Tuesday, July 13, 2010


Four years ago, in a weak moment, I wrote a tongue-firmly-planted-in-cheek set of "rules for understanding news from Japan" for my amusement and I hoped the amusement of others. Since the time of their composition, some of the rules have become rather dated. On the whole, however, they have held up rather well.

This was Rule #6:
If a Democratic Party member claims something is true on television, it is probably not true. When it is true, it was political suicide for him to have said it.
So two cheers for Prime Minister Kan Naoto and his egregious introduction of the concept of a rise in the consumption tax based on a misreading of Japan as ressembling Greece and the charged atmospheres inside the Ministry of Finance and at the G20 summit. By introducing discussion of a hike in taxes three weeks before a national election, he has given himself and the Democratic Party of Japan a just-so story for why the party finished with so many fewer seats than expected in the House of Councillors on July 11. Just run the counter-factual: imagine the chaos inside the party right now if Kan had not talked about the consumption tax and they had suffered the same dispiriting defeat.

To the benefit of the Prime Minister and the party, they have now a "lesson" that they have "learned" -- and will no longer appear irresponsible if they shelve all ideas about a hike in the consumption tax until after mid-2013.

"Whew," the party members can now say, "We are off the hook on that horrible, unpopular, regressive, contractionary, deflationary pseudo-solution to Japan's fiscal and economic growth problems which the bureaucrats of the Ministry of Finance and their acolytes throw out like a spanner into the works of any reasonable discussion of Japan's economic future!"

Photo credit: MTC


Anonymous said...

I enjoyed those rules - especially the Morita insight. How is that guy so often wrong - and why do the damn English newspapers keep going back to him??

Anonymous said...

I thought one of the plans for the consumption tax was to use it as a substitute for the Basic Pension portion of the Nenkin program. (That is, instead of issuing coupons or having the employer-employee rate at 8%.)

Kan brought it up in the context of Greece, but more practically it's an ideal way to solve the pension crisis. Especially, if they rebate part of the collections as a low-wage supplemental payment, similar to the American Earned Income Credit.

Anonymous said...

Number 3 is spot on!

The California grapefruit growers' association was smart enough to pay Mino Monta the money for an extended infomercial on the health benefits of grapefruit; studio audience; talents pontificating on grapefruit; Mino Monta pontificating on grapefruit; studio audience oohhing and ahhing about grapefruit.

Since then Japan has become their fastest growing export market (maybe fact check this...)

But I see Mino Monta's influence whenever I make the error of trying to ask my students about some recent event. They either all say the same thing (Mino Monta) or they have no opinion that they are willing to share.

Mino Monta rules!!!