Very Kind Of Him #48 - Podcast

Steve Miller of Asia News Weekly caught up with me the other day, allowing me to talk almost coherently about the Budget Speech, the supposed positive inflation/growth cycle and its discontents, constitutional reform and the 2016 House of Councillors election.

Here is the link:

Is China a bully, can Abe complete his reforms, will democracy return to Thailand and More

For the streaming audio click the orange arrow. One can also download the podcast MP3 via the provided link. Mine is the exasperated voice at the beginning of the podcast, with the main body of the conversation starting at the 4:30 mark.

JA Zenchu Reform - Really?

Wow. An instance where one really has to read a text all the way to the end...and then wonder "Where in a news organization could one find an employee capable of such mendacious wordcraft as to devise such a headline?" (Link)

Ignoring the absurd opening claim for now, what is one to make of the body of the story? Remember that the Yomiuri Shimbun is the shameless snake-oil platform claiming that every single thing Abe Shinzo attempts is a majestic work of pure genius.

OK, not all the time. But most of the time.

However here, not even the Yomiuri Shimbun could pretend for more than a few seconds that there is a real reform story in the Abe reform of JA-Zenchu.

Read that last paragraph again. When I read it I hear the echoes of the last lines of Animal Farm by George Orwell.

As for the reform plan, all I can see it doing is taking away from JA-Zenchu its serious responsibility to oversee the accounts of the mid-level cooperatives, turning over the oversight function to accounting firms -- which, post-2008, we know to be a terrific, risk-free way of guaranteeing better governance at these bodies -- this in the industry that plays the truly minor role of growing and delivering the food we are supposed to eat.

Later -The Liberal Democratic Party is now complaining about opposition parties denouncing the reform proposals as empty and pointless. (Link-J)

Knockin' On Heaven's Door

-- Our country is facing great changes of the times, such as decreasing population, intensifying competition on global scale, deteriorating education in schools and families, and changes in the national security environment surrounding Japan.

-- Under the coalition government of the Liberal Democratic Party and the New Komeito Party, we will rally together as the "Policy Implementation Cabinet," and steadily advance policies with solid foundations on the ground. We will articulate our policies with confidence, and deepen constructive debates with the opposition parties, and do our best in sincerely coming up with answers to each and every question, so that the people can live without anxiety into the future.

-- Starting with myself, cabinet ministers, senior vice ministers, and parliamentary vice ministers -- a total of 70 top government officials -- will divide up and each visit various local communities throughout the country, and listen to the voices on the ground face to face with the elderly people, young people, and people working for small and medium enterprises, and reflect their views in policies which are attentive to various circumstances.

-- It is essential to have a long-term system design to make the public pension a foundation of national daily life, a trustworthy system without anxiety for the people. This is the responsibility of politics. It is extremely important that discussions will be resumed in the Diet that transcend the positions of the ruling and opposition parties, and transparent and constructive consultations will be conducted.

-- I will make every effort to sincerely respond to the earnest voices of the people in the regions raising concerns over disparities and their future prospects, and make the dividends of reforms to be felt by the regions.

-- We will strive for local tax and financial reforms, including further transfer of power to local governments and correction of tax revenue disparities among regions.

-- We will integrate the implementation systems established under the Cabinet, including the one for regional revitalization. We will also provide assistance to regions willing to work on revitalization, in a concentrated and effective manner that adapts to the actual situations prevailing in the respective regions, by fully mobilizing measures such as the Program for Helping Striving Regions to Help Themselves

-- We will support improving vocational skills, and raise the minimum wage, in order to shore up the living standards of people working in the regions.

-- We will work to support the revitalization of the regions as a whole, by improving the productivities of small and medium enterprises which prop up the regional economy, and newly establishing a Regional Vitality Restoration Organization.

-- We will focus our efforts on policies that build for the future, including assistance to hard-working people based on the "agricultural policies on the offensive." Firmly acknowledging the anxieties held by senior and small-scale farming households, we will provide attentive assistance to them.

-- Careful attention will be paid to shoring up academic abilities by increasing classroom hours, enhancing textbooks and effectively utilizing the nationwide academic test. Efforts will also be focused on trial experiences and on moral education.

-- We will establish a well-modulated salary structure for teachers and strive to smoothly implement a renewal system for teaching licenses. Through measures such as reducing their administrative burdens, we will increase the amount of time that teachers engage fully in face-to-face interaction with students.

-- We will establish a system of emergency hub hospitals and networks responsible for emergency medical care in each of the regions, so that necessary emergency medical services can be received even during the night. We will make full efforts with a view to resolving the shortage of doctors in local regions through measures such as promptly dispatching "doctors without prefectural borders," and establishing a framework for working in remote areas at the medical departments of universities in local regions.

-- We will advance efforts to make Japan the most disaster-resistant nation in the world. We will work to make schools and other public facilities as well as houses more resistant to earthquakes, and create systems that can respond without fail if the need arises -- systems to provide information to the elderly, confirm people's safety and conduct rescue operations. Every effort will be made to ensure that nuclear power plants respond properly when earthquakes occur, while at the same time ensuring full disclosure of information in order to reassure the residents in the surrounding areas.

-- In order to create an environment where people can have children and raise them with a sense of security, we will expand diverse and attentive day care services and advance a review of the ways in which people work so that they can strike a balance between work and family life.

-- We will realize sustainable growth, making the utmost use of the strengths Japan has thus far developed, such as science and technology. By supporting new innovations that open up the next era, as well as by making the economy more open to the outside world through promoting the liberalization of Japan's aviation industry, as well as in tourism, finance and other sectors, we will bring into Japan the growth and vitality of countries in Asia and elsewhere in the world.

--We will resolutely carry out administrative and financial reforms aimed at "zero waste." We will formulate a well-modulated budget, and firmly proceed on the path of integrated reform of expenditures and revenues, toward the goal of achieving a surplus in the primary balance of the central and local governments combined

-- We will thoroughly eradicate the bad disposition of civil servants that have come to light, and create a new mold of civil servants who will shoulder the administration of the country in the 21st century.

-- I will continue to carry forward "Proactive Diplomacy."

-- I do not believe anyone has forgotten the shocks of the North Korean missile launches and its announcement of a nuclear test. The security environment surrounding Japan continues to be harsh. Japan's national security system needs to be restructured, by strengthening the headquarters functions of the Prime Minister's Office and the intelligence capabilities of the Government. We will steadily implement the realignment of U.S. Forces in Japan, while listening closely to the earnest voices of local communities including Okinawa, and exerting our best efforts to promote the development of these communities.

-- In order to resolve North Korea's abduction, nuclear and missile issues, we will further strengthen our solidarity with the international community. We will make every effort with an iron will, until the return of all the abductees will be achieved.

-- Our environmental technologies make our country proud in the world. We will achieve compatibility between environment and economy in a way characteristic of Japan, which regards the environment not as a constraint on but rather as a boost for economic growth, through such means as the promotion of widespread use of energy conservation technologies overseas.

-- On the Constitution, which delineates the shape and form of the country, the enactment of the National Referendum Law has created a conducive environment for deepening discussions on revision. I hope that discussions to meet the expectations of the people will continue to be conducted.

-- I will continue to listen to the opinions of the people attentively and explain my policies fully, and press forward in conducting the affairs of the state.

-- The statecraft I aspire for is one that, while adapting to severe changes in the environment surrounding our country, safeguards and nurtures the values that Japan possesses intrinsically, which we can still find in our daily lives such as a sense of self-discipline, compassion and warmth for others; statecraft that enables each and every person to feel true richness and satisfaction in their daily lives; namely, statecraft that advances the creation of a beautiful country. With a vision of how Japan should be in 50 years, and in 100 years, and never losing sight of our origins, I solemnly swear that I will give all my body and soul to fulfill the responsibilities of the Prime Minister.

In response to all of which my colleague of the time shouted, "And We Will All Go to Heaven!"

Abe Shinzo made the above promises to the Diet and the nation on 10 September 2007. Two days later he held a press conference, announcing his intent to resign as prime minister -- the reason I have presented that final section in blue.

As for the section in red , I think the reason for drawing attention to those promises needs no clarification.

In June the Abe Cabinet Version 2.0 will be making a third attempt at presenting a cogent and inspiring vision for the so-called Third Arrow structural reforms. From what we have been hearing from the Industrial Competitiveness Council (pictured above), its subcommittees and similar advisory bodies, the prime minister is not listening to the likes of Gerald Curtis and others who have advised him to choose four or five big but not unreasonable goals to achieve by year's end. Instead what is leaking out from the advisors and the ministers is a prodigious wish list, daunting in length, scope and difficulty.

I am not entirely unsympathetic to the tactic of listing as many agenda items as possible all at once. It makes it easier to claim victory later on. Make your list long enough and you are sure to achieve at least some of the goals by the end of the year. Maybe a whole bunch of them, given the ruling coalition's explicit ability to get things done, when it wishes to throw its weight around.

However, I cannot shake a sense that unless Abe and Company trim down the list of things "we will do" then more than a few listeners may respond in June as my colleague did seven years ago. Make your list of promises too long -- and the threads tying the package together too tenuous -- and your list of promises will be seen not as ambitious but as merely insulting to the intelligence.


For the original Abe Shinzo Diet Policy Speech of 10 September 2007, go to:
http://japan.kantei.go.jp/abespeech/2007/09/10syosin_e.html

For a sweet, rough and soft version of “Knockin' On Heaven's Door” by the Grateful Dead, go to:
https://www.youtube.com/watch?v=UYg2j8VS154

Image courtesy: Prime Minister's Residence

Abenomics Showing Indications Of Destroying Japan's Economy

Japan's prime minister Abe Shinzo has shaken up the world economic circles with Abenomics, his bold mix of scatter shot fiscal boost, extremely loose (some would say slutty) monetary policy and a bundle of gift-wrapped regulatory changes benefiting supportive company presidents and reticent gestures in the direction of structural reform. Yesterday's government release on GDP in the first quarter of 2013 hints that Abenomics seems to be doing very quickly to the Japanese economy what the Friends of Abe have spent years trying to do to Japanese diplomacy: namely, run it into a ditch.

As the chart indicates, even a modest year like 2012 when Japanese businesses were under the thumb of a socialistic DPJ-led government -- frozen as it was to near immobility by divided control of the houses of the Diet -- the economy still grew at a robust annualized 5.3% rate in the Mar-Jan quarter. However, under the pressure of the Abe government's avowed attack on the value of the national currency, its adding to the national debt at an accelerated rate and the simultaneous destabilization of the bond markets and destruction of the purchasing power of Japan's burgeoning population of retirees, economic confidence has shrivelled. Real growth in Jan-Mar 2013 crashed to a mere 3.5%. In nominal terms, which are the meaningful figures in deflationary economies such as Japan’s, GDP shrank year-on-year at an annualized -4.0% pace...

--

The above is a parody.

However it is no more absurd than many of the prematurely laudatory, rose-colored glasses-wearing articles appearing yesterday in response to the government release of GDP estimates for the Jan-Mar quarter.


Later - Via Bloomberg: Goldman Sachs researchers have tried to find inflation expectations above and beyond those created by the mandated rise in the consumption tax from 5% to 8% next year.

The GS assessment of the net effect of Abenomics on expectations: none. (Link)

Later still - Right now it is impossible to disambiguate:

1) economic behavior driven by a sense of hope for a future of rising incomes, asset prices and employment

2) economic behavior driven by coldly calculated front loading of purchases to avoid paying the extra 3% tax

3） economic behavior driven by a panicked fear of rising interest rates and import prices,

and

4) economic behavior taking advantage of inventory clearance and special promotions in anticipation of companies trying to raise prices via the introduction of new products and services.

Under scenario 1, the economy keeps chugging through 2014 with a small, sharp dip after the tax rise. In scenario 2, economic growth is strong until the imposition of the tax, after which it falls off a cliff. Under scenarios 3 and 4, economic growth declines through this year, then falls of the cliff with the tax rise.

I know that the wealth effect of rising asset prices will provide a kick to certain sectors of the economy -- but the effects of wealth effect driven demand do not seem likely to have major impacts on domestic wages and employment.

Is That What We Have Decided To Call It?

A few weeks ago, in comments to my post on my unhappiness with the Kurokawa Report and its farcical release problems, I was mocked for asserting:

The rule of thumb is when katakana eigo is used for a new term, it is with the goal of letting elites to speak to other elites, excluding the common run of humanity. This is doubly so in this case where the transliterated English term is used to purportedly explain the kanji+kana term.

This was in reference of the report's usage of the English word "mindset," transliterated into Japanese (maindosetto) and then used as the explanation of a perfectly good Japanese term (omoikomi).

A commenter replied:

As a native Japanese speaker I don't think Kurokawa is "talking to elites" by using katakana. (Where did you get this idea after all? It's sooooo outdated a notion, like in the 1980s.)

It is true I am not a native speaker. As a consequence I do not get an automatic pass on the validity/dubiousness of my ideas. I have to present evidence.

Such as the Prime Minister's testimony in the Diet yesterday:

「さっきもちょっと議論があったマイナンバーであるとか、さまざまな関連するものもあります。あるいは国民会議を早急に設置させなければならない等々あります。一体改革の関連でも。そのほかに、この国会では一体改革の法案以外にも、特例公債等々さまざまな大きな法案も残っております。そうしたものをしっかりやり遂げるというのが私の責任だというふうに思っています」

"There are, as we had in our little debate earlier regarding the mai namba, many different related points. Or, that we have to quickly set up of the People's Consultative Body and such things -- these too exist. Yes, the fundamental reforms of the pension and social welfare systems, but aside from those, bills other than the fundamental reforms, various other big bills are left, such as the special bond issuance bill. For this and bills like it, I believe it my responsibility to see them through."

What caught my attention here, aside from the bald inference "You think I am going to call a snap election after the passage of fundamental reforms of the pension and social welfare system? Keep dreaming...." was the mai namba.

Now I am a native speaker of English, so I know that mai namba is a transliteration of "my number." Since I am not always on top of the latest euphemism, I confess I had a moment's confusion. Then I thought, "Oh wait, if I wanted to keep folks from getting riled up about their being assigned a tax identification number (zeikin kanren mibun shomei bango) and were not confident enough even to semi-cloak it in a social welfare gauze (shakai hosho -- zei bango*), would refer to it with friendly, personal-sounding and foreign-language moniker. 'It's My Number. Mine. Just for me! Yippee!'"

So, perhaps mine is not a sooooo oudated notion after all...

As for what the assignment of a mai namba will do to improve the government's ability to claw taxes from out of the populace, contact Richard Katz.


---------------------------------------

* The current technical term for the number.

The End Game

The Democratic Party of Japan, the Liberal Democratic Party and New Komeito, the only three parties that matter -- a state of affairs so grating to the other parties in the Diet that the three leftist microparties and the one libertarian miniparty are joining hands to protest the "price fixing going on behind closed doors" (J) -- are putting the final touches on a final agreement on the shakai hosho zei ittai kaikaku an, the bills enabling the combined reforms of social security and tax systems. (J)

There are some hurdles standing in the way of the three parties coming to an agreement by the Prime Minister's deadline of June 15. The LDP wants the Noda government to repudiate the DPJ's 2009 manifesto pledge to rewrite pension law so as to guarantee that all pensioners receive a minimun 70,000 yen per month from the national pension plan. The LDP and the New Komeito together want Noda to repudiate the DPJ manifesto pledge to repeal the special eldercare system for persons over 75 years of age, a terribly unpopular and initially confusing program of mandatory healthcare prepayment the two parties sweated blood to pass when they held the reins of government. The three parties are also at loggerheads over what, if anything, they should do to lessen the impact of the imposition of the consumption tax on those person living at or below the poverty line.

Now according to the news noise machine, Prime Minister Noda is desperate and willing to sacrifice the DPJ's identity (E) or prepared to discard policies intrinsic to the DPJ's unity (E) all for the sake of winning the LDP's and the New Komeito's votes in favor of the passage of the bills raising the consumption tax.

Maybe. It depends on what one believes DPJ policies are.

If one takes the simplistic route, that DPJ policies are all the policies listed in the 2009 and 2010 manifestos, then the above assertions are true.

If, however, one takes the position that the policies listed in the 2009 manifesto were the ones Ozawa Ichiro tossed together trying to buy the support of every special interest the LDP, in its internal shift to becoming a modern, urban-based party, had left lying in the dust, without any concern as to whether the resulting program was internally consistent or affordable -- i.e., LIES -- then:

a) the DPJ is a party of lies and liars, and thus their promises are worthless rhetoric, not policies, or

b) the promises made in the 2009 manifesto, which Kan Naoto tried desperately to render more concrete and believable in the 2010 manifesto, were never the policies of the DPJ, just electoral dandruff clinging to Ozawa Ichiro's jacket.

When Ozawa loyalist and true believer Kawauchi Hiroshi wails about the impending deal on the sheaf of bills reforming the pension and tax systems...

"The LDP's proposal is unacceptable. If we were to agree, the DPJ would become the LDP."

...he is not only showing that he is more a courtier than a politician but also a poor student of history. Fiscal consolidation, realistic pension funding schemes and a willingness to sacrifice growth for stability are core policy positions of the original DPJ. These were the principles undergirding the August 2005 party platform, under then party leader, now Deputy Prime Minister Okada Katsuya.

That DPJ co-founder Hatoyama Yukio forgets what he used to believe and defends the 2009 manifesto as holy writ (J) is neither implausible nor particularly significant. Like the White Queen, Hatoyama can believe a half a dozen impossible things before breakfast.

What the representatives of the DPJ, the LDP and the New Komeito are going to be banging heads over today are the remnants of the fight. The DPJ has a rather weaker position due to the PM's having set a deadline. This prevents the DPJ from exercising its ultimate weapon of extending the Diet session, forcing everyone to just sit on their tailbones until the LDP and the New Komeito fall into bickering in between themselves over just who is preventing the passage of their favorite bits of legislation. It should surprise no one that the DPJ has chosen this moment to float a trial balloon for a radical restructuring of both the LDP's and the DPJ's plans to reform the House of Representatives which hews close to what the New Komeito has been proposing and which would mess up the proportional seat voting for the LDP (E) -- just at the moment the LDP is showing strength in that half of the ballot.

All could go haywire at the last moment. Someone could say something untoward about someone else's sister, leading to a termination of negotiations.

All indications are, however, is that what we are seeing is the end game, one where the LDP and the New Komeito will wander away from the table having agreed to have their members vote with the government on a raft of bills, with neither the promise for elections nor the Noda repudiation of Ozawa Ichiro which the two parties had been demanding.

A Union Is Pulled And The Government Is Better For It

At a cursory glance, I have been going a bit overboard on what a bad idea it is to merge Japan's two systems of childcare (Part I and Part II). I saw the unification of the hoikuen and yochien systems as reform for reform's sake: not offering a clear solution to a problem largely restricted to Tokyo and its bedroom suburbs; certain to spawn rivalries in between the personnel of the forcibly merged systems; and encouraging decay in the regulation covering childcare facilities.

Well, the plan to merge the two systems has been dumped. It is being killed in order to win the Liberal Democratic Party's support for the legislation of the combined reforms of social security and tax systems (shakai hosho zei ittai kaikaku, or ittai kaikaku for short). Health, Labour and Welfare Minister Komiyama Yoko (glaringly the only woman in the Noda Cabinet) has stated she will not fight for the unification. (J)

Now commentators would want us to think that this retreat from the promise made in the Democratic Party of Japan's 2010 Manifesto is a demonstration of the hopeless inability of the DPJ to follow through on its promises.

There is of course, another way of looking the situation: that the sacrifice of this promise and others like it are strategic and cheap -- giving up what have upon reflection been very bad or at least unaffordable ideas (eliminating expressway tolls; the 26,000 yen-a-month child allowance system) in return for what would be difficult-to-obtain cooperation from the LDP and the New Komeito on significant reforms, many of which the LDP and the New Komeito were too cowardly to impose upon the country when they held power.

Prime Minister Noda should therefore send gift sets to former party leaders Ozawa Ichiro and Kan Naoto, thanking them for stuffing the 2009 and 2010 manifestos with so many expendable promises.

Why One Can Admire This Man

Prime Minister Noda Yoshihiko has finished his two-day visit to Okinawa. He paid the obligatory visit to the Himeyuri Monument and also the War Dead memorial. He, however, had a private, informal dinner with the governor at the governor's residence, the sort of respectful yet warm and egalitarian gesture that escaped the grasp of his predecessors. In the formal meeting at the prefectural government offices the next day, the PM apologized profusely for the conduct of various officials and his party, putting the governor in the position of the superior. The governor reciprocated as good manners demanded, by saying a magnanimous, "No, no, no need to apologize."

It is both encouraging and sad to see Prime Minister Noda trying to make amends for the supercilious attitudes of his many predecessors. He had a tough message to transmit: that the move of Marine Corps elements from Futenma Airbase to a new base to be built at Henoko was the only possible solution to the danger posed by Futenma's continued operation. It is a deeply unpopular message, even on the mainland -- the Mainichi Shimbun (J) and Asazuba! newscast this morning castigating the PM for calling the move to Henoko the only effective solution (Henoko isetsu ga yu'itsu, koka na hoho). However, he delivered the message with such humility and reason that in a less enervated time, he might have pulled the Henoko rabbit out of his hat. As the atmosphere on the island is irrevocably poisoned -- that the PM must abnegate himself for a plan that the rival Liberal Democratic Party agreed to but never carried out -- is deflating.

Noda perseveres, putting his shoulder to wheel on issues like pension reform, raising of the consumption tax, closing down Futenma and building the Henoko Replacement Facility, watching his public popularity plummet despite his bringing responsibility and dignity to the office in which serves. That many of his efforts look Sysiphian, or destined to collapse into failure -- especially now that the near certain exoneration of Ozawa Ichiro and the now undeniable unconstitutionality of dissolving the Diet exposes him to a revolt from within this spring, elicits a sigh of pained resignation. Were it that Noda or his like in charge of the country a decade ago, these these many gestures, courtesies and displays of spine would have made a huge difference.

Now...so much is exhausted, broken and hobbled with cynicism.

It's Not LDP Lite, It's LDP Resurrected

If you are not already a subscriber to the SSJ-Forum, you might consider moseying on over to their subscription page and joining up. Once you are a member, you can wait for Greg Noble's tour-de-force post [SSJ: 6879] Back to the (bad old LDP) future, or necessary recalibration? (hurry up and archive it, people!) on the ways DPJ Party Leader and Prime Minister Noda Yoshihiko is turning the clock back to what seems to be pre-Koizumi times.

T'is a stunner...and t'is depressing.