As 2008 enters its final week, the LDP and Aso Taro, its beleaguered head, are being written off as doomed in the year to come.

No one, it seems, is willing to offer an explanation for how the LDP can save itself in a general election. The LDP may yet win the general election, but its fate is out of its hands.

Some are starting to measure the LDP’s coffin, so to speak. AERA, a weekly magazine, notes that Yamada Shinya, an elections forecaster, has predicted that the DPJ will win 230 seats to the LDP’s 191 seats. Mr. Yamada foresees sluggish turnout and notes the importance of the change in the Communist Party’s election strategy — nothing too different from my own assumptions about the next election. (I have started — and hope to finish — my own analysis and predictions for the 300 single-member districts.)

In the meantime, Mr. Aso’s situation continues to worsen. The latest blow to his government is a dispute with Komeito. Last week Koga Makoto, the LDP’s chief elections strategist, noted that it was strange that the LDP would tell supporters to vote for the LDP in single-member districts and Komeito for proportional representation seats, a statement interpreted as a hint that the LDP is reconsidering the terms of its electoral partnership with Komeito. Mr. Koga was quick to reassure Komeito that the LDP remains committed to working with Komeito to win a majority for the coalition — the LDP can hardly afford to do otherwise, given the support Komeito is said to provide for LDP candidates. Komeito head Ota Akihiro was dissatisfied enough with Mr. Koga to call for an apology. The question now is whether LDP candidates will receive the support from Komeito that they have received in the past. Will Komeito voters continue to be loyal to their party or will they stay home or vote against LDP candidates in a general election? Along with the JCP question, the Komeito vote is of course an important variable in determining whether the LDP will be returned to power.

Of course, events may render all of these factors irrelevant in a general election. If the bottom continues to fall out of the Japanese economy — Japan Economy Watch and Ken Worsley’s Japanese Economy News are essential sources for the bad news — it may simply be impossible for the LDP to reverse itself in time for a general election. The latest news is that in its monthly assessment of the Japanese economy, the government has determined that the economy has worsened (as opposed to weakened) for the first time since February 2002. There appears to be no end to the bad news. Little surprise that the prime minister’s approval ratings may be headed into the single digits, having fallen to 16% in a recent Mainichi poll.

The most pressing question now is how long the government will wait before calling an election. Abe Shinzo, quickly becoming a younger version of Mori Yoshiro, has called for the election to be delayed until May at the earliest, until after the passage of the 2009 budget. I expect that Mr. Aso will wait until he has a budget in hand before going to the voters, although I do not expect the budget to make much of a difference. The Aso government and the LDP have simply been overwhelmed by problems: sluggish domestic demand, a shift to reliance on temporary and part-time workers, growing pensions and health care liabilities, an intolerable debt burden, stagnant regions, and so on. The economic crisis is only exacerbating these problems. The result is that the LDP is on the brink of collapse. The party has simply overwhelmed by a cascade of systemic failures. As Thomas Homer-Dixon, a political scientist at the University of Toronto wrote in The Upside of Down, “When a society has to confront a bunch of critical problems at the same time, it can’t easily focus its resources on one and then move on to the others.”

The LDP, trapped by previous decisions that created or exacerbated these problems, is unable to take a definitive step in any direction. This is the essence of the LDP’s ongoing debate over tax reform and a consumption tax increase. The government needs more revenue to meet current and future liabilities without increasing the national debt; for a number of LDP members, most notably Yosano Kaoru, the economy minister, a consumption tax increase appears to be the answer to the government’s problems. But passing a consumption tax — or even committing to a timeline for phasing in a consumption tax — is a thorny political problem that has involved tortuous negotiations within the LDP and between the LDP and Komeito. Facing an election and an economic crisis, Mr. Aso has been understandably reluctant to make a firm commitment to the timing of a consumption tax increase. A consumption tax increase may solve one problem, but it may exacerbate others (sluggish domestic demand, low growth, and perhaps growing social inequality, as a consumption tax increase would presumably hurt low-income Japanese most). Japan is ensnared in a web from which there is no easy escape.

Not surprisingly, a recent Yomiuri-Waseda poll found that the public more disappointed in the LDP than hopeful about the DPJ. Regime change alone will not cut Japan’s Gordian knot. It is entirely plausible that a DPJ-led government will be equally stymied. But the public is at least willing to give the DPJ a chance, an entirely reasonable proposition given the LDP’s record.

It may be, however, that Japan’s problems are insoluble, and Japan still has a long way to fall. The greatest reason for pessimism may ultimately be that despite having experienced nearly two decades of stagnation, the establishment has yet to come up with any better ideas for organizing Japanese society. As a result, the global financial crisis, rather than providing an opportunity for Japan to take a leadership role, has paralyzed Japan. To return to Thomas Homer-Dixon, he argues that an essential quality for dealing with crises is a “prospective mind.”

“We can’t possibly flourish,” he writes, “in a future filled with sharp nonlinearities and threshold effects — and, somewhat paradoxically, we can’t hope to preserve at least some of what we hold dear — unless we’re comfortable with change, surprise, and the essential transience of things, and unless we’re open to radically new ways of thinking about our world and about the way we should lead our lives. We need to exercise our imaginations so that we can challenge the unchallengeable and conceive the inconceivable. Hunkering down, denying what’s happening around us, and refusing to countenance anything more than incremental adjustments to our course are just about the worst things we can do.”

Despite the best efforts of Koizumi Junichiro, I fear that this is precisely how the Japanese establishment has responded to the lost decade. Public debates are stale. Even minor change is watered down. Or as Yeats wrote, “The best lack all conviction, while the worst / Are full of passionate intensity.” Watching the irresolution of the LDP’s reformists, and the strength with which the LDP’s old guard resisted any attempt to redirect gasoline tax revenue away from road construction earlier this year, I cannot help but think that Japan simply lacks the ability to adjust, that despite a history of making radical changes in the face of crises, the current crop of leaders is simply not up to the task. Perhaps as bad as things look today, they aren’t nearly bad enough to force radical change — the decay of an economic system hardly compares to the threat of colonization and the blow of defeat and occupation. After all, despite the lost decade, Japan remained the world’s second-largest economy, its companies respected globally. Perhaps Japan is more capable of responding to short, sharp shocks than to prolonged, barely visible social problems.

Of course, Japan is hardly alone. I was reading Thomas Homer-Dixon Sunday while waiting in Boston’s Logan Airport, where the TV was tuned to CNN’s Late Edition. Wolf Blitzer was struggling to moderate a discussion between Democratic Congressman Barney Frank and Republican Congressman Eric Cantor on the financial crisis. Congressman Cantor insisted that when apportioning blame for the crisis, Congress must bear much of it for encouraging risky lending, which is to say that it is not necessarily the market but the government that failed.

I can think of no better illustration of what Homer-Dixon calls “hunkering down, denying what’s happening around us, and refusing to countenance anything more than incremental adjustments.”

9 thoughts on “Endgame

  1. It\’ll be pretty ironic if, after almost two decades of failing to reform Japan\’s economy when they had the chance, the LDP finally gets booted because of a global recession that was out of their control.Even more ironic because if they had been booted for good in the early 90s, Japan would probably not be as vulnerable to the global slump as it is today…


  2. Anonymous

    Old Homer-Dixon seems to have it about right.\”..we can\’t hope to preserve at least some of what we hold dear..Hunkering down, denying what\’s happening around us, and refusing to countenance anything more than incremental adjustments..\”That sums up Japan perfectly.They, the establishment, really want to hold onto their vision of \”Japan\” . Yet this does not conform with the world view and importantly, world problems. Being a very myopic race, perpetuated by centuries of \”keeping johnny foreigner\” out, has lead to this stagnation and feeling of, oh if we change, what will happen…i will loose my position, my supporters wont get their fair slice of the cake as i promised them, so on and so forth. This is of course in start contrast to the Japan that \’they\’ wish to hold dear and convey to the world. Those of that era, Samurai, would have fallen on their swords by now for bringing such dishonour to their beloved country.The current crop of Japanese politicians, are weak, spineless, and fear mongers. Until all these corrupt Cretans are removed, Japan will stagnant and i fear, by about 2030, will be no more important than say the Philippines is today.Still…sticking ones head in the sand and saying it wont happen enough times, they hope the whole country will believe them too…as they are coerced to believe everything else the GoJ edicts to its citizens.


  3. Dear Anonymous,Thank you for singling out the \”myopic race\” comment for criticism.After reading that line I was reluctant to accept this comment, but I ultimately decided to post it in the hope that a reader or readers would dismiss it.As I noted in the original post, Japan is hardly alone in having trouble coping with rapid change. Racialist or cultural arguments have little place in the discussion.


  4. Anonymous

    \”Thank you for singling out the \”myopic race\” comment for criticism.\’And thank you Tobias for presenting analysis that does not employ that type of racial generalization. The first \”Anonymous\” post looks like a parody of 19th century newspaper reportage. There are plenty of 21st century terms that we can use to hit the Japanese elite. The Japanese press finds them, making comments like \”as they are coerced to believe everything else the GoJ edicts to its citizens\” look like silly (and combined with the earlier generalization, racist) conspiracy theory.Anonymous I – Informed people read this blog, save the garbage for your friends at the bar.


  5. Anonymous

    So, if you assert that Japan is not myopic, please explain where are their eclectic policies on issues such as Immigration or Education to name just 2 of many?Also please explain to me that how keeping foreigners out for some 300 years is considered to be an assertive positive trait, perhaps you consider this to be hyperopia?and, when you quote H-D:\”..When a society has to confront a bunch of critical problems at the same time, it can\’t easily focus its resources on one and then move on to the others…\”, ..you obviously consider this comment to be a vindication that Japan is not myopic, and that it is not a mix of myopia and cultural analogies, but as you say \”..Racialist or cultural arguments have little place in the discussion…\”.!!However, you appear to be \”OK\” calling everyone \’too scared\’ (as opposed to myopic) to make a point \”..the pusillanimity that has characterized the behavior of all too many leading Japanese politicians..\”nuff said.\”..After reading that line I was reluctant to accept this comment..\”, so, what you\’re saying is that you want a bunch of acoyltes agreeing with your position (and it is just a position, certainly not THE position), rather than any form of comments/criticism? Mind you, that would be myopic!


  6. A country cannot be myopic. A \”race,\” whatever that is, cannot be myopic.Individuals can and are myopic. I have no problem with the argument that individual Japanese leaders have specialized cutting of their country\’s nose to spite its face, that they have systematically and repeatedly failed to see the big picture. My problem is your reification of the Japanese people, as if \”Japan\” collectively is at fault.Keeping foreigners out for 300 years? Clearly the story is a bit more complicated than that. For starters, sakoku lasted officially for barely 250 years, an impressive feat in and of itself. Why should Japan be condemned for that? Is openness always superior to isolation? And Japan may be less open relative to other developed democracies, but it\’s no North Korea.It is a vast oversimplification to dismiss Japan as closed to foreigners for the past 400 years. There are plenty of politicians who are out and out nativists, but there are others who are internationalists. Who\’s to say which position is more genuinely \”Japanese?\” Meanwhile, Japan\’s leaders are far from alone in their skepticism of foreign influences, capital, and people. I strongly urge you to go back and look at debates in postwar Britain over the influx of immigrants from undesirable corners of the Commonwealth. A good starting point is Tory Enoch Powell\’s 1968 \”Rivers of blood\” speech, in which he warned that Britain would be overwhelmed by unruly immigrants and suggested a halt to immigration and the promotion of \”re-immigration\” to their places of origin. (http://www.telegraph.co.uk/comment/3643823/Enoch-Powell%27s-%27Rivers-of-Blood%27-speech.html)In short, I don\’t think \”keeping out foreigners\” is inherently positive or negative — or inherently Japanese. I tend towards openness, of course, but that is not necessarily the welcome option for any country. What country in the world has opened itself to foreigners without misgivings (or worse)?


  7. Anonymous

    TB\”… My problem is your reification of the Japanese people, as if \”Japan\” collectively is at fault…\” If this is how you read my comment, then perhaps it is I who is at fault in not being clearer. In retrospect i should have perhaps said \”The Establishment\”, since a majority of Japanese politicians today have their eyes firmly fixed upon themselves and their nationals only, with complete, at times, contempt for non-nationals and what \”they\” can bring. I recall reading sometime ago Aso was quoted as say that someone with Blond hair and blue eyes could never be trusted…nuff said.I am very well aware of the Rivers of Blood speech, just as I am aware of the pure racism and hatred spude out by Nick Griffin et al. Serves no purpose other than to highlight how immigration can feed fear in some.Just because immigration, for example, is not easy, does not mean one should ignore or prevent the integration of immigrants. Which by and large the GoJ does, albeit surreptiously. For such a powerful industrialised country, and currently, the second largest economy in the world, one would \”normally\” expect such a country to be a proactive member of the UN, for example. With this leads to the issue of the UN human rights laws. Human rights in the sense through the eyes/mind of western definitions. Japan of course does not to agree to this definition, hence it refusal to sign certain UN charters relating to such. Japan only views things its way. It has been \”considering\” such things….for over 20 years!!!This is most certainly a nationalistic stance, and ordinarily one cannot fault this, it is \”their\” country and their rules. Yet for Japan to make a play on the world stage, one must play by the accepted world/global \”rules\” and its definitions. Refusing as such, one can only surmise this as myopic, to think that the world will suddenly redefine its self in the manner of Japanese definitions and values at the expense of its own tried and tested and wholly accepted.Countries like UK and others are far richer for having gone through the growing pains of immigration than not at all. The Japanese politicians prefer the notion of fear, from immigration, noted and supported by the police. The fact the Japanese police argue that crime is being perpetrated by foreigners. Japanese are law abiding so only a foreigner would conduct a crime, hence best control them or do the best to keep them out. (So the mere 2% of immigrants are responsible for the \”bad crime\” eh??). Ref given if you think Im making this up.(http://www.npa.go.jp/english/seisaku8/action_plan.pdf)Is openness always superior to isolation?…Well, the US in terms of the economy does not think so. With The Jones act et al, the notion of a capitalistic consumer society is fine, so long as the product is made by or designed by or funded by at least 80% (from memory) in the US. Which is why BMW/Honda etc have set up factories in the US to get around such protectionism laws. Just see how successful foreign companies are at setting up in Japan too, or being owned or partially owned by foreign companies. Only a few months ago a British Company wanted to buy a major stake in a Utility, many wanted it, except of course the usual suspects…The point of sakoku was to prevent or remove the religious and colonial influences within Japan. Since the fear was that Japan would become \”owned\” by the Spanish/portuguese. That mentality of being owned by or run by or dictated to in some shape or form has not left the psyche of the GoJ. Hence their constant myopia..


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