Talking about Kan on CNBC

The virtues of Kan

Kan Naoto, Hatoyama Yukio's second finance minister, was the first DPJ member to declare his intention to run in the party election scheduled for Friday — and it seems unlikely, for reasons outlined by Michael Cucek here, that he will be denied the job.

What would be the significance of Kan's replacing Hatoyama?

I think that what I wrote when Kan became finance minister is even more apropos for Kan's becoming prime minister: "While it is common to point to DPJ politicians like Hatoyama and Ozawa and conclude that the DPJ is a pale imitation of the LDP, Kan's career shows that the DPJ's victory has brought new politicians with different backgrounds and different concerns from LDP politicians to the fore." Should Kan become prime minister, he will be the first prime minister since Koizumi not directly related (son or grandson) to another prime minister, and the first non-hereditary politician since Mori. He began his career toiling on the margins of Japan's reformist left, a follower of Eda Saburō, who tried and failed to modernize the JSP, and lost three elections before finally winning a seat as a representative of the Social Democratic Federation (SDF) in 1980.

Indeed, the political origins of Hatoyama and Kan could not be more different. Not only is Hatoyama the scion of a political dynasty, he seemingly entered politics on a whim — the family thought his brother Kunio would be the politician while Yukio would pursue his academic career. Kan, however, became involved in politics purely out of his convictions, starting as a student activist. Had Kan been interested in pursuing personal ambitions, he could have found better ways to do it than by following a marginal center-left politician.

Accordingly, unlike Hatoyama, he has a core set of beliefs that may in fact be best called social democratic or liberal in the American sense. He is egalitarian, a believer in transparent, clean, and accountable government. He became famous as minister of health during the mid-1990s for taking on his ministry's bureaucrats over an AIDS-tainted blood scandal, which may be an easy position for a politician to take (especially during the "bureaucrat-bashing" 1990s), but nevertheless conformed with the focus of Kan's career in politics. During the months leading up to the election, he became the DPJ's point man on administrative reform, a role he continued to play when the Hatoyama government formed. 

Perhaps it would not be inappropriate to say that his beliefs are something like Eda's, who in 1962 stressed that he wanted Japan to have "the American standard of living, Soviet levels of social protection, British parliamentary democracy, and Japanese pacifism." While these days one would not think to look to the Soviet Union as a model for social protection — Scandinavia would probably be the model today — this mix of policies might best capture Kan's politics, perhaps with the exception of Japanese-style pacifism (more on this momentarily). He certainly made clear last summer that he believes strongly in the necessity of Westminster-style parliamentary democracy in Japan, and as finance minister

Kan has said fairly little over the years about foreign policy and Japan's relations with the US and its neighbors. To the extent that he has talked about foreign policy, for instance on previous occasions that he led the DPJ, his views have been virtually at the center in terms of the spectrum of opinion within the DPJ. He as acknowledged the importance of the alliance and the US forward presence on multiple occasions, but when Koizumi was prime minister, he criticized the government for its slavish subservience to the US and for not balancing the US-Japan relationship with the other "pillars" of Japanese foreign policy, multilateral cooperation at the UN and bilateral and multilateral relations within Asia. He isn't exactly dovish, but he's no hawk either. Accordingly, I would not be surprised if Okada Katsuya either stays on as foreign minister or continues to play an important foreign policy role in another capacity.

However, the details of Kan's policy beliefs may be less important at this juncture than his biography. Given that he is a conviction politician, given his ministerial experience (something that Hatoyama lacked), and given his emphasis on open politics, Kan may be the right man to restore public trust in the DPJ-led government and lead his party to a respectable showing in next month's upper house election. The central task for the Hatoyama government was the restore public faith in government after years of LDP misrule. The central task for a Kan government would be to restore public faith in government after years of LDP misrule — and nine months of Hatoyama misrule. If the public does not trust the government, it is difficult to see how Japan will escape its economic stagnation. As I've said before, if the public cannot trust the government to be honest about its intentions and forthright about how public money is spent, no government will be in a position to ask for something like a consumption tax increase.

Kan certainly has the right biography for this purpose — and having been a cabinet minister before, he should be more capable of managing the cabinet than Hatoyama was, avoiding the self-inflicted wounds that ultimately destroyed the Hatoyama government.

What about that other task facing the new government, the Futenma problem? Kan has said little about it, refusing, it seems, to stray beyond his brief as finance minister. However, it seems unlikely that Kan — or any other DPJ politician — will rush to embrace a plan that is now being written off as unimplementable. Perhaps he will have the backbone to scrap the thing entirely. One way or another, the demise of Hatoyama following his shift on Futenma and the collapse of the coalition with the SDPJ has undoubtedly poisoned the issue. If the Obama administration were smart, it might learn from the mistakes it made last year when the Hatoyama government took office and give the new government time to find its bearings and plan a course of action, whether that course of action is trying to soften up public opinion on some relocation option within Okinawa or searching again for an option outside of Okinawa. If the US is actually serious about resolving the problem, it is not enough to say that Japanese public opinion is simply a problem for the Japanese government to deal with: to insist once again on a plan that cannot win the support of the Japanese public and expect another prime minister to fall on his sword for it would be sheer folly.

Ultimately if Kan is the next prime minister and if the Ozawa regime is truly uprooted, the DPJ will have an opportunity to reclaim some of the goodwill that has been squandered since September.

(Image courtesy of Curzon from Mutantfrog/The Coming Anarchy, based on a whimsical Facebook status update of mine from earlier today)

Ennis on the resignation

Peter Ennis, formerly of The Oriental Economist, has picked the perfect time to start blogging.

His take on the resignation can be found here.

Discussing the resignation

I will be on Asia Squawkbox on CNBC Asia at 8:30am Japan time Thursday to discuss the implications of the resignation.

Regime change?

It seems that in addition to Hatoyama's resigning from the premiership, Ozawa Ichirō will resign as secretary-general of the DPJ.

If Ozawa does resign — together with his lieutenants in various leadership positions within the DPJ with him — and actually manages to retire from politics and not try to run the party from the shadows, the twin resignations of Hatoyama and Ozawa may actually provide the DPJ with an opportunity to reclaim the hope that accompanied the party's victory last year.

That Hatoyama and Ozawa were at the head of the new regime when the DPJ took power was a bit strange. Of course they were among the party's most senior and experienced politicians. There really was no alternative, and no other candidate — aside from Okada — was capable of challenging last year's passing of the torch from Ozawa and Hatoyama (thanks to Maehara Seiji's disastrous tenure as party leader). But these two hereditary politicians whose careers began in the LDP wound up at the head of a parliamentary majority composed largely of newcomers to politics, very few of whom had relatives in politics. The DPJ's promise was less in its policy program, aside from its institutional reforms, than in the new blood it injected into the Japanese political system. But between their corruption scandals and the fact that no one could tell just what Ozawa's role was in policymaking, the DPJ diarchy managed to squander its new majority.

More than Hatoyama's, Ozawa's departure provides the DPJ with a chance to reclaim some of the energy. It will enable a party leadership to abandon Ozawa's courtship of fading interest groups and focus once again on speaking to floating voters. Inevitably the next secretary-general will not overshadow the prime minister, meaning that the secretary-general might actually help the prime minister sell his policies to the public while corralling the party's backbenchers.

At the same time, however, the new secretary-general will not inspire the same fear in the party's backbenchers. The result could be more give and take between the leadership and the rank-and-file — or it could be complete chaos.

Ultimately it will depend on the prime minister, whether Kan, Okada, or someone else entirely. With decisive leadership at the top the policymaking system the DPJ tried to put in place when it took power might work better than it did under Hatoyama.

Hatoyama departs

It appears that the inevitable has happened: NHK reports that Prime Minister Hatoyama Yukio has informed the DPJ leadership that he intends to step down.

Hatoyama, of course, has no one to blame but himself. In the nine months since he took office, he has failed as a manager of his cabinet, as the head of the DPJ, and as the leader of his country. Unable to make up his mind, he groped from blunder to blunder, before finally making a controversial decision on Futenma without doing any of the work to convince a skeptical public of its merits.

The good news is that his successor should, to a certain extent, have an opportunity to press the reset button, seeing just how much dissatisfaction with the prime minister was behind growing dissatisfaction with the DPJ. The bad news is that Hatoyama will leave his successor the poison pill of the latest agreement over Futenma, which the public overwhelmingly opposes and which appears to be more or less unimplementable, and with an uphill battle for the House of Councillors next month. And that's without mentioning lingering problems concerning the long-term future of the Japanese economy.

And so the US gets its wish: the "loopy" Hatoyama is gone, having overstayed his welcome and squandered whatever goodwill last year's election earned him. His successor — whoever he is (given that in all likelihood the DPJ will plan for a smooth transition to Kan or Okada) — will have to set to work immediately fixing the DPJ's standing with the public, starting with yet another attempt to fix Futenma in a way that satisfies Okinawans and the general public.  He'll also have to do what Hatoyama failed to do: make Ozawa serve the prime minister, another failure that ultimately doomed Hatoyama. The US, meanwhile, would be wise to give the new prime minister plenty of space this time around.