The Guardian blog, which is interestingly copyrighted with Project Syndicate, has published a devastating review of both the fiscal and monetary sides of Abenomics (Link). Over at the Foreign Policy website, Clyde Prestowitz continues his rock-slinging. (Link)
What needs to be said in these non-Japanese language reviews is what a goodly portion of the Japanese electorate already recognizes: that Abenomics is an attempt to buy victory in the House of Councillors election. Dump cash or promises of cash all over the country, talk the yen down so that exporters can book huge profits by the March 31 end of the fiscal year, push up share prices in the short term by creating expectations of monetary easing to the point of setting off asset inflation -- then hold an election.
Win, win, win! The bill comes due after the polls close.
Sadly, Abe Shinzo and his Liberal Democratic have to do nothing, zero, zip, rien, nicht, nanimo nai, nada to come out winners in July. The opposition Democratic Party of Japan is defending 30 district seats and 15 party proportional seats -- a hopeless task for the party, given its nearly comatose state and the emergence of rival opposition forces.
Were the Abe Cabinet and the Liberal Democratic Party-New Komeito ruling alliance to just sit tight and do nothing but govern for the next six months, the LDP would seize half of the seats the DPJ and its splinters the Livelihood Party (Seikatsu no To) and Green Breeze (Midori no kaze) will be defending.
So why destabilize the economy, if one has no good political reason to do so?
1) Abe Shinzo still lives in torment over the results of the 2007 House of Councillors election
If Abe has learned anything from 2007, and from his Cabinet and top Prime Minister's Residence appointments is seems he has learned little, it is get the sequencing right: win the House of Councillors election first, then embark on your reactionary revolution. Abe's term and the dreams of his camp followers became undone after 2007 loss of seats and control of the House to the DPJ. While nothing substantial had changed -- the LDP and the New Komeito alliance still possessed a 2/3rds supermajority in the House of Representatives -- Abe's legitimacy as president of the LDP had been compromised, allowing Aso Taro (What is in Amaterasu's name he doing in the present Cabinet?) and Yosano Kaoru to move in and take over de facto control of the government.
Abe's goal this year is to win in the House of Councillors election -- whatever the costs to the nation -- in his view wiping out the memory of his 2007 failure.
2) Constitutional reform
The magic number for the reactionaries is 160, which is 2/3rds of the seats in the House of Councillors. If the LDP and its allies, whoever they may be, can cobble together 160 seats, they are within shouting distance of amending the Constitution. At present the LDP and the New Komeito hold 92 seats. The Your Party and the Japan Restoration Party, parties sympathetic to the LDP's goal of amending the constitution, hold 11 and 3 seats respectively, bringing the total to 106.
The math is daunting. The DPJ has 35 seats up for election, the Livelihood Party 6, Green Breeze 5. If the levels of losses of the December 16 election are replicated -- a not unreasonable outcome -- the LDP and its collaborators will scoop up around 75% of these seats -- i.e., 34 seats (Running total=140). Six are currently vacant -- five on-cycle and one off-cycle. Pick these up and the total is 146. Five independent seats are up for election. Take these or co-opt the seat owner to the constitutional amendment cause, and the total is 151. Snap up the one proportional seat from the doomed People's New Party and the total is 152.
At this point, the forces of constitutional amendment hit a wall. They have to
- convince a number of the DPJ seat holders up for reelection in 2016 to either jump ship or pledge to vote for constitutional amendment
- crowd out the Socialists and the Communists in the proportional vote, picking up one or two of the five seats those parties have up for election
- beat the DPJ and its splinter parties even worse than predicted
The only way to achieve any of these latter goals is for the LDP and its allies to be insanely popular going into the election and insanely popular coming out.
With no reasonable path to 160, all that is left is the unreasonable.