IN August this year it seemed that Japan had finally broken the inflexible mold that had dominated its politics for over 60 years. Voters decisively rejected the dominant Liberal Democratic Party in favor of an alternative that promised to redirect historic government financial support for banking and big business toward the country’s long-suffering consumers.
Now only 100 days later, Japan’s new political leaders, the Democratic Party and its Premier Yukio Hatoyama are in deep trouble, dogged by scandals and broken campaign promises. The scandal that broke Friday involves illegal campaign donations. Two close political aides have been indicted for keeping improper records of financial contributions and have resigned. Hatoyama, however, has said that he knew nothing of the transactions and has, therefore, refused to go. He insists that he prefers to focus on the job that the electorate gave him last August, which he points out has hardly begun.
Unfortunately such protestations sit uncomfortably with Hatoyama’s frequent insistence when he was in opposition, that any politician whose aides were accused of wrongdoing, should themselves resign.
The scandal, however, comes on top of plunging voter approval. In just five months Hatoyama and the Democratic Party have lost fully 20 percentage points in opinion polls and now have the support of less than half the electorate. Part of the problem has been the government’s abandonment of a key election pledge to end an unpopular surcharge on the price of petrol. This move has been forced on it because of the immense fiscal deficit it inherited from the outgoing government. With still falling tax revenues and ambitious plans to sustain economic activity with immense expenditures on public works (commitments which would have been simply too expensive for the incoming government to cancel), state borrowing is slated to increase by a further $484 billion. Japan may still be the world’s second largest economy but its public debt is now coming dangerously close to 200 percent of Gross Domestic Product, the point at which investors are likely to stop buying Japanese state bonds.
What Hatoyama has yet to say is that his administration has faced an almost impossible task in wresting very much control of the all-important levers of financial power away from the bureaucrats and central bankers. The prime minister’s emerging reputation for indecision may be in part due to the sheer weight of options that civil servants have laid before his government. In democracies, politicians may come and go with electoral mandates, both big and small, but the unelected civil service and it labyrinthine corridors of power flow on forever.
No doubt the Liberal Democrat establishment has calculated that in order to prove that it is the natural party of government, it needs to give Hatoyama’s administration a decently extended period of power. During that time it will do whatever it takes to ensure that none of the new man’s initiatives succeeds to any extent. Whether voters will wake up to this covert obstruction remains to be seen, but the Hatoyama’s present troubles are surely only the start.
