Wednesday, January 16, 2008

The Politics of Gasoline Prices

Rule #13. - Rely on your own powers. If you can't see the point of your opponent's move, assume there isn't any.
- from "Pandolfini's 64 Rules of Chess"

I cannot understand Prime Minister Fukuda Yasuo's strategy or his mode of reasoning as regards the renewal of the temporary gasoline surcharges.

Indeed, after seeing him fumble through a response to the question of what he intends to do about the gasoline tax in the upcoming regular Diet session, it seems reasonable to assume that he has not given a moment's thought to the problem.

Let us see if we can think this through ourselves.

First, who would be thrilled at the extension of the nominally temporary 25 yen per liter tax on gasoline, set to expire on March 31?

- Bureaucrats (is there a source of revenue they will ever forego?)

- The Road Tribe of LDP legislators and their clients in the road construction industry - for they believe, with good reason, that they will be wiped out should they lose this ability to filch from the public's pockets

Now, who would be thrilled if the tax were allowed to expire?

- The remaining of the citizens and residents of Japan, say oh, about 115 million persons, 90 million of whom vote.

The weirdest thing about the ruling coalition's hesitation over whether or not to let the tax die? The lack of a clearcut rural vs. urban angle. Gasoline prices touch everyone. However, they have a particular impact on those living in rural areas. Persons in the chihō are dependent on their vehicles and buses to get around. It is inconceivable that more persons will benefit from the budgetary depredations of the Road Tribe and its host of clients than will benefit from the repeal of a highly regressive tax on the rural population's primary mode of transportation and a major factor of the cost of farming.

As for the LDP's best interests, it is impossible to believe it will be able to buy more votes through public works paid from out of the revenues collected by the tax than it will lose from voters furious at the tax's reimposition. The tax measure was meant to be temporary--and certainly would have never been imposed had gasoline prices been, as they are now, at record high levels.

Nevertheless, the PM's bureaucratic handlers in the Kantei and the idiot-savants in the LDP leadership seem to have clouded the PM's thinking on the matter. They argue that the country cannot live without the gasoline tax revenue--quite oblivious to the fact that by recycling the money through the clients of the Road Tribe, the government will be, to borrow Okumura Jun's phrase, "bribing the people with their own money."

One need only look at the gleeful faces of the DPJ to know that the Prime Minister is facing a Waterloo. The DPJ is going to town on the temporary gasoline tax renewal threat. It yesterday unveiled a 60 Diet member "Brigade to Lower Gasoline Prices," complete with printed banners and slogans.

Who could blame the Democrats for taking advantage of the situation? "Fighting for the needs of all instead of the profits for the few!" sure makes a hell of a House of Representatives election campaign slogan.

Is there no one near the PM with any political or economic sense at all--who is able to say to him, "Ever heard of Mancur Olson? No? Well, no matter. Imagine that you are surrounded by vampires telling you that the people need to submit themselves to mandatory blood donations. Now realize that you don't need to imagine that--because that is precisely the situation you are in."

Will the PM snap out of his trance in time? Or will the DPJ just laugh, as they were laughing yesterday, as the Cabinet immolates itself?

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