Winning was the easy part for Hatoyama’s DPJ

by Jeff Kingston

After generations of rule, the Liberal Democratic Party was trounced by the Democratic Party of Japan in last month’s Lower House elections.
Jeff Kingston weighs what went wrong, what went right — and what now for a nation whose voters are sick of ‘politics as usual’?

LDP down, but not out

How could the Liberal Democratic Party, which won the Lower House elections by a landslide in 2005, suffer such a drubbing in last month’s Lower House elections?

On Aug. 30, Japanese voters voiced a collective “sayonara and good riddance” to a party that has been in power for more than half a century. This is an extraordinary turn of events that cannot solely be blamed on the unpopular, gaffe-prone Prime Minister Taro Aso, even if he is a deserving scapegoat.

The turning point in the LDP’s fortunes came in June 2007. That was then-Prime Minister Shinzo Abe’s Hurricane Katrina moment, when he showed a lack of concern and contrition following the government’s admission that it had lost tens of millions of pension records.

Prior to that, voters had not supported Abe’s ideological initiatives on patriotic education and constitutional revision, and were flabbergasted by his quibbling over so-called comfort women and his downplaying of Japan’s role in Okinawa’s wartime mass suicides. However, it was not until they saw just how nonchalant he was about their pensions that they deserted the LDP in droves.

The following month they told him to take a hike. Voters handed the opposition Democratic Party of Japan, a party formed just over 10 years earlier in 1996, a resounding victory in the 2007 Upper House elections. Abe tried to hang on, but could not endure being the national whipping boy and suddenly resigned in disgrace.

Maybe it is the curse of the botchan (spoiled sons), as Abe’s prime ministerial successor, Yasuo Fukuda, was similarly from a blue-blood political dynasty. However, he also lasted only a year, showing no belly for political infighting as the DPJ used its control of the Upper House to stonewall legislation, finally driving him to resign in frustration.

Next to be appointed premier in the LDP’s karaoke-style politics was Aso, yet another scion of a political dynasty. He was supposed to be popular, a regular guy who likes manga and, unlike the other botchan, oozed charisma. But Aso is no (former Prime Minister) Junichiro Koizumi and could not rescue his sclerotic party, instead dragging it down through his own repeated gaffes.

In off-the-cuff remarks on the eve of the Aug. 30 elections, he insulted young people by suggesting they should get a job and make some money before marrying — a sore point for the very people who have borne the brunt of the LDP labor-market reforms. The media also was merciless with this pugnacious leader, making him a national laughingstock for his misreading of kanji. As well, he suffered from three of his Cabinet ministers resigning under embarrassing circumstances, the most notable being Finance Minister Shoichi Nakagawa, his close political ally, after he showed up incoherent at a press conference in Rome, provoking widespread speculation (which he denied) that he was drunk.

Nonetheless, DPJ leader Ichiro Ozawa almost rescued the LDP by trying to cling to power even as he was dragging the party down due to a campaign-financing scandal swirling around him. He belatedly resigned his post in May, leaving Aso to claim the undisputed title of Japan’s most unpopular and discredited party leader.

Yet what’s really striking about the LDP’s Aug. 30 collapse is just how poorly the DPJ campaigned and how the public never warmed to its policy agenda nor its new leader, Yukio Hatoyama — yet another botchan. Hatoyama has a charisma deficit and he too was mired in a campaign-financing scandal, but it didn’t matter — the public wanted nothing more to do with the dead-enders of the LDP.

Though Aso called on voters to “stay the course,” that wasn’t exactly what they wanted to hear as they saw the economy spiraling downward.

Since the end of 2008, Japan’s misery index has soared as unemployment, foreclosures and suicides spiked, while wages, bonuses and workers’ sense of job security sagged. Campaigning on the slogan “secure society,” the LDP inadvertently drew attention to its role in making jobs much less secure and also reminded people how even their pensions aren’t safe under the LDP.

Polls show that voters care most about social-welfare issues, not the strong suit of the LDP. Its scaremongering about the DPJ’s ability to maintain good relations with the United States and deal with North Korea did not resonate with voters much more concerned about bread-and-butter pocketbook issues and their anxieties over jobs, health care and pensions.

The LDP stayed in power so long because it had always taken care of business and convinced voters that it was the competent and responsible party. But with a public debt to GDP ratio racing toward 200 percent — the highest in the OECD — and the economy showing only tepid signs of life after a massive binge of deficit spending, the LDP seemed like a drunken sailor unable to get a grip, let alone chart a course to recovery.

As a result of all this, the DPJ scored a landslide by riding the LDP’s sullied coattails — even though hardly anybody thinks its budget math adds up, or that it has policy proposals good enough to revive the economy. Winner and losers: This election was above all a referendum on reforms carried out by the LDP — and voters clearly didn’t like what they have seen so far. They gave their verdict on growing income disparities and voiced anxieties about social welfare. The LDP is blamed for neoliberal structural reforms promoting deregulation and privatization that have increased risk and disparities dramatically in a society that has long tried to minimize and mitigate risk and disparities.

Labor market reforms that began incrementally under Prime Minister Keizo Obuchi in 1998, and gathered sweeping momentum when Koizumi was prime minister from 2001 to 2006, have produced a society of “winners” and “losers” in a country that highly values its egalitarian ideals.

The rapid economic growth from 1955-73 did not lead to the wide disparities evident in other advanced industrialized societies. The Gini coefficient, a measure of income equality, showed a high level of equality until the 1980s. People felt that they were in the same boat rowing more or less at the same pace in the same direction.

From the mid-1980s, however, disparities began to widen, becoming much more pronounced in the 1990s. Thus, even before the neoliberal reforms of the LDP, those at the lower end of Japan’s income distribution were already falling further behind as Japan’s relative poverty rate reached 15 percent in 2000, compared to the OECD average of 10 percent. In fact, Japan is the only OECD country in which the absolute poverty rate actually grew between 1985-2000.

So disparities certainly did not start with Koizumi’s much-hyped privatization and labor-market initiatives, but they have become more prominent in the media and in political campaigns, with the LDP largely taking the blame.

Now, in a society no longer overlooking widening gaps in income, the plight of the “losers” is most definitely on the public’s radar screen.

At the beginning of this year, civil-society groups set up a tent village for recently fired contract workers in Hibiya Park just across from the Ministry of Health, Labor and Welfare in central Tokyo. It was a media-savvy campaign conducted during the New Year’s celebrations, and one that drew extensive coverage highlighting the downside of reform. Japan’s disposable workers, laid off by the tens of thousands at the end of 2008 as a result of the global economic crisis, captured the sympathy of the nation. Yet right there in the media spotlight one clueless LDP politician, Tetsushi Sakamoto, then Parliamentary Secretary for Internal Affairs and Communications, suggested that those jobless workers lacked the proper attitude and should take responsibility for themselves, earning him a well-deserved pummeling in the media.

Widening disparities and the growing ranks of the marginalized, a trend that especially affects younger workers, is a threat to social cohesion. Through structural reforms and cuts in welfare spending, the LDP has increased risk in society, but has failed to manage it well and did not prepare for the predictable consequences.

The LDP now knows the cost of not keeping faith with the people, alienating loyal, aging constituencies who feared for their pensions, and not delivering on economic recovery or improving the safety net of government social-welfare programs aimed at ensuring that the most vulnerable in society don’t fall below the poverty line. The latter, in practice, involves unemployment insurance, waivers on health insurance and copayments, and subsidies for housing, food and utilities.

Ideally, at a minimum, such a safety net in Japan would ensure that every citizen can secure housing, medical care and enough to eat, while providing vocational training and counseling for the unemployed so they can re-enter the labor force. At present, if you are deemed able to work it is hard to get welfare, even if you need it, because the assumption is that you will get a job. Meanwhile, non-full-time workers (the contract, temporary, dispatched workers) are not covered by unemployment insurance — a rather big hole in the safety net since they constitute 33 percent of the workforce.

LDP R.I.P.? The LDP will face more defections and has become a more conservative party with a much smaller constituency. It is too soon, however, to write the LDP’s obituary. Its hopes for regaining power depend on a new party leader who can hold it together while redefining the party and broadening its appeal. The so-called zombie candidates who were voted out of office in their constituencies, but came back to Lower House life as proportional representation choices, will complicate the LDP’s renewal. The voters told these old geezers to get lost and won’t be pleased to see them still hanging around. At a time that the LDP needs fresh blood and ideas, these grizzled veterans stand in the way.

The party leadership battle later this month will signal what kind of party the LDP can become. The numbers favor the ideological conservatives from the Abe spectrum of the party, those who emphasized patriotic education, airbrushed history and constitutional revision during his tenure — issues that don’t resonate with voters.

However, party interests actually dictate a more broadly appealing, moderate candidate who can refocus the party on the bread-and-butter issues that sustained its rule for so long. If the LDP can elect a new pragmatic leader later this month, and rally its various factions around an agenda of economic recovery, there is a chance it could stage a comeback if the economic crisis persists.

The Lower House election landslides of 2005 and 2009 — for the LDP and then the DPJ, respectively — show that Japan’s increasingly fickle and frustrated voters are desperate for change they can believe in — and are ready to punish a party that does not deliver.

DPJ wins, but can it govern?

Winning was the easy part, but what can the DPJ do for an encore?

In handing the DPJ a landslide victory on Aug. 30, the Japanese people voted for change they don’t believe in and for a leader they are not all that crazy about.

Polls indicate that voters do not have much faith in the DPJ’s campaign promises and disagree with key planks in its platform. Amazingly, on the eve of the elections, polls indicated only about 25 percent of voters believed the DPJ will steer Japan in the right direction. Subsidies for raising children, cuts on gasoline taxes and the elimination of highway tolls — all part of the DPJ’s strategy of reviving the economy by putting more money into consumers’ pockets — are surprisingly unpopular in the country. Voters, along with most experts, doubt the DPJ’s ability to find enough savings by cutting wasteful public spending to pay for this largesse.

The DPJ’s rout of the LDP is all the more surprising because voters have not warmed to the party’s leader, Yukio Hatoyama; he is not called uchujin (the alien) for no reason. Even as the DPJ was boasting a nearly 20-point lead in the polls over the LDP, fewer than 35 percent of people wanted him to become the next prime minister. In interviews and speeches he is wooden and aloof, lacking the charismatic and telegenic style that gave Koizumi rock-star status and a devoted following.

Despite the landslide, the DPJ victory is mostly about the LDP’s unpopularity. The DPJ is catapulting into control of both houses of Parliament on the strength of simply not being the LDP. The scale of the party’s victory is a barometer of people’s growing frustrations with government, and their desperation for change and bold leadership.

The LDP’s botchan trio (Abe, Fukuda, Aso) didn’t have it, presiding as they did over changes that are leaving more people marginalized and less well off. While the LDP was offering more of the same, voters this time round wanted fresh thinking on reform and a better safety net. Coming attractions: The DPJ and Hatoyama are untested and have a lot to prove. So far, though, the party has done a good job in lowering expectations while offering a glimmer of hope to those who have been adversely affected by structural reforms. Hatoyama must regain public trust in government by hitting the ground running, prioritizing and delivering some hopeful changes before the end of the year. High-profile cuts in wasteful spending (and there is plenty of it) will create a good impression.

Calling a ceasefire in the party’s war on bureaucrats and decisively asserting political control over policymaking are critical to demonstrating the DPJ’s ability to govern in collaboration with Japan’s powerful civil servants.

Naoto Kan, an experienced bureaucrat handler from his mid-’90s stint as health minister, will be named deputy prime minister and head of the new National Strategy Bureau. In this latter capacity he will oversee the assertion of greater political control over the bureaucracy and policymaking. Under Kan, look for the DPJ to nurture effective cooperation with the bureaucracy. His appointment is a savvy move and another reassuring sign the DPJ may not stumble as badly as some pundits are predicting.

Indeed, carefully choreographed leaks to the press about the new Cabinet have worked effectively to dampen concerns about a party that does have a lack of depth at the senior level. Undoubtedly, an untested Cabinet team will have its share of blunders, and some of the picks may not work out, but fortunately for the DPJ, the veteran LDP has already lowered the bar on Cabinet competence.

The clock is ticking, Hatoyama will become prime minister on Wednesday, and the DPJ must quickly push ahead with substantive policy reforms involving a shift of spending from pork-barrel projects to social-welfare initiatives and improving the safety net. This will show that it can tame the mandarins and mitigate the consequences of the current malaise. Upper House elections next summer will be an early report card from skeptical voters who, having finally thrown the bums out of office, are feeling feisty and are not in a mood for empty promises. Foreign policy: Concerns that the DPJ will derail bilateral relations with Washington are exaggerated. The expected appointment of Katsuya Okada as Minister of Foreign Affairs is a reassuring sign precisely because he is not aligned with Ichiro Ozawa, the DPJ leader who is most prickly about subordination to the United States.

Okada is untested in diplomacy and as a Cabinet minister, but he is one of the most able of the DPJ’s senior leaders and one of the few capable of pulling off the delicate balancing act the new government faces. He demonstrated his diplomatic dexterity and party loyalty in the classy way he handled Ozawa’s “fixing” of the DPJ leadership contest in favor of Hatoyama, with only Diet members getting a vote — many of whom are indebted to Ozawa.

Okada will draw on these skills in soothing U.S. anxieties about the DPJ’s campaign rhetoric regarding the Status of Forces Agreement (SOFA), the refueling mission in the Indian Ocean, and the antipiracy mission off the Horn of Africa — while trying to keep the Social Democratic Party (SDP) in the coalition. The SDP opposes overseas dispatch of Japanese armed forces and is critical of the U.S. alliance and the presence of U.S. bases in Japan.

Team Obama is committed to a multipolar system and can live with Japan pulling the plug on the refueling mission in the Indian Ocean and tweaking SOFA in symbolically important ways. This will include lowering the Japanese contribution to the relocation of U.S. forces from Okinawa to Guam and requiring the U.S. to take care of cleaning up any environmental waste at bases it will be vacating.

These are not deal-breakers, but are important face-savers for the DPJ. Accommodating these changes will earn Washington considerable goodwill at a reasonable cost. Conversely, if the U.S. digs in its heels and declares the SOFA sacrosanct, refusing any tweaking at all, bilateral relations will suffer considerably. This is a delicate situation with immense political implications, and it will require deft handling by new U.S. Ambassador John Roos and the untried Team Hatoyama.

In cultivating a more equal relationship, the DPJ also knows that Washington expects more from Japan. It seeks Japanese initiatives in nation-building efforts in Afghanistan and Pakistan that Hatoyama will have to weigh against domestic anxieties regarding closer cooperation with the U.S. and the war in Afghanistan.

Okada will also pursue better relations with Beijing, which will be welcome in Washington as there is a desire to update the trilateral relationship on both sides of the Pacific. The devil is in the details though, and Okada is sure to have his hands full hashing this out. By stating that he and his Cabinet will not visit Yasukuni Shrine in central Tokyo (where nearly 2.5 million of Japan’s war-dead and 14 Class A war criminals are enshrined), and suggesting a secular alternative, Hatoyama is sending a message of reconciliation welcome in China.

Yet, even as Japan and China agree that their bilateral relationship is too important to hold hostage to history, there are other lingering disputes over resources, conflicting territorial claims, product safety and the environment that will test the new bonhomie. The U.S., meanwhile, is not losing sleep over the possibility that better Tokyo-Beijing relations will undermine the strong U.S.-Japan bilateral relationship.

Turning up the heat: The media will undoubtedly turn up the heat in the coming months. During the election campaign, it spent most of its collective energy roughing up Aso and the LDP. Despite a juicy campaign-financing scandal involving dead contributors, the media was very soft on Hatoyama, feeling guilty about the way they rose like a pack to the prosecutor’s bait this past March in hounding Ozawa from the DPJ helm.

However, neither the media nor the LDP will be so circumspect once the next Diet session opens. And there is the matter of Ozawa’s appointment as Secretary General of the DPJ. Because of his crucial role in crafting a winning campaign, he could not be denied such a top-level post, but the upcoming trial of his aide — apparently the designated fall guy — will undoubtedly spatter Ozawa and the DPJ. The party that promised to hit the reset button on “politics as usual” will have an uncomfortable time living down the shadow of Ozawa-style backroom politics.

But the biggest question mark hangs over Hatoyama himself, a leader who has until now kept his leadership skills carefully hidden.

Hatoyama’s support in the media and among voters is fragile, and after a brief honeymoon he will face tough scrutiny on his choices and actions. Can this affable botchan take the heat and deliver the goods? Can he keep the errant Ozawa in line and emerge from his shadow? Ozawa is a masterful campaign tactician, but does not have a good track record in handling power. More than anyone he was responsible for the collapse of the last non-LDP government, in 1994, when he inadvertently drove the Socialists into the LDP’s arms due to his political scheming. He also suffered a high-profile meltdown in 2007, when, as DPJ leader, his plans for a grand coalition with the LDP were scuttled by Hatoyama and other DPJ leaders. He resigned and then changed his mind, but not before announcing to the mass media that the DPJ is not ready for prime time.

Now, “Ozawa’s children,” those he helped win their seats, will constitute a loyal following. He will need to coach them in the art of politics, but he will have to be careful about throwing his weight around in the party.

The DPJ is a rainbow coalition of unlikely bedfellows ranging from pacifists and union advocates to hawks and mainstream conservatives. Keeping them all on the same page is bound to be difficult, and thus maintaining party discipline is essential. This is where Ozawa will be invaluable as party whip. A sea change?: Does this election herald the emergence of a stable two-party system? Not yet. Party support remains fluid and further party realignment is possible. Unlike in 1993-94, when an unstable coalition of small parties took over from the LDP for less than a year, the DPJ is a major party with staying power.

However, there is little or nothing in the postelection air to suggest that Japanese voters are excited about the current lineup — and indeed they appear to want more and better reforms than the parties are offering. While there is no sense that returning to the old ways and means of Japan, Inc. is viable, there is also little confidence in the half-baked structural reforms Koizumi launched and his successors ignored.

Since the beginning of this century, voters have demonstrated desperation for reform, but they have clearly also wanted the government to provide a better safety net to prepare for the predictable consequences of that reform. The rejection of the DPJ’s “wave the money” promises of subsidies and handouts suggests that voters are discerning and seek more compelling and sustainable change they can believe in. Poisoned chalice: The LDP is handing the DPJ the poisoned chalice of an economy on the skids. Given Japan’s massive fiscal problems, the promised tax cuts and new spending proposals raise concerns about how the DPJ will manage the budget and promote sustainable recovery. The good news is that the DPJ will have to work hard to do worse than the LDP, the party that invented a nearly 200-percent public debt to GDP ratio. The bad news is that although the LDP has already used up much of the available ammo in its fiscal stimulus packages, the positive impact on the economy is already waning.

The DPJ also has to square some circles, figuring out how to cut carbon emissions by 25 percent at the same time as it is encouraging more carbon-spewing traffic by eliminating highway tolls and gasoline surcharges. There is a great risk that the DPJ will get bogged down in the economic quagmire and find voters impatient and unforgiving come next summer’s Upper House elections.

Nonetheless, this is an historic opportunity to reinvent Japan. Among the DPJ’s newly elected representatives, 143 are freshmen in Parliament, and many of them have experience working in civil society organizations. In addition, 40 DPJ Lower House members are women — a record number for any party. These newbies and women can help shape the DPJ’s agenda in ways that connect with voters’ needs and aspirations.

The Japanese seek a new social contract because structural reforms have generated risk, widened disparities and sown job insecurity, creating “winners” and “losers.” This is not the Japan most Japanese want. Many of Japan’s youth have been marginalized as contingent workers, and figuring out a way to give them a stake in the new Japan is crucial to maintaining social cohesion.

For the DPJ, its staying power will depend on lowering the misery index and paying more than lip service to voters’ interests. In the coming months, as it expands social-welfare programs, reconsiders labor-market deregulation and grapples with Japan’s daunting array of economic problems, impatient voters will get a sense about how the DPJ is balancing market forces and government regulation — and whether it deserves their continued support.

Jeff Kingston is Director of Asian Studies, Temple University Japan.