Tobias Harris has been looking long and hard at the fight within the Liberal Democratic Party over the commitment to raise the consumption tax starting in 2011. Harris sees screaming and yelling by the neo-Koizumians over even talking about a tax rise during an economic downturn as the prelude to the LDP's Final Battle, the Die Götterdämmerung, the Big Breakup Scene--snapping the LDP in two or more little pieces on policy grounds.
Understandable therefore is his dismay at Nakagawa Hideanao et al's acquiescence to a seemingly limp compromise on the plan to raise the consumption tax. In return for a tamping down of the rebellion, the government will commit itself to building of the legal structure necessary for the implementation of a rise in the consumption tax-- but not the implementation of the rise itself. The decision on whether or not to raise the consumption tax would be determined by the domestic and international economic situation in 2011.
Yes, of course, on the surface, Nakagawa's acceptance of this compromise language is as batty as hell--for who would believe that the government/ruling coalition would go through the time and effort of pulling together the legal structure necessary to raise the consumption tax--engaging the Finance Ministry bureaucracy in an orgy of reimagineering of the nation's fiscal structure -- only to turn around and not raise the consumption tax? If the Establishment builds the machine, nothing stops the powers that be from flipping that machine's switch and turning it on.
However, I believe that Harris worries overmuch about the ability of an LDP-led government to actually accomplish anything either now or in the future. A sworn commitment, even one being given the imprimatur of a Cabinet Decision (kakugi kettei) from this class of clowns is nought but an empty shell. This is "The Gang That Cannot Count to 60," the "We Have To Charge Seniors More For Medical Insurance This Year No Wait There Is An Election Next Year Let Us Delay Implementation Two Years AND Oh Amaterasu We Are Still Not Be Ready Even Then" Crew.
Being led, of course, by His Holiness Francisco of the 19.2%.
Nakagawa Hidenao knows that
1) this compromise has been a just one more humiliating climbdown by Prime Minister Aso Taro, driving the stake deeper and
2) if he stays in the LDP, he gets his Q1 2009 slice of political funds being handed out to the LDP.
Nakagawa and neo-Koizumians with any brains want to soak the party for as much money as they can before they bail out or get kicked out, probably in late April. Accepting the current government's feckless wordplay on a rise in the consumption tax represents a smart, personally profitable and ultimately meaningless concession.
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