Playing games

After consultations among the governing parties, the Aso government has extended the current session of the Diet for fifty-five days, with 28 July the final day of the marathon session.

Ostensibly, the government wants time to pass the supplementary budget-related bills and the anti-piracy bill. But, as Asahi reports, the government only needs to wait until 12 July to have the opportunity to vote again on legislation ignored by the upper house; given that extending the session to late July virtually guarantees that the general election will be held as close to the end of the Diet's four-year term as possible, the long Diet is clearly more about politics than about policy. Naturally opposition parties said precisely that in criticizing the extension. And LDP officials responded to the extension by pushing back the likely date of a general election: on Tuesday Koga Makoto, the LDP's chief election strategist, suggested that an October election in possible.

Who wins the most from the extension? Komeito gets its wish, a virtual guarantee that the general election will be held after the Tokyo prefectural assembly elections in early July. Aso Taro will have more time to travel and play the statesman, and time to hope for another miracle that could give his party the slightest chance of victory in the election. LDP members unsatisfied with Aso's leadership have more time to oust Aso (a petition is now circulating to accelerate the LDP presidential election that must held later this year, in the hope that Aso could be bested). The LDP gets more time to figure out precisely how to sell itself in the campaign — LDP secretary-general Hosoda Hiroyuki said it's fine if the LDP compiles its manifesto closer to an election.

Ultimately it may make no difference. Both the LDP and the DPJ are engaged in posturing with little policy content. (At Shisaku, MTC calls the DPJ on its newly submitted bill "banning" hereditary politics.) The two parties have been debating whether to slash the number of lower house members (as always, Yamamoto Ichita is in the thick of the debate with his own proposal) and the merits of a ban on hereditary politics, as if Japan's biggest problem is too many politicians related to too many other politicians. Japan remains in the midst of a historic economic crisis — even if there are some "green shoots," the overall picture is, as Claus Vistesen argues, one of a deteriorating economy. Indeed, the government recently reported a 4.4% increase over the previous month in the number of unemployed irregular and temporary workers, a reminder of the social consequences of the crisis. Despite having an extra fifty-five days for parliamentary debate, neither party is close to having an answer for the crisis. Political reform of the kind being debated among the LDP and the DPJ are not irrelevant for Japan's future, but they are irrelevant for its present.

The political system, now more than any time during the past several years, is passing time until the general election. The Aso government and the LDP are too busy figuring out how to survive — their time horizons having narrowed considerably — to make plans for a long-term recovery. The DPJ, obsessed with taking power and reluctant to give the LDP ammunition, has no interest in a good-faith debate on any urgent policy matter, not when it can see victory in sight.

I'm with Yamaguchi Jiro: there's simply nothing left for this Diet to do that cannot wait until after a general election. That this Diet will seat for fifty-five days past its expiration date is a travesty.

Has Aso made up his mind about an election?

In recent days Komeito has upped the intensity of its disapproval of the government's calling a general election following the passage of its proposed stimulus package.

The LDP's junior partner is still concerned about an overlap between the general election and the Tokyo prefectural assembly election in July, but it has added a new argument against an early election: this past week both Ota Akihiro, the party president, and Kitagawa Kazuo, the secretary-general stressed that the government should prioritize important legislation over an election, arguing that there is more work for the Diet beyond the first supplementary budget, especially the piracy countermeasures bill, budget-related bills, and the revision of the national pensions law. In fact, the Diet has enough work to do that Komeito called for extending the ordinary Diet session until the end of July, presumably to ensure that the government will have enough time to get the budget-related bills through the Diet and have them pass via Article 59 over upper house resistance. On Wednesday, both Ota and Kitagawa met with the prime minister to request an August election, suggesting a degree of urgency in the debate over the timing of a general election.

Prime Minister Aso Taro claims to be taking all opinions and insists that he is not leaning one way or another, but is the intensity of Komeito lobbying a sign that Aso has made up his mind already, that he is leaning to exploiting recent political gains and opting for an early election? His party has made its position clear. Hosoda Hiroyuki, the LDP secretary-general, said Sunday that a general election following the passage of the supplementary budget and budget-related bills, which would of course give the opposition a stake in determining the timing of the election. What Hosoda did not do was give any ground to Komeito. The two ruling parties are now on record as disagreeing on what may be the most important question facing the government. My question from last week remains unanswered: does Komeito have any leverage over the LDP in this situation — is it actually threatening to withhold Diet votes, for example? — or is it simply begging the prime minister in the hope that he'll be solicitous of the opinions of his junior partner in government?

Meanwhile, I think Komeito's desire to extend the Diet session to late July is a non-starter. It is easy to imagine the uproar from backbenchers of all parties if they were forced to remain in Tokyo with an election imminent. Are the LDP's backbenchers with the party leadership on an election sooner rather than later, or are they prepared to wait until August or September, preferably with the summer free for campaigning?

After initial signs that it might bargain with the government over the supplementary budget, the DPJ has opted for outright opposition, rejecting the government's stimulus plans as "merely camphoric baramaki" while deciding not to submit amendments to the government bill. This decision will force Aso to decide whether he will engage in a prolonged battle with the DPJ to get the stimulus package and related bills passed (ensuring that Komeito will get its wish of a delayed election) or whether he will opt for a snap election sooner rather than later. As Ozawa Ichiro said Thursday, there are only two options for the general election, early June or early August.

As for Ozawa's own preference, while he didn't say, I suspect he would prefer the latter, giving himself time to reintroduce himself to voters around the country and hope for another momentum shift in the DPJ's favor.

Aso calls for a new Japan

Prime Minister Aso Taro, having had his second stimulus package pass the Diet Tuesday, appeared before the Diet on Wednesday to deliver his latest policy address.

Rhetorically, the address contains few surprises. In the opening sections, in which Mr. Aso addressed the principles behind his policies. He spoke of the "once in a century economic crisis" (although he omitted the phrase "emanating from America"). In discussing the work of building a new society and overcome Japan's third major crisis in the past two centuries, he once again stressed the importance of the virtue of industry, of hard work. To ensure Japan's continuing prosperity, he said, "It is necessary to build a society in which hard work is rewarded, a society in which senior citizens, the handicapped, and women find it easy to work." The fact that he needs to group women with the elderly and the handicapped when talking about remaking the Japanese labor force speaks volumes, doesn't it? As before, when Mr. Aso speaks of the elderly working, he speaks of it as a virtue, as opposed to something that should be kept to a minimum. Once again he gives the impression of a coach giving a pep talk to the Japanese people instead of a leader who understands the hardships his people are facing today. And as the Japanese press has noted, Mr. Aso has joined in the anti-capitalism boom, marking an "about-face from the Koizumi structural reforms." (Of course, such talk assumes that the LDP has not already moved away from Mr. Koizumi's agenda, which it clearly has.)

After explaining his principles, Mr. Aso addressed policy specifics, making the case for a three-stage process in making his new Japan. Step one is short-term economic stimulus, as contained in the two 2008 supplementary budgets and the 2009 budget to come. Far from saving Japan, however, the measures come across more as treading water in the midst of a tsunami than as a carefully designed plan to make up for lost foreign consumption. Japan's fate may depend more on what's happening in Washington than on what's happening in Tokyo.

Having explained the government's stimulus plans, Mr. Aso proceeded to the next phase, the medium-term phase in which the Japanese government is to set its fiscal house in order. This phase entails both the introduction of a consumption tax increase from 2011 — depending on the health of the economy — and cutting waste by lowering expenditures on public corporations and cutting the number of bureaucrats. In a single line Mr. Aso also promised to shift all of the road construction special fund into the general fund, a policy question that readers will recall wore down Prime Minister Fukuda's resolve in spring 2008. He also promised to accelerate decentralization.

Finally, the medium- to long-term phase of Mr. Aso's vision calls for a "new growth strategy." At the heart of this plan is the creation of a world-leading "low carbon society." He also calls for Japan's becoming a world leader in medical care for the elderly and rebranding Japan as a country with beautiful countryside, world-famous pop culture and fashion, and delicious, safe food. Connected to this, he promised to introduce a bill during the current Diet session that will trigger the Heisei agricultural reform, with the goal of raising Japan's self-sufficiency in food production. Mr. Aso's plan calls for a shift from "ownership" to "use" of agricultural land. He also wants greater use of rice-based products and more production of wheat and soya.

Mr. Aso also promised to remake the Japanese welfare state, starting with the pensions system. He apologized for the still-unresolved pensions scandal while stating that the government is making steady progress in cleaning up the mess. He addressed concerns about the declining quality of medical care, promising an increase of doctors working in the public service. Near the end of the speech, he actually mentioned education reform, which may be the most important piece of any effort to rejuvenate the Japanese economy and implement a "new growth strategy." Mr. Aso celebrated the introduction from April 2009 of a ten-percent increase in the number of math and science classes and new restrictions on cell phones in schools, but he actually says very little in this section about reform to how Japan educates its children. After mentioning forthcoming changes, he devotes the rest of the education section to discussing the achievements of Japanese scientists and researchers. A serious plan for reforming Japanese economy and society would treat the education system as more than an afterthought.

Mr. Aso concluded the speech by discussing a three-pronged foreign policy based on the US-Japan alliance, relations with Japan's Asian neighbors, and the UN and other international organizations, in short an approach wholly consistent with Japan's foreign policy mainstream and not altogether different from the DPJ. Mr. Aso and Mr. Ozawa might emphasize different legs of the three-legged foreign policy, but the differences are less than meet the eye. Mr. Aso did speak at some length about cooperating internationally to promote freedom and prosperity and combat terror and piracy, but his appeal lacked the same spirit that his calls to promote an arc of freedom and prosperity once had.

Bringing his speech to a close, Mr. Aso took a swipe at the DPJ for slowing down the political process and dismissed the talk of pessismists, who he says ought to look back and see how Japan rebuilt itself after the war into the very model of a high-tech, culturally attractive society.

There is very little of note in this speech. After mentioning the need to make it easier for women to work (see above), Mr. Aso offers few specifics for how to equalize the Japanese workplace. He has no real solutions to reversing demographic decline. Education reform is given a passing mention. While Mr. Aso is right to emphasize the "rebranding" of Japan, starting in stagnant rural areas, he says very little about how this transformation will actually be achieved. As is typical of these policy speeches, the connection between policy inputs and the desired outcomes is more often assumed than explicitly demonstrated.

Mr. Aso seemed more willing to acknowledge the extent of the economic collapse facing Japan today, but he also seemed as defiantly optimistic as ever, convinced of Japan's ability to overcome all challenges.

It is possible, however, that the current crisis may be too much for Mr. Aso and his weary LDP.

The LDP's tax revolt

The upper house has begun debating the Aso government's second stimulus package and its controversial proposal to distribute roughly two trillion yen to Japanese citizens, 12,000 yen (US$132) per person in the hope of restarting the Japanese economy.

At the same time, the LDP is in the midst what could be the climactic battle in a long civil war over whether to raise the consumption tax.

The two policies are linked, the product of a bargain between the government and the finance ministry whereby the finance ministry agreed to release the stimulus funds in exchange for a commitment from the government to raise the consumption tax at the earliest possible date. Accordingly, the battle raging around these policies involves the same protagonists: on one side, bureaucrat bashers Nakagawa Hidenao, Yamamoto Ichita, and other Koizumian reformists (with Watanabe Yoshimi now sniping from the sidelines), and on the other, Aso Taro, Nakagawa Shoichi, his finance minister, Yosano Kaoru, the economy minister and longtime advocate of consumption tax increase as indispensable for sound public finance, and the Japanese bureaucracy.

The debate is over whether the government should include a commitment to phase in a consumption tax increase from 5% to 10% starting 2011 in the government's mid-term tax program. In making the case for the increase, it appears that Mr. Aso and his ministers will emphasize the importance of the tax for providing economic security for all citizens. Asked about the planned increase in Diet proceedings Monday, Mr. Aso stressed the importance of restoring the country's finances for providing pensions, health care, and welfare for Japanese citizens and insisted that Japan must wait no longer than the time it takes for the economy to recover to set about fixing its fiscal situation. In a sop to the reformers, Mr. Aso has also promised that any tax increase will be accompanied by efforts to cut waste and reform the bureaucracy.

Mr. Aso will likely spell out his thinking on the consumption tax question in his policy speech, which will not be delivered before January 26. Yomiuri reports that his address will spell out his economic philosophy and emphasize the need to put social security on surer footing — and also suggests that Mr. Aso will join in the capitalism bashing, criticizing "market fundamentalism" and distancing the LDP ever further from Koizumi Junichiro's structural reform agenda.

Despite indications to the contrary, the government does not appear to be backing down from its commitment to either half of the stimulus package/consumption tax increase program, despite opposition from within the party, opposition parties, business leaders, and an overwhelming majority of the public. If anything, the government is doubling down on its commitment, despite taking a beating in the court of public opinion — and the prime minister is convinced he will get his way. Asked Monday evening whether he expects rebellion within the party over the bill to revise the tax system for the 2009 fiscal year, which will contain the promised consumption tax increase, Mr. Aso dismissed the idea. His finance minister rejected an appeal from a ministry shingikai to withdraw the stimulus package with an outright "no." Jun Okumura thinks there might be more to it, but it seems possible that the Aso government is so far gone down this path that to abandon this course of action could mean the end of the government, the final push that brings the government's approval rating into the single digits and results in a vote of no confidence.

In any case, in Monday's deliberations Mr. Aso reiterated his government's decision to push forward with the stimulus package

Of course, pushing ahead with the scheme could mean the end of the government as well. While Mr. Aso dismissed the chances of a rebellion should the government need a supermajority to reapprove its bills in the Diet during the current session, the possibility is all too real. The Koizumians, having become the LDP's anti-mainstream since Mr. Koizumi left office in 2006, may finally have been pushed too far. As the Tokyo Shimbun reminds us, it will take only sixteen rebels to defeat the bill should the lower house have to pass it again over upper house opposition. Will sixteen emerge? Even without considering the Koizumians, the Aso government could be in trouble. Even Tsushima Yuji, head of the LDP's tax commission and head of the Tsushima faction, has voiced his opposition to explicitly setting a date for the introduction of a consumption tax increase. One does not need to be a Koizumian to wonder whether it is politically sensible to commit to a consumption tax increase when it appears that Japan still has not reached bottom in the current economic crisis.

But should Mr. Aso get his way in party deliberations and succeeds at introducing a consumption tax commitment into Diet deliberations, the LDP's reformists may finally stand up and say no to the government after two years of being pushed to the side, with Nakagawa Hidenao and Yamamoto Ichita the two leading figures in the campaign against both sides of the government's bargain with the finance ministry. Mr. Nakagawa's fight is as much against the bureaucracy as it is with Mr. Aso. In this post at his blog, for example, Mr. Nakagawa argues that the bureaucrats are insensitive to the lives of the Japanese people, that their planning on the consumption tax question is based solely on economic statistics instead of on the reality of daily life. Mr. Yamamoto writes at greater length on the reasoning behind the opposition of the reformists. Mr. Yamamoto, like Mr. Nakagawa, claims to not be opposed to the consumption tax increase in principle but believes that other steps must be taken first before introducing the tax: steps to eliminate waste, cut the number of Diet members (an intriguing idea, seeing as how Japan has nearly two hundred more national legislators than the United States for a country with just over a third the population), and combat amakudari. He also rejects the arguments floated to defend the idea that a consumption tax increase is political suicide for the LDP — Mr. Yamamoto finds the notions that the public will praise Mr. Aso for tackling the consumption tax issue and for showing how the LDP will pay for its proposals (unlike the DPJ) laughable.

Messrs. Nakagawa and Yamamoto have now been joined by the maestro himself, Mr. Koizumi. The former prime minister met with Mr. Nakagawa and Takebe Tsutomu Monday evening and declared that the idea of setting a date for the introduction of a consumption tax increase is mistaken. Mr. Koizumi's guidance might not influence the government, but it may steel the resolve of the LDP's reformists. I wonder too whether Watanabe Yoshimi's now constant presence on television will give courage to his former compatriots, providing a reminder that they have a place to go should they decide to rebel against the government. Mr. Watanabe's decision to act as an advance guard may yet prove to be a wise decision.

In any case, as this debate unfolds it is worth noting that the tax debate captures everything that is wrong with the LDP today and illustrates why prime minister after prime minister has failed to govern.

The tax issue encompasses everything: Kasumigaseki-Nagatacho relations, the size and role of the state, the future of economic governance (neo-liberalism versus something else), control of the LDP and the government, and the LDP's prospects beyond the 2009 general election. It shows that the LDP is several parties traveling under one label, several parties that increasingly see the political system in fundamentally irreconciliable ways. Mr. Aso and his predecessors have failed because the LDP is beyond the command of any one politician. Japan is ungovernable because the LDP is ungovernable, meaning that the loser in all of this is, of course, the Japanese people, who are no closer to having a government capable of fixing the government's finances and providing the protection they desire.

Is such a government waiting in the wings? The DPJ has been sniping on the sidelines of the LDP debate, presenting an argument similar to the LDP's reformists — the DPJ will oppose any bill stating a date for a consumption tax increase because efforts to reform the bureaucracy should precede any increase in the tax burden for the Japanese people. The DPJ, however, should tread carefully. It is easier to bash the bureaucracy than to offer a plan to fix the budget that does not include a consumption tax increase in some form. And if and when the DPJ forms a government, it will need that selfsame bureaucracy in order to govern.

Finally, as an aside, it is worth asking whether the current Diet, nearing the end of its term, should be allowed to vote on such weighty matters as whether to provide a stimulus package of dubious effectiveness or to commit to a consumption tax increase. While in a purely technical sense the current Diet is, of course, legitimate, it is in some sense a lame duck Diet, given the likelihood that the government will call an election as soon as it has the 2009 budget in hand. Why should a collection of parliamentarians, many of whom will no longer hold their seats at year's end, be allowed to decide Japan's fate at this critical turning point? It is clear why Mr. Watanabe wants an election to be held immediately.

The LDP and the DPJ face the future

The LDP and the DPJ had their annual conventions in Tokyo over the weekend, steeling their resolve for the Diet session already underway and the general election that will occur within the year.

For the second straight year, the incumbent LDP president and prime minister told the party faithful that the "responsible governing party" (how the LDP now refers to itself) faces the worst crisis it has ever faced — at the same time that Japan confronts (to use what has now become a mantra from Aso Taro and his cabinet ministers) "the worst economic crisis in one hundred years, which has emanated from America." Mr. Aso told the convention that "only the LDP" can overcome the economic crisis, which would presumably be enough to save the party from what looks like certain electoral defeat later this year. (Interestingly, Hosoda Hiroyuki, LDP secretary-general, has criticized Mr. Aso's frequent use of this exculpatory expression because it is too negative, arguing that it dampens consumer confidence and undermines the government's own policies. And here I thought the problem was that by using this expression Mr. Aso was more or less ignoring discussing the crisis and therefore ignoring a serious effort to diagnose its cause and offer an appropriate and effective response...)

On that note, Mr. Aso used his address to repeat his pledge that Japan will be the first to escape the crisis and once again express his belief in the ability of the Japanese people to overcome any challenge. He also made sure to note that the nejire kokkai (read: DPJ obstructionism) is to blame for any lack of progress in moving the government's agenda in recent years.

None of this was particularly new or particularly inspiring; the 2009 LDP convention may be about as exciting a party as the 2009 World Economic Forum, another gathering that Mr. Aso may address.

The mood at the DPJ convention, held at a former postal meeting hall in Tokyo's Minato ward (as opposed to the luxury hotel that hosted the LDP gathering), was different, and not only because of the relatively spare meeting hall, a reflection of the party's need to conserve funds for the general election campaign. If Mr. Aso's speech had a pugnaciousness reflecting his party's and government's dire circumstances, Mr. Ozawa's was characterized by what looks like an attempt to strike an Obamanian note, full of talk of building a new Japan. In fact, Mr. Ozawa's leitmotif appears to have been borrowed from Abraham Lincoln's Gettysburg Address: he declared that the DPJ's fundamental purpose is a "politics of the people, by the people, and for the people," and then offered policies to create an economy "of human beings, by human beings, and for human beings" (contrasted with "a market economy of capital, by capital, and for capital") and finally a society "of citizens, by citizens, and for citizens." Rhetorically, this construction is clumsy and actually cheapens the phrase.

Meanwhile, does Mr. Ozawa have to copy Shii Kazuo and the JCP? I am sympathetic to his point about building a safety net and counteracting the "dehumanization" caused by capitalism — score one for Karl Polanyi — but Mr. Ozawa would do well not to get too carried away in the anti-capitalist rhetoric sweeping the Japanese political system.

This election year is turning into a fight over who can be the most energetic in criticizing "market fundamentalism;" even the LDP's reformists, the vanguard of the Koizumi revolution, have shifted their emphasis from pushing for economic deregulation to attacking the bureaucracy and fighting the consumption tax. But sooner or later, one party or another will have to govern, at which point it will discover that the market is still there — and that the Japan will have to find a way to be more competitive while providing an appropriate and politically desired level of social assistance. I recognize that in criticizing "market fundamentalism" Japanese politicians are specifically criticizing neo-liberalism and the ideology that fueled the US financial crisis, but at times their rhetoric strays into more radical terrain. There needs to be less focus on pointing fingers and assigning labels and more focus on providing answers to the questions of how Japan can provide greater opportunity for its citizens and greater protection for the aged and infirm — in particular, how it can pay for it. My hunch is that the Japanese people are more interested in these answers than in learning who among their leaders are card-carrying members of the neo-liberal party.

In the latter half of the speech, Mr. Ozawa does turn his attention to these matters. He calls for two New Deals, an "environmental" New Deal and a "safety" New Deal. The former basically appends to the party's standing promise of subsidies for farmers a pledge to promote the "greenification" of rural Japan through the widespread use of solar panels and the "greening" of roofs and walls of homes and offices. The latter calls for making schools and hospitals earthquake-resistant, basically an overt pledge of support to small- and medium-sized enterprises that would benefit from these contracts. As Mr. Ozawa said himself, the goal is to promote job creation in rural Japan.

All in all, Mr. Ozawa's proposals are less ambitious than his rhetoric would suggest. And there's still no indication of how a DPJ government will pay for the two new deals. Once again, Mr. Ozawa has borrowed a phrase from American political history only to drain it off its evocative power. The New Deal was an ambitious experiment in American governance; it is still unclear how a DPJ government will be a dramatic departure from the past, other than the fact of its existence.

That's not to say it's impossible for a DPJ government to break decisively with the status quo, but for now the DPJ has a lot of work to do to determine precisely how it intends not just to jump start the Japanese economy, but to put it on a more viable footing. As an article by Waseda's Noguchi Yukio in Shukan Diamond argues, the decimation of the past several months may mark nothing short of the end of Japan as "skilled manufacturing, exporting nation."

While time will tell whether this is hyperbolic, the DPJ ought to have a better answer to this transformation than two feeble "new deals."

Watanabe to LDP: I'm outta here

It appears that Watanabe Yoshimi is nearing a decision regarding his future in the LDP. With the second stimulus package scheduled to come to a vote on January 13, Mr. Watanabe could leave the LDP in a matter of days.

Mr. Watanabe appears to be working hard to exacerbate tensions with the LDP. Not surprisingly, the prime minister rejected his demands regarding the timing of a general election and administrative reform, with the LDP mocking them as reflective of Mr. Watanabe's "heroic delusions." Not that it was ever likely that the prime minister would cave to the demands of a discontent backbencher.

Mr. Watanabe has also been going after the prime minister on the question of administrative reform. He expressed his dissatisfaction with Mr. Aso's response to a question in Thursday's Diet proceedings, suggesting that he has "given up hope" in the possibility of Mr. Aso's eliminating the practice of amakudari. Mr. Watanabe plans to question Mr. Aso directly in Diet proceedings on Friday on the same matter, which appears like a prelude to a vote by Mr. Watanabe against the second stimulus package on Tuesday.

All of this is to be expected. Mr. Watanabe has made it nearly impossible to remain in the party and have any measure of influence: better a flight to the wilderness than internal exile. His exodus may, however, be a lonely one. None of his fellow reformists have stood up to be counted with him. For all their opposition, none has publicly stated his or her intention vote against the stimulus package. The LDP is taking seriously the threat of rebellion on Tuesday — Asahi reports that the party is trying to get every member to commit to voting for the supplemental budget, along with trying to sell the plan to a wary public — but it seems unlikely that Mr. Watanabe will have company if he decides to oppose the bill.

For an example of the attitude of Mr. Watanabe's fellow reformists, see this blog post by first-termer Yamauchi Koichi, in which Mr. Yamauchi expresses his agreement with Mr. Watanabe's policy ideas, but indicates that he will not take the step of leaving the party, preferring instead to continue to work on improving the LDP from within. This attitude seems to be shared by Yamamoto Ichita, who at the same time that Mr. Watanabe has drifted further into rebellion, has created yet another study group opposing some dimension of the government's agenda, in this case the plan to raise the consumption tax in three years' time. Mr. Yamauchi is one of eight members of the new study group. For all the fanfare that surrounds some of these groups, I'm not certain that they accomplish anything, and as Mr. Watanabe is learning, they apparently do little to build solidarity among ideological compatriots. (Indeed, in the midst of all this, Mr. Watanabe just joined a study group with former Koizumi lieutenant Takebe Tsutomu.)

So the question remains then as to what will happen when he leaves the party. The DPJ is reportedly reaching out to Mr. Watanabe, but whether he will take the opposition party's hand is unknown. Presumably he won't do so without some position of prominence being given in return.

The result is that if and when Mr. Watanabe votes against the government's stimulus package Tuesday, the Japanese political system will step into the unknown. Mr. Watanabe's leaving could be the first domino of a political realignment or it could be a futile, isolated step that marks the end of Mr. Watanabe's career.

Before the deluge

After an abbreviated recess, the Diet will reconvene today for its 2009 ordinary session.

The situation facing Aso Taro, his party, and his country is dire, and growing darker by the day. The latest development is the tent village — is it appropriate to call it an Asoville or Aso-mura? — that has been growing in Hibiya Park, populated by unemployed temporary workers with nowhere else to go. From Monday the unemployed will relocate to four sites in the Tokyo area, but after next week it is unclear what will happen to them. Asahi reports that the denizens of the temporary village will be demonstrating at the Diet on Monday.

A crowd of unemployed workers sleeping in Hibiya Park, living on emergency food aid: it is with this backdrop that the LDP approaches what may be its final Diet session (for now) as Japan's ruling party.

Mr. Aso, in a press conference Sunday, did his best to remain positive, as is his wont. Far from heeding Franklin Delano Roosevelt's 1933 warning about "[denying] the dark realities of the moment," Mr. Aso insisted once again on speaking of a bright future while ignoring the ever bleaker present.

"The future," he said, "is built by us. We build. The future is bright...I want to build a bright Japan for all the people."

He insisted that the supplementary budget containing a second stimulus package must be passed before the end of the fiscal year. He repeated that he is not thinking about calling an election until the second 2008 supplemental and 2009 budgets are passed. He said that it is appropriate for the LDP to discuss a future consumption tax hike, following the restoration of economic growth. Finally, he concluded by saying that he is not worried about the possibility of rebellion by LDP malcontents, that he even understands their grievances.

It increasingly appears like Mr. Aso's anodyne remarks are intended not so much to reassure the public as to reassure himself. Perhaps it's working; maybe Mr. Aso really believes that a brighter future is right around the corner.

The reality, of course, is that it increasingly appears that not only will Mr. Aso preside over the continuing disintegration of the Japanese economy, he may also preside over a disastrous general election for the LDP and the disintegration of the LDP. Watanabe Yoshimi, the man in revolt, appears to be steeling himself for a break with the party. Speaking to his koenkai in Tochigi over New Year's, Mr. Watananbe told his supporters that he remains opposed to the government's two trillion yen payment plan and, moreover, that if the government does not continue to reform the bureaucracy — his pet issue — he is resolved to leave the party and place himself at the head of a popular movement. It remains to be seen whether Mr. Watanabe is bluffing. I'm inclined to believe he's not. Indeed, it appears that Mr. Watanabe may be setting the table so that it appears that the Aso government is to blame for his leaving for failing to accept his conditions (including an immediate dissolution of the lower house followed by a general election). The pertinent question then is whether anyone will follow him out of the LDP, or, failing that, whether a popular movement will materialize around him.

Unfortunately I'm pessimistic about both. The LDP's would-be defectors appear to have been sufficiently restrained by the party, at least until after a general election. As for the other alternative, would Mr. Watanabe be able to repeat Hosokawa Morihiro's feat of channeling popular discontent into a new micro-party that could propel him to power? Mr. Hosokawa's Japan New Party formed in 1992 and competed in upper house and local elections before the 1993 general election. Mr. Watanabe will have far less time. Would he be able to find enough candidates, not to mention enough field supporters, to make his movement into a factor in the post-election landscape? The presence of the DPJ will further complicate matters, potentially dampening enthusiasm that might otherwise have bolstered his movement.

In the meantime, Mr. Watanabe — along with Nakagawa Hideano and other reformists — will continue to agitate from within the LDP. Mr. Nakagawa began the year by declaring his belief in the need for a political realignment, and rejected all talk of a consumption tax hike. Discontent within the LDP will only grow in the coming months, whether or not Mr. Aso is prepared to address it.

Ozawa Ichiro is undoubtedly heartened by the news surrounding the start of the new Diet session. He reasserted the importance of putting the people's livelihoods first and, in a deft move, criticized both the government's delay in introducing a new stimulus package and the content of the stimulus package on offer. His point that a new stimulus package should reflect the DPJ's concerns too is a salient one, if only because the DPJ, as the master of the upper house, should be involved in the drafting of such an importance piece of legislation. The LDP still has not learned that the divided Diet means that consulting with the opposition should occur before the introduction of legislation. Of course, doing so would probably mean cutting side payments to important LDP and Komeito constituencies. (But the DPJ is the only party playing politics with an issue of national importance...)

Mr. Ozawa also voiced his approval of Mr. Watanabe's remarks before launching into an extended criticism of Mr. Aso's remarks. Addressing Mr. Aso's declaration that the key words for the Diet session are "security" and "vitality," Mr. Ozawa said, "While saying these words, the true figure of the Aso government is that by doing nothing for three months it created a political vacuum. I think the people really understand this. Therefore it's impossible for the people to be deceived by this word play."

In response to a question from a journalist, who wondered why Mr. Ozawa is spending so much time on rural districts, Mr. Ozawa reasserted the importance of the DPJ's campaigning in longtime LDP strongholds in rural Japan. He believes that the DPJ's message of opposition to market fundamentalism, competition, and the inequalities "that have resulted from globalization" can succeed across Japan — although he declined to offer specifics for what the DPJ is promise in place of these enemies.

For now, however, it seems that the DPJ will not be penalized for doing little more than campaigning on the basis of the insecurities, the grievances, and the anger of the Japanese people. The DPJ is setting the public agenda; the LDP is now talking of "protecting the people's livelihoods," not unlike Mr. Ozawa's "The people's livelihoods first." The party owns the issues that matter most to the public, and as the economy worsens may even appear to be a reliable steward of the economy compared to the LDP.

The DPJ should not be too upbeat. If current trends continue and if the DPJ wins this year's election, it may come to regret taking power thanks to a historic economic crisis that appears far from finished in Japan, not to mention everywhere else.