On January 6 of this year, I published the first of my rants about Abenomics. The final imprecation in my screed went like this:
Abenomics is grand larceny. It takes, in the form of the taxes and the value inherent in the yen, money from the people and gives it to the supporters of the Liberal Democratic Party.I wish I were wrong about this but I am not.
Indeed, Abenomics thinking has so infected governance that economic decisions taken before Abe Shinzo became prime minister are now subject to it:
Abe poised to OK tax hike(Link)
The Yomiuri Shimbun
Prime Minister Shinzo Abe has nearly resolved to raise the consumption tax rate from 5 percent to 8 percent in April as initially planned, government sources said Wednesday.
The tax hike will be complemented by a set of pump-priming measures worth about ¥5 trillion—equivalent to about two-thirds of the revenue anticipated from the three percentage-point increase—to prevent the economy, which has been gradually improving, from taking a downturn due to the higher tax.
The economy-boosting measures will be made possible through such steps as drafting a supplementary budget for the current fiscal year and a regular annual budget for fiscal 2014 in a manner that will enable each to complement the other. This will also be combined with tax system revisions that will primarily feature tax reductions, according to the sources.
The prime minister will likely make a final decision about the envisaged tax increase after analyzing the Bank of Japan’s quarterly survey of short-term business outlook for September. The central bank will announce the results of the Tankan business confidence survey on Oct. 1. Immediately after arriving at a final conclusion on the matter, Abe is expected to hold a press conference to explain why the consumption tax rate must be raised and unveil the new economy-boosting package....
Raise a regressive tax on everyone's purchases to supposedly shore up the finances of everyone's health and pension systems. Fine. Raid that store of funds before they have even been collected and spend 2/3rds of it on stimulus measures -- the apportionment of which I am sure will not be affected by politics. In the seemingly unlikely possibility one cannot find enough pork barrel projects to fund, replace increased spending with reduced revenues, i.e., tax cuts, which I am also sure will not be influenced by lobbying or votes-for-perks quid pro quos with industry favorites or major support organizations.
It is not impossible that a government can spend and invest the people's money in a fashion generating a higher rate of return than if the people were left to make random, desires-based decisions on their own. Singapore and its People's Action Party government can reasonably claim to such exalted and enlightened taxation and spending policies.
The ruling party of this blessed land, however, is the LDP -- a party that despite numerous attempts at internal reform and new corporate outreach is still enmeshed in ties with the dregs of the economy -- the tax avoiders, the deadbeat borrowers, the uncompetitive producers, the protected industries and entire sectors (new road construction) that have no economic reason for existence.
The LDP can be entrusted to spend the 2/3rds of the money that was supposed to be keeping the pension and health systems afloat, this in order to keep Mr. Abe's economic program, which is really a vote buying scheme, chugging along another year?
Ha, ha, ha, ha.
Really? That's the proposal?
No seriously, that's the proposal?
Later - The Tokyo Metropolitan District's hometown newspaper this morning presents pretty much the same take on the mooted Abe administration plan: "Obscuring the goal of protecting social welfare" (Kasumu shakai hosho mokuteki -- Link - J).
Later still - A potential need to clue in means an opportunity afforded for a semi-gratuitous link to Georgia Harrison and Eric Clapton in Tokyo.