Talking Ozawa and the economy on CNBC Asia

I was on CNBC Asia's Asia Squawkbox today to talk about the Ozawa situation and the state of economic policy.



Oddly enough, I was on CNBC Asia one year ago exactly talking about the DPJ's victory the previous day. What a difference a year makes.

Ozawa's last stand?

"All political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs." — Enoch Powell

Returning to his familiar role as Ozawa Ichirō's trusty factotum, former Prime Minister Hatoyama Yukio announced Thursday that he will be supporting Ozawa in a bid to unseat Prime Minister Kan Naoto in next month's DPJ party leadership election. Ozawa himself has yet to make an official announcement, but much like when Hatoyama was DPJ secretary-general under Ozawa, Ozawa conveyed his intentions to Hatoyama, and Hatoyama revealed them to the public. Naturally Hatoyama's backing Ozawa after earlier indicating his support for Kan is an insult to the prime minister.

I have held off from commenting on the possibility of an Ozawa run at the party leadership and premiership because the idea struck me as patently absurd (for reasons that Michael Cucek captured well here and here).

And yet here we are, with Ozawa on the brink of entering the ring once more. I suppose on the plus side, at least he's competing for a public post, one that would force Ozawa to assume public responsibility instead of hiding out of sight.

There is no shortage of speculation about Ozawa's motives for running, having to do with his tenuous legal position, his desire to reinsert himself into the policymaking process by running, losing, and then bargaining for an important post, or his genuine desire to, in Hatoyama's words, "to risk his life on behalf of the country." I have long since given up trying to read Ozawa's mind and am willing to believe that any, or all, or none of these reasons is the real reason for Ozawa's decision.

Whatever his reasoning, the consequences could be dramatic. The best-case scenario would be that Ozawa is simply unable to muster enough support and goes down to an embarrassing defeat that is a prelude to his departure from politics. It is unclear just how much support from the party's parliamentary caucus Ozawa can count on — for my part, I have always thought that the media has exaggerated the extent to which Ozawa can rely on an "army" of young MPs indebted to him for his assistance. Even more unknowable is the extent of Ozawa's support among the party's rank-and-file members, who will also be voting in the party election. Given the near-universal public disapproval (including DPJ supporters) of Ozawa, it is worth asking whether there are still enough pockets of support for the former party leader to make his candidacy viable.

And if he were, somehow, to defeat Kan and take the premiership? Many seem to think that Ozawa's becoming DPJ leader would be the catalyst for the long-awaited political realignment (although Your Party's Watanabe Yoshimi insists that the DPJ will break regardless of what Ozawa does). It is easy enough to see how Ozawa could trigger the realignment. Remember the "purge" of Ozawa loyalists that marked the transition from Hatoyama to Kan? Presumably the "magistrates" who opposed Ozawa and have occupied important positions under Kan would have little to look forward to under Ozawa, and would have two options outside of the cabinet: build anti-mainstream "factions" within the DPJ to challenge Ozawa, thereby completing the LDP-ization of the DPJ, or leave the party altogether to join with Watanabe or form yet another new political party. 

The reality is that while at another point in his career Ozawa might have been able to deliver a miracle, untwisting the Diet by encouraging members of other parties to defect or hammering out a new governing coalition, there is good reason to believe that Ozawa is out of miracles. As Kan has found as he has tried to coax the opposition parties to cooperate, with the DPJ reeling the opposition parties have the upper hand. The DPJ will pay a steeper price than the opposition parties for inaction, particularly as the economy worsens. Add Ozawa's unpopularity and his notoriety as a living symbol of the bad, old politics and the opposition's advantage grows. And if a Prime Minister Ozawa were the head of a nominally united but fractured DPJ his bargaining power would be undermined even further. Whoever wins the party election will still face a miserable political situation. Having Ozawa as prime minister would only make the DPJ's situation even more difficult.

It is ultimately for that reason that I suspect that Ozawa will provide another demonstration of Enoch Powell's maxim, adding a final defeat to a lengthy political career that has seen its share of defeats along with extraordinary victories, arguably none more extraordinary the DPJ's victory a year ago next Monday. Ozawa simply does not have a compelling case for why he should take charge of the government at this juncture — and I think that the party's voters know it.

The politics of Kan's apology

"I would like to face history with sincerity," said Japanese Prime Minister Kan Naoto in a statement issued on 10 August, the 100th anniversary of Japan's annexation of Korea. "I would like to have courage to squarely confront the facts of history and humility to accept them, as well as to be honest to reflect upon the errors of our own."

In what is now being referred to as the Kan Statement, the prime minister acknowledged the suffering caused by Japan's "colonial rule" and apologized to the Republic of Korea, and also pledged to return the remains of Koreans as well as cultural artifacts removed to Japan during the annexation.

Cynics will undoubtedly be quick to note that this is only the latest in a lengthy list of apologies issued by Japanese leaders for Imperial Japan's behavior — and one need not be a cynic to ask what value one more apology will have for Japan's relationship with South Korea or its standing in the region more generally. Japan's conservative ideologues, never shy in their opposition to what they see as "masochistic" behavior on the part of Japan's leaders, have vociferously opposed the statement. In a lengthy editorial published the day after the statement, the Sankei Shimbun, a revisionist right-wing daily, criticized the government for "imposing" a "one-sided view of history," denigrating the achievements of Meiji Japan in the process. The paper stressed that it is necessary to balance the "shadow" of Japanese rule with the "light," which came in the form of education and railroads.

In its coverage, Sankei also raised questions about the procedure by which Kan secured cabinet approval for his statement, claiming that Kan foisted the statement on his cabinet and the ruling DPJ, over the objections of party members.

Two days after the statement an "emergency citizens' meeting" met in central Tokyo to demand the withdrawal of the apology. Headed by Odamura Shirō, a leading conservative figure who was involved in opposition to the infamous "comfort women" resolution passed by the US House of Representatives in 2007, the meeting passed a resolution calling for a bilateral relationship based not on feelings of moral superiority for one party and guilt for the other and questioning the legitimacy of prime ministerial apologies. (Of course, the resolution also called attention to the role played by Japan in triggering Korea's economic development.)

The revisionist right's reaction to Kan's statement has less to do with South Korea, however, and more to do with the right's program for Japan. Its reaction is, above all, narcissistic: what does Japan lose by apologizing to those harmed by Japanese imperialism? As Kan himself noted, there is nothing cowardly about frankly acknowledging one's transgressions without hedging or equivocating. And while the list of apologies to Japan's neighbors is lengthy, it is precisely because conservatives question the legitimacy of those apologies — most notably the Murayama statement — that prime ministers are compelled to keep issuing new ones. The revisionist right believes that a "proper" and "truthful" historical perspective are critical for national pride, which it believes to have been corroded by the left-wing academics and media personalities and pusillanimous politicians. While they claim to be interested only in historical fact, their selective reading of history belies a blatantly opportunistic approach to Japan's imperial past that belittles the claims of Japan's victims and presents a blatantly self-serving (and at least in this telling contradictory) narrative in which Japan was not a colonizer, and even if it was, it was a benevolent one that hastened the demise of those wicked European empires.

Japan's revisionist right, of course, is not the only political group that propagates a self-serving account of its past that explains away inconvenient enormities (cf. the United States and Hiroshima, among other examples). But the revisionist right's attitude has persistently placed a stumbling block in the path of better relations with South Korea and China. As Kan makes clear in his statement, a good relationship with South Korea is critical in the years to come. While I do not doubt that Kan's apology is sincere, it also comes with strategic benefits, as President Lee Myung-bak appears no less interested in building a close relationship with Japan. Since taking power last year, the DPJ has steadfastly worked to build closer bilateral relationships throughout the region. This latest apology is but another step in that program.

And so the battle over Kan's apology pits two very different world views against each other. For Kan and members of his cabinet, Japan's future is in Asia, which means maintaining partnerships with important countries in the region. If apologizing to South Korea again strengthens Japan's position and clears the way to closer and deeper exchanges not just with Koreans but other Asian peoples, it is an exceedingly small price to pay. For Japan's revisionists, any unambiguous admission of Japan's guilt is evidence of "masochism" and an indication that Japan's leaders are simply not up to the challenge of competing with China for predominance in Asia. If Kan's view is strategic (although, again, not only strategic), the revisionist right is absolutist, and were it embraced by those in power it would result in an ignoble and ultimately self-defeating isolation for Japan in the region.

Of course, there is actually little risk of the revisionist agenda being implemented. Even Abe Shinzō, the most unabashedly revisionist conservative prime minister Japan has had in recent years, recognized the value of strong relationships with both South Korea and China and was willing to make concessions on the history issue, whatever his personal beliefs. Since Abe's downfall in 2007 the revisionists have been increasingly marginalized in Japanese politics, their influence virtually non-existent under the DPJ despite having sympathizers within the party. Indeed, their influence may be inversely proportional to the amount of noise they are capable of generating through various media outlets.

As Jun Okumura suggests, it is now up to South Korea to accept Kan's apology in good faith. That, of course, points to the central problem with apologies between nations: no matter how sincere the apology (and the acceptance of the apology), it is difficult for one leader to bind the hands of his successors. Nevertheless, by building a closer bilateral relationship, Kan and Lee can do their part to minimize the harm that can be done by political actors in both countries who wish to exploit history for political gain.

What can the Yakuza explain anyway?

Having read and enjoyed Jacob Adelstein's Tokyo Vice, it was with considerable interest that I read his article "The Last Yakuza" in the World Policy Journal (h/t to Corey Wallace).

Like Wallace, I have no particular expertise with which to assess the role played by the Yakuza in Japanese society. But also like him, I am skeptical about what political outcomes we can actually attribute to organized crime.

In brief, Adelstein argues that after decades of deep ties to the LDP — which organizations didn't have deep ties to the LDP when it was Japan's hegemonic ruling party? — leading Yakuza organizations have shifted their allegiances to the DPJ as it took control of the upper house in 2007 and then the lower house and with it the cabinet in 2009.

The main consequence of this shift, Adelstein suggests, is that the Hatoyama cabinet included Kamei Shizuka, head of the People's New Party, who is known to have links to organized crime. Without questioning those links, I think there is a far simpler explanation for Kamei's presence in the Hatoyama government, an explanation that does not require any reference to the Yakuza. Wanting to streamline decision making in the new coalition government, the DPJ included both Kamei and his SDPJ counterpart Fukushima Mizuho in the cabinet and created a special cabinet committee to coordinate policy among the ruling parties. Kamei, I think, was there so as to concentrate coalition negotiations within the government. The ease with which Kan Naoto cut Kamei loose once he challenged the new prime minister suggests that repaying the Yakuza was low on the DPJ's list of priorities when it came to Kamei.

But this case raises the larger question asked in the title of this post: what does the Yakuza explain anyway? What political outcome over the past half-century or so of Japanese politics is different because of the influence of the Yakuza in Japanese politics?

The most obvious answer is that the pervasive influence of the Yakuza explains the impunity with which gangsters have been able to act since the end of the war (which makes the 1992 anti-organized crime law mentioned by Adelstein a puzzle worth explaining).

But what about bigger questions? The durability of LDP rule? The rise and fall of prime ministers? Foreign policy and relations with the U.S.? What is different because of the Yakuza's power? What can the Yakuza explain that other theories cannot? I suspect not much. It's possible that gangsters may have influenced the outcome of LDP leadership elections during the former ruling party's heyday, given the shady pasts of some leading LDP politicians and the wholly opaque manner in which the LDP selected its leaders for much of its history. If it were possible to identify prime ministers who came to power only because of Yakuza support, it would perhaps be possible to identify indirect consequences of Yakuza influence, but as Adelstein's own career shows, becoming a Yakuza expert requires time, energy, and no small risk to one's person — all for exploring what may be nothing more than an auxiliary explanation.

That's not to say that the Yakuza are of no interest to political scientists who study Japan. One question worth addressing is why the Yakuza are so pervasive in the first place, at which point attention naturally turns to Italy, that other Axis power occupied by and then allied with the United States (which failed to purge and in fact developed links with far-right elements) and governed by a hegemonic conservative party for the duration of the cold war. Additionally, it may be fruitful to study the Yakuza in comparison with other interest groups that had long supported the LDP only to watch their fortunes wane during the lost decade(s). After all, Yakuza groups are interest groups, of a sort: interested in the regulation of organized crime. Like other interest groups, they had to adjust their political strategies in response to uncertain political and economic environments.

As such, while the Yakuza are an unlikely explanation for major political outcomes in Japan, they are a part of the landscape and observers should be cognizant of their role. For that we are lucky that Adelstein is working so hard to expose the inner workings of Japanese organized crime.

The 2006 roadmap's impasses

In the wake of its defeat the Kan government has made it patently clear that the Hatoyama government's "ratification" of the 2006 realignment plan was nothing of the sort — it is now saying that it will be impossible to complete negotiations before Okinawan gubernatorial election in November. The government once again is considering alternatives to the V-shaped runways to be built at Henoko bay, and is reluctant to impose a solution on the Okinawan people.

But, as the Wall Street Journal reports, American domestic politics is emerging as a new constraint on implementing the 2006 agreement. Both houses of Congress have voted to cut funding for the construction on Guam that is necessary to prepare the island to receive the 8,000 Marines and their dependents that according to the plan will move from Okinawa to Guam in 2014.

Congressional staff members said the problems in building new facilities for the Marines in Guam loomed even larger than the politics in Japan in their decision to cut funding.

The Senate appropriations committee said they remained concerned about Guam’s inadequate water, electrical, road and sewer infrastructure — and said inadequate planning had gone in to preparing for the nonmilitary aspects of the move.

The House Appropriation Committee report echoed the Senate findings about Guam, and said it had made the cuts because of the Defense Department’s “inability to address numerous concerns about the sustainability of the buildup as currently planned.”

These budget cuts come more than two years after the US government's Government Accountability Office (GAO) criticized the Defense Department the the US military for dragging its feet on the Guam end of the realignment plan and suggested that it was unlikely that the 2014 target would be met — and not because of Japanese politics. In late 2008 Admiral Timothy Keating, then the commander of US Pacific Command, acknowledged that the plan would most likely not be executed on schedule, citing budgetary concerns.

Corey Wallace is right to point to Washington's hypocrisy — for all of Washington's hand-wringing about political instability in Japan, the reality of the 2006 agreement was that the domestic political conditions concerning the agreement in both countries were at best complicated, and at worse impassable. For the realignment to go forward on schedule, the US government would have to secure the support of the people of Guam and Congress would have to budget a tremendous amount of money to improve the island's infrastructure, while Tokyo secured the support of communities in Okinawa and budget for the Futenma replacement facility and the construction underway on Guam.

In the rush to get something committed to paper, the Bush administration and the LDP have left the alliance with a festering sore, an agreement that looks all but unimplementable, has eroded trust between Washington and Tokyo, and mortally wounded the DPJ in its ten months in office. Considering these costs, it is remarkable that the Obama administration has clung so tenaciously to this Bush administration legacy. Is there anything in American foreign policy making to rival the much-vaunted bipartisan consensus on Japan?

What next for the LDP?

With the exit polls suggesting that the LDP will edge out the DPJ in this election and recover some of its strength in the upper house, it is worth asking what will be the consequences of victory for the LDP.

Most obviously, LDP leader Tanigaki Sadakazu will have a new lease on his position, delaying generational change within the LDP for a bit longer. 

Generally speaking, the LDP's old guardsmen will be able to use this vote as vindication for their resistance for anything more than superficial reform to the party. If the Diet does indeed remain twisted — if the DPJ is not able to cobble together a coalition that would swing control back to the government — the LDP will be sorely tempted to use the upper house's powers to harass the government instead of focusing on internal reform and revitalizing the party's policies.

Of course, an electoral victory against a hobbled DPJ is by no means a vindication of the LDP's approach. The party's reformers may have been better off had the LDP lost.

Twisted again

The various newspapers are reporting that according to exit polls, the DPJ won somewhere between forty-three and fifty-one seats, falling short of the total needed to preserve control of the upper house.

Once again the Diet is "twisted," barring the formation of a new coalition that enables the DPJ to retake control of the upper house.

Adamu is living blogging the returns at Mutantfrog here. I won't necessarily be live blogging, but I will be updating intermittently.

Is Ozawa back?

If there is one lesson that this upper house campaign has taught us, it is a lesson that we all should have already learned: there is no stopping Ozawa Ichirō. Despite what looked like a marvelous coup by Hatoyama Yukio in getting Ozawa to step down as DPJ secretary-general, Ozawa has been a public critic of the Kan government throughout the campaign.

However, is Ozawa's criticism of the government — he's been particularly harsh about the Kan government's comments about raising the consumption tax to 10%, which he argues with plenty of justification that the government has made life more difficult for DPJ candidates — the prelude to Ozawa's being a thorn in Kan's side after the election (as Yuka Hayashi suggests in this post at the Wall Street Journal's Japan Realtime)?

It is tempting to see Ozawa's remarks as the beginning of an Ozawa-led anti-mainstream within the DPJ that will force the Kan government to make further concessions to party backbenchers when it comes to policymaking, particular if the DPJ falls short of a majority on Sunday.

Working in Kan's favor, however, is that he has government and party leadership united behind him. United in their opposition to Ozawa's influence, Kan's leadership team already looks more effective than the Hatoyama-Ozawa team, missteps regarding the consumption tax notwithstanding. More importantly, Kan has already made concessions to the party's backbenchers, giving them a vehicle for having their voices heard by the cabinet. Ozawa's concerns about the government's abandoning last year's manifesto would carry more weight if the Kan government had not already begun working on a mechanism for incorporating the concerns of backbenchers into government decision making. Furthermore, there are few signs that Ozawa is any less unpopular now than he was before resigning as secretary-general — or that MPs are keen on preserving every piece of the 2009 manifesto. While there are still concerns that Ozawa stands at the head of a proto-faction that could number more than 100 members, I wonder how many members Ozawa can actually count on to back him. How many backbenchers would be willing to buck the new party regime to stand with Ozawa? It is worth noting that few senior party members have echoed Ozawa's critique of the Kan government.

That's not to say that party members are happy with how the government has handled the consumption tax issue over the past month. The understandable desire to give the voters a chance to render judgment on the Kan government's new approach to the consumption tax likely forced the government to roll out the proposal before properly vetting it with party members, which in turn led the government to back away from its initial position, ironically damaging the position of the government and the DPJ even further.

But backbencher dissatisfaction does not automatically translate into support for Ozawa. Far from signaling the beginning of an Ozawa-led anti-mainstream, Ozawa's behavior during the campaign could signal a new role for Ozawa as an internal critic, concerned less with vying for control of the party than with keeping the party on what he sees as the right path. It seems to me that the Kan government could live with Ozawa's moving into this role.