Sunday, November 30, 2014

On the CCP Control of the PLA

 Johannes Feige has an article in The Diplomat entitled “How Well Does China Control Its Military?” in which he details incidents that “[suggest] weakness in coordination between the center and the military, and [help] explain numerous episodes where the civilian apparatus seemed oblivious to the PLA’s activities and confused about officers’ statements that made the PLA appear ‘rogue.’” Add to Feige’s list the extended PLA incursion into the Indian side of the disputed border while Xi Jinping was visiting Narendra Modi, and it becomes hard to shake off the feeling that you have an unsavory choice between a party leadership a) eager to use physical intimidation as part of their top-level diplomacy toolkit or b) unable to rein in a military that does not hesitate to undermine and embarrass it in order to pursue its own somewhat ill-defined agenda.

One thing that cannot be too emphasized is that the notion that Xi Jinping’s brief tour as a political official in the PLA is enough to provide him with a significant influence there is nonsense. Anyone with experience in the stove-piped public sectors of East Asia will know that officials seconded from an outside institution remains an outsider no matter how well received on a personal basis. The people Xi became acquainted with in the PLA and has remained in touch with—not to mention any other princeling officers that he knew from an earlier stage in life—will certainly help him navigate his way around there as required. But the prerogatives of the institution will prevail every time.

Friday, November 28, 2014

Hey, My “No Coral Poaching Ships” Prediction Came True

Not, mind you, completely in the way that I predicted, according to this Mainichi report. But the resourcefulness demonstrated by the Japanese Coast Guard is heartwarming, so I okay with that.

Thursday, November 27, 2014

How You Too Can Predict the Outcome of a Snap Election

In a tweet the other day regarding the upcoming snap election, I took the over in a hypothetical over-under of a 30-seat loss for the LDP-Komeito coalition and also claimed that the current Abe cabinet would remain intact. It is the only one of my tweets that has been retweeted and favorite multiple times. I have also received more than the usual one or two phone calls from media acquaintances around the event. So, as a public service, I am laying out how I arrived at those predictions. The first method is easy to replicate and should be applicable to other national elections, while the second is a point that is also easily applicable albeit to the limited cases where a similar situation prevails.

When the LDP leaked suggestions of a 30-seat decline as a win-loss threshold, I became certain that it had good reason to believe that it was setting a low but plausible bar for itself. The LDP commissions private polls that I am inclined to believe for reasons that I will skip are more accurate than the media polls, which were still showing the ruling coalition (more specifically LDP) with a huge lead over the opposition parties. The LDP leadership also has a strong incentive to lowball its chances within plausible limits.

Would the LDP lead endure? The question could be cast in a more operative mode as follows: Are there uncertainties that could generate a major downside for the ruling coalition or major upside for the opposition? On the first point, the cabinet had already taken its lumps with the political financing scandals and the surprise technical recession, yet the post-announcement polls continued to show the LDP with what, obvious even to my non-abacus-trained eye, was a roughly 2.5-to1, 3-to-1 lead over its main rival DPJ. Barring an unlikely scandal enveloping the prime minister himself or mishandling of a very low-probability major disaster, there does not seem to be a meaningful downside risk to the ruling coalition’s political situation.

The DPJ is led by the weepy Banri Kaieda, whose most significant attribute appears to be an inability to be forceful enough to create internal enemies (a talent not to be underestimated BYW in a party that spans ideologies and policy preferences that are at least as disparate as those of the LDP but has yet to develop a similar culture of cohesion). As for the other meaningful opposition parties (as in plausible members of a coalition consisting largely of current opposition parties or their members), the Japan Innovation Party has run out of steam (Hashimoto slipping into irrelevance while internal differences seethe just beneath the surface), and the People’s Life Party is on life support (Ichiro Ozawa appears to have reached the end of his long string of construction-destruction cycles), and Your Party is over (literally). And don’t even ask me about the Party (of eighty-somethings) for Future Generations, where Shintaro Ishihara passed his consume-by date when he split with Hashimoto. Tell me where is the potential for upside?

So, with prospects so bleak for the opposition and the ruling coalition riding high, why not predict a gain for the LDP? After all, the LDP is doing better and the DPJ is doing worse in at least one post-announcement newspaper poll than they did at a similar pre-2012 election poll by that newspaper, even as support for the other opposition parties not named the Japan Communist Party has dwindled.

Not so fast. Although there are no major downsides/upsides to the ruling coalition/opposition parties of significance, the media is naturally biased towards making a national election more of a contest. Thus, commentary and even straight reporting will tilt in favor of the opposition in comparison to a situation where the outcome is more in doubt. The generally risk-averse public will respond positively to such media inducements in a desire to rein in an over-euphoric post-victory administration. Remember, the public is somewhat misaligned with the prime minister’s policy preferences. The candidacy coordination between the opposition parties (aided ironically by the inability of the DPJ to field candidates across-the-board) will also help the opposition in the single-seat races. Of course the unattractiveness of the alternatives will drive much of the discontented independent voters away from the voting stations rather than towards opposition. Still, there’s enough uncertainty here to take comfort in the 30-seat margin. I don’t like to “lose,” any more than the LDP prognosticators do.

To sum it up, take note of the LDP’s initial bid, since it is likely to be low-balling its chances. Then keep an eye on public polling trends, go over the potential major upside/downside risks for the relevant parties. Finally, look to the natural media bias, which, barring the existence of another overwhelmingly attractive narrative, favors the underdog (remember, the LDP was widely believed to be headed for disaster in 2006 when Prime Minister Koizumi dissolved the lower house for the postal reform election). If you follow this process, you will almost surely arrive at the same conclusion as I do. And I think that this process is applicable, in toto or in part, to all Japanese national elections.

There. That essentially explains what I did, some of it not so deliberately, and some of it may seem clear only in hindsight. But I do think that it is a process that can be easily used by anyone with knowledge of the political process in Japan.

As for my call on retaining the entire cabinet, why would he retain the two other cabinet members implicated in political financing scandals, have them pass through the misogi by election, then dismiss them? For that matter, what would be the justification of changing any ministers without cause only three months after the reshuffle? Case over.

There is one caveat there. If a cabinet minister fails to get reelected, he’s gone. Technically, (s)he can be retained, but as a practical matter, (s)he’s a goner. But that was too much to put in a single tweet.

Wednesday, November 26, 2014

Is That Collusion/Stupidity I See in Your Article, Asahi Shimbun, Or Have You Gone Over to the Dark Side?

I’m still wondering what Asahi Shimbun was thinking when it admitted after all these years that the key testimony on which the sexual slavery narrative for the Korean comfort women relied was a complete fabrication. It was so utterly unprepared for the all too predictable backlash that I wondered, could it have made a secret pact with the Devil to assist the Abe administration and its nationalist supporters in return for some unspeakably vile favor, say, a 20% increase in ad revenue? Now, as the snap election approaches, the Nov. 26 Asahi carries an article entitled “Hourly Part-time Wages in Major Cities Highest Ever: 961 Yen as Shortage of Workers Worsens (大都市バイトの時給、過去最高 人手不足進み961円)” that only deepens my suspicions.

So how much has this raised part-time wages? According to the report, the average part-time wage in the three major urban centers (Metropolitan Tokyo and its environs, Tokai (Nagoya et al) and Kansai (Osaka, Kobe, Kyoto, etc.)) in October reached 961 Yen, up 8 Yen year-on-year, surpassing the previous high of 959 Yen, in 2006. A little arithmetic will tell you that this represents a 0.8% increase year-on-year—yes, a year in which the Yen went from 97.8214 to 108.0614 to the US Dollar, a 9.5% drop in value and a consumption tax hike was introduced that imposed a 3% surcharge on most consumption items except rent and tuition. A part-time worker should feel lucky if the 8 Yen rise covers half the increase in expenses.

There’s more. The article goes on to say, “Sales and services at 944 Yen, up three from same month of previous year. Job offers were brisk for staffing events for year’s end/new year’s sales competition. Likewise, hourly wages for restaurants and other food establishments were also up 10, at 937. These job offers comprised almost half of the total, pushing up the overall figure.” Now, the average wage at food establishments are up 1.0% year-on-year, so you could argue that this is giving the overall figure a nudge. But sales and services clocked in at a measly 0.3%. How can anyone say with a straight face that these two together (the article is pretty unambiguous on this point) pushed up the total? Given the timing so close to the snap election and the administration’s emphasis on job creation as a key achievement of Abenomics, it’s not unfair to wonder if id the Asahi reporter who wrote this article and his editor have gone into the tank for Mr. Abe and his minions.

Sadly (speaking as a political analyst), there are two, more plausible, more mundane explanations for this blatantly misleading article. First, the relationship between the economic department of a mainstream daily and its subject—businesses—is less adversarial than that the more complicated relationships between the political department and its subject—politicians—or the social scene department and its subjects—the police, prosecutors’ office, criminals, etc.—so it would be receptive to the positive spin put on the information by the news source, major job information provider Recruit Jobs, which has a vested interest in drumming up demand to place adds in its publications and on its website. Second, the reporter and editor were so stupid that they swallowed the Recruit Jobs bait hook, line and sinker. But I’m not sure which explanation I find more disturbing.

Public Communication: Psst, MOFA, You Have a Problem (or Two, or…)

Foreign Policy claims in a report entitled “Who Has Contributed What in the Coalition Against the Islamic State?” that as of Nov. 11, 2014, Japan had “given more than $6 million in humanitarian aid to northern Iraq.” Given Japan’s policy preference for checkbook-over boots on the ground diplomacy, this looked like an extraordinarily low-ball figure. So I went to the MOFA website and, lo and behold, a September 19 press release entitled “Emergency Grant Aid in response to IDPs in Iraq and Syrian Refugees in Lebanon affected by the ISIL offensive” states that “the Government of Japan decided to extend Emergency Grant Aid of 22.70 million US dollars (approximately 2.2 billion Japanese yen) to Iraq and Lebanon, in order to provide emergency shelters and relief items etc. for these IDPs and refugees,” bringing the “total amount of additional contribution as countermeasures against ISIL” to “25.50 million US dollars, including other assistance which has already set (sic).” Granted, that still may not be a lot of money as far as the magnitude of the conflict and its impact is concerned, but it matches up quite well to the numbers given for other OECD member countries, and there are limits to the amount of cash that the efforts can absorb.

I don’t know where Foreign Policy gets its numbers from, but I don’t really blame them for this particular oversight. The MOFA webpage with the relevant information can only be reached from four directions; 1) the Japanese-language webpages for counter-terrorism, 2) the Japanese-language webpages for public communications, 3) the Japanese-language webpages for Iraq or Syria, or 4) the English-language webpage for “Crime.” Essentially, MOFA is doing a very poor job of taking online steps to get its contributions recognized by the overseas public.

Also troubling is the fact that no one at MOFA seems to be paying attention to Foreign Policy. If they had, someone would have noticed, or at least checked to see that it had got the facts right. FP may not be Foreign Affairs, and it does carry some fluff pieces from time to time, but it has excellent writers such as Stephen Walt and, more importantly, does carry articles on Japan from time to time and has a wide readership.

Tuesday, November 25, 2014

Public Communication: Rudy Giuliani and Michael Eric Dyson and Ferguson

Giuliani: “White police officers wouldn’t be there,” Giuliani said, “if you weren’t killing each other.”
Translation: “I’m not running for office anymore so I can say whatever I want to, whatever way I want.”

Dyson: “Black people who kill black people go to jail…White people who are policemen who kill black people do not go to jail.”
No need for a translation, that was a zinger… however…

 Dyson: “…false equivalency…”

That was not called for. No need to remind people that you’re a Georgetown professor. No need to educate the masses, no need for annotation, just let your statement speak for itself. You’re on MSNBC, Dyson, you have home advantage, take it easy.

For the full story, go here.

Tentative Proposal for Species-Specific Normative Homicide Rates

Robert Dujarric speaks out in the comments section here on behalf of mosquitos, the greater killer of humans according to Bill Gates, whose per capita human-kill rate should be much, much lower than that of humans themselves. In fact, the dengue fever-carrying mosquitos in Yoyogi Park and elsewhere in the greenery of metropolitan Tokyo have yet to claim any lives. Still, suggesting that we should exterminate humans instead of mosquitos does not quite make sense to me. What would be an appropriate measure for an animal’s right to kill humans? What would Peter Singer say?

I nominate a species’ biological footprint for that role. The key assumption here is that each species is evolved at any moment to maximize evolutionary efficiency (assuming that there is such a term) with regard to killing humans. Any more or less homicide on the part of a species and that species is taking more or fewer human lives than is optimal for life in it its entirety from a dynamic perspective.

One way to measure that would be to divide the sum of the products of the weight and metabolic rate of each animal in a given species and divide that by the sum of the products of the weight and metabolic rate of every animal. The resultant quotient expressed as a percentage is that species’ normative homicide rate. Any deviation from that rate, and it means that the species is hitting above or below its weight, so to speak. Of course, only an omniscient God can count and measure each single animal, so we’ll have to make do largely with samples, approximations and averages. Still, this appears to be conceptually sound.

Now, this may lead to what some may consider to be inequities at more granular levels. For instance, Americans would be rewarded for their obesity with a higher normative kill rate. Indeed, I can see the NRA taking up my argument and running with it. They didn’t say obesity is deadly for no reason. Perhaps that is good reason to keep things at the species level.

Peter Singer would probably put forward a different objection, namely that my method does not take into consideration the relative lack of “rationality, autonomy, and self-consciousness” on the part of mosquitos compared to humans. True, but neither do lions. By that measure, we would be justified in killing off all lions in order to eliminate what is now a very high death toll on the more rational, autonomous and self-conscious humans.

Peter Singer, the ball is in your court. 

Monday, November 24, 2014

Are Humans Really Deadlier than Lions?

Bill Gates seems to think so, since he puts humans just behind the mosquito as the second deadliest animal in terms of killing humans, to the tune of 475,000 annually, in contrast to lions, who have only100 kills to their name. My take? It depends. The World Lion Day website offers an estimate of a 25-30,000 lion population today. That’s roughly 3~4 human lion-deaths per year per 1,000 lions. By comparison, with approximately 7 billion human beings on this planet, there are only 0.7 human human-death per year per 1,000 humans. A lion in your neighborhood is vastly more dangerous than your run-of-the-mill hoodlum. Think about that the next time you call on the world to help save the lion.

Now you may say that my point is meaningless for now, since there are so few lions left. That may be true for people like you and me, whose only opportunity to come face-to-face with a wild lion will be come in a locked SUV. But try telling that to the people who live there. If we are going to ask them to bear the risk of sharing their habitat with lions to the benefit of our conservation goals, then they should be compensated accordingly.

Asahi Poll Also Looks Unpromising for Opposition

This is an Asahi poll, but it’s nevertheless remarkable how the Abe administration can get such low grades on policy issues and the responders are still breaking 37% and 3% for the LDP and Komeito and only 30%, 11%, 6%, 5%, 2%, 2% and 1% for NA/don’t know, DPJ, Innovation Party, Communist Party, others, People's Life Party and Social Democrats respectively when it comes to voter intent for the regional proportional district votes. If we assume that a) the regional proportional seats are distributed to the parties in proportion to the votes cast, b) the actual votes come out in the same proportions as expressed intent, and c) all the NA/don’t knows also vote but break two to one for the opposition parties, the proportional seats will be split evenly 90:90 between the ruling coalition. That means that the opposition would have to take 86 of the 295 single-seat districts to deny the ruling coalition a 300-seat majority or 90 to take 30 seats away from the ruling coalition, pushing them below the low bar as initially whispered by LDP members. The 90:90 split looks possible, but barring some dramatic unforeseen event, such as a serious scandal swallowing up the prime minister, the 86/90 single-seat threshold looks significantly less plausible.

I’ll try not to blog about the election for the time being unless there are serious changes in my outlook/it looks like I’ll be terribly wrong.

What Are the Chances of a Mini-Deal in the US(P5+1)/Iran Talks?

The notion around the final day of talks between the P5+1 and Iran over the latter’s nuclear program is that there will be a 3-month extension that is most likely to peter out as hardliners in the US and Iran increase their domestic influence and compromise becomes harder to achieve. Now, I’m no nuclear expert, but given such prospects, wouldn’t it be in the interests of both the Obama and Rouhani administration to maintain momentum and make it harder for their domestic opponents to force them to pull back from an eventual final deal by baking in some mutual gains in a mini-deal? I would have certainly been working at that over, say, the last couple of days before the deadline, instead of trying to bridge all the differences in a last-ditch effort to reach a full-fledged deal. 

Sunday, November 23, 2014

Media Desperation for Eyeballs in the “Whatever” Election

To show you the depths that the Japanese media will go to in order to drum up interest for the December 14 “Whatever” Election, Sankei Shimbun (yes, that Sankei Shimbun) website has posted an article entitled “DPJ Posts Major Gains, LDP-Komeito Secures Absolute Majority; Party-by-Party Forecast on Seats Won.” The whole article is based on [the thoughts of] a “political analyst” named Yoshiya Kobayashi, whose predictions are based on the assumption that the DPJ will win 50-55 seats in the regional proportional districts against 59-66 for the LDP. Yes, the same DPJ that polled 14-41 to the LDP in the latest Yomiuri poll for regional proportional district voting preferences.

I’d take Rick Santorum in 2016 over that happening.

Fred Kaplan Obviously Did Not Take to Physics in High School

“In its natural state, uranium has 238 atoms and is thus called U-238. Fissile uranium—the stuff that can make an atom bomb—has 235; therefore, it’s called U-235. The process of enrichment is done with gas centrifuges, which, by spinning very rapidly, separate the heavier U-238 isotopes from the lighter U-235 ones.

“About 0.7 percent of U-238 is naturally fissile.”

—excerpt from footnote to “Jaw-Jaw With Iran” on Slate website.

I know, it’s not hard to figure out what he means; in fact, I might have missed the errors altogether if I had been just scanning the article. But they are so elementary, and clearly not typos, that they do make me wonder, what else does the guy not know?

Good News and Bad News for People Who Dislike the Abe Administration

…and there are many of those people…

But first, the good news: A Yomiuri poll (Nov. 20-21) shows a drop in support for the Abe cabinet to 49% from 55% just a couple of weeks ago (Nov. 7-9); a shift that can only be accounted for by Abe’s call for a snap election—a move largely criticized in the mainstream media, including in my estimate NHK commentators, which appears to be making an extra effort to make the event seem relevant to actual issues such as nuclear start-ups (actually, now the host local governments and the communities that they represent) and collective self-defense (Komeito, Komeito, Komeito…sheesh).

The bad news: Intentions for proportional representation vote came out 41% LDP, 28% undecided, 14% DPJ, 6% Komeito, 5% Japan Innovation Party (JIP? The party formerly known as the Japan Restoration Party), 3% Communist Party…

…you get the picture. If actual voting behavior ends up proportionally anything like these numbers except for Komeito, which will at least double up, likely more given what is sure to be a low turnout, then the LDP will clean up in the single-seat districts and dominate the regionals, just like in 2012. 

Saturday, November 22, 2014

Friday, November 21, 2014

Do Those Old Japan Hands Retain Any Relevance in Washington?

I thought so.

Old soldiers don’t die; their cold, cold hands hang on desperately to their retainer fees—or more or less so someone (who does not rely on retainer fees) told me.

Crib Sheet for CNBC Asia Interview on Upcoming Snap Election

- Why is PM Abe likely to dissolve parliament tomorrow?
Because he can. The opposition is in disarray, the Abe administration’s poll numbers are still reasonably good, and the prime minister can go a long ways in putting the political financing scandals behind because general elections have an ablutionary effect on miscreants—it’s called “misogi.” And postponing the consumption tax hike gives him a plausible excuse.

- Impact of the tax delay on domestic politics & economy?
Each percentage point accounts for roughly 2 trillion yen, so an 18 month delay of a 2 percentage point hike means a loss of 6 trillion yen, not counting exceptions for necessities. That’s a lot of money for me to lose, but when you’re 900 trillion yen in hock, 6 trillion does not move the needle much one way or the other. Politically, it does give the opposition a hook for negative campaigning, since they could argue that the postponement is a confession that Abenomics has had two years to work its magic —three if you remember that the second hike is supposed to come into force not now, but almost a year from now—and guess what, it doesn’t.

- Would Abe & his party survive this snap elections?
Depends on what you mean by “survive.” The majority that Mr. Abe talked about as a threshold, that’s not a low bar, that’s digging a narrow ditch in the ground and saying that he’d resign if he failed to cross it. The low bar is what the Liberal Democrats thought they’d set when they talked about a 30 seat loss max. It became a little iffier with the bad 3rd quarter figures—a technical recession?!?—but I still think they’ll clear it, since independents are more likely to abstain than to vote for an opposition in disarray.

- Outlook for the economy, with recent GDP numbers confirming that the country is in a technical recession?
You are asking a political analyst? Okay, let me give it a try. All the main components of GDP did poorly in the third quarter. The employment and investment outlook as well as one-off effects wearing off likely with regard to inventories and surely with regard to consumption, it’s hard to see a third straight quarter in the negative. After that, there’s a lot of uncertainty about China and Europe, and even South Korea—and these things matter to the Japanese economy. But in the long-run, the third arrow of Abenomics must be transformative. Now, it’s pointing in the right direction, but I’m an open-minded skeptic about its flight arc.

Click here if you want to know why I don’t appear on TV more often.

Thursday, November 20, 2014

Crib Sheet for Radio Interview on Upcoming Snap Election

Yesterday on China Radio International (yes, they still call on me), largely as scripted, except for a question about Okinawa, where I made the point (I think) that it was a local issue as far as the general election was concerned and that its outcome was largely drowned out by the uproar over the prospects of the latter, as I mentioned in this post.

1. Is it a surprise to you that Abe called for an early election? (There has been speculations that he might do so after newly released figures show Japan's economy slipped into recession in the third quarter)

It depends which me that you are talking to—a month ago? Two weeks ago? I think that the first whispers were a bluff to push the opposition away from the political financing scandals back to the business at hand in the Diet session. After all, the opposition always had more to fear from a snap election. Then, when the July-September GDP forecasts came out looking less than cheerful, I thought that Prime Minister Abe would postpone the tax hike whether he wanted to or not because it would be a good enough reason to call a snap election. But when the July-September GDP numbers came in negative, Mr. Abe had no choice but to postpone the tax hike anyway. But it came to the same thing. Snap election.

2. What can be achieved by calling an election two years ahead of schedule?

It resets the political clock in two ways, and they both help Mr. Abe serve out his two three-year terms as the head of the Liberal Democratic Party, therefore six years as prime minister, and do so from a position of strength—the economy willing, okay? Now, first, obviously, the LDP-Komeito coalition will prevail, and everyone elected to the lower house gets a four-year term instead of the two that remained. Second, old sins tend to be forgotten with every general election. In Japan, it’s called “misogi,” or “cleansing.” And the stench of the political financing scandals will be washed away.

3. Analysts say Abe is almost certain to win another majority in the lower house, and then he will have the mandate he needs to introduce unpopular policies such as restarting Japan's nuclear power generation plants. Do you agree? Will that strategy work?

The election has nothing to do with moving forward with those “unpopular” decisions. The nuclear power plants? They are already in the process of being restarted; politically, it’s up to the host municipalities and the host prefectural governors. The Sendai power plants will be up early next year, and it will barely register in the poll numbers. Collective self-defense? Komeito is the one who is holding up decisions on the details, and the election itself won’t make Komeito change its mind one way or the other. And so on. I don’t see a controversial issue on which the Abe administration will be helped or hurt by the outcome—unless, of course, the LDP-Komeito coalition loses so many seats that Mr. Abe is forced to resign. But that’s not going to happen.

4. At the news brief, Shinzo Abe also announced the delay of a planned increase in sales tax. How big of an impact will that have on Japan's plan to ease the country's public debt? How would the Japanese consumers respond to that? (The first increase taking place in April didn't boost income but instead Japanese consumers stopped spending)

I’m not an economist or a financial analyst, so you are putting the question to the wrong person. But since you asked…it’s 2 trillion yen for each percentage point, so an 18-month delay of a 2% hike means a 6 trillion yen loss of tax revenue. That’s a lot of money for me to lose even in the long-run, but not so much for the Japanese treasury. And remember, it was supposed to kick in almost a year from now, not next month. So the decision has little immediate effect on consumer behavior. Now, given the positive note on all kinds of employment data and a not-so-gloomy investment outlook, it’s hard to imagine October-December GDP going negative again, and the Abe administration will be ready with a supplemental budget for January-March 2015, which will also help out in April-June. But can Abenomics convince businesses to invest in Japanese capital and Japanese labor for the long-run? Can Abenomics instill enough confidence in consumers about Japan’s fiscal and demographic future to spend more? I think that Abenomics is headed in the right direction. However, a kick can be headed in the right direction, but it has to reach the end zone to count as a goal. I have serious worries about that when it comes to Abenomics. As a Japanese citizen, I hope that the security of an extra two years will push him to do more.

5. Seeing Japan's economic output shrinking for the second quarter in a row, questions about whether the "Abenomics" have failed are inevitably being raised. What's your evaluation?

I think that I just answered that question, in a way. But just to add. I don’t blame the technical recession on Abenomics. It’s not Mr. Abe’s fault that the LDP took part in a bipartisan agreement—two years ago—including a consumption tax hike. It’s not Mr. Abe’s fault that the Chinese economy is slowing down. And it’s only a little bit Mr. Abe’s fault that the Japanese multinationals have not altered their global investment decisions to have an impact yet—after all, there’s no assurance that a 110 yen-dollar exchange rate will prevail forever. But progress on the third arrow—and that’s going to make the real difference in the long-run—that has been slow. The Abe administration needs to put more of its time and political capital into the economic agenda after the “misogi,” or “cleansing,” and less into forays in the rest of the world, worthy though they may be. And unless it does that, there is a good chance that history will remember Abenomics as an opportunity lost.

Tuesday, November 18, 2014

One Surprise in Abe’s Snap Election Announcement

Prime Minister Abe covered all the necessary bases in his televised announcement of his intent to dissolve the lower house on the 21st for a snap election except the actual election date. NHK could have done a better job to make the teleprompters less conspicuous? Is that how presumably liberal-minded production side of the institution to subtly undermine the prime minister in revenge for foisting his outspoken soul mates on them as top management and board members?

Whatever. The only surprise for me was how low Abe set the bar. He stated that he’d resign if the LDP-Komeito coalition failed to secure a majority. Dude, you guys have 326 seats between the two of you, the LDP and Komeito. You’d have to lose 88 seats to fall under the 238-seat threshold required for a majority of the 475 seats to be contested. That’s not a bar, that’s a ditch that Abe dug in the ground, claiming that he’d admit defeat if he failed to walk over it without getting himself wet. when

I predicted that the LDP-Komeito coalition would clear the 30-seat drop bar that the LDP set when they expected the July-September numbers to be far more ambiguous, and I’m sticking by that prediction. I expect a low turnout. Many independent voters will abandon the LDP, but they won’t be going to the polls, they’ll stay away. And that will help the LDP-Komeito coalition. What was a 50 meter dash with a 10 meter head start will become a 40 meter dash with a 10 meter head start.

Already? The Imminent Your Party Split

It’s not my party so I’m not going to cry over it, but my preceding post is now superseded by the news that Your Party, barring a political miracle, is set for a formal split as early as this evening. Current YP head Keiichiro Asao, the introverted DPJ dropout, looked to an eventual merger of the opposition parties with the DPJ at the core while his predecessor and bankrolling YP founder Yoshimi Watanabe, the happy-go-lucky LDP renegade, wanted to focus on getting the policy right—which in his case meant making whoopee with the Abe administration and its Abenomics. A marriage made in limbo, it appears to have fallen apart when Abe kicked the lower house into snap election hell.

This will obviously help the DPJ. The Asao camp will be free to collaborate with the DPJ in the Dec, 14 election and towards ans eventual merger. The rump Your Party will for all practical purposes be headed by Watanabe, who chose months-long occlusion when a political financing scandal broke out and has yet to give a meaningful public account of the money or his disappearing act. This will make it that much more difficult to find and/or finance YP candidates for the snap election, making it that much easier for the DPJ and its potential allies to have a more or less clean field (the token Communist Party candidate notwithstanding) in contesting single-seat districts against the LDP-Komeito coalition seat-seekers.

I still think that the LDP-Komeito coalition will emerge with a very healthy majority; indeed, I do not think that the LDP’s single-seat majority will be threatened either. With 475 seats to be contested and with 296 seats in hand (including one nominal independent, as custom requires the president and vice president of the two Diet houses to drop their party affiliations), the LDP could lose 58 seats and still hold onto a single-party majority. However, with the unexpectedly poor July-September GDP numbers and this latest YP split, the very low bar for success that the LDP set for itself and the Abe administration when it talked about a hypothetical 30-seat loss has become a plausible goal. Let’s see how the media plays with all this—the media always prefers a real race—and how good a negative campaign the opposition parties can mount around that.

Technical Recession, and the Coalition Still Wins

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

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

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

Sunday, November 16, 2014

The Okinawa Gubernatorial? What Gubernatorial?

The Okinawa gubernatorial election was always going to be an uphill battle for the LDP favorite, pro-Henoko relocation incumbent Hirokazu Nakaima. Today, conservative anti-Henoko relocation candidate Takeshi Okinaga emerged the winner. My guess is that work will move forward on the relocation anyway, albeit against significant local resistance. But the rush to a snap election largely kept the story out of the national media, and that’s of more consequence for now.

Prime Minister Abe is one lucky man.

Why Is the Maritime Self-Defense Force Staying Out of the Coral Poaching Incident?

I have been informed that my essay on The Diplomat has touched off a Facebook discussion about the lack of involvement on the part of the Japanese Maritime Self-Defense, a discussion that has been focusing on Prime Minister Abe’s alleged unwillingness to do so. I’d never considered the matter at all, since it was, is, and for the foreseeable future, illegal to bring the Self-Defense Forces into this. Article 79 of the Self-Defense Forces Act states, “The Prime Minister may order all or part of the Self-Defense Force for operations in the case where it is determined that public security cannot be maintained with general policing powers in an indirect invasion or other emergency situation. So does an “indirect invasion or other emergency situation” exist here? Remember that these are the high seas. The Chinese boats have every right to loiter there, (pretending that they are) doing nothing. The Japanese authorities can and do accost and board these boats for inspection, at which point they are known to attempt to flee, but none have been reported to resist using force. Suspicion of surreptitious criminal activity and lack of capacity to police it appropriately are hard to justify as grounds for finding “indirect invasion or other emergency situation.”

A more useful course of inquiry is this: Why not give the Self-Defense Force policing powers, in the same way that the U.S. Coast Guard doubles as a civilian authority and an arm of the military? I am not opposed to this as a matter of principle, although I suspect that the greater part of the Japanese public, even many traditional conservatives, will not accept a domestic policing role for the military. But it will bring the Self-Defense Force into play against incursions into the Senkaku territorial waters as well as the islands themselves. The possibility alone would be seen as provocative by the Chinese authorities; actual deployment would be regarded as escalation, very likely compelling them to respond in kind.

The last is a grim possibility that not even the most hawkish administration is willing to countenance, in my view. The Abe administration is looking into the so-called gray areas, but that is about as far as it appears to be willing to go, even if public opinion were not situated as I believe it to be.

Saturday, November 15, 2014

Don’t Worry, China, Obama Didn’t Really Say That

There’s a good chance that I’ll take part in a panel discussion on security issues where I’ll be making a case on China’s behalf. So, in order to stay in character…

Reuters claims in a report entitled “Obama delivers veiled message to China” that “[t]he United States is a Pacific power committed to its Asian allies and will not tolerate small nations being bullied, President Barack Obama said,” but the only direct quote that it provides is the following: “"We believe that nations and peoples have the right to live in security and peace; that an effective security order for Asia must be based not on spheres of influence, or coercion or intimidation where big nations bully the small, but on alliances of mutual security, international law and norms that are upheld, and peaceful resolution of disputes.” So I go to the White House website and confirm said fact.

So, a) where did “will not tolerate” come from, and b) what the heck does it mean? My guess: a) The Obama WH press minders, working correspondents writing against a deadline, and one of those minders scored an ace; and b) the WH will stand by its allies and issue supportive statements for the others if and when “big nations bully the small.” And the US cut-off date for new bilateral alliances in the neighborhood came and went a long time ago.

Don’t laugh. It’s more than most other states will do.

Friday, November 14, 2014

’Splainin’: Mixed Currency Bitcoin Wallet Exposed

Unlike real currencies, the Bitcoin has no currency area of its own, an economically meaningful group of entities that conduct most of their daily transactions in Bitcoins. Unlike real commodities, the Bitcoin has no practical use other than its role as an embodiment of value derived from its scarcity. Given the massive volatility that these two conditions generate, I do not see how the Bitcoin can ever have any meaningful role in our economic life unless it already had one, which it doesn’t. But this article on the Tech in Asia website purports to have identified a business model that manages to get around the volatility problem though mixed currency wallets anchored by the Bitcoin.

Leaving aside the mumbo-jumbo in the article and the vacuous sound bites including the word “egalitarian” in the Bitreserve promotion video that it links to, the writer of the article buys 1 Bitcoin (BTC), then exchanges 1/3rd each of that amount for US Dollars (USD) and Euros (EUR) at the going rate, ending up with 0.3398 BTC, 115 USD, and 90 EUR minus the 0.45% and 0.95% exchange fees for the conversion to the USD and EUR respectively. When the writer wants to buy a merchandise priced in Bitcoins, Bitserve buys the requisite Bitcoin at the going rate with the USD, presumably charging a 0.45% fee on the transaction and uses that Bitcoin to execute the transaction. It is clear from the text that any other conversion back from USD and/or EUR to BTC will be executed at the going rate, not the original conversion rate. So I guess my question is: Why not buy 0.3398 BTC and 90 EUR (or 115 USD if your money is in EUR), and convert your USD into BTC when you make the purchase, saving yourself the initial transaction fee? Or better, buy the merchandise with your USD if the vendor also accepts USD, which should be the case unless you have encountered the rare vendor who is willing to run horrible “currency” risks, and save yourself, unless you are entering into a small international transaction where the handling fee savings may justify a BITCOIN transaction?

Of course, the high that you get from executing a Bitcoin transaction may be worth the extra, (to me) meaningless cost. But what kind of a person are you that gets a high from that? Perhaps a head of product at a Bitcoin startup?

Question: Why Would LDP Diet Members Be Willing to Risk Losing Their Seats for a Chance at a Two-Year Extension?

This question was raised specifically with regard to first-term Diet members, who are typically the most vulnerable. As usual, I gave a long-winded answer, which I am going to reproduce in more coherent form.

The LDP Diet members who managed to pull through anyway in the 2009 LDP debacle that brought the DPJ into power do not fear a snap election. There is very little risk as far as their personal prospects are concerned. They are quite willing to let the prime minister choose what he deems to be the optimal timing as far as the interests of the LDP is concerned.

The LDP members who lost in 2009 but made it back in the 2012 landslide victory that brought the LDP-Komeito coalition back to power are in a much more ambiguous position. For them, a snap election means betting the certainty of two more years against the uncertainty of four more years. The hasty rush towards a snap election even before the decision regarding the timing of the next consumption tax hike is made indicates that the typical LDP Diet member thinks that the uncertainty is low enough to make a snap election worth looking forward to. My guess is that the Diet members who made it back generally fall into this category.

Rookie Diet members who did not inherit family heirloom seats—their number is unusually high this time—are typically the most vulnerable. They would very much prefer to spend the next two years building and consolidating their support base and collecting funds to repay the debt that they incurred in launching their (national) political careers, rather than run the risk of  losing everything—a significant possibility even in the case of a modest 20-seat drop-off for the LDP. Unfortunately, single-term members are relatively powerless as far as decision-making in the LDP is concerned. Their personal interests will carry little weight, leaving them to sink or swim.

Posts on Coral Poachers Make It Online with One Day to Spare

The Nov. 14 Mainichi and Yomiuri report from Japan and Shanghai respectively that the Chinese authorities are identifying and calling back the coral poaching boats back to their home provincial ports in Fujian and Zhejiang. The Yomiuri carries an account of a Nov. 12 Fujian online news service report that says four poachers have been indicted. Peace dividend from the Sourpussy vs. Mr. Whatever photo op in Beijing? Perhaps. What matters to me, honestly, is that my The Diplomat post (faulty link restored) made it online with one day to spare before the media story broke out and that the media report corroborates three verifiable conjectures of mine while refuting none of them.

1)      “…the high likelihood of these poachers operating in groups…”
I made this conjecture because of the well-known propensity of Chinese fishing vessels to work in packs as well as the obvious dangers of working solo among lawless competitors. Geographical concentration suggests strongly that this is the case.
2)      “The Chinese authorities know the identities of the detained vessels and their crew members…”
This was an easy call to make because the Japanese authorities would obviously be providing ID information to their Chinese counterparts.
3)      “The poaching will abate fairly soon.”
Actually, I didn’t realize that it was already happening (the Mainichi reports says that the number of observed vessels peaked on Oct. 30 at 212, declined from there, and dropped significantly to 141 on Nov. 10, the day of the Abe-Xi meet-and-kinda greet), wand I had qualified my conjecture with the weasel word “fairly.” But I’m going to let myself off on this one, with the admonition to take note that the Chinese authorities appear to have a pretty good handle on their ocean-going vessels that they can wield when it suits them to do so.

The last point suggests, though, that one conjecture is likely to be proven wrong, namely:

 …a few vessels will continue to show up…

I’ve changed my mind.

Correction: Yomiuri article appeared on the 13th, the same day as The Diplomat post.

Thursday, November 13, 2014

TPP, Agriculture, and Elections

For those of you who think that the need to drum up the agricultural vote for the upcoming Lower House election will complicate things for Abenomics with regard to TPP, I have a questionnaire:

1) How many rice farmers are there in the United States?
2) How many dairy farmers and stockbreeders are there in Japan?
3) What would happen to Japan’s dairy and meat imports if there is no TPP deal with Japan? (Hint: The Japan-Australia FTA is likely to go into force by the end of the year.)
4) What are the alternatives for dairy farmers and stockbreeders in the upcoming election?

There’s talk emanating from the LDP that it can lose 30 seats in the next election and still have a simple majority on its own. I think that’s called setting the bar low, in order to claim anything as victory and mandate. Dairy farmers and stockbreeders, with the most to lose, will be the last among the agricultural interests to bet on a losing horse.

Go figure.

The Chinese Poachers: A Good Source of Red Coral – and Information

For TheDiplomat. I’ll post another notice when the Japanese translation goes up on the MIGA website.

Was thinking of writing about how the Abe administration and the LDP are supposed to get away with collective self-defense, nuclear start-ups, consumption tax hike (and now postponement) and the like in the upcoming Lower House election, using the Obama administration and the Democrats as a counterexample. But not tonight.

Addendum: Sorry, bad link, now repaired.

If You’ve Been Looking for a Korean Electronic Violinist Playing “Enka”…

Wednesday, November 12, 2014

What I Say? The Increasingly Inevitable Snap Election

An alcohol-fueled self-commentary follows:

There has been a lot of talk out there that says Abe should call a snap election if he decides to postpone the consumption tax hike. They’ve got it ass-backwards. Abe decides to go to the polls, then he decides to postpone. Think about it. Postponement is tantamount to an implicit admission that Abenomics isn’t working, and that’s why Abe would dissolve the House of Representatives? Look, the number appear to be mixed enough to justify either conclusion, and it was not quite rational, if otherwise impractical, to allow the 2014Q3 numbers to dictate a decision on a tax hike for 2015Q4 in the first place. The reason for a snap election must be something else, something less publicly mentionable, if all too understandable.

Now, the Abe administration’s public poll numbers aren’t all that bad, and should get a modest boost from the Abe-Xi summit, while the opposition is in no shape to fight one. The more time goes by, the more uncertainty there is, with an accordingly growing downside risk. That’s reason enough for many members of the ruling coalition to want to get it over with now, so that the winners can get an extra two years tacked on to their terms.

Abe, of course, needs a fig leaf. Since losing two newly-appointed cabinet ministers to political financing scandals and retaining two more as a matter of choosing the lesser of two evils won’t work, seeking a public mandate on the consumption tax hike postponement turns out to be the best available excuse.

Other than that, this SCMP article is a reasonable abbreviation of my thoughts around the now-almost certain snap election.

Yes, There Will Be a Second Time, President Xi

President Xi Jinping said that “people may be strangers when they first meet, but they become friends from the second time,” Prime Minister Abe reports on his November 10 bilateral meeting on his meeting with the Chinese leader. What Xi meant, of course, was that Abe shouldn’t go to Yasukuni. And Abe openly talked about it, which must be his also-coded answer.

Tuesday, November 11, 2014

Heads Talk of “End” in TPP Negotiations in Non-News Story of the Day

The heads of the TPP negotiating members met on the sidelines of the APEC summit in Beijing to pretend to hammer out differences and issued a hopeful statement with “the end coming into focus.”

Well, yes, it must be at least a year since it became obvious that the Obama administration could never offer a done deal before a) he got trade promotion authority (TPA) and b) the November 4 midterm elections were over and done with, which meant that none of the negotiating parties would reveal anything like its bottom line until it was time for the US Congress to convene for its lame-duck session; and several months since conventional wisdom pushed the US showdown to the new year, when the new Congress would convene (so yes, with the new Congress coming into acute focus, we would expect the “end” would “come into focus” too, barring a case of severe temporal myopia). This meant, though, that what the negotiating parties told us were increasingly do-or-die negotiations were little more than negotiators going through a lengthy bird-of-paradise mating dancing act (a birds-of-paradise mating dance, mind you, that is supposed to end in an atypical 12-member clusterfu…) until the moment of truth arrived. And the media and some analysts dutifully played along—while other were completely taken in, oohing and aahing at every twist and turn in the costume play that the negotiators put on.

Mind you, the process has not been without value. Far from it. The mating dance of the bird-of-paradise reveals something very important: the Darwinian fitness of the individual specimens—a very important consideration for procreation purposes. In the case of trade negotiations, it reveals the true concerns of the negotiators and the countries and constituencies that they represent, and builds the trust that make the mutual accommodation of these concerns possible. Moreover, the various permutations of a final agreement will have been examined in excruciating technical details so that the final sprint, once the fundamental blocs of the deal is in place, will be over and done with in a geological nanosecond.

So it goes with the TPP. There is no assurance that the deal will actually go through, though I am (as usual) cautiously optimistic. But for those of you who have been gyrating, knowingly or unknowingly with every twist and turn in the get-togethers of the trade ministers and their minions, I have one message for you: Relax, the wait is over. And for the negotiators: Thank you for providing us with entertainment over the past…oh, say, the past year, at least.

Monday, November 10, 2014

Of All the Tennessee Waltz Covers Out There…

This one wins hands down. The Tiffany Lamp dress, the cheaped-out special effects; I don’t think Lady Gaga could do better.

That said, I think she captures the 1950s slicked-up production feel better in this rendition.

Meandering Thru the Media: “Who Gave Ground? China, Japan Tweak Translations to Claim Victory”

Yuka Hayashi at WSJ has done a good job of parsing the various versions—two English, one Japanese and one Chinese—each of the parallel announcements of the Japan-China agreement-to-disagree-sort-of in “Who Gave Ground? China, Japan Tweak Translations to Claim Victory.” I have looked at both English versions and the Japanese version, and I tentatively agree with what the article says. It’s a very clever, alert mini-scoop.

Addendum: I say "mini"-scoop because a) it is a fascinating piece of diplomatic arcana illuminating the difficult task of papering over fundamental differences but b) adopting one translation over the other makes no material difference going forward. Specifically, the two parties will be able to move on, but the Chinese surveillance vessels will keep entering the Senkaku territorial waters and the issue will never be taken to the International Court of Justice regardless of which translation they choose.

The Candid Camera: Abe-Xi Meet-and-Greet

Abe: Don't you think we can let the folks out there think that we’re warming up to each other?

Abe: Okay, have it your way then.
Xi: Good.

Meandering Thru the Media: "North Korea Still Holds Sway Somewhere: These Japanese Schools"

It’s a slow news day in Japan when the top Bloomberg political story coming out of Tokyo is entitled “North Korea Still Holds Sway Somewhere: These Japanese Schools.” I mean, Bloomberg is a wire service, not a Slate or Salon, right? Anyway, since it’s a slow work day for me, I’m going to critique this report because—well, just because.

Overall, I think that the writer made a conscious effort to treat all parties fairly. I don’t see any particular agenda being promoted here—the hate speech segment could have easily been sensationalized—and both sides of the issue are given voices. Does the fact that I am on good terms with the writer affected my judgment on her work? I like to think that it’s working the other way around. Now, some details:

Like many students in Japan, Kim Yang Sun cycles to school each morning. Unlike most, she then changes into a traditional Korean outfit and studies under portraits of former North Korean leaders Kim Il Sung and Kim Jong Il.

That’s the opening paragraph, which caught my eye because I thought the writer was setting us up here. The tell? “…she then changes into a traditional Korean outfit…” But the writer never goes there later on, despite the appearance of the Zaitokukai and hate speech issues. Perhaps she knew about it but thought that it would be too much of a digression on a story largely about the predicament of the schools and the students trapped at the center of a historical and political crossroads, or the editors dropped it for that or some other reason. But I suspect that Norimitsu Onishi or fashion-conscious Martin Fackler would have dwelt on it at length.

The schools were set up after World War II by Koreans who came to Japan during its 35-year occupation of Korea and stayed on as the instability that led to the Korean War and division of their country deterred them from returning. Barred from learning their own language under colonial rule, these Koreans set up schools to prepare their children for eventual repatriation, relying on North Korea for textbooks and cash.

I’m sure that’s what the North Korean schools told the writer, but it’s wrong. Korean was part of the Korean primary and secondary school curricula, until at least 1938, when the parallel school systems were unified. Compulsory education introduced under Japanese rule actually raised Hangul literacy rates—the kind of thing that Japanese nationalists like to boast about and Koreans prefer to ignore. In any case, moral of the story: don’t trust, and verify.

Japan now has about 70 such establishments offering education for 8,000 or so students from kindergarten through university. While numbers have slumped from more than 40,000 in 1961 because of the falling birthrate and some ethnic Koreans taking Japanese nationality, that compares with only four schools backed by South Korea.

This is striking. The two Koreas were engaged in a Cold War battle for the hearts and minds and nationalities of the special-status permanent residence Koreans in Japan. Yet if there are only four South Korean schools now, there couldn’t have been that many back in the 1950s and 60s either. I can make some conjectures, but I’m not going to put them out there without some research. If anyone wants some ideas for an MA thesis, you know where to find my email address. Incidentally, in addition to “the falling birthrate and some ethnic Koreans taking Japanese nationality,” could it be that proportionally more of these Koreans short of taking up Japanese citizenship are going to Japanese schools, now that North Korea-oriented schools no longer have the allure of the halcyon days of “Great Leader”?

While the schools had been tolerated for decades, anger over North Korea’s failure to return the abductees has bubbled over into discrimination against teachers and pupils.

A quibble here. Not that I agree with the Education Minister’s decision to bring the abductees issue into the picture—I disagree, as a matter of fact—but to the best of my knowledge, it is the schools that are being discriminated against; the teachers and pupils are collateral damage. It is the schools that receive the per-student subsidies, not the students themselves.

The curriculum is largely based on that of Japanese high schools, enabling 40 percent of graduates to go on to local universities.

This is an interesting figure. The national figure has hovered around 50% for some time. Do graduates matriculating at the Korean “college” make up the 10 percentage point difference?