Saturday, July 26, 2014

Dancing Toward A Better Japan-South Korea Relationship

On the occasion of Tokyo Governor Masuzoe Yo'ichi's 40 minute summit meeting with President Park Ge-Hyun (keep in mind that until the Abe-Kuroda devaluation, Tokyo's economy was assessed to be bigger than Indonesia's - Link) a gratuitous embed of World Order's "Permanent Revolution" - where Sudo Genki and the boys posit their Japanese Ultra Everymen as the agents of an East Asian concord in such sharp contrast with the current, discouraging discord.

(In HD - so do click on the Full Screen button)
It has been a lousy several weeks and months for the human species - where we seem hellbent on spinning out ever farther from Sudo's definitely quirky (and deeply skeptical of the role and motives of the United States) appeal for hitotsu no sekai e.
Later - The concantenation of ironies of Prime Minister Abe Shinzo's having to rely on freshly minted Governor Masuzoe, who had been Abe's nemesis during Abe's annus horribilis of 2007, in order to get the president of South Korea, a fellow U.S. ally, to talk to him, is not lost upon me.
Later still -For those who catch it -- in the scene shot in front of Seven & I Holdings's world headquarters, Sudo demonstrates he has issues with the Masons too.

Friday, July 25, 2014

From The Folks Who Gave You A World Cup In Qatar



I'm the Burning Bush
I'm the Burning Fire
I'm the Bleeding Volcano!

- Jagger & Richards, "She's So Cold" (1980)
Today is six years to the day of the proposed start of the Tokyo 2020 Olympics. The shade temperature at the site of the new main Olympic Stadium is at this hour a balmy 36ºC (97ºF for you of the U.S.A. persuasion). The temperature in the waterfront areas, where many of the Olympic venues are to be concentrated, is a brisk 35ºC (95ºF).

I put to you the proposition that the date of the opening of the 2020 Olympics may need to be pushed into October -- as it was in 1964.

Later - More on the heat from the good folks at JapanRealTime. (Link)

Image courtesy: NHK News

Grim Exposition Of Fundamental Flaws in Abe's Abenomics



Loose monetary policy goes a long way toward liberating a country from economic torpor. However, monetary policy alone is insufficient for the whole journey. I have for a long while been railing that the Abe Cabinet has to get down to brass tacks and figure out ways to punish companies for hoarding their profits rather redistributing them to shareholders, converting them into higher pay for employees or deploying them in investments. (Link)

In a video that everyone should watch, Charles Dumas, the chief economist for Lombard Street Research, agrees. (Link - video)

That exports continued to underperform last month despite the effective devaluation of the yen (Link) only makes the Dumas presentation all the more damning.

Given that Abe 2.0: The Return of the Princeling was orchestrated by a select group of (often China hating) empire builders of the zaikai who crowd around Abe on the weekends, not letting others with their pesky opinions near their superannuated golden boy, the chances that the PM will be made aware of the changes necessary to save Abenomics, much less implement those changes, are very, very low.


Image: Council on Economic and Fiscal Policy meeting of 22 July 2014
Image courtesy: The Prime Minister's Residence

Wednesday, July 23, 2014

From The Places They Have Seen We Might Know Who They Are



This morning Prime Minister Abe Shinzo paid a visit to the Tomioka Silk Works, Japan's first Western-style silk production facility, recently named a UNESCO World Heritage Site. He paid tribute to the citizens' groups which had cared for the site through its many decades of sleepy neglect and who spearheaded the drive to have the site designated a part of the world's heritage (Link). The prime minister also showed his appreciation for the women whose labors inside Tomioka and Japan's other giant silk mills produced the export yen that helped pay for the national strengthening policies of the Meiji Era.

Local community efforts, women working with the nation reaping benefits, international recognition - all great political messages to latch onto and integrate in the prime minister's Abenomics master narrative.(Link - J video)

However, in the "recognition for the previously under-recognized" travel league, the prime minister got trounced this week by their Imperial Majesties.



Yesterday the Emperor and the Empress finished a forty six year long project of national contrition and inclusiveness. They visited the Tohoku Shinseien, a former leprosarium, fulfilling a promise made in 1968 to visit all the former incarceration sites for sufferers of Hansen's Disease. (Link - J video)

Japan's leprosariums, where education and care was minimal, stayed in operation decades after other countries had ceased to isolate their Hansen's disease sufferers. It was not until 1996 that the draconian Leprosy Control Act was repealed. It took a 2001 unconstitutionality ruling by the Supreme Court (a rarity) to open the door for the Koizumi Cabinet to apologize for successive Japanese governments's violations of the patients's civil and human rights. (Link)

Their Highnesses's travel itineraries do not shirk revisiting the dark sides of the country's history. In May they visited the areas affected by Ashio Copper Poisoning Disaster, indicating that his Highness was not entirely displeased by House of Councillors member Yamamoto Taro's clumsy reinactment of the Tanaka Shozo Appeal last year -- and that their Highnesses are keeping their eyes on the government's fumbling at Fukushima Daiichi. In June their Highnesses paid their respects at the location of the wreck of the wartime evacuation ship Tsushima Maru, sunk by a U.S. submarine in August 1944 with loss of 1418 persons, most of them children. (Link - J)

It is hard not to love the Emperor and Empress for their efforts, at their advanced ages, to promote a full and complete reckoning of the nation's history.

Which suggests an intriguing idea. If Abe Shinzo's views of history make him unsuitable to meet or invite to China or South Korea, how about inviting their Imperial Majesties instead? By inviting them one proves that one's problems are with the policies of the Japanese government, not the Japanese people. One also gives oneself a wonderful chance to get off the merry-go-round of hatred and suspicion the region finds itself on.


Images courtesies: NHK News

Tuesday, July 22, 2014

The Nihon Keizai Shimbun Sees The Signs Too



I do not read the Nihon Keizai Shimbun's editorials as often as I should. I am glad though, that I read the editorial the paper published on July 15 on the results of the gubernatorial election for Shiga Prefecture. I am clearly not alone in seeing an emerging recidivism in Abe's and the Liberal Democratic Party's rhetoric-- like the plan to revive the economies of declining prefectures by making it easier for for small- and medium-sized businesses to win government procurement orders (I am not making this up - Link).

Abe Shinzo's party seems to be veering from its professed course of revolutionary rectitude to instead head down LDP Memory Lane -- the bramble-covered track of scrounging for rural votes and wasting everyone's time on head-in-the-sand pet security projects. You know, the things that used to make everyone to hate the Liberal Democratic Party and Abe Shinzo, only probably more so this second time around:
衆参ねじれ国会が終わってちょうど1年。古い自民党に戻りつつあるとみられがちな時期に起きたわかりやすい失態だった。野党当時の必死さを思い出すべきだ。

It has been exactly one year since the end of the so-called "Twisted Diet" of two opposing parties, one controlling the House of Representatives and the other the House of Councillors. What has come about was an easy-to-understand failure coming at a time when the gradual trend seems to be the reappearance of the LDP of old. It would be good [for the party members] to remember their zeal during their time in opposition.

The paper goes on to warn that if the Abe Cabinet, after Abe names his new State Minister for Rural Revitalization in the presumed September cabinet reshuffle, goes on to promote shallow reforms with a target of capturing local votes, then it should not expect its weakened support ratings (Link) to start climbing any time soon.

A warning worth listening to, when it comes from the editors of Japan's top business news daily, the voice, they say, of the Establishment.


Image: "The Prime Minister Receives a Courtesy Call from Members of a PR Campaign for Yamanashi Fruits"
Image courtesy: The Prime Minister's Residence


Sunday, July 20, 2014

Positive Lessons For The Opposition From The Shiga Governor's Race


"Wanna race?"

Over at Izakaya Politics, Stephen Stapczynski has published a credible analysis of the outcome of the Shiga gubernatorial election. (Link)

I cannot disagree with Stapczynski's broad point that whatever the nation's dailies and talking heads are saying, there is little reason to believe the Abe government's recent decision to reinterpret the Constitution so as to allow the exercise of the right of collective self-defense (CSD) strongly impacted the outcome in Shiga. While there is evidence the CSD decision affected the outcome by somewhat suppressing the New Komeito vote for the ruling alliance candidate (Link), talking about the possible effect of CSD detracts attention from the real valence issue in Shiga: nuclear power plant restarts -- from which Shiga Prefecture would enjoy relatively few benefits and accrue a significant amount of risk. Indeed, it is telling that Abe Shinzo and other LDP bigwigs, who have reason to blow smoke in people's eyes, have been among the most prominent purveyors of the narrative that the CSD decision affected the Shiga outcome. (Link - J)

Stapczynski's conclusion is not unreasonable:
"Abe's shift in security policy will have a broader (yet minimal) impact on his national approval rating, but nuclear energy was the key issue in the Shiga gubernatorial elections, not CSD. The LDP is still the king of the land, and I suspect that future local elections will go in their favor. And with no organized or popular opposition party in sight (Mikazuki ran as an independent), Abe really doesn’t have anything to worry about."
Nevertheless, there are aspects of the Shiga election Stapczynski does not mention which do have significant implications for revival of the fortunes of Japan's political opposition.

1) You Can Do This

After getting trounced by the LDP-New Komeito alliance in election after election since the ill-designed House of Representatives contest of December 2012, Japan's riberaru ("liberal" very much in the American sense of the word) politicians managed in Shiga to hang on in one of their strongholds. That they were able to do so at a time when the national polls show the liberal parties in total winning the loyalties of only 10% of the voters -- the LDP alone has the allegiance of 40% -- just hanging on is a major achievement.

2) The Communists Don't Enter Into It

All during the post-war era, the Japan Communist Party has served as a facilitator of LDP dominance. By insisting on running candidates in almost every race, the JCP has traditionally drained off around 10-15% of anti-LDP votes, making it difficult for moderate anti-LDP candidates to compete.

The big question for many has been whether moderate opposition is so down at present it has no choice but to forge an electoral alliance with the Communists, fielding joint candidates in order to capture that otherwise lost 10%-15%.

The Shiga result indicates that the answer to the question is "No, the opposition does not need to accommodate the Communists, a move that could destroy it, in order to beat the LDP" -- though the nuclear restart issue clouds the conclusion.

3) Make Them Happy To Vote Again

This is the big one.

Turnout for the Shiga election was 50.15%. This seems a dramatic decline from the number in 2010, when 61.56% of the voters showed up. However, the 2010 contest was held in concert with a House of Councillors election, artificially goosing the numbers in the gubernatorial race.

The true comparative is the 2006 election, when Kada Yukiko won her first term in office. The figure then was 44.94%, 5.21 percentage points fewer than in last Sunday's contest.

So what?

Here's what: the margin of victory for the former DPJ MP Mikazuki was just 13,076 votes, less than 2.4% of the total votes cast. Exit polls indicate that some of that margin of difference came from disaffected New Komeito voters, a surprising 24% of whom disobeyed the party directive to vote for the LDP's Koyari.

The vast majority of votes that made a difference, however, came from the ranks of the non-aligned vote, which according to recent polls, is 42.5% of the electorate (Link - J). Non-aligned voters broke for the anti-nuclear Mikazuki two-to-one, overwhelming the machine LDP vote (73% of self-proclaimed LDP voters chose Koyari).

The exit polls indeed indicated that while the nuclear restarts issue was crucial on the margin, it was not fundamental to the voting patterns of the voters. Only 10.3% of the voters called nuclear power the most important issue at hand. Far more named economic growth and employment (28.4%) and social welfare (19.3%) the key issues of the election. For those thinking the economy and employment the key issues, 63.1% voted for the LDP's Koyari.

So the takeaway from the election results for the opposition, particularly the moribund DPJ, are:

- keep the nuclear power phaseout plans worked out under the Kan Naoto and Noda Yoshihiko administrations - it helps at the margin

- ditch the constrictive Koizumi/DPJ economic policies of a decade ago. They made some sense in the fat times of the early part of the Zero Years. After the Global Recession of 2008-Present, they make zero sense. Be big time Abenomics boosters instead, but offer an alternative "Abenomics with a brain attached"

- snipe at Abe Shinzo and the LDP higher ups for their omniscient, dictatorial attitudes, even as newspaper editorialists tell you not to -- because doing so keeps the New Komeito leadership nervous about appearing to be the pushovers they are

- finally, GET PEOPLE HAPPY ABOUT VOTING AGAIN

The Second Abe Era began with 10 million voters not showing up at the polls in December 2012, turning a DPJ defeat into a runaway LDP victory -- in an election where there was were non-DPJ, anti-LDP alternatives for whom moderates could vote (and vote they did, for the Japan Restoration Party, which captured 12 million votes to the DPJ's 8 million). The message out of Shiga to the opposition is "Get the disaffected voters interested in voting -- not necessarily voting for you, specifically, just voting at all -- and the LDP can lose, just like it did before 2012."

Voter turnout. Voter turnout. Voter turnout.

Get it up and you are in this game again.


Later - The Economist has published a solid presentation of the more standard view, with the graph everyone has to keep in mind when thinking about Abe Shinzo -- and the advance warning the Fukushima and Okinawa gubernatorial elections are not likely to polish the image of Abe as LDP leader. As noted above, that members of Team Abe use the Cabinet Decision on CSD as an explanation for the Shiga results invites caution. (Link)

Image courtesy: Abe Shinzo official Facebook page.

Friday, July 18, 2014

Correction - Richard Katz Response To “Urban Harvest Tokyo”



In my post yesterday, I stated Richard Katz wants the micro farms inside Japanese cities abolished. I wrote off the top of my head and did not confirm with Mr. Katz his actual position.

This is his actual position, taken from an email to me:

I never said that these tiny farms should be abolished. What I said was that the property taxes on farmland, particularly urban farmland, should be the same as those on other land, and that the assessments for tax purposes should be the same. What I suspect is that many of these would no longer be commercially viable without the tax break and would go out of business. If so, the farmers should be allowed to sell their land to agribusiness or even nonfarm uses.

I have as much appreciation for nature and fresh garden vegetables as the next guy, but I don’t see why the rest of taxpayers should subsidize the old farmer in your neighborhood or your food budget. If you want him to survive, pay him the price it takes to cover his costs, without getting help from other taxpayers. When I left the speech at Temple University where you heard my comments, one man came up to me and told me that, on weekends, he went out to the nearby countryside to do gardening on land owned by someone else who had become too old to use it. It was his hobby. His hobby is subsidized by other taxpayers. My dad had a vegetable garden in our backyard every year, as did many people in my small town. But none of them required the rest of the taxpayers in the town and state to subsidize his hobby.

What I also said was that, all over Japan, land use laws that make it difficult for farmers to sell their land for nonfarm purposes. They should be abolished. That way, farmers who survive only because of huge subsidies, and most of whom are part-timers anyway, could make some money by selling their land for other purposes, if they chose. As of 2010--the latest figures I have readily at hand—the ratio of abandoned farmland as of 2010 stood at 14% IN URBAN AREAS, 6% in flat farming areas, 14% in hilly farming areas, and 16% in mountainous farming areas. All of these figures are about double their levels in 1995 and will only increase as farmers age and pass away. Land that could be used for better purposes lies useless.

How does it benefit anyone to have 14% of urban farmland lying around useless, even with the tax breaks. One wonders how much would be abandoned without the tax breaks.

My apologies to Rick Katz for misrepresenting his position.

Image: Man hoeing marginal urban farmland plot. Setagaya City, Tokyo Metropolitan District on July 18. 2014.
Image courtesy: MTC


Thursday, July 17, 2014

Live Blogging A Tanigaki Sadakazu Press Conference



Four minutes before the hour - Lugubrious, sardonic thought: "What's the difference between Japan's dovish Minister of Law and its hawkish Minister of Defense? The dovish minister gives out orders to kill people and they get carried out."

15:00 Tanigaki comes in, bowing and smiling, not wearing his trademark glasses, without tie.

15:05 He wants to talk about immigration regulations, reform in corporate law and what the Law Ministry is doing to facilitate the recovery of the tsunami, earthquake and nuclear meltdown affected areas of Northeast Japan.

Aside from substantial changes to immigration procedures, if he ends up talking about such, not much in Tanigaki's opening remarks for non-Japanese journalists to chew on.

15:10 Ten minutes in and Minister Tanigaki is still talking about minor changes to immigration control ("We now have automatic gates at Immigration!" Signs are that the good minister is eating up the clock with a drone of facts like Chief Cabinet Secretary Suga Yoshihide did last week (Link)

15:15 Still talking about immigration procedure reform. Leaves me wondering whether the first, annoyed questioner will ask about Japan's death penalty or the arrest of women who distributed data allowing a a 3-D printer to reproduced with a 3-D printer a perfect 3-D copy of her genitalia (Link). Am rooting for the genitalia option.

15:20 Substance makes a sudden appearance: Tanigaki condemns the abusive employters of foreign technical training visa holders - a system that has been compared to bonded labor.

15:25 Why is a Law Minister talking about corporate governance? Is this not a mission for the Minister of Economy, Trade and Industry?

15:33 It is official; Minister Tanigaki is just burying foreign journalists under unprintable dreck.

I am not sure he knows why he is here, unless it is to whip the attendees into a vengeful anger.

15:45 First question is on...Abenomics. Uh, Tanigaki was Finance Minister in the...Koizumi Cabinet.

15:48 Second question is on legislation against hate speech, from a Singapore journalist. Is she asking about insults to the Lee Family? They seem to handle such speech in a most...liberal-minded way.

15:50 Four minute answer -- someone send a bouquet to the poor translator.

15:53 Ah, an appeal to his vanity as regards his knowledge of China. Carried away his love of traditional Chinese high culture, he is talking way outside his remit. Oh Mr. Minister...

15:55 Thank you Richard! "What do you feel when you sign the death warrants...?"

16:07 The conference is winding up. Tanigaki is still talking but folks are heading out.

The big takeaway - the Minister of Law wants greater protection for the low-paid workers brought in through the technical training visa program. He admits these visa holders have been abused by unscrupulous employers.

Amen.

Image: Minister of Law Tanigaki Sadakazu at the FCCJ
Image courtesy: MTC

Urban Harvest Tokyo



I live in one of the 23 inner wards of the Tokyo Metropolitan District. The density of population in my area exceeds 15,000 persons per square kilometer. Nevertheless, since I live sufficient far away from the nearest railway stations there are still operating micro-farms next to my building.

At this time of year the old man who tills, sows and weeds the plots directly in front of where I live sets out the vegetables he has harvested three times a week. Most of the vegetables are purchased immediately by a crowd that gathers in front of the man's driveway in the morning. The remainder the old man leaves in a wooden shelter just off the street. Passersby pack up what they want and leave their payment in a small wooden box on shelter's left hand side.

The photo above is my morning's purchase from the old man's tiny field. Everyone says the sweet corn is divine.

Richard Katz, with whom I correspond on occasion, used to and may still have a bee in his bonnet about the farmland still dotting Japan's urban cores. For Katz, these tiny farms rob cities and the country of potential growth. Abolish them, and folks build could build big houses and apartment on the suddenly more plentiful supply of urban housing land. All Japan would benefit from the burst of consumption.

While sound in theory, the idea always rankled。Only one who does not live in the TMD would ever think of the micro-farms as wasted land. Without the farms, life in the great concrete metropolis would be far less livable. The central wards are woeful in the paucity of their area devoted to parks. Such public parks as exist are uninviting due to bad design, regulations and a love of bare dirt.

The urban farms, by contrast, are green oases -- and not just for the humans. The plots in front of my building provide shelter and food to loyal pairs of roly-poly kijibato (Streptopilia orientalis), raucous and handsome gangs of onaga (Cyanopica cyana) and flocks of mukudori (Sturnus cineraceus). The your-can't-help-but-love-them invasive pest honsei inko (Psittacula krameri) feed on the flowering tree buds. I even saw a bull-headed shrike (mozu - Lanius bucephalus) last week. It was studying the field from a perch on an electrical wire, searching the rows for prey.

When the rains come and night falls fat hikigaeru (Bufo japonicus) claw out of their holes and march on webbed feet in search worms and mates. After the rain stops, bats swoop overhead, catching flying insects on the wing.

Where would all these fellow Earth travelers have to live, if the farms were to go?

The last operating grape arbor in the ward was torn out two years ago and replaced with homes. Only two apple orchards still operate. I look forward to visiting them in the fall. But for how many more autumns will they open their gates?

Eliminating the economic inefficiency sounds excellent. Possibly increasing the size of homes sounds great. However, the actual costs to society imposed by these little fields seem trivial as compared to the benefits being enjoyed by all.

Wednesday, July 16, 2014

A Minute With The Minister In The Garden

On Monday at the Quatorze Juillet reception at the French Embassy I had a remarkable chance to speak one-on-one with a member of the Cabinet, Minister A. After an exchange of name cards and my brief self-introduction, I asked him a simple question: on a scale of 1-100, how would he rate the performance of the Abe Cabinet? His response was that it should receive a score above 90%, first for its ability to execute on its program, second for Mr. Abe's identifying from the outset Japan's need to exit from deflation. A prime minister's committing himself to ending inflation was a key achievement in and of itself, and Mr. Abe deserves credit for his identification of the problem. All indications are, the Minister continued, that the policies initiated by Mr. Abe's commitment to exiting deflation are taking effect.

What was striking in my conversation with the minister, aside from his extreme kindness in offering his opinion to lowly me, was his expression of the Abe government's commitment to the idea of exiting deflation as a goal without his ever mentioning the target rate.

I have been wondering about the government's actual stance on the goal of an exit from deflation. Richard Katz has mocked the idea of targeting an inflation rate, likening it to trying to cure a fever by putting ice on a thermometer (Link). Katz's love of his metaphor, and it is a good one, possibly leads him away from understanding the Abe's government's true goal. My sense of is that the stated figure of 2% annual CPI is more of a placemark -- a stand-in for a more iterative and elusive figure where the Japanese economy is on a self-sustaining growth path in spite of chronic deflationary pressures.

It may be that the Abe program, at least on the monetary side, is Shirakawa defeatism turned on its head and hidden under a faux Taylor rule cloak. Former Bank of Japan Governor Shirakawa Masaaki's feeling that there is no way to generate 2% inflation may be correct -- but the fact that the task of hitting 2% inflation is impossible is the reason why you try to do it. If you cannot -- cannot -- fight deflation through monetary means, where is the downside from trying anyway? Sure, you will have to come up with some cover story about the reasons why you are not hitting the target rate at the predicted time. However if GDP and wage growth have ignited in the meantime, who is really going to care?

Paul Krugman back in the mid-1990s was advocating that the Bank of Japan pull Japan out of its rut though a commitment to unlimited irresponsibility -- that the BOJ promise to do anything to pull the economy from out of the liquidity trap. Promising to be irresponsible with the nation's money is a tough sell in any democratic state, which is probably why the idea never caught on.

However, a government committing oneself to an impossible-to-achieve goal does not sound half as crazy as unlimited irresponsibility, even though it is effectively is the same thing.

So come next year on the 14th, if I meet the minister (he may not be a minister at that time, we shall see what happens in September) again under the tent in the garden, and the CPI inflation rate is not at 2%, and if he again grants me a minute of his time, I will ask him what score he would give, on a scale from 1-100, for the Abe administration's fight against deflation.