Tanigaki's Appeal To The International Finance Community

As noted earlier this morning, Liberal Democratic Party President Tanigaki Sadakazu was interviewed by the Wall Street Journal Asia (E). He was also interviewed by Bloomberg (E), leaving Reuters no doubt wondering, "What are we, chopped liver? Not raw, of course." (E)

In both articles, Tanigaki makes essentially the same points:

- If Prime Minister Noda Yoshihiko, in an attempt to prevent further defections from the Democratic Party of Japan's House of Representatives or House of Councillors delegations, proposes modifications of the bill doubling the consumption tax in FY 2015, then the deal in between the DPJ and the LDP-New Komeito alliance is off.

- Tanigaki is ready to submit a no-confidence motion against the government in August.

What could be compelling the president of the LDP to talk to foreign financial information wire services? Was he just going the rounds, talking to anyone who could schedule an interview with him?

Seemingly not. A cursory look at the domestic press shows him offering no interviews to a domestic news entity, just a press availability open to everyone on the 20th.

So what is the deal here?

The first point Tanigaki raises is trivial: a deal's a deal. The PM is not stupid -- he knows that if he tries to renegotiate the package on the passage of the pension and social welfare bills through the House of Councillors, the LDP and the New Komeito will cry betrayal, and order their senators to vote against the bills, killing the reforms.

The second point raised is non-trivial -- and gives an indication why Tanigaki chose to spend his time with Bloomberg and ASW-A rather than any major domestic news outlet.

Tanigaki faces a huge battle to retain his position, should he choose to present himself as a candidate in the LDP's presidential election in late September. He has taken the party absolutely nowhere in three years in office. The party's public support numbers are below those the party had after its trouncing at the polls in August 2009 -- though, to be fair, the LDP does rather better when the question asked is: "What party will you be voting for in the proportional seat vote for the House of Representatives?"

Ambitious colleagues in the party know that Tanigaki's election to the presidency was not due to any outstanding qualities he possessed, but merely because out of the princes of the factions, it was Tanigaki's turn on the throne (I am indebted to Okumura Jun for this insight).

The domestic news media is aware of the tenuous hold Tanigaki has upon the party rank-and-file. They know that if he cannot engineer a political crisis before the end of the current Diet session on September 8, he will go down in history as only the second LDP president to not become Prime Minister.

What the domestic news media also knows is that Tanigaki has virtually no ability to precipitate a political crisis of the magnitude capable of toppling the Noda Cabinet. He cannot bring down the government in this session over the bond issuance bill: the government has enough money to last until October, or beyond, with a little fiddling. As for a successful no-confidence motion, Tanigaki would have to round up everyone not in the governing coaltion -- every member of every party and every independent -- plus 17 of the DPJ's own members, to vote with the LDP (the numbers work out differently, of course, if there are abstentions). This means the Communists voting with the LDP, something that might happen, oh, immediately prior to a giant meteor hitting earth, extinguishing all life on the planet. It means the LDP joining hands with Ozawa Ichiro's People's Life First Party (LF).

The LDP has a strong wish to return to the position of the party of government and strict internal discipline. But grab Ozawa's hand, after all the many times he has scalded the LDP? The very thought sets the brain to boiling.

So it would make sense to talk, not to the national media, which would ask all sorts of embarrassing questions like:

- "How are you going to get the Communists into bed with you?"

and

- "What if you entice the requisite number of number of traitors to vote with you and your allies against the government? Then what do you do? The electoral districts are still unconstitutional, so a Diet dissolution and elections are illegal. What kind of coalition are you going to put together to solve that problem, after you have blown the DPJ apart?"

Better to talk to the international financial press, to sow confusion in the international markets and foreign institutions, first in the hopes of sparking questions about the stability of the Noda government, and second, through the Japanese media's peculiar obsession with the way Japan is portrayed in the non-Japanese media, a rebound of the story in the domestic press.

Because after a serious bout of political deafness over the U.S. Marines' introduction of the despised MV-22 Osprey aircraft into this blessed land (J), one which made it look as if the intransigence of the U.S. Marines was going to drive a second DPJ prime minister out of office, the PM has righted himself and is demanding safety assurances and interim flight paths guaranteed to drive the U.S. Marines nuts. This is perhaps not the "Return to Sender" message the public wants the PM to send to the United States. However, it represents a significant step in the government at least appearing to reclaim sovereignty over the nation's airspace, which Noda for a moment seemed to be giving away.

Tanigaki needs Noda to misread another issue, or have a member of the Cabinet get caught in a compromising position, to evade the axe in September.

Without Noda's or the Cabinet's help, Tanigaki is doomed. He will talk up a storm but he has no wind at his back.