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Ozawa, Japan’s one-time ‘shadow shogun,’ survives wipeout

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ozawaPhoto credit to Kazuhiro Nogi/AFP/Getty.

In Japanese politics, few figures loom larger than Ichirō Ozawa (小沢 一郎), who has been a MP in Japan’s parliament since 1969.Japan

On Sunday, he faced the largest challenge of his political career, when as the leader of the People’s Life Party (生活の党, Seikatsu no Tō), he struggled to hold onto his own constituency in northern Iwate prefecture, campaigning in his home city of Ōshū for the first time in three decades.

As it turns out, Ozawa (pictured above) held off his opponent by more than 10 points, winning one of just two seats for the People’s Life Party. So while Ozawa will return to the House of Representatives, the lower house of Japan’s parliament, the Diet (国会), he will do so as an increasingly isolated relic after reaching the pinnacle of leadership in both the dominant Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō) of prime minister Shinzō Abe (安倍 晋三) and the opposition Democratic Party of Japan (DPJ, or 民主党, Minshutō), which held power for three tumultuous years from 2009 to 2012.

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RELATED: Japan is once again an essentially one-party country

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Known for decades as Japan’s ‘shadow shogun’ for the power he wielded behind closed doors, it’s no exaggeration to say that Ozawa is one of the leading figures of postwar Japanese politics. He was a vital figure in the LDP’s 1980s dominance, and he was instrumental in leading the only two movements that have dislodged the LDP’s six-decade political hegemony. In 45 years of political life, Ozawa himself has gone from conservative to liberal and back again with no clear ideological compass beyond gaining (and regaining) power. Although he’s a controversial figure, there’s no doubting that he has played a greater role than nearly anyone else in Japan in the effort to create a truly multi-party system, even while he’s disparaged Christianity as an exclusionary religion, claimed to ‘hate’ Europe and once derided Americans as ‘mono cellular’ and ‘simple-minded.’

At age 72, and leading a caucus that contains just one other legislator, few would disregard Ozawa’s ability to mount yet another comeback, especially if Abe’s efforts to stimulate Japan’s economy, once again tumbling into recession, ultimately fail. That’s especially true with few credible opposition figures in sight.  Continue reading Ozawa, Japan’s one-time ‘shadow shogun,’ survives wipeout →

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Twelve considerations upon the DPJ wipeout in Japan’s legislative elections

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Well, that was quite a blowout.  Just a little more than three years after winning power for the first time in Japan, the Democratic Party of Japan (DPJ, or 民主党, Minshutō) was reduced to just 57 seats in a stunning rebuke in Sunday’s Japanese parliamentary elections.

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Shinzō Abe (安倍 晋三), former prime minister from 2006 to 2007, will return as prime minister of Japan, and the  Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō), which controlled the House of Representatives, the lower house of Japan’s parliament, the Diet, for 54 years until the DPJ’s win in 2009, has seen its best election result since the early 1990s, with 294 seats.  Among the 300 seats determined in direct local constituency votes, the LDP won fully 237 to just 27 for the DPJ.  An additional 180 seats were determined by a proportional representation block-voting system, and the LDP won that vote as well:

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In contrast, the DPJ has fallen from 230 seats to 57 seats — by the far the worst result since it was created nearly two decades ago.  Its previous worst result was after the 2005 elections, when the popular reformist LDP prime minister Junichiro Koizumi (小泉 純一郎) won an overwhelming victory in his quest for a mandate to reorganize and privatize the bloated Japanese post office (a large public-sector behemoth that served as Japan’s largest employer and largest savings bank).

Outgoing prime minister Yoshihiko Noda (野田 佳彦) has already resigned as the DPJ leader, and a new leader is expected to be selected before the new government appears set to take office on December 26.

The result leaves Abe with the largest LDP majority in over two decades — together with its ally, the Buddhist, conservative New Kōmeitō (公明党, Shin Kōmeitō), led by Natsuo Yamaguchi (山口 那津男), which increased its number of seats by 10 to 31, Abe will command over two-thirds of the House of Representatives, thereby allowing him to push through legislation, notwithstanding the veto of the Diet’s upper chamber, the House of Councillors.

It’s a sea change for Japan’s government, and we’ll all be watching the consequences of Sunday’s election for weeks, months and probably years to come.  Just a full working day after the election, events in Japan’s politics are moving at breakneck speed.

For now, however, here are 12 of the top takeaway points from Sunday’s election: Continue reading Twelve considerations upon the DPJ wipeout in Japan’s legislative elections →

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Can Shinzō Abe boost Japan’s economy?

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Over at Slate, Matthew Yglesias made the argument last week that the likely victory of former prime minister Shinzō Abe (安倍 晋三) and the return of the Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō) to government after a three-year hiatus means that Japan might finally embark on a path of more expansionary monetary policy — namely, more quantitative easing and a higher inflation target. Japan

With Japan apparently headed back into a recession — its fifth in 15 years — that strategy could be the surest way to boost the Japanese economy, but it’s a little naive to believe Abe can command enough political support, even with a landslide victory in Sunday’s election, to dictate monetary policy to the Bank of Japan.

Earlier in the campaign, Abe pledged to force the Bank of Japan to purchase construction bonds directly from the Japanese government (although, as Yglesias notes, Abe has already backed down from that pledge during the campaign).  Abe needs the BOJ to buy those bonds in order to finance additional infrastructure spending, with the LDP calling for up to ¥200 trillion ($2.4 trillion) in public works over the next decade.  Public spending is an old LDP favorite, but that staggering amount of spending could well pull Japan’s economy out of recession and deflation.

Abe has also pledged to appoint a new bank governor — the term of the current Bank of Japan governor Masaaki Shirakawa (白川 方明) ends in April 2013 after five years heading the BOJ — who agrees to set an annual inflation target of 2% or even 3%.

Abe’s push for expansionary fiscal and monetary policy comes as a bit of a 180-degree turn, given that the third and final government of the Democratic Party of Japan (DPJ, or 民主党, Minshutō) under prime minister Yoshihiko Noda (野田 佳彦) recently expended its last gasp of governing willpower to double Japan’s consumption tax from 5% to 10%, which is scheduled to begin in 2014.

It seems much likelier that Abe could implement a new round of fiscal expansion than strong-arm the Bank of Japan, which has an extraordinary amount of central bank independence — derived in part from the memory of hyperinflation that resulted after World War II when politicians controlled monetary policy decisions.

Noda (pictured above, right, with Abe) has attacked Abe’s platform as a dangerous intrusion on central bank independence and he has attacked the LDP plan for additional debt-financed spending as the same old LDP  ‘baramaki’ (pork barrel) politics, especially given Japan’s debt-to-GDP ratio is already, by far, the world’s largest, at around 230%.  Greece, by the way, has only a 160% ratio.

Japan has traditionally been able to carry such a high ratio because much of that debt is held by its citizens, who collective have one of the top savings rates in the industrialized world, but with $13.64 trillion in debt already on its public books, it’s not clear whether Japan could sustain public spending that would boost its debt-to-GDP ratio to nearly 300%.

As Yglesias notes, the Bank of Japan has been criticized for nearly two decades for its policy to keep Japan’s inflation target at zero:

Back in 1999, Ben Bernanke condemned the self-induced paralysis of Japanese monetary policy made by flailing officials who claimed it was beyond their power to fix this. He called for “Rooseveltian resolve” on the part of Japan’s leaders to shake the bank out of its torpor.  Paul Krugman, too, spent the late ’90s urging Japan to aim for more inflation, arguing that mucking around with the banking system was inadequate and weird delusions of respectability were holding policymakers back.

As Yglesias also notes, Europeans and Americans promptly forgot that advice when the 2008 financial crisis exploded budget deficits:

Suddenly, criticizing the Bank of Japan went out of style. America became Japan and simultaneously forgot what America used to think about Japan.

But perhaps the lesson that Yglesias is forgetting — and the lesson that the 2008 crisis taught Europeans and Americans — is that politics matters, and that politics can intrude on what might otherwise be a clear policy path, whether it’s ‘fiscal cliff’ negotiations in the United States or the ‘kick-the-can’ politics of eurozone bailouts.

Yglesias is also forgetting that Japan has politics, too. Continue reading Can Shinzō Abe boost Japan’s economy? →

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Power, destruction, and Hello Kitty: Article 9, the Self-Defense Force and Japan’s election campaign

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Among the more famous — and unique — provisions of the world’s constitutional jurisprudence is the Japanese constitution’s pacifist Article 9, which prohibits any act of war by the state.

The English translation of the article reads as follows:

Aspiring sincerely to an international peace based on justice and order, the Japanese people forever renounce war as a sovereign right of the nation and the threat or use of force as means of settling international disputes.  In order to accomplish the aim of the preceding paragraph, land, sea, and air forces, as well as other war potential, will never be maintained. The right of belligerency of the state will not be recognized.**

Traditionally, Article 9 has limited Japan’s military capability since World War II to a merely defensive capacity, with the country largely dependent on the United States for its external security.

But with tensions already high and rising with the People’s Republic of China over three of the tiny Senkaku Islands (Diaoyu in Chinese) since the Japanese government formally purchased the islands in September, and with the relatively more militant Shinzō Abe (安倍 晋三), leader of the Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō), increasingly set to win Japan’s snap elections on December 16 for the lower house of Japan’s parliament, the Diet, Article 9 may be set for reinterpretation.

Abe comes naturally to his more hawkish views on Japan and its military power.  As prime minister from 2006 to 2007, he tried to push a stronger interpretation of Article 9 and pursued a more aggressive foreign policy.  Moreover, as prime minister and most recently after winning the leadership of the LDP, he visited the Yasukuni Shrine in Tokyo, which honors Japan’s war dead, including several war criminals, a move that has consistently provoked China and South Korea. Abe’s grandfather Nobusuke Kishi (岸 信介) served as Japan’s prime minister from 1957 to 1960 and counts among his major accomplishments the signing of the mutual cooperation and security treaty between Japan and the United States.

Although Japan’s election campaign has also featured nuclear energy policy, the current government’s recent increase in the country’s consumption tax and economic policy for pulling Japan out of more than two decades of economic slump, the Senkaku showdown with China has highlighted Abe’s stance to revise the government’s interpretation of Article 9, at a minimum, to allow for collective self-defense.  Such a relatively more aggressive interpretation would allow Japan to join allies, such as the United States, in military actions throughout the world or possibly even join collective security alliances such as the North Atlantic Treaty Organization (Japan is already a major ‘non-NATO ally’).  Although all of Japan’s postwar administrations have interpreted Article 9 to prohibit such a wide interpretation, Abe and his LDP allies would prefer the capability to deploy Japanese forces alongside, for example, U.S. forces in Afghanistan.

In a sense, it’s ridiculous to say that Japan doesn’t have a military.  Its Self-Defense Force was created as an arm of the Japanese defense department in 1954, and it’s consistently grown ever since.  Although it’s technically not an army, Japan’s active forces (around 250,000) are a bit larger than either of Germany’s or the United Kingdom’s active forces.  True, under Japan’s complicated national defense policy, the Self-Defense Force is limited to exclusively defense-oriented policy, and Japan has refrained from developing nuclear weapons and traditionally worked in random to develop security arrangements with the United States.

But Japan itself has been stretching its interpretation of Article 9 for years — from 2004 to 2006, notably, Japan sent forces to Iraq to assist the United States in its occupation of Iraq, and in the past decade, Japan has become increasingly at ease with sending Self-Defense Force troops abroad to assist in humanitarian and peacekeeping arrangements, typically under the aegis of the United Nations.

The LDP’s return to government — it essentially controlled Japan from 1955 to 2009 — could not only result in a more aggressive interpretation of Article 9 to allow collective self-defense, but the re-christening of the Self-Defense Force as the more militaristic National Defense Force, and a full-fledged revision of Article 9 to allow Japan to have a full military like any other country, especially as the memory of Japan’s imperial army during World War II fades from memory and Japan feels increasingly vulnerable from a strengthening Chinese presence in East Asia. Continue reading Power, destruction, and Hello Kitty: Article 9, the Self-Defense Force and Japan’s election campaign →

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Japan heads to snap elections on December 16

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Sooner than expected, Japan is headed to the polls: prime minister Yoshihiko Noda (pictured above) announced today that he will dissolve Japan’s lower house of parliament, the Diet, on Friday, clearing the way for snap elections on December 16.

It seems very likely that the Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō), which controlled the Diet from 1955 to 2009, will return to power, and former Japanese prime minister Shinzō Abe (安倍 晋三), who served exactly one year as prime minister from 2006 to 2007, seems likely to return for a rare second stint leading Japan’s government following his selection as the LDP’s leader in late September.

Noda said the dissolution will be contingent on the LDP’s support for a package of measures to issue deficit-covering bonds this week, but the LDP seemed likely to support that package in any event.

The election will affect at least a half-dozen key policy issues, including relations with China, Japan’s pacifist constitution, a controversial sales tax increase set to go into effect in 2014, the Trans-Pacific Partnership agreement with other Asian countries and the United States, the future role of nuclear energy and fiscal policy in a country that’s seen low GDP growth since the 1980s.

Noda’s announcement was so striking because he needed to call an election only before August 2013, but currently, a record-high 64% of Japanese voters disapprove of his government, with just 18% approving.

Since the Democratic Party of Japan (DPJ, or 民主党, Minshutō) took control of Japan’s parliament after the 2009 elections, things haven’t gone so well for them — the party has gone through three different prime ministers in three years. Continue reading Japan heads to snap elections on December 16 →