are always under pressure (from consumers).”

Regarding the meaning of his statement that [consumers are] “noisy”, AFF Minister oOta explained after appearing on the program, issuing the comment, “I used it in the sense of a democratic country where consumers can uphold their legitimate rights, and meant nothing more than that.”

It’s the use of the word “noisy” that everyone is reacting to—somewhat out of context in my view. As a practical matter, slagging the Chinese the way he did cannot help either—he should have found a more politic way of saying it—but that seems to have been mercifully forgotten in the process. I predicted, sort of, that Mr. Ota would do something like this. Though I think that in this case, the negative response is disproportionately large. So is he still going to Yasukuni after this, with media trailing him? Stay tuned. You only have four days to wait.

Going back to the Chinese dumplings, I still cannot believe that Foreign Minister Komura has suddenly decided to fly to Beijing during the Beijing Olympics and the traditional obon-yasumi just to talk to his Chinese counterpart about the Chinese dumplings case, and only because the public found out that the two sides had been sitting on the case for a whole month until presumably the Olympics would blew over. It’s so embarrassing and demeaning to the office and the Fukuda administration, not to mention a loss of face for the Chinese authorities. Couldn’t they think up a good cover story and have Mr. Komura stay home?

Runoff for DPJ Leadership Election? The LDP Wishes

First, it was Katsuya Okada. Now, another ex-DPJ leader, Seiji Maehara, has declined to run for the DPJ presidency when Ichiro Ozawa’s current term expires in September. Since the other ex-leaders Yukio Hatoyama and Naoto Kan have set aside their differences in order to take down the LDP-Komeito coalition in the next Lower House election, this leaves Yoshihiko Noda with his own nineteen-member Let All the Flowers Bloom Association as the only significant DPJ figure left who has not abandoned the thought.

Nobody expects Mr. Ozawa to be unseated. In fact, it is unlikely that anyone outside of Mr. Noda’s group and We Will Rise above the Clouds Association with 38-members (seven of them also belong to LAFBA) will cast a vote for a pretender to the throne. The logic behind a contested election despite such bleak prospects for a challenger* is that a healthy debate over the policy manifest for the upcoming election can only strengthen party unity and the campaign platform. Reelection by acclaim would rob the party of the invigorating effects of the runoff.

Don’t believe a single word of that.

It is telling that the calls for a contested election are coming from Mr. Ozawa’s opponents. An open debate would only serve to rehash the fragile political compromise that has papered over fundamental differences with regard to the need to raise the consumption tax rate for a 100%-subsidized basic pension plan and the desirability of overseas commitments for the Self-Defense Force. Moreover, it is likely to unleash the barely-disguised animosity between the anti-Ozawa crowd—witness, for example, Yukio Edano’s near-perpetual rage against the old-school politician—on one side and his diehard supporters and fellow travelers on the other. The LDP will scour the records of the proceedings for material to throw at the DPJ in a negative campaign come election time. Better, then, to maintain the façade of party unity, at least until the final polls are in for the main event, no later than September 2009.

An added point is that Mr. Ozawa is at best a mediocre debater, in demeanor and substance, and his obvious dislike of the limelight is well-known, to the point where a reporter was recently moved to ask him whether he really intended to serve if the DPJ won. The contrast in a public face-off with, say, the loquacious Mr. Noda would not reflect well on the party leader.

This last point reminds me of a related issue with regard to the Lower House election itself. The secretive, taciturn Mr. Ozawa is a stark contrast in style not only to the goofily pleasant Prime Minister Fukuda, but also to the congenial, loquacious-to-a-fault Taro Aso, and it shows in the polls. The latest Fuji TV Metropolitan Tokyo area poll taken on August 3 showed Mr. Aso leading Mr. Ozawa 29.2% to 12.4% as the preferred successor to Mr. Fukuda. Now this does not mean that the LDP will be replacing Mr. Fukuda with Mr. Aso any time soon. But it is important to note that at the hustings nationwide, it is Mr. Aso who will be the face of the LDP in lieu of the Prime Minister, who will be confined—perhaps a little too conveniently—to Tokyo for official business. The outcome of a Sir Foot-in-Mouth vs. Mr. Uncongeniality matchup is by no means foreordained, but it will nevertheless behoove the DPJ to avoid putting Mr. Ozawa front and center of the electoral fight.

The obvious corollary of this is that the LDP should do its best to make Mr. Ozawa the issue. The LDP cannot run on the coalition’s record; it cannot run on its program either. And it cannot run against itself, as it did in 2005 under Prime Minister Koizumi. The only option left is to run against the opposition, whose greatest strength and weakness is Mr. Ozawa. So look forward to plenty of negative campaigning, much of it personal. But that is the subject for a separate post.

* The DPJ has 219 Diet members, with two vote each. Official Diet candidates who are not Diet members have one each. Supporters and rank-and-file party members cast 100 votes; local assemblymen also have 100 votes. This brings the toal number of votes that can be cast to 638 plus the number of official candidates that have been selected by the time of the party election.

The New Fukuda Cabinet and the Reshuffle Bounce

The Big Four general-purpose mainstream dailies all took telephone polls (August 1-2) on the new Fukuda Cabinet. I’ve put the support/do-not-support percentage-point numbers in the following table in ideological order from the bleeding-heart liberal Asahi to the Japaneocon Sankei. The results of the previous polls are given in parentheses. The new Fukuda Cabinet receives zero lift in the Asahi poll, a modest 3pp from the more moderate Mainichi, a whopping 14.7pp leap from the establishment-populist Yomiuri, and above-the-statistical-noise 4.7pp from Sankei.

Yomiuri does warn against a straight comparison with its previous poll, which as a regular monthly poll used the face-to-face interview method (unlike the other three, which always use telephone polls). Still, it’s hard not to conclude that the results from the Big Four have lined up exactly asin the order you would expect them to. Note that Yomiuri has been far more supportive of the China-friendly, traditionally conservative Yasuo Fukuda than Sankei, which has made no secret of its displeasure with the namby-pamby Prime Minister. I suspect that the Prime Minister owes much of the bounce to Taro Aso, whose appointment as Secretary-General, the number two role in the LDP, has been received favorably across the board.

You know what? All in all, I think it is a modest bounce, no momentum changer.

	support	change	not support
Asahi	24(24)	-	55(58)
Mainichi	25(22)	+3	52(54)
Yomiuri	41.3(26.6)	+14.7	47.0(61.3)
Sankei	31.5(26.8)	+4.7	48.1(53.5)

A Few Random Thoughts on the New Cabinet

Last night, the cabinet ministers were trotted out one by one to face the media, like some kind of a beauty contest, if you can imagine a beauty contest of mostly 60-something guys in suits. In fact, the average age of the ministers is 62. Some impressions:

Say what you will of Bunmei Ibuki, the Finance Minister, he has the chops for the job. He can take anything about the economy and public finance and explain it in a layman’s terms without talking down to you. Seriously, he acknowledged the structural fiscal pressures—specifically raising the government subsidy for the minimum public pension payment from 1/3 to 1/2 in fiscal year 2009—and the eventual need to raise the consumption tax (if not in exactly those same words), but referred to a “two-, three-year span” to deal with the problem, eliminating waste in the meantime to gain public acceptance. He more or less told the audience that there was enough money in the coffers to tide the government over this period.

So we now have an LDP stance that looks remarkably like the DPJ’s. Even the reconciliation of fiscal conservative Seiji Maehara and his minions with the DPJ’s 2007 no-consumption-tax-hike manifest (near the end) is matched by Kaoru Yosano’s conversion to fiscal permissivism. They all want to fight the Lower House election on a promise to cut waste thorough the next election cycle. They will deal with the fiscal consequences after that, dipping into the “buried treasures” to bridge the temporary gap. “We are all Hidenao-Nakagawaists!” For those of you who can’t get enough of this stuff, I hope to have more to say in a separate post about the General Budget.

No one in this cabinet is obviously stupid in a non-partisan sense, although most of the newbies did appear to rely on crib sheets prepared by the bureaucracy. If there’s a loose cannon in this group though, it’s Seiichi Ota, the new Agriculture, Forestry and Fisheries Minister. Mr. Ota has a strong agricultural and academic background. He doesn’t hide it either, or much else. A lot of knowledge can be a dangerous thing though. He’s been known to shoot from the hip, and he did do a lot of thinking out loud during the press conference. Keep an eye on him; he could be this cabinet's Kunio Hatoyama.

Each of the ministers would make a mercifully brief nomination speech (the inauguration would come the following day), then take a few questions before the kisha club mediator called in the next minister-in-waiting. Holdover Foreign Minister Masahiko Komura fielded two questions—both about the abductees. Which brings me to the appointment of Kyoko Nayama as Minister of State for the Abduction Issue—and Gender Equality and Social Affairs as well as Minister of Public Records Management and National Archives.

Mrs. Nakayama’s remarkable progress from Cabinet Counselor to Head of the Abduction Issue Headquarters to Special Advisor to the Prime Minister to now cabinet minister is paralleled by a singular lack of progress on the issue itself. Mrs. Nakayama of course has no responsibility whatsoever for this lamentable state of affairs. And she will continue to dutifully play her role as long as the Japanese media will continue to play along too. As a gaijin scholar said the other day, there are some policymakers who admit to her that Japan needs to reorder its priorities with regard to North Korea, but none of them are willing to go on the record to say so.

That’s it for now.

* That is what it says on the official Prime Minister’s website. The Japanese version says 少子化対策=Shoshika Taisaku or “Countermeasures for Dwindling Number of Children”, not “Social Affairs”.

Quick Look at the Not-So-New Fukuda Cabinet and Party Leadership

The new Fukuda Cabinet-select does not appear to be aimed at a bump in the polls. Nobutaka Machimura (Chief Cabinet Secretary), Masahiko Komura (Foreign Affairs), Yoichi Masuzoe (Health, Welfare and Labor) and Hiroya Masuda (Internal Affairs and Communications) kept their respective portfolios. Of the four, the retention of the oft-criticized Mr. Machimura is the only choice that raises even a mild political eyebrow. Two of the new ministers are actually repeat performances, Toshihiro Nikai at the Ministry of Economy, Trade and Industry and Koji Yasuoka at the Ministry of Justice. Former MOF official Bunmei Ibuki is typecast as Finance Minister, although that means that he knows the territory, and that his acerbic tongue will cause him less trouble there than it did as Secretary-General, where…

In a genuine coup for Mr. Fukuda, Taro Aso, the understudy-in-waiting, as Secretary-General, the party No.2, has been co-opted. Not only must Mr. Aso abandon his strategy of enhancing his street cred with the local chapters while waiting for the beleaguered Prime Minister to give up the ghost, and instead help prop up the Fukuda administration; he must also share the blame in the event of a Fukuda or (heaven forbid) LDP debacle.

The other minister of interest is Kaoru Yosano, who inherits the Economic and Fiscal Policy portfolio from the hapless master of the non sequitur Hiroko Ota. That post, like its predecessor the Secretary-General of the now-defunct Economic Planning Agency, is as important or un- as the minister who occupies it. Mr. Yosano is a heavyweight. Don’t expect him, though, to impose the fiscal hawk agenda that we have become accustomed to hearing from him—and now-MOF Minister Bunmei Ibuki. A couple of weeks ago, he appeared on a Sunday morning talk show and explicitly repudiated his long-held tightwad prescriptions for the time being, claiming an epiphany he had yet another two week before. He has seen the light.

Seiko Noda snaps up the Consumer Affairs portfolio. Mr. Fukuda clearly felt that Ms. Noda came with most of Yuriko Koike’s glamour and little of her impulsiveness and tendency to march to the beat of a different drum. In the past, consumer affairs—like the Environment Ministry—would have been considered a for-the-girls, token assignment. The impression does not go away completely. However, Ms. Noda, as one of the Post Office rebels readmitted to the LDP, has to be grateful to be the first of the eleven penitents to be awarded with a cabinet post. More important, she is taking on what will be one of Mr. Fukuda’s two major projects for the upcoming extraordinary Diet session.

The rest is detail, including the other woman in the cabinet and abductees caretaker Kyoko Nakayama. All in all, it’s an effective stop-loss order. But holding serve is not good enough for Mr. Fukuda and the LDP-Komeito coalition.

Speaking of our beloved coalition partner, Komeito gave up the powerful Ministry of Land, Infrastructure and Transport portfolio (replaced there by fading PM candidate Sadakazu Tanigaki, who slides over from the Policy Research Council Chair) for the more mediagenic Environment portfolio, reminding us of its across-the-social-spectrum, non-pork-barrel support base. Which reminds me that it has no ideological obstacle to switching its coalition partner. It will hold all the cards—as Gerald Curtis predicted years ago—if neither the LDP nor the DPJ gains an outright majority in the next Lower House general election.

On the Eve of Not-Quite Extreme Cabinet Makeover

The delay in the return of the METI and MAFF Ministers from the deadlocked Doha Round negotiations in Geneva had narrowed the early window for a cabinet reshuffle to a few days before the Beijing Olympics would begin and blot out any political news short of regime change. The next opportunity would be late August, after the Games end. The clincher was Foreign Minister Masahiko Komura’s last-minute decision to cancel his August 1-8 visit to India, Sri Lanka and Uzbekistan. Hiroko Ota, the Economy and Finance Minister, was also grounded. You never cashier a Minister in absentia unless you absolutely must. Prime Minster Fukuda went into a huddle with the party leadership; there was no way to back off now without losing face. With everything set for an early cabinet reshuffle, the event itself was threatening to turn into an anticlimax. Mr. Fukuda salvaged a modicum of momentum by defying predictions by carrying back the date all the way to August 1.

The most obvious conclusion to draw from this turn of events is that Mr. Fukuda has chosen August as the time to summon the annual extraordinary session to deal with the politically contentious re-extension of the counterterrorist refueling operations in the Indian Ocean by the Maritime Self-Defense Force, as well as his pet project—legislation to establish a Consumers Protection Agency. His hardliner LDP deputy Bunmei Ibuki had been pushing this line of attack, while election czar Makoto Koga and, more important, coalition partner Komeito had wanted to ditch the refueling operations and opt for a late-September summons. A new cabinet needs a minimum of a few weeks to get its sea legs before it sets forth to do battle in the Diet. Ministers can no longer rely the bureaucracy to answer all the tricky, detailed questions, so a post-Olympic cabinet reshuffle would have destroyed any chances of an August Diet session.

Will this turn the tide for Mr. Fukuda? I doubt it. If the musical-chairs itself produces a bump, it will be fleeting. Extending the refueling operations, a show of political courage as it is, will not be popular with the Japanese public. As for the Consumers Agency, the public split 46-46 in last month’s poll from the LDP-friendly Yomiuri. The saving grace for Mr. Fukuda is that his constituency must be down to the core LDP support, which means that pushing the refueling operations can’t make thing any worse, and that efforts on the two items will bring back some of the Fukuda skeptics that would otherwise be supporting a coalition administration.

The real test comes on the gasoline surcharge and its conversion to the general budget and the elephant in the room—financing the 2.3 trillion yen price tag on the 2009 increase in subsidies to the public pension system, which means, as a practical matter, a consumption tax hike—rule of thumb: 1percentage point=2 trillion yen. The Fukuda administration decided to avoid these tricky issues when it authorized the budget planning ceiling for FY 2009 on Tuesday. They will both come to a head next year, when the next regular Diet session convenes in early January. Likewise, any efforts at cleaning up the expenditure side of the national coffers.

By going ahead with a cabinet makeover, Mr. Fukuda will be making it known: He is determined to go into the next Lower Houser election as Prime Minister. Indeed, it will make it more difficult for someone else to swoop in, take his place and do yet another reshuffle. The bad news for Mr. Fukuda is that this does little to improve his chances of coming out of the election as one.

(sidebar) Suffering collateral damage are the realignmentists. It seems like only yesterday that political realignment was all the rage. Now, the media has dropped most such talk, and the two men who had been attracting media attention and openly talking about starting new political parties, Takeo Hiranuma and the far less credible Daijiro Hashimoto, have been relegated to the pages of the “vernacular tabloid” Shuukan Posuto and reduced to talking up faux-Prime Minister Kimutaku over Mssrs. Fukuda and Ichiro Ozawa.

Six-Fold Jump in Priority Spending Will Not Change the Narrative for Fukuda Administration

The media reported today that Finance Minister Fukushiro Nukaga has indicated that the Fukuda administration will expand the Budgetary Provision to Promote Prioritization (BPPP) (Juutennka Sokushin Kasan Waku) for the FY 2009 General Budget to 300 billion Yen, up from 50 billion yen in FY 2008. Sounds impressive? But the real significance of this message is that the Fukuda administration will not be conducting a serious overhaul of government expenditures, and therefore will be unable to make a strong case that a consumption tax hike is justified as part of a thoroughgoing tax reform package. I believe that this more or less reinforces my 4 June assessment of the prospects for the Fukuda administration and the ruling coalition. Let me explain.

First, a few facts about the General Budget. Of the 83.1 trillion yen in total expenditures for FY 2008, 20.1 trillion yen go to servicing the government debt while 15.6 trillion yen cover mandatory transfers to local governments. Of the remaining 47.3 trillion yen—called general expenditures—21.8 trillion yen fill the gap between social security (public pension, healthcare/medical insurance) premiums and expenditures. Further subtract civil servant salaries and other overhead, and the Japanese government is left with about 15 trillion yen that are considered discretionary.

Every year, usually in August*, the administration imposes by Cabinet decision overall and ministry/agency-specific ceilings on the following year’s General Budget expenditures. Each ministry/agency gets more or less the same share each year, after accounting for 1% reductions in defense and education expenditures respectively and the annual 3% reduction in public works and other discretionary expenditures. The Koizumi administration initiated this mandatory reduction process. The Fukuda administration persists despite grumbling from the party rank-and-file.

The ceiling-cum-pro-rata-reductions are an effective way to reduce government borrowing. But the rigidity of the system makes it difficult for any administration to implement policy initiatives of its own. The BPPP is an attempt to overcome this defect by setting aside funds to allocate to priority issues over and beyond the individual ceilings.

For FY 2009, if all goes well, the Ministry of Finance will be allocating 300 billion yen to the Fukuda administration’s priority issues—eliminating the doctor shortage, combating climate change, developing next-generation technology—over and above the budgetary ceilings imposed on each ministry and agency by Cabinet agreement on 29 July. That sounds like a lot of spending money for Prime Minister Fukuda, until you remember that it’s only one five-hundredth of the 83 trillion yen FY 2008 General Budget. And how will the Fukuda administration come up with the 300 billion yen? According to reports, Mr. Nukaga intends to impose an across-the-board 2% cut on the entire 15 trillion yen in discretionary expenditures, including the up-till-now untouchable R&D expenditures.

So, the Fukuda administration will be able to reduce discretionary expenditures by a little less than 300 billion yen, and reshuffle 300 billion more between ministries/agencies, if all goes according to plan,. So, this is the expenditures overhaul that will serve as the backdrop to the “thoroughgoing tax reform” that Prime Minister Fukuda has promised for this autumn. “Thoroughgoing tax reform”, of course, is a euphemism for “raising the consumption tax” to cover a legally mandated two and a half trillion yen hike in the General Budget subsidy to the national pension system starting in FY2009. Do you see the Japanese public buying this? I don’t.

On the other side of the political aisle, the DPJ has been talking down expectations in the face of the 18 trillion yen price tag on its policy manifest and subsequent on-the-fly promises. Ozawa’s kagemusha Kenji Yamaoka and dissident Seiji Maehara were both on message today, as they appeared together to talk about the time it will take to implement the DPJ manifest and its future incarnations, as they root out the multi-trillion excesses accumulated over the years under the LDP-Komeito regime. Translation? Don’t hold us to any timetable.

Flip-flopping? Sort of. But I suspect that the emergent realism in the DPJ will be reassuring to the independent voter and will compare favorably to a ruling coalition that is unable to change its ways.

The House of Councilors Censure Motion Looks Like a Dud

If I am wrong on this one, I will seriously doubt my hold on my faculties…

The fireworks have been missing from Japanese politics the last couple of weeks, so the censure motion against Prime Minister Fukuda will get some play in the media, but the DPJ has fiddled around with it for so long that it is now little more than an anti-climax near the end of what was an eventful Diet session. What’s surprising is that Ichiro Ozawa pushed it, even though he must have known that Mr. Fukuda would never resign and in any case had already positioned the ruling coalition to avoid any serious fallout from the resulting paralysis. Which means that it’s no concern to anyone except political junkies like…

I can’t think of anything having a major political impact between now and the autumn battle over fiscal reform. Which is better than nothing for the incumbent, since the opposition will not have a Diet in session as a platform to torment the administration.

Gazing into the Crystal Ball as Fukuda Numbers Settle at Late-Abe Levels

The Fuji TV network conducts a weekly telephone poll, where the first two questions are always the same. I’ve chosen the results from 2007 July 19 poll, taken three days before the House of Councillors election where the LDP-Komeito coalition went down in a devastating defeat under the Abe administration, and the 2008 May 29 poll, the latest available for the Fukuda administration. Take a look:

Q1: Which party do you want to vote for in the next House of Representatives election?

2007 July 19:
LDP 17.8%, DPJ 25.8%, Komeito 6.0%, JCP 3.2%, SDP – 1.0%, PNP – 0.2%, NPN – 0.0%, independent or other – 1.2%, abstain – 1.2%, undecided – 43.6%

2008 May 29:
LDP 17.4%, DPJ 26.8%, Komeito 3.8%, JCP 2.4%, SDP – 0.4%, PNP – 0.2%, NPN – 0.0%, independent or other – 1.2%, abstain – 0.6%, undecided – 47.2%
LDP – Liberal Democratic Party of Japan, DPJ – The Democratic Party of Japan, Komeito – New Komeito, JCP – Japan Communist Party, SDP – Social Democratic Party, PNP – People’s New Party, NPN – New Party Nippon.

Q2: Do you support the Abe/Fukuda Cabinet?

2007 July 19:
Yes – 29.4%, No – 60.8%, other/don’t know – 9.8%

2008 May 29:
Yes – 22.8%, No – 68.6%, other/don’t know – 8.6%

I could probably switch the numbers between the two poll results and if you came back a day later, you wouldn’t notice the difference. The numbers sometimes fluctuate from month to month, sometimes for no specific reasons, but the trend is clear: The Fukuda administration in recent months has been as unpopular as the Abe administration at its worst, and the LDP-Komeito coalition is seeing a similar fate.

What can Prime Minister Fukuda do to regain momentum? He could use one of the two main prerogatives of a Prime Minister, a Cabinet overhaul. (The other, more nuclear option, a snap election, is most inopportune at this moment.) When Prime Minister Abe undertook a wholesale makeover including the LDP leadership—also within his rights as party president—his administration received a 10.2% percentage point bump from 24.6% to 34.4% (negatives down from 64.6% to 57.6%) between the 2007 August 23 and August 30 polls. This was no statistical fluke; all the other polls at the time registered similar gains for the Abe administration. Unfortunately, most of this gain was gone the following week, as was Mr. Abe for all practical purposes in another. More significant to the current situation, it did nothing for the LDP-Komeito coalition.

Of course the Fukuda administration could always try to win on policy. But I don’t think that sweating the small stuff, such as tinkering with the Late-Term Elderly Medical Care Insurance system, is going to have a major impact. I don’t believe that the Hokkaido SG-8 Summit and a squishy agreement on greenhouse gases or any other combination of diplomatic or national security issues are going to be winners either. That leaves the autumn fiscal reform package, including a likely decision on a consumption tax hike, usually a loser. However, I think that the Japanese public is ready to bite the bullet on that one and move out of the none-of-the-above category and away from DPJ, which, under Ichiro Ozawa, is increasingly looking like the not-the-LDP, Socialist Party of old, on steroids. But to gain public acceptance, the authorities must impose the kind of budget cuts that could be coupled with a consumption tax hike to bridge projected revenue shortfalls in the national welfare system and to begin crawling out from under the huge public debt overhang. As part of any deal, they must deal with the unpopular gasoline tax surcharge. The civil service reform package notwithstanding, Mr. Fukuda and/or his associates have so far been unable to show the leadership and vision that would be necessary to carry out this daunting task. More likely is continuation of the across-the-board annual budget cuts with some allowance for the most popular items such as education and healthcare—the surcharge revenue will come in handy here—and possibly a substantial reduction in civil service salaries and severance pay. As popular as civil service bashing appears to be, this does not look like a recipe for a coalition victory in the next House of Representatives election.

As far as the political game is concerned, the coalition—the LDP to be more precise—can take an even more drastic route than Mr. Fukuda by replacing him with a new Prime Minister. This should bring more long-term relief than a Cabinet reshuffle. A Koizumi might counterattack with a snap election in that situation, but Mr. Fukuda does not appear likely to do that, and Taro Aso, the frontrunner and popular campaigner—if prone to verbal gaffes—is positioning himself to take over if given the chance. However, neither Mr. Aso nor any of his putative rivals appear capable of doing the kind of drastic overhaul that the LDP can sell to the public, much less wield the raw political power necessary to push Mr. Fukuda over the edge in case he is unwilling to leave of his own volition.

Thus, I’ve been coming around to the view that the opposition has a good chance of denying the LDP-Komeito coalition a majority, and doing so just by not losing. However, having made all those pricey promises to be financed by vaguely (if at all) identified budget cuts and money stashes and lacking a “twisted” Diet as an excuse for not fulfilling them, the DPJ is likely to encounter serious difficulties maintaining credibility when leading a coalition regime of its own. It’s a given that the DPJ will need a coalition partner or two, since it does not have a majority in the House of Counselors. That will complicate efforts to draw up a coherent policy manifest and see it through. Another post-HR election possibility is the beginning of a bidding war between the LDP and the DPJ for the services of the minor and micro parties. In fact, anything less than a robust victory for the LDP-Komeito coalition should result in a period of political instability whose practical consequences I cannot make out, until the dust settles on a major realignment along more coherent lines policy-wise.

Meandering from Opinion Polls to the State of the Economy

The latest Yomiuri poll (May 17-18) has come out, as the excitement whipped up by the Late-Term Elderly Medical Care Insurance rollout and the gasoline tax reinstatement has worn off and talk has turned to trimming some of its rougher edges or reverting to the old insurance system (the opposition); [ and divvying the gas money between roads and other objectives or simply getting rid of the surcharge and making up the difference for local governments from the national budget (the opposition)]. The results show a slow but steady slide in public esteem for the Fukuda administration and the LDP-Komeito coalition. The changes appear to be within or near the margin of error. But when all the numbers trend in the same direction, they’re harder to explain away.

If you really want to get a good view of the Fukuda/coalition dip-DPJ lift right after the gasoline tax surcharge reinstatement and the subsequent fallback, there’s no better place to go than the weekly Fuji TV polls and compare the numbers for the past four weeks. I hope you’re not a coalition fan though, because the DPJ has consistently been beating the LDP-DPJ numbers for some time. The silver lining if you are is that your trend-lines appear to have steadied since February despite taking more major hits in the form of the insurance rollout and the gasoline tax surcharge reinstatement.

Where diplomacy is concerned, the poll also confirms that Hu Jintao’s visit had little effect on the Japanese public—no surprise, what with no visible breakthrough on the East China Sea gas fields and the 2millon-dollar price tag on the giant panda “gifts (according to unofficial reports—neither side has actually mentioned it). Looking ahead, beyond the polls, there’s no downside for the Prime Minister in the July G-8 Summit in Hokkaido. On the other hand, there’s not much upside to what has become over the years something of a giant photo-op. (Are they going to dress up in kimonos? Better than the clown suits that Jiang Zeming gave his colleagues. ) The Fukuda administration and the ruling coalition should not expect anything more than a small, momentary blip in popularity. Be thankful, instead, that botching the LTEMCI rollout and reinstating the unpopular gas tax surcharge have done limited damage.

Which brings us to the real political issue—the fiscal reform package, coming to us this autumn. You know that I have grave doubts on this about both sides. Now Ross approaches this from a different angle. He believes that an LDP loss, any LDP loss, will break the stranglehold that vested interests have on policy making, and that Ichiro Ozawa knows this and is willing to do anything to make it happen. The trillion-yen price tags on the DPJ promises are worth it.

I dunno, Ross, here’s hoping: You’re right, I’m wrong.

PS: And yes, there is the economy. There’s precious little that the Fukuda administration can do on its own in the event of a serious economic downturn. And if it’s really serious about fiscal reform , it will come up with a big tax bill. But I don’t think that the Japanese public trusts the DPJ with economic management either.

Prefectural Chapters Don’t Want to Fight Next Election under Fukuda

Prime Minister Fukuda’s poll numbers continue to slip. Now, the LDP party faithful are also turning against its leader.

Asahi asked the prefectural chapters of the LDP and DPJ to see if they wanted to go into the next House of Representatives election under Yasuo Fukuda and Ichiro Ozawa respectively. In the LDP, only 12 chapters were willing to go with Mr. Fukuda, while 22 chapters wanted a replacement. By contrast, Mr. Ozawa had the support of 44 DPJ chapters.

And it looks even worse for Mr. Fukuda when you go into more detail. Of the ten prefectures with the largest populations, seven* want to go with someone new, while only two** want Mr. Fukuda to stay. (Tokyo, the most populous prefecture, chose neither of the two options.) Between No.11-20, it was six to two against him. Smaller, more rural prefectures are showing loyalty.

A Prime Minister used to have the choice between picking up his marbles and calling it a day, or dissolving the HR and calling a general election. But Mr. Fukuda is not a faction chief, so he has nothing to pick up. His options are limited.

* Osaka, Kanagawa, Aichi, Saitama, Hyogo, Fukuoka, Shizuoka
** Hokkaido, Chiba

If I Still Had Any Doubts that the Fukuda Administration Was a Goner…

The May 8 Fuji TV weekly poll says it all: support for the Fukuda Cabinet further fell (if only within the margin of error) to 20.2% (from 22.2% in the May 1, post-gasoline tax hike poll). The same poll said that only 17.8% (15.4%) wanted to vote for an LDP candidate in the next House of Representatives election, while 32.6% (33.0%) chose the DPJ. None of the Above has slipped slightly, but is still clear of its two major rivals at 42.6% (45.4%).

The polls show that Hu Jintao’s visit did little to improve the Mr. Fukuda’s political fortunes. No wonder, since not-positives outnumbered positives by 59.8% to 26.0% on the Prime Minister’s policies toward China. Images of China’s harsh response to the demonstrations in Tibet and along the Olympics torch relay certainly did not help, nor did the inability to come up with something beyond still more words on the East China gas fields and the sputtering investigation into the source of the poisoned Chinese dumpling. It’s hard to see any major gains to be had from the largely ceremonial G-8 get-together in Hokkaido two months from now, nor any other foreign policy coups for that matter. If anything, the expiration of the law that authorizes JSDF operations in Iraq—opposed by a healthy majority of the Japanese public throughout its lifetime—in 2009 July will throw the next regular Diet into a frenzy if John McCain wins the U.S. Presidential race.

On the two touchstone issues, there is no doubt that the reinstated gasoline tax surcharge remains as unpopular as ever, though no new polling was done on the subject this time. But only 20.4% want the Late-Term Elderly Medical Care Insurance system be abolished; a full 71.0% seek improvements in its operation or its outright revision. Couple this with the persistent gap between the highly negative response to the reinstatement of the surcharge and the positive response when it is coupled with the turnover of the revenue to the general budget, and add the inability of the DPJ to pull in the great undecided to its side: I cannot escape the feeling that it is the sense of incompetence and indifference, as opposed to the policies themselves, that is the main cause of the precipitous fall in the support for the Fukuda administration and the LDP.

To gain a healthy majority, if not to maintain a supermajority, in the next HR general elections, the ruling coalition must regain the trust of the public on this front. It must play to win, not, mind you, not to lose. With no dramatic diplomatic coups in sight, the only viable candidate for that hallmark achievement appears to be a credible reform package of the entire fiscal profile, expenditures as well as taxes and debt, come fall. Mr. Fukuda, however, does not appear to have the intellectual breadth, his own or borrowed; support within the LDP to override all the entrenched vested interests; or the outreach to the public to go over the heads of fifth columns. Even now, his piecemeal approach to administrative and fiscal reform does not give the lie to this rather dismal evaluation.

In this negative phase of the political game, the deck is stacked in favored fo eh opposition, more specifically, the DPJ. Barring unforeseen circumstances, it is difficult for the DPJ to slip seriously—all it has to do is support popular causes and oppose unpopular ones. At this point, “Don’t play to win, play not to lose” seems to be highly viable election strategy for it.

Given this situation, it must be tempting to the LDP to string the public along with the Fukuda administration along as far as it can go, then dump it and go on to the next HR general election under the next “Most Popular” LDP Representative, full steam ahead, before the charm wears off the new Prime Minister.

The other option, of course, is the political Big Bang. There is any number of intra- and cross-party power breakfast, lunches, and dinners going on, which gives an air of credibility to rumors of a major realignment. But beyond sheer inertia, the main obstacle to such an outcome is the lack of political incentive on the part of the DPJ. The DPJ has healthy plurality in the House of Councilors. With a relatively small number of other opposition members on its side there, it will not need an HR supermajority to get its way, policy-wise. Thus, whatever the outcome of the next HR general election, I can understand some splintering but no obviously serious cracks, as a few Representatives here and there, from the major parties as well as micros and the covey of the unaligned court and are courted from the two major players.

All this will lead to an outcome that will leave an inconclusive, even more fluid political situation in place and, more troubling, the major policy issues unresolved. Let’s hope that I’m proven wrong, in a good way.

Gasoline Taxes Potpourri

For the first quarter of 2008, the average state gasoline tax is 28.6 cents per gallon, plus 18.4 cents per gallon federal tax making the total 47 cents per gallon. For diesel, the average state tax is 29.2 cents per gallon plus an additional 24.4 cents per gallon federal tax making the total 53.6 cents per gallon.
—from Motor Fuel Taxes, American Petroleum Institute

Let's do the conversion math. For gasoline, that’s a 4.86 cent/liter federal tax and a 7.56 cent/liter state tax for 12.42 cents in federal and state taxes per liter. For diesel oil, the respective figures are 6.45 cents, 7.71 cents, and 14.16 cents.

The so-called gasoline tax in Japan consists of a 5.2 yen/liter local road tax and 48.6 yen/liter volatile oil tax, for a total of 53.8 yen/liter. The “temporary” surcharge accounts for 24.3, 0.8, and 23.8 yen/liter, respectively. The light oil (i.e. diesel fuel) tax 32.1 yen/liter, of which 17.1 yen is the “temporary” surcharge.

There’s more:

You know, I think Americans would be shocked to learn that only about 60 percent of the gas tax money that they pay today actually goes into highway and bridge construction. Much of it goes in many, many other areas.
—2007 August 17; Mary Peters, U.S. Secretary of Transportation

By contrast, most of the Japanese gasoline tax money goes into the construction and maintenance of roads, including some very expensive bridges. Yes, the U.S. highway system may be going to pot. Yes, compensating Japanese landowners is expensive, and so is building against earthquakes. Still, I see a good prima facie case that Japanese roads can do without a lot of that money without risking pothole epidemics and collapsing bridges. In fact, as an American journalist said to me the other day, a few potholes here and there would have the salutary effects of showing that we weren’t overspending.

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Last month, 42 of the 47 prefectural governors in Japan told Yomiuri that they wanted to maintain the surcharge, and none of the other five opposed it outright. With regard to putting the money into the general funds, only four governors supported it. On the other hand, only 11 opposed it outright. Most of them must be waiting to see how much of the money would continue to be shoveled back into their coffers and local economies before they break either way. The Tokyo governor is a strong supporter of the status quo; wealthy Tokyo has no problems in meeting the local copayment requirements for national road project and still have more than enough money to finance the rest of its own projects—roads or otherwise. Better then, to have the money spent on Tokyo roads rather than run the risk of the national government taking a bigger cut or shunting the money to the poorer prefectures. Those poorer prefectures on the other hand would benefit from string-free cash handouts as long as they didn’t lose money in the bargain.

These governors aren’t that far off from their constituents as the two-, three-to-one public opinion polls running against the maintenance of the status quo would seem to indicate. This Asahi poll shows that the 67% who supported putting the revenue into the general funds were split 44%-44% on the reinstatement of the surcharge in the event of the handover to the general funds. That’s 29% of the sample group, much higher than the 22% who support the reinstatement of the surcharge outright. Now there may be some overlap between the two numbers (I have no way of knowing unless I see the full survey results), but the results do suggest that the Japanese public by and large would support the retention of the surcharge if the government coupled it with a major overhaul of the road development program and its implementation process and a revision of the program’s place in the list of national priorities. Can the Fukuda administration and the ruling coalition do it this fall? I am increasingly skeptical.

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If the Fukuda administration wants to put the road money in the general funds come fiscal year 2009, why doesn’t it just drop the 10-year extension of the pending special bill and use the money in the FY2008 road budget, which has already been passed?

Because the special bill is needed to extend special rates for subsidies that the national government doles out to local governments. Without it, the subsidy rates would revert to the lower “normal” rates, throwing local budgets out of whack.

Opinion Polls—Missing in Action

There’s an article in today’s hardcopy Yomiuri, page four, on the response from the Prime Minister regarding the most recent drop in the opinion polls. It’s very, very brief, so I’m going to translate it in its entirety.

Sudden Drop in Support “[I Accept It] with Great Seriousness”

On the night of [May] 2nd, Prime Minister stated regarding the sudden drop in support for the Fukuda Cabinet in all the media opinion polls, “I am accepting them with great seriousness.” He responded to a question from reporters at the Prime Minister’s Office. According to the Kyodo News survey (taken on May 1-2), support dropped into the teens, at 19.8%; with the Asahi Shinbun survey (taken on April 30-May 1) at 20% and the Nikkei, Inc. survey (same), they fell between 5-8% from their previous surveys.

So you tell me what’s wrong with this picture. Need a hint? Mainichi also took a May 1-2 poll, putting the Fukuda Cabinet at 18%.

Yamaguchi By-Election Revisited, with Some of Its Implications

Hideo Hiraoka, the DPJ candidate, wins the House of Representatives by-election for the Yamaguchi Prefecture 2nd District seat by a hefty margin of 116,348 to 94,404. A DPJ victory had been the closest thing to a sure thing, with the virtual incumbency of Mr. Hiraoka and the absence of a Communist Party candidate figuring substantially in the outcome. But the unusually high turnout for a by-election (69.00% of eligible voters, was only lower 3.45% lower than the 72.45% district turnout in the 2005 general election) and the results from the exit polls show that the troubled rollout of the Late-Term Elderly Medical Care Insurance System, as well as the road money issues, took a heavy toll on the LDP-New Komeito candidate*.

A robust and appealing fiscal reform package is the only thing that can raise Prime Minister Fukuda’s political fortunes. But that requires going up against powerful vested interests, a daunting task for a politically weakened, consensus-oriented Prime Minister.

Within the media, even the reliably pro-establishment Yomiuri appears to be slipping off the Fukuda bandwagon. Reports indicate that the DPJ will ease up a bit to ensure that the Fukuda administration will die a slow and politically painful death. This all means that the mainstream media will give increased coverage to speculation over the succession within the LDP, as the prospects of a snap election under Mr. Fukuda fades away.

Three related items: First, the Late-Term Elderly Medical Care Insurance System requires the insured to pay roughly 10% of the costs, with 40% coming from other public pension systems and 50% from government revenues. The DPJ wants to eliminate the 10% insurance premium, and its representatives are repeating their by now-familiar mantra that the money will come out of unidentified savings on public expenditures. Now I beg to differ with the DPJ’s suggestion that there is enough government fat to finance its multitrillion commitment to pensioners present and future, small-scale farmers, car drivers, and now the late-term elderly, and hold the line on the ever-growing public debt. But it is tempting to see what it could do, relatively free of the pork-barrel vested interests that encrust the political establishment, on the cost-cutting side.

Second, the substantial boost that the Communist party gave to the DPJ candidate by staying out highlights the importance of the interaction between discontent and the opposition parties. Here, microparties, as well as to a lesser extent the Communist Party, face a dilemma. They all want to topple the LDP (since they remember what happened to the Socialists the last time they slept with the enemy), but they don’t want to be the schmear on the bagel when the DPJ pulls up to the breakfast table. Sure, the DPJ will yield a few districts here and there to Socialist and other fellow traveler-party candidates. But that is no assurance that any of them will be the first past the stile. More importantly, a wholesale shift of the discontents to the DPJ—and that’s what it’s going to look like if and when the DPJ wins an HR general election—means that the little guys will be starved for votes in the (mostly) multi-prefecture proportional districts, where party-name write-in plays a crucial role. When elephants…

Third, if it was obvious even to an outsider like me that Mr. Yamamoto was a goner from the git-go, why did the LDP fail to portray him as the underdog, something which would have taken the pressure off the two national issues in the event of the loss? This may be a small matter compared to the botched Insurance System rollout, but it adds to the impression of a political party without a game plan. After all, it did become an national event.

* It is impossible to make an estimate of the relative effects of the various factors without access to the full results of exit polls. It is pretty clear that Representative-elect Hiraoka got a big push from the discontent vote and that the absence of a Communist Party candidate helped him substantially in that respect. The hardcopy Yomiuri does give us some figures from its exit poll covering 1,607 voters at 48 voting stations. Here’s what it has to say:

The most important issue in the election: public pensions and medical care 38%; the economy 15%; gasoline taxes and other matters regarding the road money 14%; (income and regional?) disparities 6%; Prices 3%; national security and diplomacy 3%; no answer 21%. Of the 38% who answered public pensions and medical care, 67% voted for Mr. Hiraoka, while 29% voted for Shigetaro Yamamoto, the LDP-New Komeito candidate.

Party preferences: LDP - 25% Hiraoka, 72% Yamamoto; New Komeito - about 20% Hiraoka, under 80% Yamamoto; Communist Party - over 90% Hiraoka; no preference – Hiraoka 73%, Yamamoto 21%. The report mentions that in the 2005 election, a little under 60% of Communist supporters voted for the Communist candidate, while the LDP and DPJ candidates each got about 20% of their votes.

See AP Spin the Latest Yasukuni Visit

It’s on the CNN, WaPo, and NYT (but not the BBC) websites under the headline Japanese Officials Visit War Shrine. According to the AP wire:

Eight top government officials and more than 150 lawmakers prayed at the Yasukuni Shrine, which reveres 2.5 million war dead, including executed war criminals, said organizer Yoshinobu Shimamura.

It goes on to say that:

The pilgrimage marking an annual spring festival comes at a sensitive time -- the day after the South Korean president's visit and only two weeks before a planned trip by the Chinese president. Provocative, no?

The AP report does tell you that “Prime Minister Fukuda did not attend”. What it doesn’t tell you, though, is that Chief Cabinet Secretary Nobutaka Machimura, Foreign Minister Masahiko Koumura, and Shigeru Ishiba also didn’t go. Call them the Big Four--the Chinese authorities told the Koizumi administration that if they stayed away, it would be okay with them (if not with the South Koreans). Prime Minister Koizumi wouldn’t listen, but the Abe administration did. So has the Fukuda administration, but that’s no surprise; there aren’t that many people in the LDP to Mr. Fukuda’s left, as far as foreign relations is concerned. No. The real news is that no Cabinet member joined the Yasukuni-fest, and how often do you see that happen?

The Fukuda administration is floundering, and the last thing that it needed was a distraction involving China and South Korea. Unable to do anything about the timing of the spring rites or the two heads-of-state visits aand the Japan leg of the Olympic torch run, Mr. Fukuda must have made sure that no one in his Cabinet － mostly handpicked by Mr. Abe － would step out of line. That's the real story.

And I had thought that wire services were above that sort of trick. Fooled me once.