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2008年10月12日 (日)


(Mainichi Japan) October 11, 2008

Prime Minister Aso's 'Inchworm Cabinet' stalling in face of international financial crisis


Prime Minister Taro Aso's administration has been aptly described as the "Inchworm Cabinet" for postponing the dissolution of the Diet an inch at a time. But I would like to make two requests of our dilatory prime minister. First, I hope that he, in responding to the global financial crisis, will manifest greater political leadership by applying Japan's experience in overcoming the bursting of the financial bubble. At the same time, I urge him to not make light of the fact that two consecutive prime ministers from the Liberal Democratic Party have walked away from power, and to take rapid steps to restore legitimacy to his Cabinet by holding elections.


"The LDP has fulfilled its mission," say several high-ranking LDP members, some of whom have even served in the party's top three executive posts. The LDP's accomplishments were to make Japan into a member of the liberal democratic camp during the Cold War between the U.S. and Soviet Union, and into a prosperous nation focused on its economy. These goals were miraculously attained. These LDP elders now insist that the party's only remaining raison d'etre is its governing ability, which enabled it to use bureaucrats, and quasi-changes of government, to deftly hang onto power. Former LDP Secretary General Koichi Kato asserts, "For two (prime ministers) in a row we did something (walked away from power) to cast doubt on our governing ability."


By rights, the LDP should have at that time given up power and received its baptism in the general election. The basic playbook remains the same even now. However, the global financial crisis that has emanated from the U.S. has changed the political environment. The Dow Jones average plunged below 10,000 in the U.S., and the Nikkei fell below 10,000 yen on Thursday, and Asian and European markets have fallen like dominoes, driven downward by a negative globalism. Underlying economies have also begun to suffer, and the cutback in consumption by Americans has led to steep declines in exports and production of Japanese cars, South Korean personal computers, and Chinese textiles.


This is a time for politics, even if Prime Minister Aso will not be the one to step to the fore. Aside from the political drama over dissolution, one could say that something has arisen that requires the administration of the moment to take emergency action, exercising its crisis management obligations. To borrow Kato's turn of phrase, "this will be a supplementary examination of the Cabinet's governing ability." To respond to the vicious cycle in the markets, a nation must implement rapid and decisive public interventions. The passage of the supplementary budget aimed at the domestic economy is within sight. But what is essential is the adoption of resolute and radical measures to respond to the ailing U.S. economy, which is the epicenter of the crisis.


What needs to be recalled is the experience of Japan, which went through the bursting of the bubble in the 1990s, the lost decade, and the recovery of its financial system from 2003. How did Japan get through plummeting stock prices and real estate prices, which led to asset deflation on the scale of several hundred trillion yen? The numbers make you want to cry. In order to rescue the broken financial system, Japan adopted a low interest rate policy that, according to Bank of Japan estimates transferred 304 trillion yen in interest income away from households over 14 years, and ultimately funneled 13 trillion yen in taxes (public funds) directly into the financial industry, with 20 major banks being consolidated into three large banking groups to halt the negative chain reaction.


The Japanese people, who had boogied with the bubble, learned a hard lesson -- that the tab for the bubble would be paid with their blood, sweat, and tears. What is happening in the U.S. today closely resembles what transpired in Japan. The starting point is the same -- the shattering of the myth that the price of real estate, which had soared, would never fall. The U.S. passed a financial stabilization bill the other day, but is still, as the Nihon Keizai Shimbun newspaper pointed out in its Oct. 5 morning edition, "not even halfway through the crisis." While deciding on the method and timing of the ultimate trump card -- using public funds to infuse capital into the banks -- is difficult, one could even say that the fate of the global economy rests on the certainty and speed of such measures.


( 週末開かれる先進7カ国財務相・中央銀行総裁会議(G7)で、日本は米に対し公的資金投入を要請する段取りのようだが、それだけでは物足りない。首相自らが世界の首脳に働きかけ、ブッシュ米大統領にひざ詰め談判でもする覚悟で説得すべきではなかろうか。日本しか経験していないこと、しかも、対応が遅れるほど世界経済が壊されていく。日本の出方がこんな国際貢献につながる舞台はめったにない。 no English equivalent part

I recall President Bush's fondness for citing the U.S. occupation of Japan as a success story in order to legitimate the Iraq War. His argument was that Iraq, like postwar Japan, would under U.S. occupation become a Western-style democracy. However, this cheap historical analogy ignores the special characteristics of Japan's Imperial system, and I felt at the time that then Prime Minister Junichiro Koizumi had abdicated his responsibility as the leader of a U.S. ally when he failed to point out the president's misunderstanding.


How to handle the Japan-U.S. relationship will be one of the major issues to be contested in the coming election. While the Japan-U.S. alliance should be considered a given, Japan must not simply follow the lead of the U.S., for it does seem that the time has arrived for the leaders of both countries to say what must be said, as the U.S. does make mistakes.


So let me return to the issue of governing ability. The current financial measures are merely temporizing attempts at crisis management, but a genuine manifestation of governing ability is only possible after the administration is bestowed legitimacy. The prime minister surely would not object to the assertion that the only way that this will happen is by dissolving the Diet and having the popular will render judgment via elections. I hope that he bears in mind the fact that if he needlessly extends the Diet, he will diminish Japanese politics. ("As I See It," by Atsuro Kurashige, Deputy General Manager of the Editorial Division of the Mainichi Shimbun)


毎日新聞 2008109日 005


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