Tuesday, February 5, 2008

Nakagawa's economic policy

As noted in this post, Tahara Soichiro thinks that Nakagawa Shoichi, instigator of the "True Conservative Policy Research Group," would make a fine leader in place of the current crop of party leaders and would be adept at addressing the many pressing issues facing the government.

What, you wonder, does Mr. Nakagawa think about economic policy?

Mr. Nakagawa tells us himself in a column published on 1 February.

Correct me if I'm wrong, there's nothing in it this strikes me as particularly novel or innovative.

He offers the standard rationalizations for using the temporary gasoline tax for road construction (the revenue is needed, and not just for road construction, but for maintenance, snow removal, and safety). The special measures tax bill has to pass because the government conveniently bundled the gasoline tax portion with tax breaks for small- and medium-sized businesses and tariff reductions. The US has passed a temporary fiscal stimulus program, so Japan should too, handing money to salarymen so that they can spread it around the economy — and passing more emergency tax breaks for individuals and small- and medium-sized businesses. He also thinks that Japan should investigate the creation of a sovereign wealth fund. (Does anyone actually trust the government to administer a fund without corruption or mismanagement?)

In short, I think Mr. Nakagawa, along with the other members of his study group, still have a blind spot for economics and matters related to the structural reform of the Japanese economy.

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