Background to the DPJ's Ongoing Counter-Reformation

Prime Minister Kan Naoto has nearly completed filling up the holes in the new line up of Democratic Party of Japan executives and the Cabinet. From announcements and speculation printed in the nation's newspapers, it is clear that the DPJ is undergoing a massive shift away from the course it has been following since 2005.

When Kan and former Prime Minister Hatoyama Yukio founded the DPJ in 1996, the party's core faith was that Japan suffered from an excess of government spending on slow growth or even loss-making endeavors. The key to reviving Japan's health was the removal of the control of spending from bureaucrats (who were supposedly using the budget compilation process to featherbed organizations and industries that would supply them with sinecures following their formal retirement from government service) and assaults on the system of subsidies and supports for industries and activities (agriculture, construction, package delivery) with close ties to the ruling Liberal Democratic Party. Under the classic DPJ paradigm, government would have a limited role in directing the economy, with the focus of policy on the cutting away of the relations of economic dependency. The goal was a more open, failure-tolerant structure, where a social safety net would catch those who fell out of those industries undergoing shrinkage.

Two major events post-2000 forced the party to junk this policy framework. The first was the wholesale larceny of the party's ideas by Koizumi Jun'ichiro, who ran against the traditional policies of his own party, the LDP, promising change almost identical to the changes proposed by the DPJ.

The second was the landslide loss in the 2005 House of Representatives election, where a glum Okada Katsuya seemed to be campaigning on the slogans of "no fun anymore, suffering for everyone." Against improbable optimism of Koizumi, Okada's grim warnings of disaster were a total electoral downer. Unsurprisingly, the party fell flat on its face, getting wiped out in urban and suburban districts, its supposed impregnable electoral fortresses.

Rather than switching to a Koizumi-like bon vivant with a taste for the spotlight, the DPJ opted for the leadership of Ozawa Ichiro. Like Koizumi, Ozawa had a flair for the irresponsible and insincere promise. Unlike him, he was disdainful of the press, preferring to build his political machine out of the knitting together a thousand normally mutually exclusive promises to a thousand different interest groups. Recruiting local worthies to his cause through patient courtship, he built up a huge electoral bank of persons he could run as candidates who were primarily reliant on his political wiles for their educations.

This was, of course, the classic LDP Tanaka/Takeshita faction's winning playbook. Under Koizumi, the LDP abandoned its traditional method of building coalitions of interest groups and patient local recruitment in favor of a media-driven presidential and national mode of rule. As the LDP set about "modernizing" itself, Ozawa moved into the gap, dragging the DPJ, kicking and screaming, in with him.

The new DPJ had a successful test drive in the 2007 House of Councillors elections, where it prevailed over the LDP. It can be argued, however, that the DPJ did well due more to latent disgust at the LDP (particularly over the pension scheme fiasco and other policy missteps ) than thanks to the DPJ's new look.

Ozawa's DPJ received its real test in the 2009 House of Representatives elections, where it completely flipped the country's districts from LDP to DPJ control. The touchstone of the election was the DPJ's policy manifesto, which contained so many concessions and promises to so many different constituencies as to be internally incoherent, and impossible to implement as a whole. A strategy of promising everything to everyone made perfect sense in political terms, however: the electoral map having been drawn by the old time LDP in such a way as to favor the party that could make the most improbable promises.

The results of the 2009 vindicated Ozawa and bolstered his standing in the party to immense heights. A grateful Hatoyama, who found himself in the position of being the party's candidate for Prime Minister thanks to Ozawa's having rigged the snap 2009 party leader election, granted Ozawa the position of Secretary-General and the ability to fully complete the transformation of the DPJ into his personal policy and elections machine.

Events, however, began eating away at Ozawa's authority within the party faster than he could remake the party to his own needs. The global economy began recovering from the 2008 crash much earlier than anticipated, reducing the intense need for the deficit spending tthat undergirded his promises to interest groups and shifting attention toward countries with seemingly unsustainable debt increase paths, of which Japan was one. Prime Minister Hatoyama's political finance difficulties turned out to be far, far worse than imagined, composed of hundreds of real, repeated criminal acts involving hundred of millions of yen. The Futenma base problem turned out to be insoluable, no matter that most of the country believed that the Okinawans had been shafted by previous LDP governments.

What seems to have broken the camel's back, however, was Ozawa's shutting down the DPJ's Policy Research Council. While nominally a move to concentrate policy formation in the Cabinet, the abolition of the Council looked like shutting down the only forum for anti-Ozawa elements to argue that the party manifesto was a laundry list of promises, not a plan -- and an electoral liability for a ruling party. Whether or not this contention was true on not is debatable -- but by abolishing the Policy Research Council, Ozawa seemed to be declaring that that debate would not ever happen.

While members from the DPJ's middle ranks fought with Ozawa over the elimination of the Council, it was likely that they did so under the supervision of senior members of the party, many of whom understood that their own influence was in danger of being usurped. Until the abolition of the Council, the claims that Ozawa sought to establish a dictatorship could be explained away as fanciful LDP scare stories. After its abolition, and the sidelining of dozens of longtime DPJ policy wonks, these scare stories seemed suddenly far less farfetched.

The turning point, it seems, was the Ubukata Affair. When Ubukata Yukio went to the media with the case against Ozawa, the party directorate announced that Ubukata would be stripped of his Deputy Secretary-General post. This decision did not last the weekend. Announced on a Thursday, the dismissal was rescinded on the following Monday.

Several weeks ago I wondered why the Seven Magistrates of the DPJ did not follow Ubukata's lead and rid themselves of their wounded and troublesome Secretary-General and his associates. At the time, I rationalized the inaction of Sengoku Yoshito, Edano Yukio and others as their decision to take the path of least resistance: clashing with Hatoyama and Ozawa head on was risky, picking up the pieces after a disastrous House of Councillors election would be child's play.

Following the collapse of support for the Cabinet and the Party in the wake of the Futenma climbdown and the dismissal of Fukushima Mizuho from the Cabinet, the Seven Magistrates found themselves in the situation where they could carry out the prophesied coup -- because, as every poll indicated, the House of Councillors election was lost.

[Yes, a paradox: anti-Ozawa forces could move in and alter the course of future events only after the course of future events was inevitable.]

Since seemingly winning over Hatoyama Yukio to their cause, the anti-Ozawa leaders have moved with staggering efficiency and dispatch to eliminate Ozawa's influence over both policy and party management. Fiscal conservatives are now in all the party's and the government's top policy setting positions (bureaucrat bête noire Ren Ho, who had been slated to take over for Fukushima at Consumer Affairs, will take over for Edano as Minister of Government Revitalization), the Policy Research Council is being revived and the PM has told former Secretary-General Ozawa to keep his thoughts and advice to himself.

Today's party position announcements and tomorrow's new Cabinet lineup will be sending a message, one that will have repercussions well beyond its already mesurable impact on the fortunes of Kan & Company in the upcoming House of Councillor's election.

The DPJ, the classical DPJ, is back.