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Ozawa and Obama

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By Michael Auslin

After seeming to get back on track earlier this decade, Japan once more faces a host of intractable problems, from a paralyzed political system to an economy again officially in recession. Like its American counterpart, the Japanese electorate wants change, and the likely success of the Democratic Party of Japan in this year's general election could mark a new era in Japanese politics and the end of over half a century of Liberal Democratic Party rule. A DPJ government will not only lead to new policies, but may have a significant impact on the Obama administration's relations with its closest Asian ally.

For over two years now, the LDP has been unable to resolve Japan's economic and political challenges. Having lost control of the Upper House of Parliament in 2007, and on its third prime minister in as many years, the LDP will be hard-pressed to retain its majority in the powerful Lower House. An election must be scheduled no later than September, but with current Prime Minister Taro Aso's popularity in the 20% range, the LDP might be forced to call elections earlier, and an electoral defeat could lead to its dissolution. Should the LDP manage to keep a majority in the Lower House, the current political deadlock will continue, with the two parties splitting control of Parliament and unable to agree on any but the most basic legislation. This would paralyze most of Japan's foreign and domestic initiatives, and impoverish the country at home and abroad.

Ichiro Ozawa, head of the DPJ, is waiting impatiently. Mr Ozawa has spent the past two decades trying to defeat the LDP, largely through populist measures such as reforming the tax code, improving social services, and distancing Japan from U.S. foreign policies -- in particular those related to the war on terrorism. For example, he has repeatedly expressed a desire to work more closely with the U.N. on international issues and avoid becoming entangled in U.S. global military activities.

Mr Ozawa's policy preferences cause concern among "strong alliance" proponents on both sides of the Pacific. He is also seen as more pro-China than recent Japanese leaders, who have continuously, if quietly, balanced the economic benefits of closer Sino-Japanese relations with concern over Beijing's growing political influence and military strength.

Even if he wins, however, Mr Ozawa will not have carte blanche to impose new foreign and domestic policy. The DPJ is riven with factions. Younger foreign policy "hawks" are uneasy with their leadership's call for closer cooperation with the U.N. or with China. Others are skeptical that the DPJ's plan for massive stimulus spending to jumpstart the economy will work any better than the LDP's failed pump-priming in the 1990s. Moreover, should the Democrats falter once they take power, young politicians across the political spectrum may find it more appealing to join forces, thus radically altering the Japanese political landscape.

Even if Japan's voters deliver a clear verdict in elections, whoever wins faces a tremendous economic challenge in 2009. Last month's news that manufacturing output plunged more than 8% in November underscores the bleak prospects for the coming months. The global slowdown has reached Japan's leading exporters, such as Toyota, and the knock-on effect on Japan's numerous domestic suppliers to multinationals will have widespread impact throughout an already fragile economy. Much of Japan's job growth the past decade was through temporary employment. Those workers are now being laid off in droves, putting pressure on social services.

Without a firm government policy to lower taxes and recover the reform mantle wielded by popular former Prime Minister Junichiro Koizumi, Japan's economic gains of the early decade are at risk, and the country may be facing yet another "lost decade." Combined with America's own extended slowdown, the world economy will be profoundly weakened by the problems plaguing its two largest economies.

The Obama administration needs all the help it can get to shore up the global economy and ensure stability around the globe. Mr Obama will undoubtedly find many areas of common interest with a potential Ozawa government, but both should learn from ineffective policies pursued during Japan's recession in the 1990s. Both will do well to recognize that their trans-Pacific partnership can be a powerful tool for solving some of the vexing problems they face, but only if both act resolutely.

Tokyo and Washington should jointly push for free trade to stimulate economic growth, set an example by lowering tax rates, promote development of new energy technologies, and commit to maintaining stability in Asia's common areas. Doing so will help both Japan and its American partner weather a year of living dangerously.

Michael Auslin is a resident scholar at the American Enterprise Institute.

© Asian Wall Street Journal

©2021 GPlusMedia Inc.

8 Comments
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Japan sure as heck needs a change pretty soon. Aso isn't even funny any more and the LDP are building up a mountain of economic problems for the country.

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If the DPJ do secure a victory, all that will happen is the bureaucrats who have enjoyed generations of privilege and back-scratching from the LDP will simply refuse to cooperate, as they did during the brief DPJ tenure in the early 90's. The ruling party will be denied accurate information and timely administration, and be made to look incompetent by the LDP apparatchiks who have held the keys to the stationery cupboard since Japanese "democracy" was imposed.

The LDP need only wait until the tame media report appropriately, and they'll be returned within the year by an electorate afraid of being governed by their traditional overlords.

Japanese democracy just never happened.

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The government holds our money and is in deadlock, however corporations and wealthy individuals roam free to do what they choose, and should choose wisely.

It is our obligation to convince both ourselves, our wealthy bosses, and our organizations to allocate more to humanitarian causes because we are slowly becoming the victims ourselves. The corporation and its employees are the buffalo, and ignoring starving kids, homeless, and unemployed, etc, is the cliff that we are not seeing. Lower your salary, stop just waiting for leaders to act, and be a real leader yourself. No more talk about economic stimulation, subsidies, your portfolio. Corporations and people with money and resources are either the disaster or can prevent it. It's the only way. Do something while you still can, don't just watch your colleagues company go bankrupt, you might be next. Trust me, I know.

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I wonder why this article was called "Ozawa and Obama". There's very little here about Obama, certainly not enough to justify the title. I was expecting some kind of comparison between the two.

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I agree with Notginger and I suggest a wait and see attitude. Frankly speaking, I have always been very pro-Ozawa as he truly reflects the thinking of the Japanese people.

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This article is a thinly veiled hack job by a now highly disregarded neo-conservative think tank that wants to, you guessed it, lower taxes. Bush lowered taxes and sent the US government into massive debt with the economy following now in the US to near depression levels.

If you see anything by the American Enterprise Institute you can be sure it is simply propaganda for a very, very narrow band of out of touch regressive one trick pony ideologies. Even JT should know better than to reprint their stuff.

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Ozawa has no chance whatsoever. Fact of the matter is that the LDP is the government. The DPJ has no idea how to govern a nation and the people of Japan know not to trust outcasts from the government itself - they must be even worse.

Can someone name a single law that the DPJ has passed? None? Well, that shows you something about their lack of ideas. All they can do is vote down LDP laws, which are designed to help the people of Japan. DPJ wants to force an election - why? Only to inconvenience the people of Japan. Once again, they will have to go and affirm that the LDP and imperial family's eternal unbroken rule of government will remain.

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What is the true root cause bahind Japan's chronic instability of govt?

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