Tag Archives: house of councillors

Abe calls snap elections in Japan as recession returns

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Barely hours after the news that Japan is entering a recession, with an annualized GDP drop of 7.3% in the second quarter and 1.6% in the third quarter, prime minister Shinzō Abe (安倍 晋三)  has announced snap elections that will be held sometime in mid-December.Japan

Ostensibly, Abe’s rationale is his determination to postpone the next installment of Japan’s consumption tax increase, which jumped from 5% to 8% in April and is set to rise further to 10% in 2015.

But that’s an obvious fig leaf — the consumption tax is the legacy of the opposition government that Abe defeated in his landslide victory in December 2012.

Instead, Abe hopes to maximize his government’s relative popularity and to take advantage of a scattered opposition to win a rapid mandate next month and extend the LDP’s control for another four years instead of waiting to face voters in 2015 or 2016, when the opposition could be stronger and when Abe’s policies might be even less popular. Abe also faces an internal LDP presidential election next year — it will be hard for rivals to attack Abe so soon after a successful election victory.

Ultimately, however, the election is also a referendum on ‘Abenomics,’ the most audacious experiment in neo-Keynesian economic policy today. Continue reading Abe calls snap elections in Japan as recession returns

Japan pushes forward with consumption tax hike

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Earlier this month, Japanese prime minister Shinzō Abe (安倍 晋三) moved forward with plans to increase the top rate of Japan’s consumption tax from 5% to 8%, effective as of April 2014 — and he is expected to allow the rate to rise further to 10% in autumn 2015. Japan

It was the first major policy decision since Abe led his party, the long-dominant Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō) to a landslide victory in the July vote that elected one-half of the seats (121) in the House of Councillors, the upper house of Japan’s parliament, the Diet (国会).  That vote was essentially a referendum on Abe’s big-spending economic stimulus program — widely called ‘Abenomics’ — following Abe’s equally impressive victory in December 2012 in the elections for the House of Representatives, the Diet’s lower house.

It’s notable for three reasons. Continue reading Japan pushes forward with consumption tax hike

Quivering for the fourth arrow of Abenomics (and other Japanese policy matters)

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As widely expected, Japan’s Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō) surged to an overwhelming victory in Sunday’s national elections in Japan to determine half of the seats (121) in the House of Councillors, the upper house of the Diet (国会).  While the victory wasn’t enough to give the LDP a two-thirds supermajority in both houses of the Diet, it was enough to usher in a new era of continuity, with the government of prime minister Shinzō Abe (安倍 晋三) set to consolidate power after winning election in the lower house, the House of Representatives, last December.Japan

The result leaves the LDP, together with its ally, the Buddhist conservative New Kōmeitō (公明党, Shin Kōmeitō) with a majority in the upper house, and that will give the LDP the ability to push through legislation without needing to compromise in the House of Councillors and it makes Abe the strongest Japanese prime minister since Junichiro Koizumi (小泉 純一郎) in the early 2000s and ends a seven-month period of a ‘twisted Diet,’ with control of the upper house still in the hands of the Democratic Party of Japan (DPJ, or 民主党, Minshutō).

But the LDP looked set to fall just below an absolute majority in its own right:

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In contrast, the LDP holds 294 seats in the 480-seat House of Representatives, and together with the 31 seats of New Kōmeitō, holds a two-thirds majority.  That the LDP doesn’t hold an equally impressive advantage in the upper house is due to the fact that only half of the seats in the House of Councillors were up for election yesterday and, among those 121 seats, the LDP’s dominance is clear:

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That also means that the Democratic Party doesn’t face an immediate wipeout, and it will remain the chief opposition party — in fact, their 59 seats in the House of Councillors is actually more than the 57 seats they currently hold in the House of Representatives.  That will give the DPJ a legislative base from which it can attempt to rebuild itself as a political force and to position itself for 2016, when Japan’s next elections are likely to come.  Banri Kaieda, a fiscal hawk who assumed the party’s leadership after its December 2012 defeat, will stay on for now as leader.

But the Democrats weren’t the only losers on Saturday.  It was perhaps an even more difficult election for the Japan Restoration Party (日本維新の会, Nippon Ishin no Kai).  A merger between the two smaller parties of Osaka mayor Tōru Hashimoto (橋下徹) and right-wing, nationalist former Tokyo governor Shintaro Ishihara (石原慎太郎), it emerged with 54 seats in the House of Representatives in December to become as the third-largest party.  But it won just eight seats on Saturday, and the party now seems likely to split up.  That’s largely due to Hashimoto’s awkward comments suggesting U.S. soldiers in Okinawa should be permitted to use prostitutes and controversial comments that largely defended the ‘comfort women’ system, whereby Japanese soldiers forced women in enemy countries to serve as sexual slaves.  But it’s also due to the fact that nationalist tensions stemming from a standoff with the People’s Republic of China over the Senkaku Islands (Diaoyu Islands in Chinese) have calmed somewhat since last December.

One success story was the Japanese Communist Party (JCP, or 日本共産党, Nihon Kyōsan-tō), which won eight seats on Saturday, bringing its total to 11. Founded in 1922, the JCP has not been a strong force in recent years.  Though it has left its Marxist roots in the past, it has gained a modest amount of strength since the 2008 global financial crisis and it supports ending Japan’s military alliance with the United States.

But beyond the horse-race dynamics of Saturday’s result, what can we expect from Japanese policy in the next three years?  Here’s a look at eight key issues that are likely to dominate the LDP’s agenda, at least in the near future.  Continue reading Quivering for the fourth arrow of Abenomics (and other Japanese policy matters)

Will the real Japanese opposition please stand up? (Hint: It’s all about the factions.)

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Four years ago, Japan looked like it had finally moved toward a truly competitive party system after years of virtual one-party rule by the dominant Liberal Democratic Party of Japan (LDP, or 自由民主党, Jiyū-Minshutō).Japan

But after a landslide LDP victory last December ushered former prime minister Shinzō Abe (安倍 晋三) back into office, the LDP once again controls over two-thirds of the seats in the House of Representatives, the lower house of Japan’s Diet (国会).  After Sunday’s House of Councillors elections, the LDP is overwhelmingly expected to re-take control of the upper house from the Democratic Party of Japan (DPJ, or 民主党, Minshutō), giving Abe a much easier time in implementing policy, likely for the next three years.  The LDP might well even find that it controls over two-thirds of the upper house as well.

Abe (pictured above) swept into power, nearly decimating the DPJ that had governed Japan from 2009 through last December, on a platform of massive monetary and fiscal intervention to boost the Japanese economy in what’s become known as ‘Abenomics.’  With approval ratings over 70%, Abe seems to have succeeded, at least in the short-term, in boosting confidence in his party and his ability to stimulate Japan’s economy after over two decades of deflation and low growth.

Critics fear, however, that if Abe controls a two-thirds majority in the House of Councillors as well, he’ll be in a position to push through amendments to Japan’s constitution, potentially paving the way for a controversial push for a more militarized Japan in the future.

Things are looking decidedly bleak for the Democratic Party.  Although only half of the seats in the House of Councillors are up for reelection, the DPJ’s grasp on power there is extremely narrow — it holds 106 seats to 83 seats for the LDP and 19 seats for the LDP’s more conservative, Buddhist ally, New Kōmeitō (公明党, Shin Kōmeitō).  Moreover, the Democratic Party would have been playing defense in this year’s elections regardless of its dwindling popularity — it will be defending 44 seats and other opposition parties will be defending 26 seats, while the LDP will be defending just 34 seats and New Kōmeitō will be defending just 10.

None of Japan’s other third parties seem capable of breaking through either.  The one party that seemed to have some momentum in December’s elections was the Japan Restoration Party (日本維新の会, Nippon Ishin no Kai), a merger between Osaka mayor Tōru Hashimoto (橋下徹) and right-wing, nationalist former Tokyo governor Shintaro Ishihara (石原慎太郎).  In particular, it was the youthful Hashimoto’s charisma that seemed to propel the party to win 54 seats in the House of Representatives last December, giving it nearly as many seats as the DPJ (which fell back to just 57 seats).  But the party’s fortunes have collapsed over Hashimoto’s comments indicating that U.S. soldiers in Okinawa should be allowed to use prostitutes and that ‘comfort women’ — civilians that Japanese soldiers forced into sexual slavery during World War II — were a necessary evil at the time.

Polls indicate that virtually no party can stop the LDP’s projected sweep — one representative poll earlier this week indicated that the LDP would win 43% and New Kōmeitō would win 8%, while the Democratic Party, the Japan Restoration Party and two other third parties, the liberal reformist Your Party and the Japanese Communist Party would each win just 6%.  That result would essentially thrust Japan back to its norm of one-party rule, leaving the Democratic Party potentially permanently shattered and permitting Abe to push forward with a pro-nuclear energy policy (still controversial after the 2011 Fukushima meltdown) and otherwise implementing a more nationalist Japan.

Or would it? Continue reading Will the real Japanese opposition please stand up? (Hint: It’s all about the factions.)

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

Can Shinzō Abe boost Japan’s economy?

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?

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

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