Change Comes to Japan

Most Westerners have not understood the tight grip that the alliance of business and politics has exercised in Japan.

This change in political control in Japan, for the first time in 54 years, has potentially significant implications for the US dollar as a reserve currency.

Change will be slow and deliberate. The new ruling party will not wish to upset the balance of things. But change will occur, and what has been will not, and will no longer be.

Associated Press
Japanese election upends long-ruling party
By Eric Talmadge
Associated Press Writer
August 30, 2009

TOKYO – Japan's ruling party conceded a crushing defeat Sunday after 54 years of nearly unbroken rule as voters were poised to hand the opposition a landslide victory in nationwide elections, driven by economic anxiety and a powerful desire for change.

The left-of-center Democratic Party of Japan was set to win 300 or more of the 480 seats in the lower house of parliament, ousting the Liberal Democrats, who have governed Japan for all but 11 months since 1955, according to exit polls by all major Japanese TV networks.

"These results are very severe," Prime Minister Taro Aso said in a news conference at party headquarters, conceding his party was headed for a big loss. "There has been a deep dissatisfaction with our party."

Aso said he would have to accept responsibility for the results, suggesting that he would resign as party president. Other LDP leaders also said they would step down, though official results were not to be released until early Monday morning.

The loss by the Liberal Democrats — traditionally a pro-business, conservative party — would open the way for the Democratic Party, headed by Yukio Hatoyama, to replace Aso and establish a new Cabinet, possibly within the next few weeks.

The vote was seen as a barometer of frustrations over Japan's worst economic slump since World War II and a loss of confidence in the ruling Liberal Democrats' ability to tackle tough problems such as the rising national debt and rapidly aging population.

The Democrats have embraced a more populist platform, promising handouts for families with children and farmers, a higher minimum wage, and to rebuild the economy.

"The nation is very angry with the ruling party, and we are grateful for their deep support," Hatoyama said after the polls closed. "We will not be arrogant and we will listen to the people."

The Democrats have also said they will seek a more independent relationship with Washington, while forging closer ties with Japan's Asian neighbors, including China. But Hatoyama, who holds a doctorate in engineering from Stanford University, insists he will not seek dramatic change in Japan's foreign policy, saying the U.S.-Japan alliance would "continue to be the cornerstone of Japanese diplomatic policy."

National broadcaster NHK, using projections based on exit polls of roughly 400,000 voters, said the Democratic Party was set to win 300 seats and the Liberal Democrats only about 100 — a third of its strength before the vote.

Is Change Coming to Japan?

It will be good news for Japan indeed if the opposition Democratic Party in Japan can win their August 30 elections.

The LDP has been in power since 1955!

Can you imagine what kind of corporatocracy the US would have if the Republicans had won every election since Eisenhower? This is what exists today in Japan.

There is an embedded bureaucracy in the Japanese Ministry of International Trade and Industry that is formidable, and that will resist policy change. So there is room for pessimism.

And the election is far from won. Do they use voting machines in Japan?


Bloomberg
Aso Dissolves Japan’s Parliament, Admits Failings
By Sachiko Sakamaki and Takashi Hirokawa

July 21 (Bloomberg) -- Prime Minister Taro Aso dissolved Japan’s parliament, clearing the way for an Aug. 30 election that polls indicate will hand power to the opposition Democratic Party of Japan for the first time.

Lower-House Speaker Yohei Kono announced the dissolution in parliament today to a chorus of cheers. Aso’s ruling Liberal Democratic Party, in power for all but 10 months since 1955, will defend a two-thirds majority in the election.

“The era of one-party dominance is over,” said Gerald Curtis, professor of Japanese politics at Columbia University in New York. “This is the first election since the LDP was formed when just about everybody believes that the chance for a change of the party in power is very real.”

The DPJ plans to encourage consumer spending by providing as much as 5.3 trillion yen ($56 billion) in child support, eliminating road tolls and lowering gasoline taxes. The party also aims to shift tax money from public works spending to strengthen social security, DPJ legislator Tetsuro Fukuyama said in a July 14 interview.

“They are going to increase the purchasing power of the people directly and they are going to fund this by cutting out wasteful spending,” said Jesper Koll, Tokyo-based chief executive officer of hedge fund adviser TRJ Tantallon Research Japan. “That’s a good, sensible economic policy to have.”

Poll Lead

Forty-two percent of respondents in an Asahi newspaper poll published yesterday said they would vote for the DPJ, compared with 19 percent for the LDP. The opposition, which has controlled the less-powerful upper house since 2007, had a public approval rating of 31 percent, compared with 20 percent for the LDP, according to the poll.

Aso, who came to office last September, has resisted calls from within his own party to resign before the election. His administration has been plagued by cabinet scandals and a deepening economic recession.

“I’m sorry my unnecessary remarks damaged credibility in politics,” said Aso in today’s televised press briefing. Since taking power, he has said doctors lack common sense and mothers need discipline more than their children, angering both groups. “I also apologize the LDP’s lack of unity” created public mistrust.

Aso, 68, pledged to revive the world’s second largest economy and improve the financial security of voters with free pre-schools and higher wages for part-time workers....