The Courts Try Reason

In most industrialized democracies, the above title is something of a non sequitur. However, in this blessed land, where the courts have long shown deference to the executive and legislative branches, the sudden irruption of reasonable and reasoned decisions against the government is a surprise -- and a cause for celebration.

Last year Philip Brasor and Masako Tsukubu posted on their Yen for Living blog about the case of a former Osaka salaryman and father of two small children. The man had found a way to beat the odds, putting together a program that, when applied in a brute force manner, could net a tiny profit out of betting on horse races. Relying on databases of race results, the man placed massive, repetitive, automated bets on multiple horses, resulting with each iteration in a tiny, but compounding, return.

After letting his computer run these bets for three years, the man learned, to his horror, that under existing interpretations of of tax law, his tax bill would be calculated not based upon his net winnings but upon the blunt, arithmetic total of his gross winnings, minus the cost of the winning tickets. This meant that when the dust cleared the man owed the National Tax Bureau 570 million yen in back taxes on transactions that had netted him only 140 million yen in income. (Link)

The man filed suit for relief from the Osaka District Court, arguing that the tax office's method of calculating income was insane.

Incredibly, at least for those of us who have been around these parts for a while, Osaka District Court Justice Nishida Masaki this morning handed down a judment in the man's favor (Link - J). He released the man from the immense tax penalty he had incurred, ordering him to pay taxes only upon the amount he had actually earned from his successful, fractional trading betting strategy.

Justice Nishida is of the 34th graduating class of lawyers, so he is near, if not exactly on the cusp of, retirement.

So?

So for those looking for the story of Japan being saved despite itself, perhaps talking with hot young entrepreneurial types or reformist politicians and bureaucrats is a misleading waste of time. Perhaps the real vanguard of change for the better is a posse of old guys and gals in long black robes.

Signs of the Apocalypse #5

The #1 story on "Google News Japan - Politics" right now is...

....the latest updates on the white hot electoral race for the post of leader (sosai) of...

...AKB48.

Here is the screen grab. Click on the image if you want to see the evidence of our decadence in greater detail:



OK, so it is politics...of a sort.

Still, I cannot shake the sense of our species having hit rock bottom.

Bring on the rule of the machines! They purport to know what we really want!

Cadmium and Itai-itai

With the explosion of the story of excess levels of cadmium in the rice of Guangzhou (Link) there is talk, though only in passing, of Japan's experience with food and water-borne cadmium poisoning, which is known in the literature as Itai-itai ("It hurts! It hurts!") disease.

This is peculiar. Japanese researchers have done the lion's share of work on cadmium poisoning. Toyama Prefecture indeed has an entire museum that opened just last year dedicated to keeping alive the memory of the worst outbreak of itai-itai, which occured along the Jinzu River.

Not that many diseases with its own museum.

For afficionados of comparative politics and the functioning at various levels of the courts, regulators and democracy in East Asia, the length of the era of obscene disregard for public health in Japan -- with decades falling between identification of the cause of the disease and the final shutting down of the effluant source -- does not bode well for the future health of the Chinese people, especially in light of the close intertwining or even interchangeability of industrial and political elites in China.

Later - Yes, it would be interesting to see and hear the narratives of responsibility and blame allowed or preserved at the Toyama Prefectural Itai-itai Disease Museum. I am sure that there is a least one paper for an enterprising scholar therein.

Smooth (Alleged) Criminals

Yesterday, convicted felon Ishikawa Tomohiro, member of the House of Representatives for the Hokkaido-based New Great Land Party (Shinto Daichi - Link - J) tendered his resignation from the Diet. His explanation for why he had to give up his seat less than half-a-year after the December 2012 general election: the Tokyo High Court's having upheld in March his convictions on charges stemming from the filing false political fund records during his stint as personal political secretary to House of Representatives member and Life Party leader Ozawa Ichiro, who himself is no stranger to the justice system.

According to Ishikawa, he needs to quit politics temporarily in order to concentrate on the final, Supreme Court appeal of his conviction and by so doing avoid prison time (an impossible dream -- ask any lawyer).

To replace the scandal-tainted Ishikawa, New Great Land is elevating the #2 on the party proportional list for Hokkaido – a 27 year old (the minimum age is 25) woman, a former NHK director with a clean record.

All to the good, right?

Errr, not exactly.

The young woman in question in Suzuki Takako, eldest daughter of Great Land party leader Suzuki Muneo (Link – video J) – the Diet's former poster boy of corruption who himself has been twice convicted -- and held in a cell for a year and a half -- on corruption and embezzlement charges.

With all apologies to Ms. Suzuki, winning a seat in the House of Representatives through a private deal cut by two cons, with nepotism the big winner, does a great disservice to the image of Japan's democracy, such as it may be.

That Ishikawa's sentence was way too severe, and his arrest and conviction politically motivated, does not make the transaction any less dispiriting, unfortunately.

Thank You, Aurelia George Mulgan

With clarity, erudition and thoroughness, Aurelia George Mulgan attacks the thicket of nonsense flung about by the forces both within and without Japan in support/defense of constitutional revision:

Abe rocks Japan’s constitutional boat

For those whose inquiry begins and end at "Japan has proven itself capable of self-control. What could be wrong with normalization?" -- the essay's crucial paragraph:

The price of formally amending Article 9 will be high, particularly in terms of Japan's foreign relations. China and South Korea will 'over-interpret' the move as signifying a dramatic change in the status quo and the rise of a potential Japanese military threat. Moreover, Japan will no longer be able to lay a strong claim to being a 'peace state', which has been an important source of its soft power. The proposal to revise Article 9 could, therefore, have a destabilising effect in the region and come at the cost of Japan's international standing and soft power.

Due to the absence of regional economic and security structures, due to Japan's being in a bad geo-political neighborhood (think of when Japan exited from the Occupation: no other industrialized states nearby, no other democracy in the region except the chaotic Philippines) -- and due the halt in the program of purging the government of totalitarianism, post-Occupation Japan faced unleapable hurdles to integration (some China-sodden commentators might say "re-integration") into East Asia. The latter half of the 20th century would then most likely have been much like the first half: constant warfare, with an armed Japan in contestation with the Soviet Union and a fragmented China, the dogs of war unleashed by a breakdown, after a decade or so, of Japan's alliance with the world's premier maritime power.

[As to the implications of a martial post-1945 Japan on the process of decolonization in this alternate universe East Asia, the mind boggles.]

Article 9 had a purpose and effect of breaking the chain of inevitability. Japan could integrate into East Asia at minimal cost, both in terms of its own sovereignty and social structure. A de jure shackled Japan had a chance of living at peace with the military dictatorships and expansionist communist states of the region. A demilitarized Japan could be given free rein to permit the rehabilitation of its pre-war elites.

Someone needs to look the PM in the eye and tell him, "Look, your enthusiasm for constitutional revisionism is misguided. The Meiji State was a miserable one for the common people. But forget about them. The only reason your grandfather could walk out of Sugamo Prison alive and hearty to take up where he left off, becoming Prime Minister less than eight years later -- was Article 9. Article 9 made it possible for your grandfather's younger brother to, eventually, succeed him, your great uncle Eisaku becoming the longest serving post-war prime minister. It has allowed you, who have been steeped in a culture of unscientific, ahistorical, backward-looking authoritarian fantabulism, to become Prime Minister not once but twice.

Forget about what Article 9 has done for the average citizen; think about the tremendous service it has done for your family."

The attempt to encourage a reconsideration of a commitment to constitution revision out of simple self-interest would likely fail. However, that does not mean it would be wrong to at least try it.

A More Serious Slapping Around of Abenomics Cheerleading

Edward Hugh has a sharp review of the negative view of Abenomics, or perhaps more properly the dismissive-as-irrelevant-and-possibly-quite-harmful view of Abenomics:

The Real Experiment That Is Being Carried Out In Japan

Particularly thought-provoking are the quotations from Keynes, showing both the incredible brilliance of the man and the continuing validity of the old saw, "There is nothing new under the sun."

I agree with almost everything in the post, particularly with the quotations from the speeches of former Bank of Japan governor Shirakawa Masaaki, whom the Kool Kids in this blessed land's business and media elites all feel free to disdain and revile. Shirakawa is revealed to be who he is and what he always was: a central banker blessed with intelligence, humility and a conscience.

With all that is good (and there is a lot of it) I think Hugh does himself a disfavor with the cheap shot at the what may be the most important goal of the creation of inflationary expectations: pressing savers to convert their assets in to real goods or put them into higher risk/higher return investments. A critic would point out that "Uh, that's sort of the point of the program. Duh."

The demographic angle of the story is that while there is a vast pool of cash that could be deployed in lifting the economy to a higher level of activity, almost all of it is in the hands of persons over 60 years of age. Seniors are very, very conservative about their assets and cash, clinging to low-or-negative return real estate or money kept in bank accounts...or in the safe at home.

The government is trying some direct methods to get older citizens to turn over their savings to younger citizens, the most famous/infamous being the tax free accounts for the education of grandchildren (a plan which has been widely derided as just a tax avoidance scheme for the extremely wealthy). Increased taxation of the assets of retirees would be the one, absolutely effective, politically lethal (those damn retirees vote, a lot) solution.

Debasing the currency and creating the desire to convert cash into something that is meaningful and useful is an actual, non-ridiculous goal of induced inflation...the caveat being "but what if instead of increased consumption and domestic investment the result of debasing of the yen is capital flight, with savers sheltering the current value of their money in overseas accounts and assets?"

I guess we have to keep an eye on the yen. I am sure if someone popped an inquiry into Richard Katz's mailbox he would have something to say about what the yen level should be, using trade-adjusted figures.

Later - Richard Katz responds in comments. He corrects my incautious claim that he would know at what level the yen should be.

No one knows this, save, supposedly Mr. Market.

What Richard Katz can tell you is what the long-term average real exchange rate has been, and whether or not the Abe governments disengenuous program to crush the "high yen" has firm intellectual roots.

Nota Bene: All comments to Shisaku are moderated, except my own.

Abenomics Showing Indications Of Destroying Japan's Economy

Japan's prime minister Abe Shinzo has shaken up the world economic circles with Abenomics, his bold mix of scatter shot fiscal boost, extremely loose (some would say slutty) monetary policy and a bundle of gift-wrapped regulatory changes benefiting supportive company presidents and reticent gestures in the direction of structural reform. Yesterday's government release on GDP in the first quarter of 2013 hints that Abenomics seems to be doing very quickly to the Japanese economy what the Friends of Abe have spent years trying to do to Japanese diplomacy: namely, run it into a ditch.

As the chart indicates, even a modest year like 2012 when Japanese businesses were under the thumb of a socialistic DPJ-led government -- frozen as it was to near immobility by divided control of the houses of the Diet -- the economy still grew at a robust annualized 5.3% rate in the Mar-Jan quarter. However, under the pressure of the Abe government's avowed attack on the value of the national currency, its adding to the national debt at an accelerated rate and the simultaneous destabilization of the bond markets and destruction of the purchasing power of Japan's burgeoning population of retirees, economic confidence has shrivelled. Real growth in Jan-Mar 2013 crashed to a mere 3.5%. In nominal terms, which are the meaningful figures in deflationary economies such as Japan’s, GDP shrank year-on-year at an annualized -4.0% pace...

--

The above is a parody.

However it is no more absurd than many of the prematurely laudatory, rose-colored glasses-wearing articles appearing yesterday in response to the government release of GDP estimates for the Jan-Mar quarter.


Later - Via Bloomberg: Goldman Sachs researchers have tried to find inflation expectations above and beyond those created by the mandated rise in the consumption tax from 5% to 8% next year.

The GS assessment of the net effect of Abenomics on expectations: none. (Link)

Later still - Right now it is impossible to disambiguate:

1) economic behavior driven by a sense of hope for a future of rising incomes, asset prices and employment

2) economic behavior driven by coldly calculated front loading of purchases to avoid paying the extra 3% tax

3） economic behavior driven by a panicked fear of rising interest rates and import prices,

and

4) economic behavior taking advantage of inventory clearance and special promotions in anticipation of companies trying to raise prices via the introduction of new products and services.

Under scenario 1, the economy keeps chugging through 2014 with a small, sharp dip after the tax rise. In scenario 2, economic growth is strong until the imposition of the tax, after which it falls off a cliff. Under scenarios 3 and 4, economic growth declines through this year, then falls of the cliff with the tax rise.

I know that the wealth effect of rising asset prices will provide a kick to certain sectors of the economy -- but the effects of wealth effect driven demand do not seem likely to have major impacts on domestic wages and employment.

Is Today The Day For The DPRK?

Yesterday Abe Shinzo envoy and symbol manipulator extraordinaire Iijima Isao (the bald gentleman above) met with President of the Presidium of the Supreme People's Assembly Kim Yong-nam (the other...errr...gentleman above).

Now it is true that the government of North Korea could just be trotting out its #2 leader for a meeting that goes nowhere, releasing footage of Iijima and Kim in The Big Chairs in front of The Big Painting only to metaphorically pull the chair out from under Iijima-san's massive posterior, humiliating both him and his prime minister.

However, does one need the #2 in the leadership to take time out of his busy schedule of evildoing in order to humiliate Iijima, whose formal title is the decidedly modest one of Special Advisor to the Cabinet (naikaku kambo sanyo)? Would not ordering a driver to take Iijima all around greater Pyongyang, permitting him meet no one of consequence, have done the trick? Yes, some commentators have suggested that the meetings Iijima has had with top government officials are designed to make South Korean and U.S. officials worried that Japan is about to cut a deal undermining ongoing denuclearization and military pull back efforts. (Link)

But a breakthrough, even a lousy one, should be welcomed, right?

As I noted earlier, the complete lack of coordination between the Government of Japan and the governments of the United States, South Korea and seemingly China...and the only-Abe-could-get-away-with-this keeping in the dark of the families of the abducted are indicators that Abe has something in the works similar to, if not commensurate with, the Nixon Shock (Nikuson shokku).

If Iijima has secured a deal in Pyongyang regarding a resolution of the abductees issue then that deal could be put to the Cabinet for Cabinet Decision (kakugi kettei) during the its regularly scheduled meeting today (Friday). Prime Minister Abe could then call a special press conference starting at, if experience is any guide, 18:00 local time.

We shall see.

Image courtesy: Sankei News

The Kim Jong Il Statement

There is a reason why I call The Yomiuri Shimbun "Pravda-by-the-Palace."

I know that I should not because the Yomiuri organization employs the husband of a dear friend. The YS has also made, through its Japan News, a concerted effort to force The Japan Times to figure out the mechanics and purpose of an English-language newspaper.

However, my prejudices, suspicions and disdain for the editors of the Yomiuri all get bolstered by the publication of pieces like this:

Kono remark twisted 'comfort women' issue

The Yomiuri ShimbunA statement in 1993 by then Chief Cabinet Secretary Yohei Kono that suggested the government admitted forced recruitment of so-called comfort women aggravated what had already become a diplomatic problem between Japan and South Korea.

The Asahi Shimbun in 1992 published an article on the issue of comfort women that included some misinterpretations. The story reported that the Imperial Japanese Army had controlled and supervised the establishment of comfort stations, as well as the recruitment of women.

It also said the military mainly recruited Korean women under the name of Teishin Tai (volunteer labor force) in a forcible manner. It misleadingly labeled the “Jyoshi Teishin Tai” (women’s volunteer corps) under the wartime labor mobilization system as “comfort women hunting.”

The major focus of the problem was thus whether the comfort women were forcibly recruited.

The Cabinet of then Prime Minister Kiichi Miyazawa announced in July that year results of an investigation into the issue, in which it said there was no evidence that women were recruited against their will by the military.

Since then, however, criticism against Japan in South Korea has not let up. In an effort to politically settle the issue, Kono made the statement in August 1993, saying the government admitted the military was directly or indirectly involved in establishing and managing comfort stations and transferring comfort women. It also apologized and expressed remorse to former comfort women.

However, as the misunderstanding that the government admitted the defunct Imperial army forcefully recruited comfort women has spread, the first Cabinet of Prime Minister Shinzo Abe approved a written answer to Diet questions on the matter at a cabinet meeting in March 2007.

In it, the government said there were no descriptions in any documents the government found that directly pointed to forced recruitment of women by the military or government authorities.

(Link)

The Japanese version of the above can be found here.

There are false narratives whose origins can be traced back errors in one newspaper story printed long ago. However, it is the height of absurdity to trace the negative view of Japan's Imperial Age system of military brothels to a vocabulary mistake, if there even was one, by the cross-town rival The Asahi Shimbun.

As for the lack-of-documentation argument, I wish someone would stand up to it with a simple parallel:

"You know, Kim Jong-il's verbal apology of 17 September 2002 was only him talking. There exist no official government documents actually proving that Japan's so-called abductees were taken against their wills. Sure they say they were abducted -- but where is the documentary evidence for this?"

And before turning away, thinking "MTC, you are just being vulgar" consider how much of the abductee movement's pull depends the stories of Soga Hitomi and Yokota Megumi -- who, being minors just going about their daily lives at the time of their disappearance, clearly fit the definition of abduction.  Less is said about the disappearances of adults like Arimoto Keiko, who as a student studying English in Europe made the unfortunate mistake of befriending members of the Red Army Faction Japan Red Army terrorist organization...

[For the record it is Arimoto's story that is the most compelling, with her, her husband and infant being murdered after their betrayal by Japan's Socialist Party.]

...where the non-issue over use or non-use of physical force in abduction, where there is illusion of choice, whether to be lured or not be lured, has its clearest parallel.

As for the applause line in the above for the Abe Cabinet's 2007 revision of the Kono Statement, what can one say? Sycophancy is unbecoming to anyone, but least of all to a purported news organization.


Later - My thanks to the readers who pointed out the incorrect terrorist group name.

Worthwhile Reads #1

Some links to works making arguments worth considering:

Michael Penn looks hard for the gold amid the dross that is the life and career of Osaka City mayor and Japan Restoration Party leader Hashimoto Toru:

The True Sins of Toru Hashimoto

Call me presumptuous -- but being a sexist, libidinous jerk in your private life attaches a fuse to your career. Being a consumately self-possessed (self-adoring?) individual makes that fuse short.

Stephen Harner reads the An Awkward Embrace: The United States and China in the 21st Century and asks whether in the clamor over a need to confront China a presumption is being overlooked - that the presence of the military of the United States in the region is something the Chinese just have to accept:

Carnegie’s Vision of a Tense China-U.S.-Japan Security Standoff Is Not Inevitable

I salute Harner's opening up the book and reading it. The cover art would have stopped me. That and the opening line of the blog post Elizabeth Economy wrote promoting the study:

One of the most enjoyable aspects of Dan Blumenthal and Phillip Swagel’s new book on U.S.-China relations, An Awkward Embrace, is its lack of nuance.

Whew! Talk about fainting with damn praise. (Link)

An essay that is all nuance is Georgetown Professor Kevin Doak's reasonable and erudite defense of Abe Shinzo's nationalism, available via the Japan Chair at the Center for Security and International Studies:

Shinzo Abe’s Civic Nationalism

Dr. Doak's argument is seductive. I would only ask the reader to tarry for a while on footnote #2, where Dr. Doak's 2007 book A History of Nationalism in Modern Japan: Placing the People is revealed to have been given, in its Japanese version, a somewhat zingier title.