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The Diet has completed a round of plenary debates on Prime Minister Yoshiro Mori’s policy speech — the first full-dress parliamentary exchanges since he launched his second Cabinet following the June 25 Lower House election. But the prime minister has only disappointed the people. He fell far short of showing a credible road map for the nation as it moves toward the 21st century. In particular, his “Japanese renaissance plan” has failed to convince the public, for all its laudable intentions, because he was unable to explain clearly how he is going to implement it.

Public confidence in the Mori administration, and in his Liberal Democratic Party, is wavering again, just a month after the launch of his new Cabinet. The cause this time is the resignation of the chairman of the Financial Reconstruction Commission, Mr. Kimitaka Kuze, who was forced to step down over a money scandal. Opposition parties fired a broadside at Mr. Mori’s decision to appoint Mr. Kuze as the nation’s top financial regulator. But the prime minister offered perfunctory apologies that only revealed he is insensitive to his responsibility for making such a Cabinet appointment.

Mr. Mori admitted that he had named Mr. Kuze with full knowledge of his dubious financial background. The prime minister apologized for “appointing a man who would be forced to resign,” and emphasized that he will do his utmost to “fulfill my responsibilities in full unity with the Cabinet.” These statements, read almost directly from a prepared text, did not help to alleviate growing public skepticism over his integrity and leadership as the nation’s top official.

Mr. Kuze reportedly received, a long time before his appointment, hundreds of millions of yen from a private bank and a real estate developer. As opposition parties pointed out, the scandal has exposed once again the shady side of Liberal Democratic politics, a structure of corruption that continues to bedevil Japan’s largest political party.

The Kuze scandal is a fresh reminder that the LDP must rebuild itself from the ground up. Indeed, hard-hitting party reforms, including breaking the cozy ties with business, are indispensable in order to restore the public’s trust in LDP politics. However, party and government leaders, from Prime Minister Mori on down, do not seem to be aware of the severity of the Kuze problem, judging from the stopgap manner in which they have dealt with it.

Another major issue in the Diet debate was the collapse of the department store chain Sogo Co. — which has raised new concerns about the lingering bad-debt problem. Opposition leaders questioned Mr. Mori on the government’s policy on debt bailout, particularly the “debt buyback” contract with Shinsei Bank (formally Long-Term Credit Bank of Japan), which is one of Sogo’s major creditors. The contract says the government — which sold LTCB after temporarily nationalizing it — will take over Sogo debts if their market value drops by more than a specified margin.

The prime minister defended the Financial Reconstruction Commission, which had made the buyback contract, saying the FRC had no other choice in order to sell the LTCB. He also said banks should not easily forgive debts owed by troubled clients — a veiled warning of “moral hazard” that could retard or reverse restructuring efforts on the part of debtors. But he went no further than that.

Mr. Mori played it safe on the issue of political corruption. New Komeito, the coalition partner, is pushing for legislation that will penalize lawmakers who make personal gains by peddling influence. Although Mr. Mori indicated a willingness to promote such legislation, he never spelled out specific ways to establish political ethics, saying only that he will wait and see how talks between the ruling and opposition parties develop.

Sogo’s bankruptcy, for one, has shown that the economy, though out of the woods, remains fragile and that the corporate sector is still saddled with heavy debts. The gigantic public debt also weighs heavily on the government. However, the prime minister showed a lack of determination to tackle these urgent issues, repeating only that the government will embark on budget reform after the economy is back on its feet.

The overall impression is that Mr. Mori is not very willing to take a leading role in promoting needed reforms. He has shown himself to be less than enthusiastic about soliciting public understanding and support for his policies. He must acknowledge the reason the public is critical of the way he is running the government and the country. The only way for him to regain public confidence is to demonstrate his leadership in establishing political ethics and pressing ahead with needed reforms.

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