Nakagawa will not survive

Nakagawa Shoichi's behavior at the G7 meeting in Rome — the slurred speech heard around the world — has quickly become a full-blown scandal.

With the rallying cry of "exposing disgraceful behavior," the DPJ, the SDPJ, the JCP, and the PNP are preparing to submit a (non-binding) censure motion in the upper house.

Mr. Nakagawa will go because his transgressions occurred on the world stage, in full view of the foreign media. While I do not expect it, if Mr. Nakagawa's conservative comrades were consistent, they would call for his immediate resignation for having defamed the Japanese nation abroad. Indeed, if Mr. Nakagawa was as serious about national pride as his past rhetoric suggests, he would willingly step down. But in lieu of such behavior from Mr. Nakagawa, the DPJ appears more than willing to take up the cudgel of nationalist rhetoric — more often used to criticize leaders "guilty" of traitorous negotiations or apologies — and pressure Mr. Nakagawa and the government. (Yet another reminder that the DPJ, far from being a progressive party, is comfortable with the language of the nationalist mainstream.)

But it appears that Mr. Nakagawa and Prime Minister Aso are digging in; Mr. Aso has asked Mr. Nakagawa to stay on, and Mr. Nakagawa continues to insist that his unusual behavior was the result of taking too much cold medicine combined with pain killers for back pain. The government will, not surprisingly, ignore any censure motion passed by the upper house. It will continue to insist on the "cold medicine" story — Mr. Nakagawa visited a doctor who certified that he has cold symptoms — in the hope that the scandal will go away quickly. Members of the team that traveled with Mr. Nakagawa have been called before the lower house's fiscal and monetary affairs committee to attest that they do not recall seeing the minister drink during lunch at the G7.

But despite these gestures, it is unlikely that the government will succeed in protecting Mr. Nakagawa for long.

More significant than the opposition calls for Mr. Nakagawa's head, Yomiuri reports that members of the LDP and Komeito want the finance minister to go. Some fear that a prolonged struggle with the opposition over Mr. Nakagawa's fate will stall the debate on the 2008 second supplementary budget related bills and the 2009 budget, and are ready to toss the finance minister overboard if it means that debate can resume. Of course, removing the finance minister in the midst of debate over the government's response to the economic crisis could be equally detrimental to pushing legislation forward, and would no doubt be accompanied by calls for an election from the opposition.

The question of the cause of Mr. Nakagawa's behavior, however, seems tangential to the debate over Mr. Nakagawa's future. Whether he was drunk or not, his alcoholism is no longer an open secret — it's simply open. Following closely on the heels of Mr. Nakagawa's mistake-prone performance in late January when he gave his policy speech to a joint session of the Diet, when he made a number of errors in presenting his remarks, it is hard to avoid the impression of the finance minister as, in MTC's word, a "broken" man. Should he be punished for overdosing on cold medicine? No, of course not. But if Mr. Nakagawa's addiction has become a problem, it is a matter of national concern. For that reason, Mr. Nakagawa's doctor's note will not be enough to dispel questions about his behavior. The Japanese people have a right to know the state of Mr. Nakagawa's health, beyond whether he has the sniffles.

But ultimately it will come down to where Mr. Nakagawa's indiscretion occurred. By appearing drunk when representing Japan in one of the world's most exclusive club — membership in which is a point of pride for Japanese elites — Mr. Nakagawa has disgraced his government and his country, an impression that will be reinforced the more video of his performance circulates around the internet and in foreign media. Japanese leaders, always sensitive to how Japan is perceived abroad, may ultimately feel compelled to approve Mr. Nakagawa's resignation, whatever the consequences for the Aso government.

This scandal reinforces the impression that the Aso government is completely bereft of authority and legitimacy. If it has not become a laughingstock home and abroad already, the Aso government is rapidly becoming one. And yet in the midst of this scandal and his plummeting popularity, Mr. Aso insisted that he is throwing his whole being into fixing Japan's economy.

Like Beaumarchais's Figaro, I laugh so as not to cry.

A future for values diplomacy?

Daniel Twining, currently a senior fellow at the German Marshall Fund and formerly an Asia policy staffer at the State Department's policy planning staff and an adviser to John McCain, offers his recommendations to Secretary of State Hillary Clinton at Shadow Government, a new blog at Foreign Policy featuring the writing of conservative and Republican foreign policy analysts.

Twining is a dedicated believer in the idea of "values diplomacy," that catch phrase of the Abe government — with Aso Taro as foreign minister — that placed "universal values," at the center of Japan's foreign policy, at least rhetorically.

The US, Japan, and other democracies of East Asia, according to this view (common in neoconservative circles in Washington, see this post for example), must cooperate to promote the spread of democracy in the region. Accordingly, for Twining the first two goals for US strategy in Asia must be "Accelerate the rise of democratic great powers in Asia that are increasingly willing to help police the region" and "Encourage strategic cooperation among Asia-Pacific democracies." Democracy reappears in point eight, "Promote democracy." The contrast with Secretary Clinton's vision of US East Asia strategy could not be more pronounced. Recall that in her first statement on Asia policy, Mrs. Clinton barely mentioned cooperation among democracies and democracy promotion as important US goals in the region.

And yet Twining thinks that no goal is more important than binding the region's democracies closer together. Twining celebrates what he sees as a "trend" of "Asian nations...leading the effort to form democratic security concerts, a trend Washington should enthusiastically nurture."

There are several problems with Twining's proposal.

First, it is not clear that the trend he sees is actually a trend. He cites the "quad," the strategic partnership among the US, Australia, Japan, and India, as a leading example of this trend. Except that it appears that the quad barely survived the Abe government that spearheaded its creation. Similarly, while the Australia-Japan and India-Japan security agreements are unprecedented in Japanese foreign policy, it is still unclear what substance lies behind the agreements. The democracies may be talking to each other more, but it is too early to declare that Asian democracies have deepened their strategic cooperation in any substantial way to the point of promoting "regional peace and prosperity."

However, if we grant that Twining's assessment of the state of cooperation among Asian democracies is correct, he still makes what I think is an overly optimistic assessment of the gains from said cooperation. Twining concludes that strong, democratic states on the Asian littoral — the same democratic states who he believes are deepening cooperation amongst themselves — "could deter Chinese adventurism and help ensure its peaceful rise."

Does Twining really believe that, that China will somehow be so impressed by the strength of its neighbors that it will simply accept what is tantamount to encirclement, cease enhancing its military power, and trust the US and the other democracies on its periphery to keep the sea lines carrying vital resources to China open at all times? If China is, in Twining's words, "a prickly, insecure giant," why would it feel any less insecure in these circumstances? It does not take a considerable leap of imagination to wonder whether this view might be a bit fanciful. Why is Twining so sure that deepening security ties among democracies (and non- or semi-democracies, in the case of Vietnam and Singapore) arrayed around China's borders while trigger such a benign response from China? This isn't simply a matter of Chinese paranoia. Is there a country in the world that would respond benignly to the formation of ever closer security ties among surrounding countries that also stress the illegitimacy of the surrounded country's government?

In short, the policy proposed by Twining here and by US and Japanese officials at various points in time would amount to encirclement, whether intentionally or not. As Joseph Nye has said, "If we treat China as an enemy now, we’re guaranteeing an enemy for the future."

But it is unlikely that this scenario will come to pass, for another reason ignored by Twining. Even if the Asian democracies are talking more with each other, they are also talking more with China, because, much like the US, none of them can afford to let relations with China deteriorate. South Korea, a strong Asian democracy that barely figures in the flurry of strategic cooperation mentioned by Twining except in regard to NATO-South Korea ties, is often written off as destined for the Chinese sphere of influence if and when reunification occurs. Australia has worked to avoid giving the impression that new security talks with Japan are aimed at China. India certainly looks warily across the Himalayas and now out into the Indian Ocean at China, but that does not make India a reliable junior partner for the US in a league of Asian democracies.

As I've argued before, to understand the future of East Asia it is essential to look at the role of middle powers, the powers forced to maneuver between China and the US, working to minimize antagonism while preventing the two from reaching agreements prejudicial to their interests. The firm ties rooted in shared values envisioned by Twining make it more difficult to pursue the flexible diplomacy required by life as a middle power, and I do not expect we'll see substantial progress in security cooperation among the democracies qua democracies. Twining comes close to recognizing this: "They are less likely to fall under the sway of their giant neighbors when they have options for partnership with a benign, distant partner. America's staying power at a time of dramatic strategic change gives smaller Asian countries geopolitical options they would not otherwise have." But while small (and not-so-small) Asian countries are in no hurry to see the US leave Asia, they also do not want the kind of universal relationships envisioned by Twining. They want the US as an option: a hedge against Chinese expansionism, a market for their goods, and perhaps as a source for investment. But that does not mean that they support active containment of China or making democracy a top priority for the region. The desire of middle powers for an active US presence in the region is an asset for the US only insofar as the US doesn't overreach in its zeal to promote democracy and bend regional institutions to its ends.

Twining further calls for fostering a "pluralistic regional order" in East Asia but the reality is that East Asia is already pluralistic, checkered with a growing array of bilateral, mini-lateral, regional, and trans-Pacific organizations, in addition to the network of US bilateral alliances. These organizations are based not on shared values, as they feature ties between democracies and non-democracies, but shared interests, and one interest in particular: stability in East Asia. The US should be engaged as much as possible in these organizations, but it should also be willing to accept that there is not a seat for the US at every table, at least not if the US wants to dominate the discussion and, as Mrs. Clinton said Friday referring to past US governments, act "reflexively before considering available facts and evidence, or hearing the perspectives of others." While he recognizes the importance of "talking economics," it seems for the most part US engagement in the region would involve more talking — about democracy and security — than listening.

Meanwhile, given the existence of a pluralistic regional order, the US should not fear the creation of what Michael Green calls institutions based on "preserving Asian exceptionalism." Asian exceptionalism sounds like another way of saying, Asian countries working together to solve Asian problems without the US at the table. Is that such a terrible thing? If there are, as Twining says, so many burgeoning and established democracies in the region, why should the US fear organizations from which it is absent?

Finally, on the very question of democracy promotion, Twining includes it as a goal but does nothing to explain how to go about it except to say that democracy is on the march in the region and China is on the wrong side of history. (Sounds awfully Marxist, doesn't it?) How does Twining propose to make China (or Vietnam or Burma or North Korea) democratic? How does Twining propose for the US and other regional democracies to keep existing democracies from lapsing, as in the case of Thailand?

Meanwhile, there is also a bit of irony in Twining's enthusiasm for democracy promotion, in that the more developed the democracy, the greater the popular ambivalence regarding the country's ties with the US. For example, while Japan's leaders talk of the strength of the alliance — perhaps for want of anything else to say — the Japanese public is increasingly doubtful about the alliance after years of an approach to the alliance that dovetailed with Twining's vision. Skepticism regarding ties with the US in countries like Japan and Australia does not necessarily mean that the Japanese and Australian peoples are more trusting of China, it means they are moving in the direction of a middle-power foreign policy that looks at both regional powers with a certain degree of distrust, wary of Chinese intentions while concerned about US overzealousness that would entrap their countries in wars not of their choosing.

In sum, the emphasis on democracy is misguided, not just because there is little the US can do — and little US allies want to do — to promote democracy in the region, but because it assumes that the region can be neatly divided into democracies and non-democracies, which in turn risks alienating China and sending it down a more assertive and unilateralist path, the very future Twining says he wants to prevent.

Nakagawa Shoichi is now Aso's problem

As the above video illustrates, Nakagawa Shoichi, finance minister, financial services minister, and Aso ally appeared at the G7 meeting in Rome, where he stumbled and slurred his way through his remarks to the press and fell asleep during the plenary session.

Hatoyama Yukio, DPJ secretary-general, has already called for Mr. Nakagawa to be fired for "doing immeasurable harm to the national interest." (Presumably Mr. Hatoyama was referring to ABC's reporting on Mr. Nakagawa's falling asleep.) Ozawa Ichiro added that for a minister to act as Mr. Nakagawa did on the world stage is a "disgrace."

The question now is whether Mr. Nakagawa was drunk. As this Asahi article reviewing the response to Mr. Nakagawa's behavior notes (in passive voice), "Mr. Nakagawa is known as a drinker." Kawamura Takeo, the chief cabinet secretary, admitted that while Mr. Nakagawa had some wine at lunch, it was not enough for Mr. Nakagawa to become inebriated — the cause was his taking too much cold medicine.

Former Prime Minister Mori Yoshiro, however, did not help the government by noting in an appearance on TBS that he had warned Mr. Nakagawa about his drinking in the past. (Mr. Mori has become almost fatalistic about the future of his party in recent remarks — in the same appearance on TBS, he said that an election should be held as soon as the budget passes, in effect admitting that there is nothing Mr. Aso can do to rescue his government and his party before September so he might as well go through with an election sooner rather than later.)

Given that Mr. Nakagawa's alcoholism is an open secret in the Japanese political world, it is unlikely that the government's explanation will hold water, which raises the question: should it matter?

On this question it is worth looking at a 2006 article at Slate by British historian Geoffrey Wheatcroft on the fall of Charles Kennedy, the leader of Britain's Liberal Democrats. Wheatcroft looks back at the role of alcohol in democratic politics over the twentieth century and concludes that times have changed.

Kennedy," he wrote, "is a likable man, but you have to say he had it coming. He had regularly given the impression in public of being either sozzled or monumentally hung-over, making an awful mess of policy presentation during last spring's election."

He concluded, "Charles Kennedy's departure is sad but not tragic."

The same might be said of Mr. Nakagawa should he be forced to step down as the result of this scandal.

Mr. Nakagawa clearly has a problem to deal with, but that is his concern; he should not be the object of ridicule. The important question is whether Japan's finance ministry should be headed by a man struggling with a disease that clearly affects his ability to work just as its economy collapses, the answer to which is no. In some sense, this is a symbolic question, because I have to imagine that the finance ministry bureaucrats have ensured the smooth functioning of the ministry under Mr. Nakagawa's watch. (Indeed, I imagine that the finance ministry's power has waxed in recent months, despite the anti-bureaucratic wave in Japanese politics.) But the symbols do matter; surely pictures of the finance minister falling asleep at a summit alongside the finance ministers and central bankers of the developed world do little to inspire confidence in the ability of the Japanese government to respond to the crisis.

It is, of course, possible that the government's explanation is correct. Mr. Nakagawa has said that his behavior was the result of mixing alcohol and cold medicine, but even if this is true, this incident has shed light on Mr. Nakagawa's alcoholism, which, as suggested by Wheatcroft, should be considered problematic. The lid has come off on the open secret, and it is now a subject for discussion.

The bigger question, beyond Mr. Nakagawa's fitness for office, is Aso Taro's capacity for governing. When Mr. Aso named Mr. Nakagawa as his finance minister, I suggested that naming Mr. Nakagawa as finance minister was akin to John McCain's naming Sarah Palin as his running mate — not because Mr. Nakagawa is as abjectly clueless as Mrs. Palin, but because both choices suggested that the choosers were unserious about governing, as they handed important posts to manifestly unqualified individuals for wholly political reasons (Mr. Aso to reward an important ally in the party, Mr. McCain to shore up his support among conservatives and to try to poach disgruntled Hillary voters). Now we learn that Mr. Aso handed an important post in the midst of a "once in a century economic crisis" to not only a political ally with little background or expertise in financial and economic affairs, but to a political ally with little background or expertise in financial and economic affairs struggling with a medical problem that can affect his ability to perform his duties.

Mr. Mori, in the same TV appearance mentioned previously, said that had he not been on a trip to the US when the Aso cabinet formed, he would have protested Mr. Nakagawa's being named the finance minister.

It is too late to lament the original mistake. With the government's committing to the story that Mr. Nakagawa was simply doped up on cold medicine, it may be too late to fix the mistake without mortally wounding a government already nearing death. It is entirely conceivable that this scandal, with its international ramifications (mostly in terms of Japan's pride), could set in motion a train of events that will bring down the government and trigger an election, the final blow to the prime minister's support within his own party.

The can kicks back (Noah Smith)

In my earlier post, I stated that Japan's current-account surplus can vanish in one of two ways: either Japan can consume more (which it won't because of debt and demographics), or it can (over)produce less. That is true. But when the adjustment happens is not set in stone.

A casual observer might think that Nakagawa Shoichi's speech condemning protectionism might sound a little hypocritical, coming as it does on the same day that he threatened to intervene in currency markets to weaken the yen. But from the perspective of very-short-term Japanese national interests, the policies are complementary: the only way to stave off the day of reckoning I described earlier is to pump up exports. Naturally, that will only make the adjustment more painful when it happens, but given current electoral politics one could understand why the LDP isn't exactly planning for the long term. Instead of letting Japan take its lumps now and planning for a brighter future, it seems fairly certain that the LDP will fall back on the old "developing-country" export-promotion, and kick the can a few feet down the road.

But kicking the can carries another, little-mentioned risk. So far, American and British economists and executives have been holding the line against a rising protectionist tide, evoking the memory of "Smoot-Hawley" like a mantra. So far the line has held, as America's Democratic politicians have been too afraid to reach for the bazooka. But the consensus is badly fraying, with Paul Krugman saying he can see the case for "Buy American" provisions in America's stimulus bill. The monster is straining the bars of its cage. And if America's ire is ever roused against Japanese currency manipulation, the US will be far quicker to act than it has been against China; after all, US multinationals do not have their factories in Japan.

No one knows how much a modern-day round of "Japan bashing" would hurt Japan's economic model, but I suspect it would be more severe than nearly anyone can imagine. Japan's much-discussed "dual economy" relies on a compact in which the bureaucracy distributes the rents from world-beating export industries to a host of less efficient domestic industries and small businesses. In the 70s and 80s those rents came from the superior operational efficiency of Japan's auto, electronics, and machine-tool champions; in the mid-2000s they came from the costs saved when those champions moved their operations to China. If America closes its doors to Japanese imports, those rents will vanish and the compact will be broken.

So a best-case scenario for the LDP's kick-the-can strategy is a delayed, more-painful adjustment in maybe three or five years. A worst-case scenario is that American protecionism rises from the dead and smashes Japan's economic model like the hammer of a vengeful god.

In choosing to run the dreadful risk of delaying Japan's day of reckoning, the LDP has proven what many of us always knew — that it represents only a subset of the Japanese people, all its claims to the contrary.

- Noah Smith

The Clinton-Ozawa meeting

After some waffling, Ozawa Ichiro has agreed to accept visiting US Secretary of State Hillary Clinton's request to meet. They will meet on Tuesday.

Jun Okumura wonders how Mr. Ozawa will handle the range of issues on which he has criticized the alliance, leading some American Japan hands to dismiss Mr. Ozawa as an unreliable friend of US-Japan relationship.

I do not expect any drama on this occasion. Mr. Ozawa himself has said, "There are no particular subjects of discussion; it's just an introduction." With that in mind, MTC is right to question the DPJ's leadership's initial response to the US request. Once the request was public, the DPJ should have not hesitated to say yes. Mrs. Clinton is under no compulsion to meet with Mr. Ozawa, but she and the administration in which she serves are clearly trying to illustrate symbolically that the Bush era is over. She is also acknowledging the importance of the DPJ in looking to meet with its leader, an acknowledgment the DPJ should have rushed to pocket and parade about.

Dithering has reinforced the image of a DPJ incapable of leading or, even worse, a DPJ incapable of managing the alliance, which in turn enables DPJ critics like Nakagawa Hidenao to argue that Mr. Ozawa is anti-American.

This whole debate will likely pass over the heads of the general public; I do not expect the DPJ to lose any votes for hesitating to accept the US request. But the DPJ is mistaken if it thinks that public relations only involves the voting public. The DPJ also has to convince the Japanese establishment that it is a reliable ruling party, which means playing the part of a potential ruling party. Part of playing the part of a potential ruling party means accepting the theater of the US-Japan alliance. The challenge for the DPJ is reconciling appearing to be a responsible steward of the alliance while still presenting to the public a poignant critique of how the LDP-Komeito government has mismanaged the relationship, a critique that cannot simply be dismissed as anti-Americanism.

By not rushing to accept Mrs. Clinton's request, the DPJ failed to exploit a golden opportunity to show that even while the party criticizes certain alliance policies, it is committed to a strong US-Japan alliance. Naturally the establishment will continue to sow doubts about what will happen to the alliance under a DPJ government.

Aso falls below ten percent

NTV has just released a new opinion poll conducted over the weekend that shows that Aso Taro's approval rating has fallen below 10%, clocking in at 9.7% compared with 17.4% the previous month. His disapproval rating in the same poll rose seven points to 76.2%.

Among the 55 respondents who said they support the Aso government, a plurality (35.7%) said they supported the government because they could not see anyone else doing the job, with another 23.2% supporting the government because they support the ruling parties.

As for those in opposition to the government, the single greatest reason was a lack of hope in the government's policies (33.3%), followed by a lack of leadership (28.7%), and a lack of confidence in Mr. Aso's personality (20.3%). Advocates of a cabinet reshuffle should note that only 2.1% of respondents cited the cabinet lineup as their reason for not supporting the cabinet (although obviously some might believe it to be an ancillary reason).

Meanwhile the same poll found that nearly twice as many respondents (51.9% to 26.2%) favor a DPJ-centered government after the next general election than favor an LDP-centered government, and more than twice as many respondents (40.6% to 16.3%) said Ozawa Ichiro ought to be prime minister as said Mr. Aso should be prime minister (although 43.1% of respondents didn't know or didn't answer the question). In the big list of potential prime ministers, Mr. Ozawa received the highest support at 15.6%, more than Koizumi Junichiro and every other politician, although once again a large number of respondents (53.3%) did not know or did not answer the question.

The point of this poll is not that Mr. Aso is challenging Mori Yoshiro for the title of least popular LDP prime minister ever. The difference between 15% approval and 9% approval seems purely symbolic, the consequence of the amputation of a digit and nothing more.

But it does confirm that the public has lost whatever confidence in the Aso government and the LDP it still had. Supporters don't quite know why they're supporting the government, while opponents know full well why they do. The LDP is dithering while their lives are getting worse; more than sixty percent of respondents said that their economic circumstances had gotten more or less worse since last year.

One consequence of Mr. Koizumi's criticism of Mr. Aso is that it reinforces the image of a governing party incapable of ruling itself, let alone the country. Public discussion now concerns whether Mr. Koizumi will widen rifts within the LDP to the point of blocking the passage of the bills related to thesecond supplementary budget, rather than on the government's efforts to overcome the economic crisis. The Aso government has forfeited all control of the public agenda. Efforts to try something different — talk, for example, of a "Green New Deal" (something the DPJ has also discussed) — gets lost in the noise generated by discord within the LDP.

That was the most incisive portion of Mr. Koizumi's critique. Mr. Koizumi dismissed the government's blaming its failure to move an agenda on the divided Diet — Mr. Aso repeated this complaint recently, saying that he was jealous at the speed with which the US Congress acted on the Obama administration's stimulus plan and blaming the opposition for retarding the legislative progress — by claiming that if the two houses and two leading parties disagree, they should nevertheless be able to negotiate on a plan that meets the approval of the public (and, one could add, the government has the trump card of the supermajority if the opposition were to opt for obstructionism instead of good-faith negotiations).

I think the public is sympathetic to Mr. Koizumi's assessment. The public sees government inaction, and the blame the government for it, not the DPJ. The DPJ may not be beloved by the Japanese public, but the public is not looking for a party to love. It is looking for a government that will be able to lead and show some creativity in policymaking. The LDP and the Aso government have demonstrated neither.

It is for this reason that talk of jettisoning Mr. Aso and trying again with yet another leader before a general election is fanciful. First, it is hard to see Mr. Aso leaving willingly. Given his ability to cocoon himself from reality, Mr. Aso may be able to hold on to power simply by denying that anything is his fault, blaming his struggles on the opposition, the "once in a century" economic crisis, the media, etc. Second, the LDP's old guard seems reluctant to countenance replacing the prime minister before an election, given that most of the names mentioned as possible replacements are names more acceptable to the LDP's reformists — weak in numbers — than to the party at large and the old guard. The marriage between Mr. Aso and the LDP appears truly to be until death do they part.

The question, however, is whether the prime minister will be able resist pressure to call an election following the passage of the 2009 budget. Public approval in the single digits has the paradoxical effect of raising pressure on the government to call an election while reducing further the LDP's desire to face the public. It remains to be seen what will give way first, the irresistible force that is public opinion or the unmovable object that is Mr. Aso's LDP.

The DPJ may not be up to the task, but the alternative of so bereft of legitimacy and authority that it seems certain that Mr. Ozawa and the Democrats will get their chance to govern.

"We are supposed to be the problem solvers"

Secretary of State Hillary Clinton spoke at the Asia Society in New York on Friday on the eve of her departure for a trip to East Asia that will include stops in Japan, Indonesia, South Korea, and China.

Her speech is worth a look, because I do think she succeeds at indicating how the Obama administration will differ from the Bush administration in its approach to Asia.

During the presidential campaign, I suggested that the difference between an Obama administration's and McCain administration's Asia policies would be the difference between problem-oriented and partner-oriented approaches.

At that time I wrote, "Mr. Obama...seems to share the outlook of Mr. Fukuda and Australian Prime Minister Kevin Rudd, among others. Disinclined to divide the region into democracies and autocracies (or non-democracies), Mr. Obama would seek to work with any and all appropriate partners, not just formal allies, in addressing regional challenges — necessarily meaning more cooperation with China, because as the Bush administration has learned, few of the region's most intractable problems can be solved without China's involvement."

It bears recalling because the theme of "solving problems" ran throughout Mrs. Clinton's speech Friday.

The United States, she said, "is committed to a new era of diplomacy and development in which we will use smart power to work with historic allies and emerging nations to find regional and global solutions to common global problems."

This is a marked shift away from the "values diplomacy" used by the Bush administration to bind democratic US allies closer together, which in practice appeared to be a means of isolating China, banishing it to the rogues' gallery with Burma and North Korea. Mrs. Clinton did speak of shared values, but it was in the limited context of Southeast Asia, the values that bind the countries of ASEAN. She did not use the word democracy, and while she did speak of religious freedom for Tibetans and Chinese and political freedom for North Koreans, it is clear that Japan's leaders are not wrong to anticipate greater engagement with China by the Obama administration.

"As members of the Asia Society, you know very well," she said, "how important China is and how essential it is that we have a positive, cooperative relationship. It is vital to peace and prosperity, not only in the Asia-Pacific region, but worldwide. Our mutual economic engagement with China was evident during the economic growth of the past two decades. It is even clearer now in economic hard times and in the array – excuse me – in the array of global challenges we face, from nuclear security to climate change to pandemic disease and so much else."

In short, despite the lack of shared values — at least by the previous administration's assessment — the Obama administration sees in China an indispensable partner in solving the problems facing the region.

That does not mean that Japan will be ignored.

If anything, the Obama administration will challenge Japan. Mrs. Clinton signalled that the administration will shift the focus away from security; aside from mentioning a new accord regarding the relocation of US forces to Guam, she mentioned Japan's civilian contributions abroad, and said, "We anticipate an even stronger partnership with Japan that helps preserve the peace and stability of Asia and increasingly focuses on global challenges, from disaster relief to advancing education for girls in Afghanistan and Pakistan to alleviating poverty in Africa." In other words, it seems that the new administration will accept the political difficulties Japan has in sending its armed forces to contribute abroad, but it will ask for other, perhaps more meaningful contributions instead. The Japanese government may find that dealing with the Bush administration was easier, in that the previous administration set a fairly low bar for Japanese contributions, being more content that Japan was "showing the flag" and "putting boots on the ground" than in the gains from Japan's contributions. The Obama administration appears less interested in how Japan contributes than in the fact of Japanese involvement in solving regional and global problems.

While Mrs. Clinton will be meeting with the families of the abductees (an unfortunate legacy of the Bush administration), with this speech it does appear that the Obama administration is making a clear break with a Japan-centered Asia policy. Japan's value will not be valued intrinsically, as a bastion of democracy in East Asia, but for the role it plays in solving problems.

The LDP may have a problem with this, accustomed as the LDP's conservatives have become in recent years to using the alliance as a means to promote the long-standing revisionist agenda of remilitarization, constitution revision, and a hawkish foreign policy towards China and North Korea. They may find the idea of contributing abroad for the sake of solving global problems hard to swallow.

Koizumi laughs

Did Koizumi Junichiro just kill the Aso government with a laugh?

Speaking at a meeting of the Diet members' group for the promotion of postal privatization, an LDP study group featuring a number of leading reformists, including Nakagawa Hidenao, Shiozaki Yasuhisa, Takebe Tsutomu, and Ishihara Nobuteru, Mr. Koizumi commented on Aso Taro's recent remarks about "revising" postal privatization.

"More than being angry," he said with a slight smile on his face, "I just have to laugh. I am just totally fed up." (I'm deferring to MTC on the translation.) Asahi describes Mr. Koizumi's criticism as scathing, but watching the video Mr. Koizumi seems more dismissive than angry. He dismissed Mr. Aso as petty and shiftless, unworthy for the role of prime minister. He went on to the prime minister for not listening to dissenting opinions and for have a serious lack of common sense, which have eroded public trust in his leadership. He further suggested that the prime minister should not use the supermajority to pass the bills enabling the second supplementary budget's direct payment plan, which the press is reporting as a suggestion by Mr. Koizumi to his followers to vote against the bill should it come before the lower house a second time.

But more than that, in his laugh Mr. Koizumi effectively waved off the two-and-a-half years of LDP rule since he left office: the readmission of the postal rebels, the backsliding on structural reform, the resurgence of the LDP's old guard and the bureaucracy, the mishandling of the pensions fiasco, the near-total failure to move an agenda despite the supermajority, and now Mr. Aso's turning on Mr. Koizumi's legacy in order to save himself. Without having to say any of that, Mr. Koizumi declared the current government and the LDP bankrupt and unworthy of governing, a declaration amplified by its timing, coming in the midst of uncertainty regarding the passage of the budget and the bills related to the second stimulus package and the government's dismal approval ratings.

Mr. Aso has opted to say nothing in response to Mr. Koizumi, saying that he didn't hear the speech and so won't comment. Yomiuri quoted someone in his retinue dismissing Mr. Koizumi's remarks as "no big deal" because the former prime minister had already decided to retire.

It's possible that Mr. Koizumi's remarks will have no impact. But it's also possible that Mr. Koizumi has cut the thread keeping the reformists loyal.

Jun Okumura has hypothesized that discontented LDP members will not defect but will do everything in their power to distance themselves from Mr. Aso (his post includes a handy list of behaviors to look for). The question now is whether Mr. Koizumi's intervention disproves Jun's hypothesis, whether Mr. Koizumi's "anti-Aso declaration" will serve to rouse the reformists to vote against the government, which would presumably topple the government and set in motion an alignment of some sort during the run up to a general election. I think Jun's logic is sound, but it will be tested by this latest twist in the LDP's collapse.

Perhaps the clearest sign that Mr. Aso is in trouble is that Mori Yoshiro, the self-appointed guardian of the past three prime ministers, did not dismiss Mr. Koizumi's remarks outright. "Mr. Koizumi," he said, "ought to watch his words, but the prime minister also talks too much." Not exactly a ringing endorsement of Mr. Aso.

Exchange on the alliance

East Asia Forum has some comments by Aurelia George Mulgan regarding the article I co-wrote with Doug Turner for Policy Innovations last year, along with my response to Professor George Mulgan.

Mrs. Clinton and Mr. Ozawa

The US State Department is reportedly sounding out the DPJ on the possibility of a meeting between Secretary of State Hillary Clinton and DPJ President Ozawa Ichiro when Secretary Clinton visits Japan next week.

Sankei reports that it would be the first ever meeting between a US secretary of state and the leader of a Japanese opposition party. The DPJ and Mr. Ozawa, however, are treading carefully before committing to a meeting. Mr. Ozawa reportedly told the party leadership, "If the schedule works, we'll meet, but election preparations are my top priority."

On one level, meeting with Mrs. Clinton should be a no brainer for Mr. Ozawa. A meeting would show that the alliance is in the process of transitioning to a post-LDP alliance. The DPJ could signal that the alliance would be safe in its hands, that it is keen to forge a new relationship with the Obama administration that rectifies the mistakes the DPJ believes were made under the Bush administration in cooperation with the LDP.

But on the other hand, it is worth asking whether the DPJ would gain anything from a meeting. Washington will not pick the next government; the Japanese people will. And at the moment the Japanese people do not seem to be interested in business as usual in the alliance. Inevitably the public script for a Clinton-Ozawa meeting would involve some sort of reaffirmation of the importance of the alliance, a photo op to reassure the folks back in Washington, undercutting the DPJ's message of calling for a revision of the realignment agreement that moves US forces from Okinawa entirely. Private discussions between the two would be little more useful, as Mr. Ozawa is not in power yet. Jun Okumura sees similar problems with this meeting.

But now that the story has been leaked that Mrs. Clinton wants a meeting, Mr. Ozawa will undoubtedly be pressured to accept, lest he be lambasted in the press — with the help of LDP politicians — for "unstatesmanlike" conduct. (Just as he was criticized after missing a meeting with Indian Prime Minister Manmohan Singh last year.) Ultimately the opportunity to forge some link with the Obama administration, plus the possible public relations blow to the DPJ's reputation, will lead Mr. Ozawa to meet with Mrs. Clinton.

As for the wisdom of the meeting on the part of Mrs. Clinton, I appreciate that the Obama administration is reaching out to the largest opposition party instead of treating the DPJ (or Ozawa, anyway) like an enemy at the gates of the alliance, as, for example, this article more or less does. It is the US-Japan alliance, not the US-LDP alliance, although after more than fifty years of LDP rule it is understandable that it is hard to tell the difference sometimes.

At the same time, however, perhaps it would be better off if Mrs. Clinton stayed away from Japan altogether in the midst of the tumultuous political situation. Naturally the US government is officially blind to the domestic politics of its allies. But US interference in Japanese politics since the occupation, from comparatively benign gaiatsu to the CIA's distribution of funds to Kishi Nobusuke and other conservative politicians (and activities to suppress left-wing activities) is a matter of the public record. More recently, the Bush administration played an undeniably important role in raising the profile of former Prime Minister Abe Shinzo, giving him access to senior administration officials while he was just an LDP functionary (as opposed to a government official), which raised his profile and helped him leapfrog more experienced politicians and succeed Koizumi Junichiro. The point is that given this history, the new administration should be extremely wary of doing anything to influence the outcome of the forthcoming general election.

It may be unlikely that Mrs. Clinton's visit has any impact on the political situation, but it is not impossible, especially if she meets with Mr. Ozawa or the abductee families.

There are other reasons for Mrs. Clinton to stay away, of course, starting with the vacancies in the ambassadorships in Tokyo and Beijing. Joseph Nye still hasn't been officially named the ambassador-designate, and the Senate has yet to confirm other Asia policy officials, including Kurt Campbell, Mrs. Clinton's assistant secretary for East Asia and the Pacific.

Everything about this trip smacks of a hasty scheme to assuage Japanese fears with symbolic gestures. But symbols can have consequences, whether for the alliance or for Japanese politics.

The accounting reaper cometh (Noah Smith)

A specter is haunting East Asia. Consumption is falling in the world's "deficit" countries, as American and British consumers rebuild their balance sheets. The global current-account and capital-account imbalances are thus coming under immense strain. An accounting identity states that for the imbalances to vanish, one of two things must happen in the "surplus" countries: either consumption must rise, or production must fall. In layman's terms, Japan has for at least a decade been making more stuff than was efficient for it to make. Now either Japanese people must buy more of the stuff, or make less of it. As one of the two big rich "surplus" countries (the other being Germany — the Axis of Overproduction?), Japan will not be able to escape the adjustment. It is too big to continue to overproduce and hope that some other overproducer will start overconsuming.

The optimal solution, as most international economists have stated, is for China, Germany, and Japan to boost their fiscal sending by huge amounts — much more than America — to increase domestic consumption. China is already doing this. Germany, for reasons that I won't go into, is not. That leaves Japan.

The smartest way for Japan to raise consumption would be to expand social security and unemployment benefits. People plan for the future (they base much of their consumption on their "permanent income"), so government spending that is guaranteed in perpetuity is more effective at getting people to spend now — otherwise they may just squirrel their money away to guard against future tax increases. But thanks to its massive debt overhang and low birthrate, Japan will find it had to do either of these. The dead hand of the 90s reaches up from the grave to throttle our best hope of escape.

So what will happen in Japan? Gravity. Japan will fall to something closer to an efficient long-term production level. This means jobs lost, whether it's the cushy full-time type or the hand-to-mouth Dickensian temp type. It will mean big losses and industry consolidation — farewell to a few more of the corporate baronies of Japan's old entrepreneurial families. It will mean more angry street protests from the laid-off temps and more lonely suicides from the laid-off lifers. More divorces, fewer children. A spiral of lower consumption and higher unemployment. Empty apartment buildings, higher petty crime. Yakuza and foreign mafias taking over more neighborhoods. More teenage girls and married women turning to prostitution in the soaplands and deri-heru services, sometimes pushed by their parents and husbands. Families squatting together in cramped conditions. Rural ghost towns. Heat shut off in buildings in winter, people accidentally dying of malnutrition from eating cup ramen too many days in a row.

Accounting looks pretty ugly in real life.

And the thing is, there is very little Japan's government can do about this. For too long, Japan has pretended to be a richer country than it is, not unlike how American consumers used easy credit to pretend they were richer than they were. In fact, that same American deficit spending, funneled through exports or through China, was what kept Japanese wages and profits above what production-efficiency dictated. The bill has now come due; Japan must wash off its makeup, take off its go-go boots, and stagger out the back of the dance club. And this is a sad thing. Those whimsical economists who have studied the phenomenon of "happiness" — myself included — have generally found that happiness comes to people who are coming up in the world. Someone who makes $50,000 when last year they made $40,000 is more likely to be happy than someone who makes $100,000 but who last year made $110,000.

Japan, sadly, chose the short-term illusion of wealth over the chance to climb higher in the future. They chose it when they pulled the lever for the LDP.

But I'd like to end this dreary litany with a little hope. Falling back to an efficient level of income will be painful for today's Japanese people, but it had to happen. After this crash — the recession Japan should have had in the 90s — Japan will have nowhere to go but up. Leaner, more profit-driven companies will start looking for hires — hopefully something between the full-time and part-time positions of today. Women will find themselves on a more level playing field. There will be room for new industries, new entrepreneurs who are not the first sons of old entrepreneurs. Researchers will invent new technologies, and start companies to sell them — the nerds will win out. And if Japan changes its political system now...if it lays the pipes for a workng social safety net...if it dramatically cuts bureaucratic meddling...if it modernizes its corporate governance and legal system...then the rebound will be deep and lasting.

That is why right now, in the depths of Japan's despair, is the most important time to elect new politicians who focus more on building the future than preserving the past. Accounting says nothing about the day after tomorrow.

— Noah Smith

A new course on the abductees

Kawamura Takeo, the chief cabinet secretary, told reporters Monday that the government is working to arrange a meeting between US Secretary of State Hillary Clinton and the families of Japanese abducted by North Korea.

As MTC wrote of a dinner Secretary Clinton had with Asia experts in advance of her trip, "Members of the Bush Administration Asia team committed a major blunder in failing to speak bluntly to the Japanese government and the Japanese people about the DPRK abductions issue. Having the Yokotas visit with President Bush was a nightmarishly bad decision, setting the stage for an ultimate, inevitable 'betrayal' of Japan over the DPRK terrorism delisting."

I cannot stress this point enough.

The Bush administration, for all of its good work on behalf of the alliance, nearly allowed itself to get entrapped by the Japanese right. Japanese conservatives sought not only to make Japan's North Korea policy center on the abductees — a goal largely achieved — but also to center US North Korea policy on the abductees. The US was to be the instrument by which the Japanese people would be made whole again, because US pressure in tandem with Japanese pressure would force North Korea to provide a full account of its abductions and release any surviving abductees.

Of course, if the conservatives were really focused on recovering the abductees, they would have been making overtures to China, presumably the only country with enough leverage over North Korea to get it to do anything (which may overstate the extent of Chinese influence in Pyongyang). They did not look to China for help on the abductees. Could that be because they had little interest in recovering the abductees but rather in using the abductees as a lever to take a harder line against both North Korea and China, a way to justify a more hawkish foreign policy?

Similarly, the abductees were also used as a bludgeon against the US. Consider that once the US opted to embrace the abductees by scheduling face-to-face meetings with the families for former President Bush and former US Ambassador J. Thomas Schieffer, it became difficult for senior US officials — even the vice president — to question openly the Japanese government's emphasis on the abductees. Naturally some Bush administration officials believed in the importance of abductee issue, but as the about-face on North Korea showed, not everyone believed it, because ultimately the US was able to break the bargain on the abductees and commit to negotiations with North Korea. Assistant Secretary of State Christopher Hill, however, was left to take much of the blame for "betrayal," with the president reassuring Japan even as the US proceeded to remove North Korea from the list of state sponsors of terrorism.

The point is that if the Obama administration is going to rest on symbolic gestures, like meeting with abductee families and taking care to stress the problem at every opportunity, it better be prepared to follow through on those gestures — or be prepared to damage the alliance.

My frustration with last year's "crisis" in the alliance was that it was completely foreseeable, and yet the Bush administration did nothing to soften the blow, nothing to convince Japanese officials to shift their focus and try to turn the attention of the Japanese public from the abductions to other pressing concerns regarding North Korea. The administration wasn't wrong to treat other issues as more important; it was wrong to continue to signal to Japan that the abductees were important to the administration when clearly the administration had other priorities in its final years.

I only hope that Secretary Clinton is conscious of this dynamic. Yes, Japanese are wondering about the durability of the US commitment to Japan following the "betrayal" of 2008. But is the way to renew the US commitment simply repeating the same empty promises that led to the sense of betrayal in the first place? It would be one thing if the Obama administration were prepared to commit political capital to solving the issue (although if it were I would have grave concerns for the administration's priorities). But I suspect that the abductees — and the alliance in general — are not among the top five priorities. So why continue the game of using the beleaguered relatives of the abductees as pawns to show that the US cares about the abductees? The alliance is desperately in need of a reassessment of each ally's expectations of the other.

Accordingly, I hope when Mr. Kawamura speaks of Mrs. Clinton's "busy schedule," he is preparing the way for the secretary's not meeting with the abductee families, for the good of the alliance of course.

Just a flesh wound

Speaking in the lower house's budget committee on Monday, Aso Taro said, "If you compare our economic conditions to other countries, our wounds are shallow."

Naturally I immediately thought of nothing so much as this:



I think Jun Okumura is on to something when he writes that the prime minister isn't a "total nincompoop," just in his own world.

After the latest opinion polls, he will no doubt retreat further into his private world.

But seriously, it is hard to square Mr. Aso's optimism with the bleak picture provided by analysts like Claus Vistesen at Japan Economy Watch — and the bleak reality that ordinary Japanese now face.

Naturally Mr. Aso is going to be optimistic. I would expect nothing else from him or any elected official, certainly not from a prime minister with an approval rating heading into the single digits. But maybe, just maybe, there might be some political benefit in acknowledging that Japan will not miracuously escape its recession, that Mr. Aso is remotely aware that life is hard and getting hard for his people. Of course, at that point he would also have to provide some plan to get out of the mess. Optimism, it seems, is a substitute for policy.

Given the haste with which Mr. Aso condemned the "Buy American" provision in the US stimulus package, it seems that Mr. Aso's economic recovery plan basically means buy time in the hope that the US somehow manages to restart its economy, preferably before September.

A twenty years' crisis

"Japan is an economy that is almost certainly producing well below its productive capacity - that is, the immediate problem facing Japan is one of demand, not supply. And it gives every appearance of being in a liquidity trap - that is, conventional monetary policy appears to have been pushed to its limits, yet the economy remains depressed. What can be done?"

So wrote Paul Krugman in his 1998 analysis of Japan's prolonged economic crisis, in which he argued that to escape its liquidity trap, it was necessary for "the central bank to credibly promise to be irresponsible - to make a persuasive case that it will permit inflation to occur, thereby producing the negative real interest rates the economy needs."

Four years later, then-Fed governor Ben Bernanke, in his noteworthy speech on deflation, echoed Krugman, arguing "We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation" — but then concluded that Japan's prolonged crisis was not the result of ineffective monetary policy but reluctance on the part of political actors to implement structural reforms, reforms that, Krugman argued, may be necessary but would do little to "induce people to spend more."

A decade after Krugman, Japanese authorities are once again stuck trying to stimulate aggregate demand.

Economist Ikeda Nobuo, in considering Japan's sluggish aggregate demand, concludes, like Bernanke, that the high liquidity preference of Japanese households — nearly half of Japanese household assets are held in cash or low-risk, low-return bank accounts — is a response to inefficient Japanese companies. Pessimistic that the Japanese government is capable of stimulating Japanese demand in the absence of foreign demand for Japanese goods, Ikeda concludes that the lost decade never ended: Japan is in the midst of a "lost twenty years."

A group of fifteen LDP lawmakers, however, has decided to embrace Krugman's solution, calling for the government to run the printing presses, expanding the money supply by 50,000 billion yen independently of the Bank of Japan in order to finance further economic stimulus. The "Diet Members League to consider the issuance of interest-free government bonds and government money" will hold its first meeting on Tuesday, with upper house member Tamura Kotaro chairing. Former finance ministry official Takahashi Yoichi will address the inaugural meeting.

The group's motto is essentially "desperate times call for desperate measures." Acknowledging that running the presses has positive and negative consequences, the group believes that the economic situation is sufficiently dire to merit the risk of hyperinflation. Quoted in an FT article, Mr. Tamura clearly has read his Krugman: "We are facing hyper-deflation, so we need a policy to create hyper-inflation. We have to do something to undermine the central bank and government’s credibility or else we won’t be able to halt the yen’s rise. So, while we know this is drastic medicine, we will do it."

The new study group has drawn the opposition of senior LDP and cabinet officials. Yosano Kaoru, minister without portfolio for economic and fiscal policy, suggested that the government should issue more bonds instead of printing currency. Shirakawa Masaaki, president of the BOJ, insisted that the policy would do precisely what its proponents intend, namely undermine the credibility of his bank and the health of the currency. The heads of the LDP's factions were equally critical of the proposal, with Tsushima Yuji, the eponymous head of the Tsushima faction, likening the proposal to the enten ponzi scheme.

In other words, this is yet another policy upon which the LDP is divided and unsure of how to proceed, yet another sign of the governing party's flailing about in hope of finding some way to save itself (and Japan).

Not being an economist, I cannot say whether this group's proposal is appropriate. After years of weak domestic aggregate demand, it may be that only drastic inflation may be the only way to make Japanese spend at home — or demand less liquid assets with higher returns — no matter how politically risky it is for the LDP. Pensioners, already angry at the government, will presumably be no less angry as they watch inflation erode their fixed incomes.

But however appropriate the inflationary proposal, it may be beyond the power of the Aso government to implement. Whatever legitimacy the LDP-Komeito government had is now in tatters. The prime minister's latest misstep is to call for the revision of the postal privatization scheme, the very basis of the government's parliamentary supermajority. Mr. Aso questioned whether it is appropriate to divide the postal system into four companies, and stated that now is the time to revise the privatization scheme. He blithely stated that this position is wholly unrelated to the 2005 election that gave the government its mandate. Public opinion may have changed since 2005, but to backtrack now makes a mockery of democratic legitimation. If the government wants to revert from a policy that was critical to returning the coalition to power, it should have to go to the people and ask for approval to change course. (Nakagawa Hidenao made this argument at his blog, as did DPJ member Nagashima Akihisa.)

Naturally LDP proponents of postal reform have been quick to criticize the prime minister for his naked appeal to find some issue that will rescue his sinking government. (It bears noting that Mr. Aso has spoken of preserving the quality of postal services, a major concern of the public when it comes to privatization.) Koizumi confidante Takebe Tsutomu was perhaps the most succinct in his criticism: "What nonsense! I wish he would be more discrete in his speech."

In short, the prime minister is gradually losing whatever ability he has to rally his party and the public to an agenda. He is incapable of setting priorities or taking decisive action. The halls of power echo with rumors of plots to unseat him.

It is unlikely that this shiftless prime minister is capable of deciding on so risky and decisive a policy as proposed by the new league.

This prime minister, his party, and his government are bereft of authority and legitimacy — and they appear determined to drag Japan into the abyss with them.

As MTC so eloquently observes, hopefully Secretary Clinton will take heed of the stench of decay when she visits Japan later this month.

The LDP fiddles while its kingdom burns

As LDP members increasingly come to terms with what looks to be certain defeat in this year's general election — described in graphic terms by MTC as the LDP's "thrashing about and coughing up blood" — the party's leaders continue to struggle in vain for some way to avoid destruction.

As I mentioned in a discussion with Ken Worsley and Garrett DeOrio when I recorded my latest appearance on their podcast Seijigiri, the LDP looks like an animal caught in a trap: the more it tries to escape, the worse the pain, for both the party and those who have to watch it struggle.

One manifestation of this struggle is, as MTC noted, the party's foolish discussion of making Diet reform a prominent plank in its election platform. The LDP is considering both a cut in the number of lower house seats and a proposal to eliminate the upper house. MTC lays the former proposal at Komeito's feet, but there appears to be no shortage of enthusiasm for both ideas among the ranks of LDP Diet members. But MTC is right to note that this is an absurd waste of time considering that Japan's economy is in freefall.

But the LDP seems incapable of doing anything other than busying itself with distractions in the hope that one of them triggers a bout of irrationality on the part of Japanese voters that leads them to return the LDP to power later this year. (Yes, irrationality: each day makes it harder to describe voting for the LDP as anything but irrational.)

Hence the irrepresible talk of replacing Aso Taro with yet another party leader and prime minister. The ubiquitous Tahara Soichiro wins the prize for perhaps the worst suggestion for a replacement in a field full of contenders: he suggests that Tanigaki Sadakazu, former finance minister and perennial contender for the party leadership, is the right man for the job. He barely explains why, tucking the suggestion in the final line of an article discussing the political situation more broadly. What can Mr. Tanigaki possibly offer the LDP now that he couldn't offer the party before?

But substitute any name for Mr. Tanigaki's, and the answer is the same. The LDP will not be saved by a new leader, because the LDP's problems are beyond the ability of any one man or woman to fix. The LDP is overwhelmed by the ever-growing mountain of problems facing Japan today. And rather than work on setting priorities, the LDP's leaders are distracted by trivia (Diet reform) or irrelevant factional matters.

In this latter category falls the battle for leadership of the Machimura faction, which has been settled in Mori Yoshiro's favor. The triumvirate that had governed the faction will be replaced, as Machimura Nobutaka will once again become the titular head of the faction, with Mr. Nakagawa staying in place in what will now be a lesser position along with upper house member Tanigawa Shuzen, the third member of the triumvirate. Having been effectively demoted in the faction, will Mr. Nakagawa now go back on his declaration of loyalty to prime minister and party? Not likely. Not surprisingly, Yamamoto Ichita and other younger members of the faction are opposed to the demotion, complaining that a faction member shouldn't be punished for stating policy positions different from certain leaders. The reformists will complain, but ultimately they will stay put, at least until a general election.

At the same time as the turmoil within the party's largest faction, Mr. Aso is in talks with Koga Makoto, head of the Kochikai, the party's third largest faction, with an eye to merging the Aso faction to restore the Kochikai to its old borders and make it the second largest faction. But to what end? What possible difference could it make? It is already clear that the factions have little power over how their members think or how their members vote in leadership elections. Will Mr. Aso's position be any more secure for having the support of the second largest faction, or the largest faction for that matter? Will LDP members grumble any less about the prime minister?

The same goes for that other favorite tool of LDP leaders, the cabinet reshuffle. Other than putting someone competent at the head of the finance ministry, what difference will a cabinet reshuffle make in shoring up public support for the government?

Despite its claims to be the "responsible" party, the LDP is no more responsible or focused on good policymaking than the DPJ. The problem, of course, is that the LDP leads the government.

Is she or isn't she?

Despite reports that Secretary of State Hillary Clinton will be going to Asia on her first foreign trip, none seem to have the State Department's confirmation that she will in fact be going to Japan, South Korea, and China in the coming weeks.

CNN cites "diplomats familiar with the planning."

The LA Times cites "a foreign diplomat knowledgeable about plans for the trip."

Sankei is even more vague, saying that "it is understood" that Secretary Clinton will be in Tokyo on Feb. 16th, where she will meet with Prime Minister Aso, Foreign Minister Nakasone, and Defense Minister Hamada. The agenda, Sankei says, will include talk of the economic crisis, Afghanistan and Iraq, the realignment of US forces, and, of course, North Korea.

There's a hole in your department, dear Hillary, dear Hillary...

Nevertheless, while I am still concerned about the new administration's pampering Japan, I suppose it is encouraging that the Obama administration recognizes that it has work to do in Asia.

Can the LDP — or anyone — eradicate amakudari?

The Aso government, looking to hasten the passage of the FY2009 budget (the third stage of Prime Minister Aso's plan to overcome the recession), has promised to accelerate the timetable for introducing the ban on the practice of amakudari and the related practice of watari, whereby a retired bureaucrat wanders to other employers who might have inappropriate ties with his former ministry. The government will concurrently hasten the creation of a new organization that will help retiring bureaucrats find jobs.

Clearly Mr. Aso is trying to head off criticism from multiple directions: reformists within the LDP, former LDP administrative reform czar Watanabe Yoshimi, and the DPJ.

Economist Ikeda Nobuo dismisses as "make believe" the idea that the government can simply decree an end to amakudari.

Ikeda makes the astute point that one cannot simply decree the end of amakudari, because the problem is intertwined with a range of problems relating to the nature of the bureaucracy and the labor market. How, he wonders, are fifty-something ex-bureaucrats — despite their management experience and (presumably) advanced degrees — supposed to find jobs on their own in the labor market as it exists today? What company is hiring senior managers in their fifties, unless it entails providing a sinecure in exchange for the ex-bureaucrat's connections and knowledge? At the same time, both the LDP and the DPJ are on record as wanting to cut waste, which in practice means dissolving the semigovernmental corporations that absorb a good number of ex-bureaucrats. If the private sector cannot gainfully employ them, and if there are fewer semi-public or public sector jobs available, where exactly will these still-useful ex-bureaucrats go? Foreign companies?

One way to ease the pressure on the system is by having more bureaucrats retire earlier. Takahashi Yoichi, formerly of the finance ministry and now one of its biggest critics, and Eda Kenji, formerly of METI and now an independent Diet member collaborating with Mr. Watanabe, have been promoting precisely that, with their 脱藩官僚会 (dappan kanryo kai). Based on the example of the bakumatsu, when samurai voluntarily left the service of their daimyo, their idea is to encourage bureaucrats to retire early and put their policy expertise to work for the whole of Japan, as a means of encouraging the transfer of power away from the bureaucracy. Incidentally, Mr. Eda calls for the same combination of cutting waste and banning amakudari, meaning he better get to work recruiting dappan kanryo. (He explains the group here.) Clearly, however, these changes will not be enough. It may take the bureaucracy introducing merit-based promotions, which in turn will require that incoming bureaucrats receive more education before entering their ministries instead of devoting the first several years of their careers to training.

Of course, there is a whole different set of problems assuming it were even possible for companies to hire mid-career ex-bureaucrats as managers with ease. The US government is, in a sense, engaged in an ongoing struggle to prevent retired civil servants from abusing their former positions. A whole range of institutions — departmental inspectors general, the government accountability office (GAO), the Justice Department's public integrity section, the office of government ethics, and so on — is engaged in the hard work of investigating and punishing abuses of office by current and former government employees.

The laws are fairly clear. Former employees are legally proscribed from representing a third party with government agencies on any matter in which involvement was "personal and substantial." Some high level officials are subject to a "cooling off" period, a one-year period during which any attempt to contact their former employers with "the intent to influence" an official decision is forbidden. "Very senior" employees are banned from contacting senior executive branch officials and employees of their former agency for a year. Naturally it is worth asking what happens after the cooling off period, because Japan also has laws mandating cooling off periods. The difference, it seems, is not a matter of law, but a matter of enforcement.

As the Global Integrity Report on the US found, the US government has more work to do on policing ties between former bureaucrats and their employers. But the point is not that the US is perfect — far from it. Rather, the US government has made a point of trying to root out this behavior. It has developed a number of organizations with the explicit purpose of keeping these corrupt ties in check. And despite that, it still has a hard time policing ties between retired civil servants and their former agencies, especially, I would argue, in matters of defense (Eisenhower's defense-industrial complex).

In other words, it is not enough to declare amakudari at an end and offer to assist retiring bureaucrats with finding new employment. Is this government prepared to create new institutions to police ex-bureaucrats and the government's ministries and agencies? Is it ready to protect whistleblowers? Is it prepared to create and nurture a whole new agency whose explicit purpose is policing the rest of the bureaucracy? Uprooting amakudari will require a government-wide commitment to eradicating the practice. It will also require Diet oversight.

Naturally the same challenges apply for the DPJ, which has made cutting waste its top promise for the next general election.

Unlike Nakagawa Hidenao, who continues to impugn the DPJ's reformist credentials based on the slightest of pretenses, I believe the DPJ is serious about administrative reform. I recently talked for an hour with Nagatsuma Akira, the man responsible for exposing the pensions scandal and a currently a member of the DPJ's "Next Cabinet" as minister responsible for pensions. Mr. Nagatsuma is passionate about administrative reform, seeing it, correctly in my view, as essential for democracy. He is positively bursting with ideas for reform., with a zeal unmatched by any Japanese politician I have ever met. He believes in the importance of accountability. His zeal, I think, is representative of how the DPJ will govern.

But zeal or no zeal, the DPJ will still have to find a way to navigate through this treacherous minefield, with the additional challenge of the party's ties with public-sector unions. I still have hope for the DPJ, but I am not blind to the difficulties it faces on this fundamental issue.

For now, simply declaring an end to amakudari is nothing more than a publicity stunt. (Ikeda, more generous than I, calls it a first step, which I suppose is true but that presumes that this government is prepared to take the aforementioned next steps.)

Benign neglect

After being misled twice (perhaps thrice) by premature reports in Japanese newspapers regarding some aspect of the Obama administration's Japan policy — despite articles in both Asahi and Yomiuri, the administration has yet to announce an ambassador to Japan, and the State Department has yet to confirm that Hillary Clinton's first foreign trip will take her to Japan — I have decided that it is time for an immodest proposal.

Unless the Obama administration is determined to devote serious political capital to fixing the US-Japan alliance, the new administration should practice benign neglect towards Japan.

First, allow me to make clear what I am not proposing. Naturally the US should not break off relations, abrogate the security treaty, withdraw all US forces from Japan, or another such radical measure. It should continue to do whatever it can to implement the agreement on the realignment of US forces in Japan, whether in its current form or some revised form. It should continue to pursue greater interoperability between US forces and the JSDF, looking for more ways for the two militaries to share bases and train together. The alliance as it exists is essential for deterrence in East Asia, and naturally the administration should do whatever necessary to maintain bilateral deterrent power. (It should also continue to reassure Japan that the nuclear umbrella is firmly in place.)

So what do I mean by benign neglect?

By benign neglect, I mean that it is time for Washington to stop devoting its energy to maintaining the fictions of the US-Japan relationship. It is time to rename the "bar none" ranch. Secretary Clinton strongly hinted at this when she referred to the Sino-US relationship as "the most important bilateral relationship in the world in this century," and it is little wonder that the Japanese establishment had a collective fit in response. Secretary Clinton's statement may have been an uncomfortable truth for Japanese, but just because it is uncomfortable does not make it any less true. In short, US officials need to stop telling Japanese leaders how important the alliance is to the US. They need to stop exaggerating the importance of Japanese commitments. And they need to stop making commitments to Japan — regarding the abductees, for example — that they are not prepared to honor.

The final two years of the Bush administration show what happens when an administration continues to stroke the ego of Japanese elites without actually devoting sustained effort to the relationship. The Bush administration, despite a shift in focus to the Korean Peninsula and the relationship with China during its final years, continued to use the same slogans from the supposed "golden age" of the first half of the administration.

More than slogans, however, the administration continued to go through the motions of treating the alliance as a relationship unlike no other. Former President Bush met with the Yokotas in spring 2006, around the same time that former Ambassador Schieffer went to Niigata to visit the beach from which Megumi disappeared. A year later, when Abe Shinzo was prime minister, Mr. Bush repeatedly reassured Mr. Abe and other Japanese officials that the US was completely behind Japan in its efforts to get a full accounting of North Korea's abductions even as Christopher Hill was moving the US towards a major shift in negotiations with North Korea. The administration continued to emphasize shared values, although thankfully it balked at putting those "shared values" to work in Mr. Abe's scheme for an arc of democracies. Indeed, this last example makes my point perfectly: the US was happy to praise Japan to the skies publicly, but presented with an opportunity to undertake what would have been a profound departure from its Asia policy, the Bush administration was reluctant to go forward. As was so often the case during the Bush administration, it wrote rhetorical checks it couldn't cash.

The Obama administration should not make the same mistake. Unless it is prepared to devote significant attention to fixing the alliance, which alliance hands in both countries acknowledge is in need of fixing, it should not raise Japan's expectations of the US to unrealistic levels. It must avoid both overvaluing Japanese contributions to US-led coalitions abroad and giving the impression that such contributions are reciprocal, as the Bush administration, whether intentionally or not, did.

The other side of the coin is that neglect should be benign. The administration should also abjure from the kind of cajoling practiced by Mr. Schieffer.

The goal of benign neglect is simple. The frenzied reaction by Japanese elites to even the slightest signal emanating from Washington over the past three months suggests an unhealthy overdependence on the US. Japan is not just dependent on the US for its security. Its elites seem to have a hard time considering Japanese foreign policy without looking for cues from Washington first. This degree of dependence is bad for both countries. The idea that US Asia policy will be fine as long as Japan is happy is no less dangerous illusion than the idea — promoted by Koizumi Junichiro — that if Japan gets the alliance right, good relations with its neighbors will follow. The US has important matters to discuss with China, whether Japan's elites like it or not. There are greater concerns on the Korean peninsula than Japan's abductees, whether Japanese like it or not. It may not be able to reach a satisfactory agreement that denuclearizes North Korea, particularly after the latest turn in North Korean foreign policy, but the new administration ought to continue to work at it. Additionally and relatedly, the US has work to do figuring out how to overcome what Secretary Clinton described as "vastly different values and political systems" to establish a constructive relationship with China.

But Japan also needs to work more on finding its place in the region, forging new relationships with its neighbors without looking over its shoulder at the US. Its leaders also need to think hard about Japan's role globally; the Aso government's reluctant commitment to fight pirates in the Gulf of Aden shows just how much work needs to be done on this score. A degree of distance from the US might actually force the Japanese people and their leaders to consider these questions. It might also force them to consider the appropriate level of defense spending, a question that has been largely answered by the finance ministry over the past decade. Tomohiko Satake is right to emphasize the importance of Japan's playing a global role, but he makes my point that the global alliance should be deemphasized when he argues that the DPJ is not averse to an international security role provided the UN is involved. A DPJ government may be the best opportunity for Japan to develop a global security role independent of the alliance, in other words, a foreign policy in which the US-Japan alliance is essential as a force for regional stability while Japan develops independent initiatives internationally. But it may not take a DPJ government to get such an outcome.

So to conclude, the Obama administration should pursue benign neglect as a way to wean Japanese elites off their dependence on Washington. The administration should be more careful with its rhetoric and the symbolic politics of the alliance. To this end, I hope that reports of Secretary Clinton's first foreign trip being to Japan are mistaken. And I hope that President Obama and Prime Minister Aso do not meet too soon. What would such a summit accomplish other than giving Japanese elites the attention they desperately crave? The administration should not slight Japan, but it also should not go out of its way to give special attention.

Again, all of this is moot if the Obama administration decides to devote significant attention to fixing the alliance. North Korea could make this a reality if it decides to go forward with its rumored Taepodong-2 test, a move which will go a long way towards focusing US and Japanese attention to fixing the problems with the alliance.

But that said, even if the Obama administration decides that getting the alliance right is a priority, it should consider whether indulging Japanese elites is amenable to fixing the relationship.

Obama already passing Japan?

The US State Department has told the Yomiuri Shimbun that it intends to initiate a high-level "comprehensive strategic dialogue" with China that will address political, economic, and security issues and will include an exchange of visits by Vice President Joe Biden and Chinese Premier Wen Jiabao.

Naturally, Yomiuri's report is quick to note that many Obama administration officials worked in the former Clinton administration, conjuring up memories of "Japan passing." Yomiuri also includes the requisite quote from Michael Green, who warns that "it gives the impression of bipolar rule in Asia, causing a great disturbance among Japan, South Korea, India, and Australia, US allies."

The problem with this view is that it only tells one side of the story. Of course, governments in the region worry about a US-China condominium that might lead to their interests being slighted. But do they really worry more about the US and China talking than they worry about war between the US and China? This is the reality of life for the region's middle powers, Asian countries with close and important ties with both China and the US (in many cases security relationships with the US of one form or another): they want China and the US to be cordial, but not too cordial; the US should be involved in the region as a force for stability, but should not try to encircle China.

Japanese officials should welcome efforts by the US to open new channels of communication with China, just as the US should welcome Japanese efforts to do the same. This idea that Japan loses just by the US government talking with China is a relic of the cold war that needs to be retired.

Tokyo has no reason to be dissatisfied with the Obama administration, despite Komori Yoshihisa's fears about President Obama and Secretary of State Clinton "being in agreement" about putting China first. (His analysis reads more like American conservative talking points than genuine analysis that considers what's happened during the transition and the early weeks of the new administration.) The Obama administration — apparently after months of hearing reports about Tokyo's fears regarding the incoming administration's ideas regarding Japan — has done more than enough to reassure Japan's leaders that the new administration will not deviate from the Washington establishment's Japan consensus. Most recently, Susan Rice, the US ambassador to the UN, told her Japanese counterpart that the president and secretary of state are in agreement about the need to strengthen the US-Japan alliance, and indicated that the Obama administration will basically continue the Bush administration's Japan agenda: requesting help in Afghanistan and in regard to other international crises, while promising US support on North Korea and UN security council permanent membership. Even more than that, the State Department has announced that Secretary Clinton's first foreign trip will be to Japan, in mid-February.

All of this is on top of a host of appointments favorable to Japan. The national security adviser, the director of national intelligence, and the secretary of the treasury are all familiar with one aspect of the bilateral relationship or another. Most of the major Asia-related jobs have gone to Japan specialists. And now Secretary Clinton is taking every opportunity to reassure Japanese officials that she does not intend to "pass" Japan.

If anything, the Obama administration is doing too much to reassure Japan.

The US needs the aforementioned dialogue with China; there is too much to discuss to wait or to defer to the fears of select members of the Japanese establishment and their allies in Washington.

I hope on her visit to Japan Mrs. Clinton emphasizes the importance of direct talks among the US, China, and Japan. I hope she makes clear that smoother Sino-US relations are actually in Japan's interests, even if some Japanese think otherwise. I hope fears of angering a portion of the Japanese establishment do not lead the Obama administration to back away from reorienting US Asia policy from being overly focused on the US-Japan security relationship.

This administration needs to exorcise the ghost of Richard Nixon from the US-Japan alliance: it needs to make clear to Japan (and China) that the US-Japan and the US-China relationships are not zero sum.