Observing Japan in the Wall Street Journal Asia

My (optimistic) assessment of the current political situation is in today's issue of The Wall Street Journal Asia.

You can read it here.

Low posture to blame for Fukuda's problems?

In Japanese postwar political history, the phrase "low posture" — 低姿勢, teishisei — is most associated with Prime Minister Ikeda Hayato (1960-1964). No mere slogan, the phrase signaled an end to the Kishi era, which ended in violence in the streets of Tokyo.

The Ikeda era would be one of "tolerance and patience," of working with the opposition to formulate policy.

The phrase subsequently became associated with the LDP mainstream as embodied by the Kochikai — indeed, it became part of the furniture of LDP rule under the 1955 system. Even Fukuda Takeo, the current prime minister's father, who was associated with the anti-mainstream Kishi faction, declared his commitment to a "low posture" in Diet proceedings in August 1977: "As for Diet management, for my government and the LDP, in facing other parties we must have a low posture...So, concerning important policy, before the government decides we want to ask for everyone's opinions as much as possible."

Of course, the flip side of the declared commitment to a low posture was the inevitable criticism from opposition parties when the government reportedly failed to adhere to this stance. Prime Minister Ikeda was not immune, as in the later years of his government, Socialist Diet members regularly claimed that his low posture was just a political maneuver to placate the public before elections.

Fukuda Yasuo is but the latest adherent of the LDP's low posture school to serve as prime minister — and according to Sankei, the Fukuda cabinet's troubles illustrate the "bankruptcy" of the low posture and the need for a firmer line with the DPJ. In an article that sounds suspiciously editorial-like, the newspaper suggests that there are "omens" that Mr. Fukuda is set to abandon the cooperative posture he adopted upon taking office.

It seems that Mr. Fukuda's — and the LDP's — problem is that its posture hasn't nearly been low enough. While the government has been sparing in its use of its HR supermajority, it has acted as if the supermajority gives it the ability to dictate terms to the DPJ and the HC. Prior consultation? Genuine deference to the DPJ's positions? The government has preferred to submit its proposals and then attempt to hammer out a compromise after the fact. MTC ably demonstrates how the government's poor time management is indicative of the Fukuda government's attitude towards the DPJ. In the months since being denied its grand coalition with the DPJ, the LDP has preferred to gripe about the DPJ's failure to be a "responsible" opposition party than to forge realistic and working cooperation as necessary with the HC's largest party. If any government deserves to be criticized for announcing a "low posture" as a political ploy, the Fukuda government is it.

The government still has not come to terms with the idea that unless it wants to govern solely by Article 59 and leave important posts unfilled, it has no choice but to work with the DPJ. And so the BOJ governorship is occupied by an interim governor (has the sky fallen yet?) and the Japanese people are about to get a nice tax cut come April 1.

Bank chaos

The fight between the LDP-Komeito governing coalition and the DPJ over the leadership of the Bank of Japan shows no sign of abating.

On Wednesday, of course, the DPJ-led House of Councillors formally rejected the government's nomination of Muto Toshiro to be the new president of the BOJ. The government has resubmitted Mr. Muto's nomination in response. In his daily press conference Wednesday, Chief Cabinet Secretary Machimura Nobutaka professed an inability to understand the DPJ's reasoning and once again highlighted the urgency of a smooth transition to a new BOJ president given prevailing financial conditions.

I must agree with MTC: the DPJ does not bear the blame for this "crisis" alone. For all of Mr. Fukuda's willingness to cooperate with the opposition, his party and his government have failed to come to terms with new masters of the Upper House. They have refused to accept that they actually have to consult with the DPJ, instead of presenting them with proposals as faits accompli (as they did in the case of Mr. Muto). Not surprisingly, Kitagawa Kazuo, Komeito secretary-general, used this occasion to complain about the constitutional defect of the HC's role in personnel appointments, illustrating the disdain with which the government still views the opposition's control of the HC.

If the government is so concerned about a vacancy at the bank, it should have been both (a) making the case for Mr. Muto persistently and loudly starting months ago and (b) exploring alternatives with the DPJ. The LDP is always talking about urgent national problems and yet now, when faced with one, it seems that the government has no plan B. It's Muto or nothing. Is there really only one man qualified to serve as BOJ president? If so, Japan must be in even worse shape than I thought.

So the HR will pass the Muto nomination again this afternoon, daring the HC to once again reject it. If it does, will the government nominate Mr. Muto a third time? And will the DPJ suffer political consequences as a result of holding fast in its opposition to Mr. Muto?

The DPJ keeps pushing

With the Fukuda cabinet's popularity in free fall thanks to the fallout from the Atago incident, the DPJ's stance on the government's nomination of Muto Toshiro to be the next BOJ president has become decidedly less ambiguous. The DPJ has indicated that there is no chance of its consenting to Mr. Muto's nomination.

In response, Ibuki Bunmei, LDP secretary-general, has criticized the DPJ for "playing politics" with the nomination. Playing politics. As if the DPJ is in the wrong for exercising its prerogatives as the largest party in the House of Councillors and forcing the LDP to respect the opposition.

Mr. Ibuki, the game has changed. Through a series of accidents, the DPJ is once again in a position to criticize the government for its poor handling of just about every issue it faces. This is the approach emphasized by Ozawa Ichiro, who spoke of the government's breach of trust in the relationship between LDP and DPJ, and Yamaoka Kenji, who suggested that if there is a vacancy at the BOJ, it will be the government, not the DPJ that bears the blame. The government, the DPJ reasons, will be the anger of the global markets for failing to do whatever necessary to placate the DPJ and ensure a smooth transition at the BOJ.

The DPJ may be right, because, after all, among those whose voice actually matters when it comes to forming governments, I imagine that the LDP's claims that the DPJ is "playing politics" with the BOJ transition will stick less than the opposition's claims that the government has mishandled every issue it has confronted and can't even tackle corruption and malfeasance within the bureaucracy.

Another turn may be waiting in the wings, but it looks like the DPJ has played this issue right: from the start it focused on the process of HR-HC "dual-key" nominations rather than specific nominations, preserving its options to cooperate or resist depending on the public mood. The government, so certain that it would get its man, only now seems to be preparing alternative nominees (Yamaguchi Yutaka, a former BOJ vice president, has been suggested) that might placate the DPJ.

Welcome to the divided Diet, Mr. Fukuda (and Mr. Bunmei, et al).

The limits of Japan's bipartisan moment

With diminishing prospects for a general election before July and no signs of another attempt to form an LDP-DPJ grand coalition, Japanese politics appear to have entered a bipartisan phase.

The most prominent symbol of this moment is the Sentaku movement, which, according to Yomiuri, may ultimately include between fifty and sixty members of the HR and HC, in addition to prefectural and local officials. Another sign is the bipartisan Diet reform group mentioned in this post.

Will Japan's new bipartisanship (or tri-partisanship, with the participation of Komeito) produce any tangible results, or is it the product of frustrations with the nejire kokkai that will fizzle out once a general election nears and both the LDP and the DPJ return to full-time campaigning?

This moment is a natural response to the divided Diet: cooperation short of a coalition government, as policy entrepreneurs in both parties search for allies in an attempt to move their issues (Diet reform, decentralization) to the forefront of political discussion.

I'm skeptical that a small cadre of Diet members and their allies in prefectural governments will be able to halt the emergence of a two-party system. The movement might be able to shift the agenda somewhat, not least because it is unclear exactly what agenda the Fukuda government will pursue in the second half of the current Diet session. Beyond that, however, they will run firmly into the twin walls that are the DPJ's imperative to oppose the government and differentiate itself from the LDP, and the LDP's imperative to shore up its support in rural Japan in advance of a general election.

On that point, I have a hard time seeing how the LDP could give its full support to Sentaku's decentralization proposals. Fiscal centralization has been a pillar of LDP rule — it has helped elect LDP officials in local and prefectural elections, as they would have better access to the LDP-controlled trough in Tokyo. Radical decentralization would likely be the final blow against LDP rule, breaking the pipeline between the parliamentary and prefectural LDPs and introducing more political competition into local politics. In that event, the DPJ's small breakthrough in last April's local elections would be the beginning of a major shift in local governance, which would in turn strengthen its position in national politics.

Accordingly, the impact of the new bipartisanship will be marginal at best.

If the Sentaku movement is the germ of a new party, its significance might be greater, but in becoming a new party, it faces an entirely different set of obstacles. As Ito Atsuo, a veteran of the political upheaval of the 1990s, writes in the March issue of Chuo Koron, new parties face considerable barriers, starting with the collection of members and money. However, one advantage that Sentaku would have as a party is that unlike many of the new parties that formed during the 1990s, it would be comprised of more than just Diet member defectors from other parties — it would be able to draw on support at the prefectural and local levels, giving it a more formidable presence. That said, as is the case with Hiranuma Takeo's mooted "true" conservative party, I don't expect a new partisan realignment until after a general election, if then.

And besides, should a desire to find a "nonpartisan" agenda on the part of some LDP and DPJ Diet members be interpreted as a sign of their willingness to defect?

The headline says yes, but the body says not yet

The FT's David Pilling reports that the DPJ will accept the government's nomination of Muto Toshiro, currently the BOJ's deputy governor, to serve as Fukui Toshihiko's successor as BOJ governor.

At least that's what one might think from the headline: "Japanese opposition to accept new bank chief."

The body of the article, however, indicates that while the DPJ has softened its opposition, it has yet to assent officially to the government's nomination.

In fact, Ozawa Ichiro, DPJ president, insisted over the weekend that the DPJ's position is "blank" — he will respect the decision of the party's investigatory subcommittee on joint personnel decisions. Sengoku Yoshito, the subcommittee chairman, emphasized the need for a proper debate on Mr. Muto's elevation to the bank presidency.

It's perhaps a little hasty to assume that Mr. Muto is set to assume control next month. I expect that the DPJ will ultimately assent — as the FT article makes clear, the DPJ's objections are flimsy — but I suspect it will not do so until it has made its point to the government about the need to share power properly, especially in an area like this in which the constitution mandates a role for the House of Councillors.

UPDATE: Definitely read Jun Okumura's post on this debate.

The LDP and DPJ discuss personnel

Among the tasks facing the Diet in the first half of the regular session is the selection of a new heads for the Bank of Japan, the Board of Audit, the National Personnel Authority, and the Fair Trade Commission. Selecting personnel for these posts is done by a "dual key" system: both houses — in other words, both the LDP and the DPJ — must agree on the candidates for these positions.

A vacancy at the helm of the Bank of Japan now, in the midst of a growing global crisis, would be particularly unwelcome.

I have to imagine that this has something to do with the DPJ's willingness to work with the LDP on the "regularization of regulations for election" to these posts. To that end, Oshima Tadamori and Yamaoka Kenji, Diet strategy chairmen for the LDP and the DPJ respectively, met Thursday at the Diet. The DPJ's proposal calls for private hearings with candidates in the Rules and Administration committees of both houses. The LDP is giving this proposal due consideration.

For its part, the government has announced that its candidate is Mutoh Toshiro, BOJ vice president. This is indicative of the approach favored by Machimura Nobutaka, chief cabinet secretary, which calls for the government's choosing a candidate, who would then face questioning by the Diet. The DPJ would prefer to question multiple candidates and have the final decision truly be the result of bipartisan cooperation. If DPJ opposition to Mr. Mutoh is as firm as some suggest, the government may be forced to find a new candidate.

Nevertheless, with more than a month before Mr. Fukui's term expires, I am confident that the LDP and DPJ will agree both on a process for choosing new personnel and find candidates acceptable to both parties. This is one sign that fears of gridlock are overblown. Both parties have incentives to work with together on issues like this, when not cooperating carries greater risks than rewards. As far as personnel choices are concerned, there is no single best choice. There is certainly more room for compromise than in other areas.

The problem with Fukuda

The DPJ's Nagashima Akihisa, writing at his blog, cites Max Weber's "Politics as a vocation" to criticize not just Mr. Fukuda but his predecessors and express his hope for a different style of politics under DPJ rule.

Mr. Nagashima quotes from the concluding paragraph of the essay:

Politics is a strong and slow boring of hard boards. It takes both passion and perspective. Certainly all historical experience confirms the truth --that man would not have attained the possible unless time and again he had reached out for the impossible. But to do that a man must be a leader, and not only a leader but a hero as well, in a very sober sense of the word. And even those who are neither leaders nor heroes must arm themselves with that steadfastness of heart which can brave even the crumbling of all hopes. This is necessary right now, or else men will not be able to attain even that which is possible today. Only he has the calling for politics who is sure that he shall not crumble when the world from his point of view is too stupid or too base for what he wants to offer. Only he who in the face of all this can say 'In spite of all!' has the calling for politics.

Mr. Fukuda, he argues, feels no passion. Mr. Abe, meanwhile, felt plenty of passion — driven by the certainty that he, and no one else, had the right ideas for Japan's future — but was lacking in judgment, leading to poor personnel decisions, an inability to respond to events, and an aloofness to the interests of the Japanese. Mr. Nagashima is more charitable to Mr. Koizumi, whom, he argues, had both judgment and passion as prime minister. The problem was that Mr. Koizumi's politics were "fireworks" politics, flashy but with little enduring substance.

Mr. Nagashima concludes that for the DPJ to succeed, it must hew to these principles. It must dedicate itself to improving the livelihood of the people, continuing on "in spite of everything."

There is considerable merit in his description of the qualities and failings of the current and recent LDP governments. For my part, I thought Mr. Fukuda's "passionless" politics would be an improvement following the frenetic politics of Messrs. Koizumi and Abe. I thought by draining the theatricality from politics, he would adjust the government's priorities and begin making the case, patiently and without hyperbole, for structural change needed to reinvigorate Japan.

At this point, it looks like I was wrong. Mr. Fukuda has been so low key that he has disappeared. After stabilizing the LDP and the coalition with Komeito, he has failed to begin articulating a way forward for his government, his party, and the country.

Mr. Fukuda, I think, belongs to the cautious tendency within the LDP. One can divide the LDP a number of ways, but I think one of the most important divisions going forward is between risk-takers and risk-avoiders. Mr. Koizumi was a risk-taker par excellence, both domestically and internationally. His gambling led to his ultimate gamble, that of risking his government's majority in the hope of gaining a mandate for postal privatization. The landslide victory in September 2005 has somewhat obscured the reality that there were real concerns that Mr. Koizumi's government would not receive a simple majority of seats in the House of Representatives, let alone the two-thirds majority that it eventually received.

But the most revealing moment from the summer and autumn 2005 may not have been the drama-filled election campaign but the decision made by the LDP executive council in late June to force Mr. Koizumi — on the basis of an unprecedented majority vote in the council, instead of a unanimous decision — to accept revisions to the six bills for postal privatization. The party elders, fearful of the consequences to the LDP of Mr. Koizumi's uncompromising push for postal privatization, thought that the key to minimizing the risk to the party was corralling the passion of Mr. Koizumi.

Once Mr. Koizumi departed, if not before then, the party was back in the hands of the risk-averse elders, who thought the key to restoring balance was the superficially pleasing Abe Shinzo. The failure of the Abe cabinet can be chalked up to misdirected passion. Mr. Abe, for all his passion, never risked anything. The revision of the fundamental law on education? Elevating the JDA to ministry status? The political consequences of these measures were limited. Even the constitutional referendum law was not particularly harmful to the government. The problem was in heeding the advice of the risk avoiders and backing away from both structural reform and efforts to heal the pain of structural reform, by, say, acting swiftly to fix the welfare system. I remain convinced that Mr. Abe — or those who whispered in his ear — did just about nothing from the time he took office until the July Upper House election because he sought to avoid the risks associated with Koizumi-style reform politics.

Mr. Fukuda, it seems, is just as incapable of taking the risks to transform the economy and political systems as Mr. Abe was, but for different reasons. I do not think the divided Diet is the primary reason. A bolder leader might find a way to present a vision to the public and use public support to force a recalcitrant DPJ to either cooperate or watch the government pass legislation over Upper House opposition. Mr. Fukuda has almost made a point of not presenting a program for his government. (MTC gets at the problem here: Mr. Fukuda has been so wrapped up in finishing what Mr. Abe started on the anti-terror bill that not only has he been able to articulate an alternative approach to this issue, he has been unable to articulate policies on other issues, including the lingering pensions problem.)

There is nothing inherently wrong with a "low posture" that drains some of the energy from politics, but a low posture cannot mean the absence of policy. Mr. Fukuda may have one more chance to correct this, at the start of the regular session in January.

Meanwhile, I have my doubts about whether the DPJ can be the party that Mr. Nagashima wants it to be. At the moment, the DPJ seems to wholly lack an "in spite of it all" attitude, reacting more to the vicissitudes of public opinion than acting from deeply held passions. This may be a result of the nature of life in opposition, but I'm not clear how the DPJ can transition from shiftless opposition party to ruling party insensitive to the ups and downs of public opinion. (It's much easier to see it becoming a shiftless ruling party.) Mr. Nagashima suggests that the DPJ must ensure that all of its candidates have "guts." Perhaps a bit easier said than done.

UPDATE — Everyone is apparently reading Weber this weekend. Arthur Goldhammer, author of the indispensable blog French Politics, recommends Weber's essay to M. Sarkozy in this post.

I'm with Mr. Koga

Koga Makoto, head of the LDP's election strategy committee, has once again come out with remarks that suggest that the government is trying to deescalate tension in the political system that has resulted in a situation in which the press parses every comment by LDP and DPJ leaders in search of its significance in suggesting the timing of an election.

Addressing (ok, indirectly) a question that I asked in this post, Mr. Koga said, "By no means must the prime minister resign and the Lower House dissolve in the event of an Upper House censure resolution." He also reiterated that the LDP is in no hurry to surrender its supermajority in the House of Representatives.

I expect that the government will take this line should the DPJ use one of the few weapons that comes with control of the House of Councillors. And why not? There is no precedent of a non-binding censure motion taking down a government. Why would Mr. Fukuda want to set one? He could and should shrug off such a motion as an abuse of the powers of the Upper House, and press on with his agenda.

Looking back at my response to Mr. Koga's earlier remarks about delaying a general election, I'm inclined to think that this is another way to reiterate that contrary to appearances, the LDP still has the upper hand in the current political situation: the government will not be tricked or forced into calling an election it doesn't want.

The elusive rules of the game

Prime Minister Fukuda held another meeting with Ozawa Ichiro and the heads of the other opposition parties on Thursday.

Unlike the last meeting, nothing of note occurred — perhaps the other leaders were there to forestall a "corrupt bargain" between Messrs. Fukuda and Ozawa — and the LDP and the DPJ appear to be no closer to establishing the rules of the game for a divided Diet.

The editorials of the major dailies blame Mr. Ozawa for standing in the way of compromises on, "many things that should be done." (Believe it or not, that's in the headline of Asahi's editorial, not Yomiuri's.) Mainichi, while recognizing that both sides need to work together to make policy on behalf of Japan, singled out Mr. Ozawa for not taking a position amenable to cooperation on the new decision making rules, calling it "regrettable."

Yomiuri, not surprisingly, has the most strident tone in criticizing the DPJ: "Under the divided Diet, the DPJ, as the largest party in the House of Councillors, bears great responsibility in driving the political situation...However, on the DPJ's side, one cannot see them bearing this responsibility." The editorial goes on to criticize the party's irresponsibility at length for opposing the anti-terror law without passing alternate legislation, and raises the prospect of a "a debate on the uselessness of the House of Councillors."

Sankei largely echoes Yomiuri and Mainichi, and Asahi devotes most of its attention to the LDP and its agenda, but the common thread running through these editorials is dissatisfaction with gridlock.

I do think that the blame falls on the DPJ's shoulders. Had the party — and Mr. Ozawa — been more flexible on foreign policy questions, upon which the political debate is now focused, the DPJ could have pressured the LDP to approve all or most of the DPJ's domestic plans in exchange for the DPJ's assent to the MSDF refueling mission. But Mr. Ozawa has refused to give on anything, instead staking out a hardline position and hoping that the LDP will bend to his will. When push comes to shove, Mr. Fukuda and the LDP control a supermajority in the Lower House, and should public dissatisfaction (or, perhaps more accurately, media dissatisfaction masked as public dissatisfaction) grow, the DPJ will lose. The fact remains that the DPJ needs the LDP more than vice versa. I think the DPJ has completely mishandled the current Diet session. Even while compromising with the government on the anti-terror law, the DPJ could have criticized the LDP for ignoring the concerns of the public — which are overwhelmingly domestic, "lifestyle" issues — and for serving as the tool of the Bush administration. By holding its nose and supporting the MSDF mission, the DPJ could have refocused discussion on domestic policy issues, to its advantage, I think.

Now, in the wake of the meeting, it seems that talk is growing both of yet another Diet extension and a snap election. The former step will be necessary if, as I suspected (as in this post), the DPJ uses its control of the Upper House to delay action on the anti-terror law. Remember that according to the constitution, if the Upper House takes no action within sixty days — not counting days out of session — the bill is considered rejected, giving the Lower House the opportunity to pass it again. Should the bill be passed in this manner, however, a snap election could be unavoidable; Mainichi suggests that an Upper House censure motion would follow Lower House "re-passage" of the bill, leading to a general election. (I still disagree with the assumption that an Upper House censure motion against the government will necessarily lead to a snap election, but I recognize that it is a plausible outcome.)

Whatever the difficulties ahead for Mr. Fukuda as the debate over the MSDF mission reaches a climax, whatever the problems associated with corruption at the Defense Ministry, the DPJ has squandered its advantages — and, for the moment anyway, the prime minister may be enjoying a slight boost thanks to two successful foreign trips. It is not at all clear how this Diet session will wrap up, but as MTC suggests, Mr. Fukuda has not faltered in the face of adversity.

Is a snap election within the next seven months likely?

Publicly, Mr. Ozawa and the DPJ leadership remain determined to push for a general election. At a meeting of prefectural chapter heads last week, Mr. Ozawa spoke of intensifying the party's preparations for a general election and outlined the DPJ's four principles for a general election campaign: (1) not standing candidates in all 300 electoral districts, (2) working with other opposition parties to support candidates, (3) not backing — without exception — candidates running solely in PR blocs, and (4) giving party nominations to candidates from other parties (a technical distinction that could influence how a candidate is presented to voters).

My sources inside the DPJ tell me that the mood within the party still anticipates a general election within the next seven months, with members divided as to whether it will be before the end of 2007 or in the springtime, following the passage of the budget. And there has yet to be any serious dissension from the party line that calls for pressuring the government to call an early election. But how long can that last?

Given the nature of Japanese campaigning, a party cannot start preparing for a general election too soon — this applies as much to incumbents as to challengers. (I saw Hayashi Jun, a Koizumi kid first elected in 2005 as a representative for Kanagawa-4, campaigning before generally indifferent passersby outside Kamakura station last week.) Not surprisingly, Koga Makoto, the LDP's new election strategy chairman, also set to work last week on preparing the LDP for a general election, but gave no indication that he expects it to be anytime before September 2009.

I am increasingly inclined to agree with MTC on the unlikelihood of a general election until the very last minute, unless the LDP once again finds its popularity in free fall (as I think it was before the July election and in the weeks following it). If the Fukuda government squanders the opportunity afforded it by the Japanese people, who have clearly given the LDP one more chance to get things right, I cannot help but wonder whether the government might cave and call an election, perhaps finding that delaying would only contribute to the free fall. But I expect that under Mr. Fukuda the party may be able to avoid the free fall that occurred under Mr. Abe, not because there isn't the possibility of scandals or inappropriate remarks by cabinet ministers, but because I don't think the prime minister will let things spiral out of control — and if he manages to act on his rhetoric about fixing the problems of reform, he might buy enough credit with the public to ensure that he can escape the consequences of ministerial incompetence or malfeasance.

In the meantime, though, I think Mr. Koizumi's characterization of the new relationship between the LDP and DPJ — as explicated by MTC here — may prove to be exactly right. As MTC wrote: "At election time and in the runup to the selection of a new prime minister, the factions sharpened and inflated their policy differences. However, once the elections were over or a new prime minister was voted into office, factions allowed these seemingly life-or-death differences to fade. Instead, what became important was finding the means to cooperate on passing legislation and equitably dividing the political spoils."

After the sharpened partisan conflict that has surrounded the extension of the MSDF mission subsides — with the DPJ increasingly likely to face defeat on the bill — Mr. Ozawa and his party may retreat and then return to the table to talk. With the lessening of partisan tensions, calls for an early election might subside as 2007 turns into 2008, and with less focus on an imminent election, the LDP and DPJ might actually get around to legislating in the manner suggested by Mr. Koizumi, at least until late 2008 when thoughts turn to election strategy once again.

All of this means is that like in intraparty LDP competition under the 1955 system, election contests will hinge less on policy differences than on intangibles (in urban Japan)— the popularity and charisma of party heads and the candidates themselves — and tangibles (in rural Japan) — the money brought home, or not, by the incumbent.