Aso's last stand

Global capitalism is in crisis. For once the headlines are doing no more than telling the stark truth. The entire financial world has been transformed into meltdown mode since the five-way Liberal Democratic party presidential contest got underway.

With the U.S. and European markets in turmoil and major banks under threat, there is no way that Japan can be shielded from the mess on Wall Street and the lax supervisory regimes that looked the other way. A leveraged system that appeared to be heading effortlessly for the stratosphere can now be seen to have been little more than a house of cards. Endless cheap credit, slick, inventive salesmanship from once sober bankers and a pretty gullible public that was too easily persuaded to take out monster housing mortgages have destroyed the reputations of folk who ought to have known better.

The present chaos is spawning fresh problems daily for central bankers, regulators, politicians and corporations. The result at a humbler level is that neither the Japanese salaryman nor his frugal wife will know for months what the unpleasant outcome will be for their standard of living and the prospects for their children. What is certain though is that Mr and Mrs Watanabe, like their anxious counterparts in both the West and in the emerging economies, will be unable to dodge the ensuing pain.

The whirlwind, already seen by instant historians as unprecedented since the early 1930s, is certain to have ramifications for Japanese politics. The impact on Japan's economic fortunes is already apparent. The Tokyo Stock Exchange is leaking badly and any remaining hopes of an upturn for industrial output through an export-led charge are being dashed by the weakness of the dollar.

The ongoing mess and fears of contagion from abroad for a Japan that has its own memories of banking crises ought to benefit the veteran LDP politician Taro Aso. In what must surely be his final bid for the top spot, Aso has long been calling for further government intervention to shore up a vulnerable provincial economy. With his links to the countryside, ties with the conservatives' coalition partner Komeito and his lengthy experience, he has both the best pedigree and form in a race where quality is in pretty short supply.

Provided that Aso can avoid his habit of shooting himself in the foot, he ought to win by a good couple of lengths.The polls suggest that he is well ahead of two neophytes in Nobuteru Ishihara and Yuriko Koike, though how long the eventual winner can keep the coveted job is another question. A general election is all but certain this autumn where much will depend on whether the LDP-Komeito team can unite behind a new leader and come up with programs that might help the nation best hunker down in the face of the global storms.

It could well be that an uneasy Japanese electorate may reckon that for better or worse now is not the ideal moment to switch party allegiances. The Liberal Democrats have had little to boast about since the highly popular Junichiro Koizumi quit office but at least it can be said of Aso that he is unlikely to resign mid-term. He won't deploy trumped up excuses about ill health or complain about the manner in which the naughty Democrats under an unscrupulous Ichiro Ozawa refused to defer to the once almighty LDP lawmakers in the parliamentary bun fights.

It may be fanciful but perhaps - just perhaps - Aso might surprise us all and actually display some of the qualities that made his grandfather a legend in early postwar Japan. Shigeru Yoshida, Japan's only politician of the last three generations to lay decent claim to the title of statesman, earned his fame the hard way through leading occupied Japan out of the MacArthur era and on from the San Francisco peace settlements to the beginnings of national recovery.

The circumstances may indeed be different today but the challenges ahead certainly call for a politician with guts and vision. Aso won't get another chance to prove whether he is man enough for the job.

© Japan Today