How severe is the fallout from Ozawa's fall?

Despite widespread expectations that he would not survive to lead the DPJ into this year's general election, Ozawa Ichiro's resignation is reverberating around the Japanese political system.

Aso Taro, commenting on the Ozawa's resignation, claimed that he could not understand why Ozawa would resign now, two days before the debate scheduled between the party leaders. It does not seem that hard to understand to me. Why would Ozawa stand up and speak on behalf of a party that had been sending overt signals that it wanted an amicable divorce from its embattled leader? Why would the DPJ want him to speak for the party? Did Ozawa reach this conclusion himself, or did someone senior within the party have to lean on him?

Regardless of why Ozawa finally decided it was time to go, he's gone. Not surprisingly he said very little in his press conference Monday, other than that he was stepping down for the sake of party unity and the goal of regime change.

The political consequences of his resignation are actually not particularly interesting, at least compared to his last resignation, when the DPJ was not quite ready to part with its helmsman. I anticipate a smooth return to the leadership for Okada Katsuya. He's probably the one candidate acceptable to the party's various factions and sects — he inspires neither love nor loathing (unlike Ozawa), but he is acceptable. At this point acceptable to all is good enough. If it is Okada, he won't be a significant departure in policy terms from the outspoken Mr. Ozawa.

On foreign policy, he accepts Japan's alliance-centered foreign policy but has recently suggested that the US-Japan relationship should not be overdependent on the bilateral military relationship (a view reciprocated by some in the Obama administration). Like others in his party, he wants Japan to cooperate more with its Asian neighbors.

On domestic policy, he has the inescapable air of a technocrat, not surprising considering his background as a MITI official, and as a result he does not ooze pathos when talking about the nation's problems as some other politicians do. But he has a solid grasp of the issues, he has reformist credentials, and he has worked hard to travel the country and connect with voters like Ozawa has done. Given his background, he might even be better at coaxing the bureaucracy to accept the DPJ's administrative reform plans. Although I'm not certain about this: lasting administrative reform may require a dramatic battle of the sort that would have likely occurred under an Ozawa premiership. Sankei cites an anonymous source at METI headquarters who wonders whether an Okada premiership would be better for the bureaucracy than an Ozawa premiership. If there is a different, it is not a matter of an agenda. The DPJ's adminstrative reform plans predate Ozawa's leadership of the party. What is at issue is the enthusiasm with which the new leader goes about the task.

Either way, Okada is more than adequate. If the LDP isn't worried — and there were signs earlier in the Ozawa scandal that the government feared that Okada would replace Ozawa — it should be, if only because, as MTC notes, with Ozawa gone, so goes one of the last obstacles keeping voters from embracing the DPJ.

Would the same apply if Hatoyama Yukio, the outgoing secretary-general who has virtually served as Ozawa's footman, is elected DPJ president? He may have adequate support from the left of the party, but I think Hatoyama would be more compromised as party leader than Okada. Hatoyama, like the prime minister, is a scion of a political family who in his time in leadership posts in the DPJ has shown himself to be better suited to supporting roles than to leadership. Hatoyama, I think, would be the poorer of the two choices in a race with Okada. And I wonder whether his time as Ozawa's designated apologizer will tar his image.

Regardless of who winds up as party leader, the tasks facing the new leader are simple: don't forget the countryside, remind voters how disastrous LDP rule has been just since the last election, add some details to the party's economic plans, and prevent LDP politicians from running against the LDP. Don't let LDP reformists get away with their bait-and-switch again.

The end of the beginning

Ozawa Ichiro indicated, in a tearful press conference Tuesday evening, that he will stay on as DPJ president despite the indictment of his chief public secretary — but Ozawa's statement may have only been the end of the beginning of the final act of Ozawa's long career.

The press conference itself was a masterpiece of defiance. Ozawa did not give an inch, insisting on the outrageousness of the actions of the public prosecutor's office and the lack of wrongdoing his part or the part of his secretary. He appealed to the public for support and understanding, and insisted that now as ever his purpose is to build Japanese democracy. (The press conference can be read in its entirety here, here, here, and here.)

But it is unlikely that the press conference will be the end of Ozawa's troubles.

First, by staying on Ozawa will remain a target for the media. As Jun Okumura notes in his reading of editorials on Ozawa, the press has for the most part called for Ozawa's resignation, and will likely to continue to press for it by reporting every snippet of news that might back Ozawa into a corner. To paraphrase another politician who had his troubles with the media, it looks that the Japanese press will have Ozawa to kick around for at least a little while longer — and it will not hesitate to get its kicks in.

The press will also report on every note of criticism of Ozawa from within the DPJ, of which there appears to be plenty. Apparently DPJ members were holding back their criticism in the hope that he would bow out freely, without their having to do anything to force him out. But as before Ozawa's press conference, the press is being disingenous in its reporting on criticism of Ozawa. The critics mentioned in press reports on "cracks in the DPJ" appear to be none other than the usual critics of Ozawa, the youngish, reformist members clustered around Maehara Seiji, Edano Yukio, and Noda Yoshihiko. Mainichi, for example, quotes Sengoku Yoshito as calling for Ozawa to "independently make the political decision [to resign]." Sengoku Yoshito is one of Ozawa's most outspoken critics within the DPJ and had made some noise about challenging Ozawa in last year's party leadership election before backing down like Ozawa's other critics. Maehara Seiji, Ozawa's predecessor and perhaps his most frequent sparring partner within the DPJ, has also questioned the wisdom of Ozawa's decision and wondered why Ozawa received so much from one company. Sankei's discussion of criticism of Ozawa comes entirely from the Maehara-Edano-Noda axis, featuring quotes from Sengoku, Komiyama Yoko, education minister in the DPJ's shadow cabinet, and Edano, who said that Ozawa's explanation was inadequate. Sankei actually mentioned Komiyama's remarks in a separate article, which notes that this was her first public criticism of Ozawa without mentioning her connection to what is effectively the most anti-Ozawa portion of the DPJ.

It is for that reason that the image of a DPJ falling to pieces must be taken with a lump of salt.

The DPJ has a mainstream-anti-mainstream dynamic not unlike that which has characterized the LDP for much of its history. By ignoring this background, press coverage of the DPJ's divisions conveys a misleading impression of Ozawa's having been completely abandoned when in reality criticism from these members is entirely in keeping with their role as the opposition within the opposition. There are critics outside of this section of the party, but for the moment it appears that most of the criticism comes from the party's anti-mainstream. And given their history, it is worth asking whether their criticism is any great concern. In its battles with Ozawa, the Maehara-Edano-Noda axis has repeatedly failed to follow up its criticism with action. After spending most of last summer painting a portrait of Ozawa as DPJ dictator, not a single member of the anti-mainstream decided to run against Ozawa in the September election. When Ozawa stepped down after facing criticism for his discussions with Fukuda Yasuo regarding a grand coalition, not a single member of the anti-mainstream stepped forward as a possible successor. For all of Maehara's participation in LDP-centered study groups, there are few signs that he is actually willing to defect along with other anti-mainstream DPJ members.

In short, the press coverage of the criticism may be worse than the criticism itself. These critics are simply doing what the anti-mainstream is supposed to do, and I read their remarks as being more about election positioning than a serious effort to drive Ozawa to resignation. As I wrote when the first polls after the scandal were published, the indictment merely reinforces the trend towards urban, reformist DPJ candidates running against Ozawa and the party in order to win their seats. But in order to do that, they have to act like anti-mainstream candidates. I don't take their fretting about whether they will win their districts all that seriously: they are still facing LDP candidates who are weighed down by Aso, Fukuda, Abe, 50 million missing pensions records, and a disintegrating economy. Reformist candidates for both parties will be running against their party's leadership — and for all the suspicion surrounding Ozawa, DPJ candidates should still have an easier time distancing themselves from him than their LDP rivals.

I am not ruling out the possibility that the DPJ leadership is making a grave mistake in backing Ozawa, but I do not think that the political situation as been wholly transformed or that an LDP victory is assured by Ozawa's staying on as party leader. The LDP does have more reason to hope; the LDP has officially questioned why Ozawa is staying on, but I think this Mainichi article is right that the LDP would actually prefer Ozawa as the face of the DPJ than any other leader. But Aso has critics of his own within the party, and his future as the head of the LDP is no more secure than Ozawa's future as DPJ leader. And the public is far more concerned with what Aso is doing as prime minister than what Ozawa did or did not do a few years ago in service of his political ambitions.

Unpacking the DPJ's divisions

Curzon at Coming Anarchy looks at a couple recent statements by DPJ officials and concludes that the DPJ suffers from cognitive dissonance.

He also suggests that I believe that the Obama administration plans to create an alliance "focused solely on joint security declarations." If he read my post on the subject more carefully, he'd notice I believe in precisely the opposite, that the 1996 alliance has been characterized more by joint declarations and symbolic gestures than by substantive transformation of the alliance and that the Obama administration, insofar as it has a Japan policy, will try to move away from token security contributions and flighty rhetoric about shared values and shared interests to substantive cooperation, even if it doesn't involve Japan's self-defense forces.

But let me turn to the point of his post. Does the DPJ suffer from cognitive dissonance?

First, I think it is best not to anthropomorphize a political party. In other words, individuals suffer cognitive dissonance; parties, as collections of individual politicians, have contested interests or policies. This difference is essential. Curzon seems to imply that parties should have more or less coherent policy approaches, that the party's statement of principles or policy platform, once enunciated, binds its members and creates, in a sense, a corporate identity for the party. In theory there should be no problem with this: this party the hawks, that one the doves, this party the capitalists, that party the socialists, and so on.

But does it ever work this way in practice, especially since socialism lost its authority, muddling the distinctions between left and right? Looking solely at the Japanese party system, the ambiguities of the DPJ's policy positions — such as they exist (more on this momentarily) — are a product of Japan's messy party system, not a cause of it.

Why is this the case?

First, arguably in a political system in which one party has dominated as long as the LDP has, valence issues — defined by Donald Stokes as "[issues] that merely involve the linking of the parties with some condition that is positively or negatively valued by the electorate," in contrast with position issues, which concern policy alternatives — will most likely take precedence over position issues in the competition for power between the governing party and the opposition. Simply by having been in government for more than fifty years, the LDP's performance in government is the issue. Its ability to formulate and implement policy, its relationship with the public, its relationship with the bureaucracy: these issues are all connected to the LDP's fitness for government but have little to do with policy per se. Debate over administrative reform, for example, has less to do with the content of reform (although one can easily find LDP members who oppose it) than with the LDP's ability to deliver on its promises. Similarly, both parties claim to want to formulate policy on the basis of the concerns of the people. Who can be opposed to that? The question is which party is best able to follow through on the pledge. On the one hand the DPJ may be an unknown quantity, but on the other hand the LDP is known all too well.

But arguably valence issues also take precedence over position issues for reasons having to do with the LDP's own ambiguities. Curzon describes the DPJ as a "motley crew of socialists, right-wingers, and free market liberals," but that could just as easily describe the LDP. Of course the LDP doesn't literally have socialists in the sense of former Socialist Party members, but is the LDP's old guard all that different from the old left? The LDP is no less motley than the DPJ, and may even be more motley. We can ascertain the confusion within the LDP by the complaints its ideologues make about the party. Nakagawa Hidenao, a leading Koizumian reformist, ceaselessly calls for a new LDP that will break from the LDP's tradition of governing hand in hand with the hated bureaucracy. Meanwhile, further to the right there have been no shortage of complaints from conservative LDP members and intellectuals about the LDP's not being a truly conservative party. Hence the Hiranuma-Abe-Nakagawa (Shoichi)-Aso study group in pursuit of a "true" conservatism. Hence Hiranuma Takeo's ongoing talk about creating a new conservative party as a third force in Japanese politics. Some of this talk was linked to Fukuda Yasuo's premiership, of course, which only goes to show that the conservatives love the LDP only when one of their own is in charge, i.e. someone like Abe Shinzo or Aso Taro. LDP members who belong to these two ideological tendencies are woefully unhappy with the LDP as it exists today, but both groups appear to prefer staying in the party and battling for control to building new parties.

In addition to the LDP's internal divisions, there is also the matter of LDP governments' being adept at lifting policies from the opposition, making it more difficult for opposition parties to compete with the LDP on policy terms.

The same dynamic is at work today. There is arguably a national agenda, with little disagreement that the government, regardless of which party is in power, has to shrink the national debt, fix the health, pensions, and welfare system, revitalize stagnant regions, and now, above all else, get the economy growing again. While there are different proposals for addressing each of these problems, the disagreements are more in degree than in kind, and are as often within parties as between parties. The disagreements between the LDP and the DPJ are by and large not ideological, now that even the Koizumian reformists are doing their best to not look like Thatcherite neo-liberals. (It bears mentioning that behind the aforementioned issues lurk cultural issues like immigration, and women's and minorities' rights, about which there is little consensus in either party and surely neither the LDP nor the DPJ would like to make central issues in an election campaign.)

As such, the concerns about a lack of policy differentiation between the LDP and the DPJ are overblown. Parties do not need to fit the model of two large political parties sharply differentiated on ideological terms to have fruitful and intense competition.

Turning now to the question of the DPJ's divisions, analysts like Curzon often assert that the DPJ is divided, because its members come from different parties, but provide little evidence of how the DPJ is divided. I don't deny the party's divisions, but it seems to me that analysts often assert these divisions and move on to other matters instead of providing proper elaboration of what they mean.

In some ways the DPJ's divisions are similar to the LDP's: the party's young reformists fret about Ozawa Ichiro, who they see as emblematic of the old LDP way of politics that they believe must be destroyed. But oftentimes this has less to do with policy and more to do with political style. This was my argument in a post regarding Maehara Seiji's mini-rebellion against Ozawa in June 2008, which I described as more a matter of Maehara's idealism in opposition to Ozawa's realism. Ozawa is the consummate fixer, as we've all been reminded in recent weeks, which means questionable fundraising ties, shadowy ties across party lines, leadership veiled in secrecy, and some creative accounting in policy proposals. By contrast, Maehara and his compatriots are idealistic almost to a fault. But I do not doubt that they share the goal of bringing down the LDP and uprooting the LDP-bureaucratic system of governance.

Meanwhile, analysts — myself included — often have little to say about the role of the DPJ's left wing. It is obligatory to mention that the party includes former socialists, but few seem to have much to say about the left's role within the DPJ. That may be in part because the DPJ's left wingers are simply less visible than the party's neo-conservatives, who are regulars on Japanese TV and frequently quoted by the domestic and foreign press. It may also be because the DPJ's left has made its peace with Ozawa. On economic policy, there is surely little for the left to be disappointed about: the DPJ is now, for better or worse, mildly anti-capitalist (cf. Ozawa's speech at this year's DPJ convention). As far as I can tell even the neo-conservatives are following along. I can't imagine Maehara would have as much praise for the Koizumi-Takenaka reforms today as he did last year. The party is running on a hybrid platform of old-style protection at home for workers and small- and medium-sized businesses, the creation of a new-style welfare state for the twenty-first century, and a relentless campaign to remake the bureaucracy.

Obviously foreign policy is a different matter entirely, as Curzon argues. Curzon is concerned above all with the vagueness of statements by Hatoyama and Ozawa. He's right to a certain extent, in that it is hard to tell just how these statements about a more equal alliance will translate into policy under a DPJ government. As he says, we will only learn if and when there is a DPJ government. At the same time, however, Ozawa's remarks — clearly more important to discerning a DPJ government's plans as long as Ozawa is still head of the party — are finely tuned to balance between the DPJ's left and the DPJ's right.

It is worth looking back to when Ozawa's Liberal Party merged with the DPJ in 2003. Recognizing that foreign policy had the potential to splinter the party, Ozawa and Yokomichi Takahiro, a onetime Socialist, agreed in 2004 to a list of foreign policy principles that included support for a UN standing army, Japanese participation in multinational UN-mandated coalitions (with some fudging on the precise details of Japan's participation), opposition to the dispatch of the JSDF abroad without UN approval, and the maintenance of Article 9. Arguably this agreement has survived intact. Ozawa has clearly strained against the boundaries of this agreement with some of his remarks on foreign policy (his call for armed Japanese intervention in Afghanistan were there to be a "proper" UN mandate, for example), exploiting some of the ambiguities in his non-binding agreement with Yokomichi, but even his "controversial" remarks about reducing the US presence in Japan to the Seventh Fleet with the JSDF picking up the slack for the defense of Japan are consistent with the terms of the agreement. Naturally the neo-conservatives would prefer to do whatever possible, but even they seem to be able to live within the terms of this agreement, even as DPJ members like Nagashima Akihisa argue for vigorous Japanese involvement in the multinational anti-pirate campaign off the horn of Africa.

It is fair to ask whether this entente would survive in Ozawa's absence. I doubt it would — hence my concerns about the Ozawa scandal — but in the meantime Ozawa has managed to strike a balance between the left and the right in the DPJ. Standing up to the US is something that everyone seems to be able to agree on, and doing so conveniently enables them to distinguish the DPJ from the LDP, which has to wear a crimson "B" for having worked alongside the Bush administration for eight years, for "showing the flag" and "putting boots on the ground" when the Bush administration went to war. Is this an uneasy balance? Without question. Is it largely symbolic? Absolutely. Should the DPJ win the general election and form a government, it will be in no position to act on what was not even a proper policy proposal from Ozawa, in part because of budgetary constraints, in part because of the long list of domestic problems that will demand the new government's attention. And facing the Obama administration instead of the Bush administration, a DPJ government will have a harder time saying no for the sake of saying no, especially if the Obama administration is smart and limits its requests to non-military requests, as Obama did when discussing Afghanistan with Aso last month.

For the time being, divisions within the DPJ are less of a concern than it would seem, provided that Ozawa survives this scandal. Even if Ozawa falls but is replaced by someone like Okada Katsuya, the DPJ's policy bargain could survive relatively untouched. While Okada inspires no particular adoration from the party's ranks, he would also not be the object of loathing that Ozawa is in certain corners of the party. Indeed, Sankei reports that the LDP and Komeito are afraid that Ozawa might pass the torch to Okada, who is younger and would deprive the LDP of its efforts to paint Ozawa as the ghost of the bad, old LDP (no small amount of irony there). Much as the DPJ would prefer to contest an election against Aso than anyone the LDP might find to replace him, so the LDP might rather have Ozawa as the face of the other side than any of the DPJ's younger politicians waiting in the wings.

The point is that the DPJ not perfect, but it is by no means as shambolic as the conventional wisdom suggests — or as shambolic as the LDP, for that matter. There is a fragile unity in the party, most likely a product of Ozawa's authority, the decline of constitution revision as a central issue in Japanese politics, the emergence of a broad national consensus on the most important issues facing the government, and, most importantly, the prospect of unseating the LDP, which has undoubtedly worked wonders for party unity. If the DPJ takes power, there will be missteps, mistakes, and u-turns, all of which are to be expected from an opposition party taking power for the first time. But that is no reason to dread a change of ruling party. If the DPJ manages to maintain this uneasy balance within the party and govern effectively, great. And if it doesn't, and it is unable to govern, leading to an electoral defeat, that would be good for Japan too. The very worst thing, however, would be the replace one deeply divided, unmanageable perpetual ruling party with another.

Did the LDP just find its miracle?

Hold the debate, indeed.

Naturally Ozawa Ichiro's top aide had to get himself arrested the day I wrote 1,000 words on what kind of leader Ozawa would be as a prime minister.

Jun Okumura has the details here.

In brief, Ozawa's aide has been accused of receiving funds for one of Ozawa's political support groups from Nishimatsu Construction, a construction company (not surprisingly) with some history of dubious contributions to politicians.

It is hard to see how Ozawa will recover from this: I can only imagine the glee with which Aso Taro said "no comment" to reporters this evening.

Sankei has already broken out the pictures of Kanemaru Shin, which is precisely why this is so devastating.

Ozawa's challenge since becoming DPJ president has been to convince voters (and members of his own party) that he has left his past as Tanaka Kakuei's "son" behind, that he means what he says about reform. It is questionable how much success he has had. I've heard DPJ members talk of urban voters viewing Ozawa with some distrust, and, after all, would rural voters — among whom Ozawa has campaigned heavily — be all that dismayed by his past association with Tanaka? Nevertheless, whatever progress Ozawa has made in changing his image will probably be undone in one fell swoop. It is hard to run as an agent of change when you're taking shady money from that most corrupt of industries, the construction industry. Even if Ozawa had nothing to do with this deal, the damage has been done. The past, it seems, has caught up with Ozawa.

While it is far too early to identify the political consequences of the arrest, the question now is whether Ozawa leaves the leadership without a fight and designates a successor, or whether the DPJ falls into civil war. For all we know this incident could lead to the DPJ's reformists throwing up their hands and quitting the party. For my part, I suspect that Ozawa will be nudged out the door and given some advisory position, with the leadership passing to Okada Katsuya, who has been working hard to burnish his image and has the virtue of not being strongly disliked by the bulk of the party. The DPJ can presumably only save itself by jettisoning Ozawa, and quickly.

This seems to be a fitting end to the age of Ozawa, with Ozawa a Moses-like figure who has brought an opposition party within sight of the promised land only to be denied entry for past transgressions (past in the nature of the act, not in the timing).

And who ever said that Japanese politics is boring?

Aso limps on

The Aso government won a small victory on Friday when the lower house passed the 2009 budget, ensuring that even if the upper house does not act on it the budget will pass into law before the start of the new fiscal year.

The discussion will now unavoidably shift to the timing of the general election. Aso Taro will try to shift the discussion to a new economic stimulus package, but I wonder whether the LDP has the energy left to pass yet another round of economic stimulus. Yamaoka Kenji, the head of the DPJ's parliamentary affairs committee, saw the link between further economic stimulus and the government's desire to prolong its life, and not surprisingly rejected it. The DPJ has a point. Why should a government on its last legs be given license to spend even more public money in a desperate bid to stave off an economic crisis and electoral defeat? At this point, will it make much difference in overcoming the crisis if the political system takes one month off to contest an election?

Nevertheless, the LDP looks determined to press forward with a supplemental budget before calling an election. In a TV appearance over the weekend, Koga Makoto, the LDP's chief election strategist, indicated that it is the government's responsibility to formulate another stimulus package before going to the voters. If the debate over the supplemental budget drags on, however, the LDP may find it convenient to delay longer, enabling Aso to attend the July G8 meeting in Italy (although after Nakagawa Shoichi's performance last month perhaps Japanese officials should stay away from Italy for a while). In other words, Koga's statement looked like an acknowledgment that the election might be held earlier than the end of the term in September, but circumstances might guarantee that government holds off until then.

Not everyone is pleased with the prospect of waiting too long. Ishiba Shigeru, MAFF minister and possible Aso successor, said Saturday that the government should go to the people sooner rather than later, that it is not wise to wait until September. That being said, Ishiba still stands behind Aso as the man to lead the LDP into the election.

And so, it seems, does much of the LDP's leadership. The party's young turks remain discontent — a new group called the "association to reform the LDP and regenerate Japan," including a number of members of the anti-Aso group formed last year by Shiozaki Yasuhisa, recently formed in the hope of finding a post-Aso party leader, but has called itself not anti-Aso but non-Aso. I'm not entirely sure what the difference is, but the fact that the group's leaders felt the need to stress that they are not anti-Aso is telling. The LDP leadership has unified around the besieged Aso, not out of love for Aso but because the party has little alternative. As dismal as the party's prospects are with Aso at the helm — Koga revealed that the party hopes to take 230 seats in the general election, which would mean a loss of seventy-three seats and leave the LDP short of an absolute majority — it is hard to see how matters will improve without Aso. The very process of removing him could guarantee the party's defeat. Without an obvious successor, the fight to replace Aso could be bitter and brand the LDP as completely irresponsible for focusing more on party infighting than policy in a time of crisis. And that's assuming that Aso could somehow be convinced to step down without a fight or without calling a general election against the party's wishes.

As a result, senior LDP officials have been lashing out at those who have talked of taking down the prime minister. Sasagawa Takashi, the head of the LDP's executive council, simply dismissed the idea that Aso would resign. Sonoda Hiroyuki, the deputy head of the Policy Affairs Research Council, said it is shameful that people like Takebe Tsutomu, a former LDP secretary-general, would call for the prime minister's resignation in the midst of a crisis. Suga Yoshihide, one of Aso's conservative allies, added that it was "truly regrettable and shameful" that someone who had served as secretary-general would call for a new leader.

Aso has also received a vote of confidence from Komeito's leadership, which is only fair given the extent to which Aso has bowed to his coalition partner's wishes. Ota Akihiro insisted that now is a time for focusing on economic policy, instead of political positioning.

The Aso government is therefore in an unusual position. It is limping along, its popularity teetering on the ten-percent threshhold, but it cannot be removed, not without a display of uncommon courage on the part of the prime minister's critics within the LDP who thus far have failed to match words with action.

It seems impossible, but Aso may be able to hold out until September.

Endgame

As 2008 enters its final week, the LDP and Aso Taro, its beleaguered head, are being written off as doomed in the year to come.

No one, it seems, is willing to offer an explanation for how the LDP can save itself in a general election. The LDP may yet win the general election, but its fate is out of its hands.

Some are starting to measure the LDP's coffin, so to speak. AERA, a weekly magazine, notes that Yamada Shinya, an elections forecaster, has predicted that the DPJ will win 230 seats to the LDP's 191 seats. Mr. Yamada foresees sluggish turnout and notes the importance of the change in the Communist Party's election strategy — nothing too different from my own assumptions about the next election. (I have started — and hope to finish — my own analysis and predictions for the 300 single-member districts.)

In the meantime, Mr. Aso's situation continues to worsen. The latest blow to his government is a dispute with Komeito. Last week Koga Makoto, the LDP's chief elections strategist, noted that it was strange that the LDP would tell supporters to vote for the LDP in single-member districts and Komeito for proportional representation seats, a statement interpreted as a hint that the LDP is reconsidering the terms of its electoral partnership with Komeito. Mr. Koga was quick to reassure Komeito that the LDP remains committed to working with Komeito to win a majority for the coalition — the LDP can hardly afford to do otherwise, given the support Komeito is said to provide for LDP candidates. Komeito head Ota Akihiro was dissatisfied enough with Mr. Koga to call for an apology. The question now is whether LDP candidates will receive the support from Komeito that they have received in the past. Will Komeito voters continue to be loyal to their party or will they stay home or vote against LDP candidates in a general election? Along with the JCP question, the Komeito vote is of course an important variable in determining whether the LDP will be returned to power.

Of course, events may render all of these factors irrelevant in a general election. If the bottom continues to fall out of the Japanese economy — Japan Economy Watch and Ken Worsley's Japanese Economy News are essential sources for the bad news — it may simply be impossible for the LDP to reverse itself in time for a general election. The latest news is that in its monthly assessment of the Japanese economy, the government has determined that the economy has worsened (as opposed to weakened) for the first time since February 2002. There appears to be no end to the bad news. Little surprise that the prime minister's approval ratings may be headed into the single digits, having fallen to 16% in a recent Mainichi poll.

The most pressing question now is how long the government will wait before calling an election. Abe Shinzo, quickly becoming a younger version of Mori Yoshiro, has called for the election to be delayed until May at the earliest, until after the passage of the 2009 budget. I expect that Mr. Aso will wait until he has a budget in hand before going to the voters, although I do not expect the budget to make much of a difference. The Aso government and the LDP have simply been overwhelmed by problems: sluggish domestic demand, a shift to reliance on temporary and part-time workers, growing pensions and health care liabilities, an intolerable debt burden, stagnant regions, and so on. The economic crisis is only exacerbating these problems. The result is that the LDP is on the brink of collapse. The party has simply overwhelmed by a cascade of systemic failures. As Thomas Homer-Dixon, a political scientist at the University of Toronto wrote in The Upside of Down, "When a society has to confront a bunch of critical problems at the same time, it can't easily focus its resources on one and then move on to the others."

The LDP, trapped by previous decisions that created or exacerbated these problems, is unable to take a definitive step in any direction. This is the essence of the LDP's ongoing debate over tax reform and a consumption tax increase. The government needs more revenue to meet current and future liabilities without increasing the national debt; for a number of LDP members, most notably Yosano Kaoru, the economy minister, a consumption tax increase appears to be the answer to the government's problems. But passing a consumption tax — or even committing to a timeline for phasing in a consumption tax — is a thorny political problem that has involved tortuous negotiations within the LDP and between the LDP and Komeito. Facing an election and an economic crisis, Mr. Aso has been understandably reluctant to make a firm commitment to the timing of a consumption tax increase. A consumption tax increase may solve one problem, but it may exacerbate others (sluggish domestic demand, low growth, and perhaps growing social inequality, as a consumption tax increase would presumably hurt low-income Japanese most). Japan is ensnared in a web from which there is no easy escape.

Not surprisingly, a recent Yomiuri-Waseda poll found that the public more disappointed in the LDP than hopeful about the DPJ. Regime change alone will not cut Japan's Gordian knot. It is entirely plausible that a DPJ-led government will be equally stymied. But the public is at least willing to give the DPJ a chance, an entirely reasonable proposition given the LDP's record.

It may be, however, that Japan's problems are insoluble, and Japan still has a long way to fall. The greatest reason for pessimism may ultimately be that despite having experienced nearly two decades of stagnation, the establishment has yet to come up with any better ideas for organizing Japanese society. As a result, the global financial crisis, rather than providing an opportunity for Japan to take a leadership role, has paralyzed Japan. To return to Thomas Homer-Dixon, he argues that an essential quality for dealing with crises is a "prospective mind."

"We can't possibly flourish," he writes, "in a future filled with sharp nonlinearities and threshold effects — and, somewhat paradoxically, we can't hope to preserve at least some of what we hold dear — unless we're comfortable with change, surprise, and the essential transience of things, and unless we're open to radically new ways of thinking about our world and about the way we should lead our lives. We need to exercise our imaginations so that we can challenge the unchallengeable and conceive the inconceivable. Hunkering down, denying what's happening around us, and refusing to countenance anything more than incremental adjustments to our course are just about the worst things we can do."

Despite the best efforts of Koizumi Junichiro, I fear that this is precisely how the Japanese establishment has responded to the lost decade. Public debates are stale. Even minor change is watered down. Or as Yeats wrote, "The best lack all conviction, while the worst / Are full of passionate intensity." Watching the irresolution of the LDP's reformists, and the strength with which the LDP's old guard resisted any attempt to redirect gasoline tax revenue away from road construction earlier this year, I cannot help but think that Japan simply lacks the ability to adjust, that despite a history of making radical changes in the face of crises, the current crop of leaders is simply not up to the task. Perhaps as bad as things look today, they aren't nearly bad enough to force radical change — the decay of an economic system hardly compares to the threat of colonization and the blow of defeat and occupation. After all, despite the lost decade, Japan remained the world's second-largest economy, its companies respected globally. Perhaps Japan is more capable of responding to short, sharp shocks than to prolonged, barely visible social problems.

Of course, Japan is hardly alone. I was reading Thomas Homer-Dixon Sunday while waiting in Boston's Logan Airport, where the TV was tuned to CNN's Late Edition. Wolf Blitzer was struggling to moderate a discussion between Democratic Congressman Barney Frank and Republican Congressman Eric Cantor on the financial crisis. Congressman Cantor insisted that when apportioning blame for the crisis, Congress must bear much of it for encouraging risky lending, which is to say that it is not necessarily the market but the government that failed.

I can think of no better illustration of what Homer-Dixon calls "hunkering down, denying what's happening around us, and refusing to countenance anything more than incremental adjustments."

Political Japan awaits a black swan

"SOCIAL ENTROPY: A measure of the natural decay of the structure or of the disappearance of distinctions within a social system. Much of the energy consumed by a social organization is spent to maintain its structure, counteracting social entropy, e.g., through legal institutions, education, the normative consequences or television." – Krippendorff's Dictionary of Cybernetics

The LDP is in an advanced state of decay. Not surprisingly, as its death throes worsen, as the chaos within its ranks grow, more energy is being expended simply to preserve the fiction that the LDP remains a coherent party capable of governing its own members, let alone Japan. As entropy grows, so too does the energy dedicated to preserving the structure.

The signs of decay are everywhere.

At present the leading example is the developing Watanabe mutiny, which shows no signs of abating. Watanabe Yoshimi appealed to Prime Minister Aso for cooperation in a speech in Fukushima prefecture Saturday, but only on Mr. Watanabe's terms. Mr. Watanabe criticized Mr. Aso's new stimulus package as doing little to shift power from the bureaucracy to the politicians. "Change for this country," he said, "is truly desired." Behind Mr. Watanabe stands what AERA suggests is a group of forty-eight young reformists who share Mr. Watanabe's desire for wide-reaching reform and fear for their political lives. These forty-eight, including Shiozaki Yasuhisa, chief cabinet secretary under Abe Shinzo, are more than sufficient to overthrow the government by depriving the government of its supermajority. The question is whether they are willing to do so. The article makes a good point in suggesting that the reformists may have nowhere to go: with the DPJ running candidates in nearly 250 of 300 single-member districts, many of the Koizumians — particularly those in their first or second terms — face uphill battles for reelection and are hardly in a position to run to the DPJ. In Albert Hirschman's terms, their exit option is limited, so they are left trying to exercise voice within the LDP by forming study groups and publicly criticizing the prime minister. (And the DPJ will do everything it can to encourage the exercise of voice by LDP members — just as LDP officials have cheered for DPJ members opposing Ozawa Ichiro and criticized the lack of voice within the DPJ.)

Perhaps this explains Kan Naoto's inclusion in what is now being referred to as the YKKK. Growing out of the LDP's liberal dynamic duo of Yamasaki Taku and Kato Koichi, the final two letters are for Kan Naoto, DPJ executive, and Kamei Shizuka, founder of the People's New Party. Messrs. Yamasaki and Kato are apparently in touch with the latter two regarding the possibility of a post-election realignment. Asahi reports that Mr. Kato is open to leaving the LDP before an election — as are the other two (naturally) — but Mr. Yamasaki is reluctant, saying only that his goal is ending the divided Diet. Accordingly, Mr. Yamasaki joined the six other faction leaders to voice their support of the Aso government.

Based on the combination of names, the YKKK looks to me more like a way for a potential DPJ-led coalition government to pry away some LDP members than the basis for a comprehensive political realignment. The liberals are even more alienated within the LDP than the Koizumian neo-liberals, and have little to lose from leaving the LDP. It's little wonder that Mr. Kan would want to pry the liberals into the DPJ; not only would the bolster the party's numbers, but they would strengthen Mr. Kan's group within the DPJ. Not surprisingly, Mr. Kan has rejected the notion of a realignment before a general election. (I should add that this must be precisely what Ozawa Ichiro wants: all talk of a realignment is focused on LDP members defecting, as opposed to the dissolution of both the LDP and the DPJ during a realignment. The YKKK resembles less a multi-partisan alliance than the opposition parties looking to pluck low-hanging fruit from the LDP.)

The LDP's leadership, consistent with the notion of social entropy, is taking all of these threats seriously — these manifestations of entropy within the LDP. The party elders have closed ranks around the prime minister. Mori Yoshiro, don of the Machimura faction and a former prime minister who knows something about low approval ratings, most recently lashed out at Messrs. Yamasaki and Kato, as well as Nakagawa Hidenao. "Deplorable," he said. "Nothing but carefree, thoughtless politicians who have profaned all who have done the hard work of building Japan's politics." Ibuki Bunmei, Mr. Abe's education minister and LDP secretary-general under Fukuda Yasuo, has also spoken up on the prime minister's behalf, first by arguing that the party has no choice but to stick with Mr. Aso, because the public would be outraged if the LDP picked a fourth leader without a general election (how is four any less bad than three?) and then by warning that the YKKK could be like the KKK, "assassinating" young LDP members who follow them. It's hard to describe just how offensive this is, although MTC tries. But lame attempt at a joke aside, Mr. Ibuki couldn't be more wrong. Staying loyal to the Aso LDP — Mr. Aso's name has been inserted before the party's name in recent promotional material — at the same time that the party has moved ever further from the platform that got so many of the young LDP members elected in the first place seems like a terrible career move. Mr. Ibuki forgets that the party has systematically alienated its young Koizumians in the two years since Mr. Koizumi left office. How could the YKKK, or whatever alternative emerges, possibly be worse?

The LDP leadership's goal is to both close off exit options and stifle the exercise of voice.

None of this is to say that any one scenario is inevitable. There are number of possibilities for the coming year: a pre-election realignment that involves defection of the liberals and/or the neo-liberals; the creation of a neo-liberal third party before or after the next election; no change before a general election, in which the Koizumians are defeated; a fierce leadership struggle in the DPJ should Mr. Ozawa be forced to step down due to ill health. No one can say with any certainty which scenario will come to pass. The actors themselves don't know. The Japanese political system is waiting for a black swan of one form or another, the next jump in the history of Japanese politics. "History and societies," Nassim Nicholas Taleb wrote, "do not crawl. They make jumps. They go from fracture to fracture, with a few vibrations in between."

What is certain is that the LDP establishment is losing its grip over the LDP and its constituent parts. They cannot silence mutinous backbenchers. They cannot stop backbenchers from forming study groups working at cross purposes with the government. When the right opportunity comes, they will most likely be unable to stop discontented members from leaving.

And they cannot stop voters and interest groups who have long supported the LDP from breaking with the LDP to support the DPJ.

Can the LDP save itself?

In a vitriolic post at Shisaku, MTC goes after those who insist that despite the LDP's current crisis — which has only gotten worse since back in January when Fukuda Yasuo called it the worst since the LDP's founding — the LDP will recover as it has done before.

I have encountered this argument all too frequently, and share MTC's frustration.

Rarely have I encountered someone who offers a causal mechanism to explain how the LDP will escape the reaper this time. The argument is usually presented as the simple assertion that the LDP has survived to the present day, so it will continue to survive. This argument is logically flawed. The LDP's survival in the past, despite defections and internal divisions, tells us nothing about whether the LDP will survive in the future. Arguably the LDP has never faced the possibility of defections while facing a major opposition party that was a plausible contender for power (indeed, an opposition party that was the largest party in the upper house). More importantly, the LDP has never contended with a major opposition party that was a plausible home for LDP defectors. While it is common to complain that the LDP and the DPJ are too similar, on the plus side the ideological overlap — if their similarities can be attributed to ideology — means that the DPJ is better prepared to welcome LDP malcontents than the Socialist Party ever was. The DPJ might be less attractive to LDP defectors by virtue of Ozawa Ichiro's being the party president, but it's not inconceivable that Mr. Ozawa could cut a deal regarding the premiership in order to bring in LDP members.

That said, it is far from certain what will happen. The next six-twelve months in Japanese politics will depend on contingencies and accidents, on the decisions taken or not taken by key individuals. But I'm still willing to predict that the LDP will fail to win a majority in the next general election, that the DPJ will, if it doesn't win an absolute majority, will still win enough seats with which to form a government. I'm less certain about whether the LDP will splinter. I'm certainly convinced that the LDP divided among seemingly irreconcilable ideological tendencies, but I'm willing to admit the possibiliy that the party's leaders will find a way to keep the party together, despite being unclear about the tools LDP leaders have at their disposal to keep dissatisfied members in the fold.

Various LDP bosses have publicly chastized Watanabe Yoshimi and other young turks for their "anti-Aso" activities, but I don't know what pressure is being applied in private. I'm guessing that there is little the party can do to stop Mr. Watanabe, a second-generation politician who has won his four terms in Tochigi's third district by sizeable margins and enjoys a certain prominence. But what the LDP can do is lean on the other young turks who might otherwise follow Mr. Watanabe in opposing and possibly leaving the LDP (Yamauchi Koichi, a first-term member from Kanagawa-9, is desperate in this post to make clear that Nakagawa Hidenao's new study group is not aimed as undermining Mr. Aso). It is unclear whether Mr. Nakagawa is willing to cut his ties with the LDP. Sankei suggests that the Machimura faction is working to contain Mr. Nakagawa; Abe Shinzo's participation in Mr. Nakagawa's study group on social policy is conspicuous in this regard. The group had fifty-seven members attend its inaugural meeting, but it is far from clear how many of those members are contemplating rebellion or whether their leader is prepared to support an effort to overthrow the government. He is still criticizing Mr. Aso — he criticized the prime minister's handling of the tax reform debate on a radio program Friday — and desires an election sooner rather than later, but he is giving few hints as to whether he'd be willing to back a break with the LDP.

It may take an election to break the LDP. Depending on the balance of power within the LDP post-election, certain blocs could be convinced to split should the LDP fall short of the majority while a certain bloc strengthens its hold. I imagine that Mr. Nakagawa hopes that his group of reformists will be left standing after an election, giving them the upper hand in a power struggle.

Given the LDP's divisions, can the LDP possibly save itself at the ballot box?

History is not in the LDP's favor. The LDP has failed to win majorities in every election under the new single-member district/proportional representation system but for the idiosyncratic 2005 election. It is nearly universally acknowledged that the LDP and Komeito will lose the supermajority they won in 2005. The question, then, is how far the LDP will fall. It is reasonable to surmise that the LDP will win no more than what it won in 2000 (233 seats) or 2003 (237 seats). It could conceivably do worse, as a result of widespread dissatisfaction throughout Japan over how the LDP has governed since the 2005 election.

As far as I'm concerned, the important question is whether the DPJ will come close enough to an absolute majority that it will have no trouble forming a government.

It's possible that I'm wrong. Like a good social scientist, I'm willing to accept the possibility that I'm mistaken, that my assumptions are faulty. In fact, my theory can be easily falsified: if the LDP remains in power after the next election and (presumably) remains united, I've clearly missed something, at which point it will be necessary to figure out precisely what was missing. In the meantime, as I — along with others, like MTC — have postulated, all signs point to the LDP's facing a reckoning at the next general election.

I'm waiting for someone who believes that the LDP will recover to tell me, in advance, what I'm missing. What will serve to keep the LDP in power? Will rural voters ultimately be unable to vote for the DPJ in a general election? Will the LDP's reformist candidates survive in urban districts that are trending back in the DPJ's favor? Will Mr. Ozawa repel a sufficient number of voters to save the LDP (as the LDP hopes)? Is there anyone out there who is convinced that the LDP will survive who can venture a causal explanation for how it will save itself, other than "it has done so in the past, and it will do so again?"

I'm not even convinced that the LDP has saved itself in the past so much as it has been lucky in its opponents. Its luck may have run out. It's amazing how that as the Aso government's support has plummeted, there are fewer stories about the divisions within the DPJ in the media. Nothing like the prospect of success to quiet discontent in the ranks.

Conservatives, Clientelists, and Koizumians

Asahi has published a long article illustrating the feeling of crisis that has descended upon the LDP, especially following Aso Taro's disastrous showing in the latest Nikkei poll (discussed here).

After months of building, it appears that the dissolution of the LDP may finally be in motion.

The LDP can be roughly divided into three broad groupings, with some overlap: conservatives, clientelists, and Koizumians. I provided an outline of these various divisions in an article published at the Far Eastern Economic Review's website in October, in which I argued that "it is best to think of the contemporary LDP as divided not by faction or policy group, but by broad ideological 'tendencies.'" The members of these groups have largely distinct visions for how Japan should be governed and how the LDP should wield power (with some overlap, especially on foreign policy), and it is increasingly difficult to see how these tendencies can inhabit the same party. Whereas the goal of keeping the LDP in power might have once served to unite various LDP groups — the party has, after all, always been divided along a number of fault lines — this goal is no longer sufficient to unify the party, perhaps in part because power is no longer shared evenly throughout the party. Over the past seven years, one tendency or another has been marginalized within the party. The Koizumi government was essentially a coalition of the conservatives and Koizumians to wage war on the clientelists, culminating in the fight over postal privatization. The Abe government rested on an uneasy truce among the three groups, with the Koizumians gradually being marginalized as his government proceeded. The Fukuda government saw both the conservatives and the Koizumians marginalized, resting largely on the power of party elders who still aim to keep the LDP in power and constitute a power bloc in their own right. By the end of the Fukuda government, the conservatives had regained some of their strength, taking important positions in the second Fukuda government before electing Mr. Aso with a coalition of conservatives, clientelists, and party elders. The Koizumians, marginalized virtually since Mr. Koizumi left office, have hinted at forming their own party (see this thread), but have done little more than talk.

Until now: Watanabe Yoshimi, a leading Koizumian and adminstrative reform minister under Messrs. Abe and Fukuda, appeared on TV Asahi Tuesday and suggested that he and his reformist colleagues could be prepared to leave the LDP and form their own party. Previously talk of a Koizumian party was fed more by media speculation about various study groups formed by reformists — the latest being Nakagawa Hidenao's new study group on social security — rather than by explicit threats by reformers to leave and form their own party. It's possible that Mr. Watanabe is bluffing. The party leadership certainly thinks he is. The clientelists, through the vehicle of the party's general council, is pressing for a three-year freeze in the the Koizumi government's 2006 plan to cut public works spending by three percent compared to the previous year and restrict the growth in social security entitlement payments. If the clientelists win, it may be the final indicator that the Koizumians are no longer welcome in the LDP, the beginning of the LDP's existence as a rump party of conservatives and clientelists.

The Asahi article suggests that Mr. Nakagawa — and Yosano Kaoru, who, as the leading "fiscal reconstructionst" is in some sense a tendency of his own — may yet have a role to play in destroying the LDP as it exists today, as they have links with each other and across the aisle to Ozawa Ichiro and former DPJ leader Maehara Seiji. The LDP's liberals (the LDP's truly marginalized group), namely Kato Koichi and Yamasaki Taku, may also be making their preparations to defect from the LDP.

Little wonder that Mr. Ozawa has now proposed a plan that is transparently an attempt to break up the LDP, calling for an all-party coalition government to govern until an election can be held (provided Mr. Aso resigns); in fact, Mr. Ozawa's scheme is so transparent I have a hard time believing anyone in the government will buy it. LDP members may be discontent with Mr. Aso, but that does not mean that they will run to embrace Mr. Ozawa.

But the point is that the Koizumians may finally be ready to fight back against their marginalization in the LDP by threatening the Aso government with defection (and the consequent destruction of the government's supermajority). They may be bluffing or not as eager as Mr. Watanabe to depart — Mr. Nakagawa is doing all he can to dampen rumors that he is moving against the prime minister — but the threat has been made. Will the LDP do anything to attempt to retain them?

If it doesn't, will the LDP as it exists today survive to contest the next general election?

The center cannot hold

A new Nikkei-TV Tokyo poll conducted at the end of November found that Prime Minister Aso Taro's approval rating is in free fall.

According to the poll, Mr. Aso's approval rating fell seventeen points to 31%, while his disapproval rating rose nineteen points to 62%. Twice as many respondents oppose the government's plan for a new stimulus package as support it (56% to 28%). The LDP remains more popular than the DPJ, but I doubt that's of much comfort to either Mr. Aso or the party's backbenchers.

The dramatic fall in support for the government reinforces the notion that the LDP-led government — and with it the Japanese political system — is shuddering to a halt along with the Japanese economy. Mr. Aso's own economy minister has indicated that he stands with the 56% of respondents in the Nikkei poll who oppose the stimulus package, telling the Financial Times that the stimulus package will not work. "The time for endurance has come," he said. Japan, it seems, is at the mercy of the global economy; domestic consumption will not be coming along to stand in for foreign demand for Japanese goods.

Little wonder that Mr. Aso may be losing control of his own party. It seems that the remaining reformists may finally be reorganizing themselves to pressure the prime minister and pull the LDP into the future. The latest sign is that Nakagawa Hidenao has announced the creation of a new study group with the goal of creating "secure foundation accounts" designed to consolidate payments to citizens and free up some 220 billion yen (approximately $2.3 billion) annually to meet the government's social security obligations. The idea is to both cut waste from budgets (including drawing down the so-called "buried treasure" of Kasumigaseki, the special accounts) and streamline administration by directing all government transfer payments (tax rebates, unemployment compensation, welfare payments, farm subsidies, etc.) into a single account.

At his blog Mr. Nakagawa claims that this study group — which apparently includes Koike Yuriko and Watanabe Yoshimi among its twenty members — is about policy, not politics. Why can't it be both? There is clearly unrest stirring within the LDP ranks. The clearest sign is that Mori Yoshiro felt the need to criticize critics of the Aso government in a speech Sunday. Speaking in Hyogo prefecture, Mr. Mori said, "Why only a little more than two months after selecting him do they not feel the need to defend the party president? This is not the Jiminto. This is the Jibunto. They think only of themselves." [For non-Japanese speakers, Mr. Mori was making a pun on the LDP's name, changing the middle character min, from minshu — democracy — into bun, making jibun, oneself, i.e., from the LDP to a party of one.] It's generally a good sign that things are even worse than they appear when Mr. Mori feels the need to discipline party members publicly.

Mr. Nakagawa may claim that he is thinking only of policy, but he doth protest too much. He is on record of having said, "If the dissolution of the lower house [and a general election] are delayed, I will not understand for what purpose Mr. Fukuda Yasuo resigned and a party president election was held" — and he was Ms. Koike's staunch backer against Mr. Aso in September. He clearly knows that forming a study group at this juncture would send a signal to both allies and enemies that he is preparing for both the aftermath of Mr. Aso and the aftermath of a general election, whichever comes first. Yamamoto Ichita writes at his blog that the new study group took his young reformist colleagues by surprise, and that they wrote to him inquiring about what Mr. Nakagawa has in mind. (Mr. Yamamoto responded with what is probably sage advice at this point in time — don't worry about maneuverings within the party, worry about getting reelected. There will be no miracle from above as in 2005.)

It remains unclear how events will unfold. The government continues to reject the idea of a general election any time before the spring. The government is still trying to make the most of the extended Diet session to respond to the crisis, even if it won't be submitting a new stimulus package. Instead Mr. Aso is looking at other measures to dampen the impact of the economic crisis on workers, appealing to big business to hire more unemployed workers in smaller municipalities and new graduates (perhaps hoping to avoid what happened in during the 1990s), regularize irregular workers (instead of sacking them), and to raise wages. I doubt government appeals to the good conscience of companies will work. Meanwhile Ozawa Ichiro has hinted that if Mr. Aso resigns, he will bring the DPJ into a grand coalition comprised of all parties to manage the government until a general election. Whether Mr. Ozawa is serious is irrelevant; he will undoubtedly make up his mind at the spur of the moment. I imagine, however, that his purpose in letting this slip now is an attempt to encourage "opposition forces" within the LDP to overthrow Mr. Aso in order to bring about the grand coalition — a national government to deal with the crisis? — and hasten the approach of a general election and with it a DPJ majority government.

For the moment, Mr. Ozawa's fantasy is unlikely to come to pass. Mr. Aso's predecessors were able to hold on despite crumbling support inside and outside the LDP, and I suspect that Mr. Aso is no less determined than Messrs. Abe and Fukuda to hold on despite adversity.

In the meantime, Japan will continue to sink.

Japan sinks?

Aso Taro has arrived in Washington for the G20 summit on the global economic crisis.

He leaves behind a country tottering on the brink of ruin. The OECD has announced that, like the reappearance of cancer after remission, Japan may once again experience deflation in 2009. Consumer confidence is at a record low. The question on the table now is not whether Japan will be able to avoid recession, but how long the recession will endure. The government's latest stimulus package is on hold until January, leading some within the LDP to wonder whether Mr. Aso has a handle on the situation. (The Economist summarizes the bad news here.)

The Japanese people, it seems, are battening the hatches. As Blaine Harden wrote in the Washington Post Thursday, Japanese citizens are not particularly enthusiastic about the government's announced tax cuts, an attitude that might change when they start receiving payments, but then again, it might not. The Japanese public has been through this before, and rather than wait for the government to do the right thing, it seems that citizens are preparing to take care of themselves, whether by stuffing yen under the mattress, deferring big purchases, or doing a bit more shopping at the hundred yen shop. Little surprise that there is little taste for structural reform or any other kind of shock therapy.

Mainichi has released the results of its latest annual survey of livelihoods. Mainichi surveyed 3371 respondents in the Kanto and Kansai areas, and found that the level of insecurity among those surveyed is the highest since 1998. More importantly, support for the institutions of "Japanese-style" capitalism has grown: respondents who favored the protection of the seniority system of compensation rose six points to 22.3%, and belief in the value of meritocracy fell nearly nine points to 41.4%. Citizens seem less interested in Nakagawa Hidenao's argument that Japan will be able to grow itself out of its problems than in being sure that they will have enough in their old age. They are not interested in promised handouts or, for that matter, talk of consumption tax increases to come. It seems that what they want is quite simple: some modicum of economic security and some acknowledgment on the part of the government that things have gone horribly astray, that the quality of life is withering. They will not be comforted by Mr. Aso's pep talks concerning the "latent power" of Japan or the DPJ's promises to put lifestyle first.

Mr. Aso may yet pull off an electoral victory next year — it is increasingly certain that the next general election will not be held before April 2009 — but a general election will not substantially alter the situation (even with a DPJ victory, although a DPJ victory would at least ensure that the same party controls both houses of the Diet for the next several years).

In case there was any lingering doubt, the Koizumi era is over.

Little wonder that Japanese are hoping for an Obama of their own: the political system is broken and the economy is faltering. Neither the LDP's nor the DPJ's performance in the face of crisis has been particularly impressive. The DPJ's greatest strength remains that it's not the LDP, and even that assertion is increasingly questionable. Japan looks increasingly set to decline steadily, unable to take decisive steps to restore national dynamism. This is the bakumatsu, but with few signs of a restoration to come, despite Ozawa Ichiro's determination to be the vehicle of that restoration.

Perhaps Japan should hold a lottery to pick a new ruling elite, choosing from among the eminently sensible housewives of Tokyo. I don't see how they could be worse than the status quo.

Plus ça change...

There appears to be little doubt that on Thursday Aso Taro will announce a new set of economic measures — and will also announce that he will not schedule an election for the later part of November. Yomiuri reports that Oshima Tadanori, the LDP's parliamentary affairs chairman, has voiced his disagreement with the prime minister's intention to postpone an election, arguing that delaying will make the opposition less willing to cooperate with the government on its agenda. Nikai Toshihiro, METI minister, and Amari Akira, administrative reform minister, have sided with the prime minister, citing the urgency of the global financial crisis.

"Not before the end of November" probably also means not before the end of this year. Asahi speculates that the next possible dates are at year's end after the budget compiliation for the next fiscal year, in January at the start of the next regular session of the Diet, or April, after the passage of the budget. Yamamoto Ichita, however, suggests that delaying now means that it is likely that Mr. Aso will delay until September 2009. I'm with him. Barring an unlikely uptick in Japan's economic fortunes (or in the LDP's standing in public opinion polls), I see no reason why the prime minister would chance an election unless he had no other choice, as will be the case in September.

An Asahi poll suggests that the public is not in a hurry to vote. In a dramatic reversal, 57% of respondents (up from 33%) think that an election is not urgently necessary. The poll contains some less-than-good news for the prime minister, however. It lends support to the idea that the government may be pushing on a string when it comes to building public support with its economic stimulus plans. Respondents were nearly divided on the value of the government's stimulus package, with 40% approving and 41% disapproving. Perhaps the next package will tip the balance, but the government's support may depend on which pages of the newspaper citizens read: are they swayed more by the relentless string of bad news on the financial pages or the promises of stimulus to come on the politics page?

Regardless of how the government will fare in the court of public opinion, the DPJ is already repositioning itself to respond to the delay (beyond calling Mr. Aso a chicken). While Okada Katsuya, the DPJ president who led the party into the last general election, doesn't want to believe that Mr. Aso means what he says, the DPJ appears to be taking Mr. Aso at his word. The response? For now, backing off on a promise not to hold up the government's new bill authorizing the MSDF refueling mission in the upper house. The upper house foreign affairs committee was supposed to vote on the bill Tuesday, but the DPJ's upper house affairs chairman denied an LDP request for a vote. The rejection may be part of a strategic decision by the DPJ to back away from cooperation now that the government is signalling that it will a delay an election.

It is unlikely that the DPJ will uniformly oppose the government, seeing as how it has little to gain from obstructing the government's efforts to respond to the crisis. (At least I hope it will see that there is little sense in being wholly uncooperative — the DPJ is currently mulling its response to the government's plan for shoring up troubled financial institutions.)

In short, the political system is back to where it was when Fukuda Yasuo decided to depart. The DPJ is hungry for an election, the LDP sees no reason to hurry given external events. The DPJ will cooperate with the government on an ad hoc basis, the LDP will paint the DPJ as putting politics before country.

Expect another ten months of this.

Aso pushes back

Prime Minister Aso, holding a press conference in Beijing where he is attending the annual Asia-Europe meeting (ASEM), suggested that in the midst of the current crisis, he will be prioritizing Japan's international role over the "domestic political situation."

The press interpretation of this remark is that Mr. Aso was signaling that he will not call an election for the latter half of November. He is still scheduled to make an announcement regarding election timing by month's end, but it appears unlikely that the prime minister will call for an election by the end of November.

Of course, by Japan's international role, Mr. Aso actually meant domestic stimulus in the hope of replacing vanishing foreign demand for Japanese products with more robust domestic consumer spending. Naturally the means by which to encourage greater domestic consumption have nothing to do with the "domestic political situation" and the LDP's electoral prospects...

The LDP and its partner Komeito are, according to Mainichi, divided over whether to hold an election within the year. Komeito actually used the F-word ("Fukuda") to argue that Mr. Aso should not delay an election, suggesting that if Mr. Aso tarries, the DPJ will become uncooperative yet again, rendering the Aso government a premature lame duck, like the former prime minister. (Apparently Komeito foresees that an election will "untwist" the Diet. Is that because Komeito thinks the LDP is bound to lose its majority?) Finance Minister Nakagawa Shoichi, meanwhile, suggested that it would be irresponsible for the government to call an election in the midst of the current crisis.

What, I wonder, do the LDP's backbenchers make of this? At this point will waiting until the spring or next September make any difference in their electoral prospects? Is it reasonable for the LDP to expect that the economy will look any better in the new year, new stimulus package or no new stimulus package? Does any expect that the Aso government will finally find a way to stimulate sluggish domestic demand in the midst of a crisis that seems to be encouraging anything but consumption? The Bank of Japan has already revised its growth expectations for the 2009 fiscal year down to zero.

MTC suggested Friday that the government could use talk of a future consumption tax increase to encourage more spending in the near term. Maybe, but such suggestions could simply leave citizens outraged and put them in even more of a hanging mood as regards the LDP. For a backbencher, the delay simply means more scare campaign funds spent idling in the non-campaign campaign. Given that the LDP's prospects are unlikely to have improved by the spring, it's probably just as well (from the backbencher's perspective) that the party opt for an election sooner rather than later. Holding an election will at least clarify the muddied political situation.

Of course, from the perspective of Mr. Aso and his cronies, delaying is entirely in their interest. Will the public — already angry at the government for a host of reasons — be charitable to the Aso government and return it to power in the midst of a crisis? The prime minister is better off waiting to see whether the two stimulus packages have some salutary effect before going to the people in a general election. And I doubt Mr. Aso is keen on the idea of potentially being one of the shortest-serving prime ministers ever.

All of which goes to say that the DPJ's new approach of calling Mr. Aso a coward for not calling an election is unlikely to succeed at either forcing Mr. Aso's hand or drastically impacting the prime minister's approval rating.

The LDP looks to delay a general election

His poll numbers slipping (even in Yomiuri, in whose latest poll his approval rating fell 3.6% to 45.9% and his disapproval rating rose 5.2% to 38.6%), the financial system collapsing, the US "passing" Japan on North Korea, and the DPJ refusing to provide an issue with which the government can galvanize public opinion (for now), it is little wonder that Prime Minister Aso Taro is reconsidering calling an early election.

Due to the need for a second round of economic stimulus — I do hope the DPJ, even as it decides to cooperate, as I expect it eventually will, asks the obvious question of why the government needs a second stimulus package when the first one could have been altered to reflect the worsening economic situation — Mr. Aso seems to concur with the public that the government's response to the economic crisis should take precedence over a general election. In the aforementioned Yomiuri poll some seventy percent of respondents said precisely that. Mr. Aso seems happy to oblige.

So too does the LDP. Koga Makoto, the LDP's election strategy chief, suggested that in the current economic environment the LDP "cannot possibly consider" contesting an election. LDP elders are also citing the need to formulate a budget as a reason for delaying the election; if an election isn't held by 16-23 Nov., the government should wait until March or September of next year.

The DPJ is, of course, irate over the idea of waiting until next year to square off with the LDP in a general election it thinks it can win.

But the DPJ should not panic yet. It is by no means guaranteed that the LDP will be able to use the next year to engineer a reversal. The soft support for Mr. Aso is the clearest sign yet that the LDP is running short on options. Even a second stimulus package may not be enough to save the LDP from an electoral defeat, in part because it is not clear how exactly the government will pay for a second stimulus package (that, and the government's looming assumption of a greater share of the burden for pensions). After wracking up debts and mortgaging Japan's future — and then avoiding a debate over how to fix the problem — the LDP seems to have discovered that it is nearing the end of its ability to find creative ways around the budget problem.

Which surely lends itself to the argument that maybe the DPJ deserves a chance at governing, which apparently 58% of respondents in a recent Yomiuri poll now believe.

The DPJ embraces tactical retreat

Yamaoka Kenji, the DPJ's Diet strategy chairman, indicated in Diet proceedings Wednesday that the DPJ will consent to a quick vote on the bill extending the MSDF's refueling mission in the Indian Ocean. He didn't say that the DPJ would support it, of course, but he did say that the DPJ would consent to moving the bill through the Diet with minimal debate.

Naturally Mr. Yamaoka and the DPJ are not acting out of charity. Rather, Mr. Yamaoka took care to emphasize in his remarks that why should the opposition sit on the bill when the LDP is assured of Komeito support in passing the bill a second time in the Diet.

By that Mr. Yamaoka clearly meant is that the DPJ should not waste precious time debating a bill that will pass anyway — now that Komeito has apparently backed down from its threat to not vote for the refueling mission should it come before the lower hosue a second time — and refocus the discussion on how the LDP has mismanaged pensions and health care.

The DPJ seems to have concluded that the next election will not be won on the floor of the Diet. It gains nothing from appearing unreasonably obstructionist, and it loses little from giving Mr. Aso victories on issues of lesser importance or of paramount importance, like the stimulus package, in which case the party would suffer if it were to oppose the bill. The election will be won in delivering the party's message that it is more responsive to the public on healthcare and pensions than the cold-hearted, "market-fundamentalist" (a term that surely resonates more today) LDP. This necessarily entails buying time for DPJ candidates to work that much harder to communicate with voters. Depriving Mr. Aso of salient issues is one way to buy some time.