The Bloom Is Off

Despite having the world's second largest economy, Japan has been stagnating politically and economically for nearly 20 years. Actually, "stagnate" may be putting it negatively. What's wrong with saying its economy "plateaued?" But, no one likes no-growth economics, so the political party that has been running things since the mid-1950's has been thrown out of office. Pretty dramatic stuff in a country that shows maximum respect and deference to the men in suits who went to Tokyo University. Frankly, it's about time. The Japanese are more than capable of standing on their own militarily and diplomatically. That they might be shrugging off the political legacies of WW2 is good news for Japan and for the world.

But all anyone in the US can ask is, "What does this mean to me?" Uh, who gives a f***?: Shift In Japan Presents US With A Stranger As a Partner

Inside the administration, the historic change in Tokyo is raising concerns that Japan may back away from supporting key American priorities like the war in Afghanistan or the redeployment of American troops in Asia, according to senior officials.

Specifically, the newly elected Democratic Party says it may recall the Japanese naval forces from a mission to refuel American warships near Afghanistan. And it wants to reopen an agreement to relocate a Marine airfield on Okinawa, which requires Japan to pick up much of the cost for moving thousands of Marines to Guam.

The victory of the Democrats on Sunday means the White House must deal, for the first time in decades, with a Japanese government that is a complete stranger, and one that has expressed blunt criticism of the United States. The party’s leader and presumptive prime minister, Yukio Hatoyama, recently spoke out against American led globalization and called for a greater Japanese focus on Asia.

The LDP's loss underscores what a unique partnership the US and Japan have had since WW2. Am I exaggerating when I say that Japan has been the US's most reliable non-Anglo ally? I don't think so. While its neighbors followed various forms of fascism and communism in the post-WW2 era, Japan alone followed the US's path in creating a dynamic, sophisticated middle class society. It has been a remarkable achievement, one that is often denigrated rather than celebrated.

The great unknown is what the new guys will do, but that should be Japan's concern, not ours. The Japanese are not radicals. nor are they ignorant masses ready to be mislead by the easy blandishments of progressivism and socialism. The new guys might have a mandate, but that doesn't give them carte blanche. As in Mexico (another former one-party state), all this election means is Japan finally has a functional two-party system.

If the US wants to learn anything from this, it should look to how Japan got to this point: a government that - when faced with a financial crisis originating in a housing bubble - used its coercive powers over its manufacturing and financial sectors to paper over major structural problems, and which used Keynsian deficit spending in an effort to stimulate the economy. Only, none of it worked. Banks with massive liabilities were allowed to soldier on as "zombies" simply because no one could imagine life without them. Dams and highways were built in places where they weren't needed. Taxes went up. If government activity were enough to generate growth, then the Japanese economy should have come back with a roar. It hasn't. Instead, the LDP appears to have run out of other people's money.

We are just a few years removed from the reformist Koizumi era, when a handsome, charismatic prime minister, who was both a political leader and cultural icon, led a reformist wave that was supposed to revive, not only Japan, but also the LDP. While this might have worked in the (very) short term, it had little lasting impact, and was in fact that last gasp of political arrangements that were not long for this world. Our present-day reformers would do better to look to Japan as a warning, rather than wonder whether the new guys will "complicate" foreign affairs.