Chapter 1

Chapter I
Coming to a Head

Japan in the post-war era has proved a subject of fascination for many. Its devastation in the aftermath of the Bombing of Tokyo, the atomic bombs and the massive loss of military casualties overseas and in places such as Okinawa meant that Japan faced an uphill challenge to rebuild itself as a nation. Yet today it stands as the world’s second biggest economy (China is likely to overtake it some time later in 2010) and a nation that holds a fascination for millions worldwide.

In this essay, we will explore the contemporary political climate in the buildup to Japan’s Upper House election, which took place on July 11.

Japan’s Lower House (House of Representatives) is dominated by the Democratic Party of Japan (DPJ), which swept to power in a landslide in the summer of 2009. The DPJ won 308 seats of the 480 up for grabs, a gain of 195. The Liberal Democratic Party (LDP), its nearest rival, won 119 seats, a loss of 117. The LDP had held power almost uninterrupted for more than half a century before the Aug. 30 election. Its loss represented a change in the course of Japanese politics.

Behind the DPJ victory was Ichiro Ozawa, a master political strategist and a parliamentary heavyweight of the pot-Bubble era. Ozawa’s political career since the early 1990s is intertwined with the story of Japanese politics in that era. His maneuvers led to the first non-LDP government in 1993. His strategy was a major factor in the 2009 DPJ lanslide. Media coverage of his activities helped bring down the government of Prime Minister Yukio Hatoyama in June 2010.

BEFORE 1993

Ozawa started his political career with the LDP in 1969, and is widely considered to have been a protoge of Prime Minister Yasuhiro Nakasone (1982-87). When he bolted from the party in 1993, he set out on the quest that has defined his later career: dismantling the system that kept the LDP in power for so long. Below, we will explore the facets of that system.

The LDP was formed in 1955 in response to the threat of a left-wing coalition getting into government. It governed from that time until 2009 for all but one year, using pragmatism, bureaucrat-led politics and a new system for filtering money from urban centers to the countryside in order to maintain power.

The second half of the LDP era was dominated by a style of policy developed by Prime Minister kakuei Tanaka (1972-74), which saw massive amounts of money spent on developing Japan’s infrastructure away from the major cities. The system saw massive amounts of money raised for the LDP, which was then pumped back into local communities through infrastructure projects. By this means, the LDP was able to maintain a grip on power until the early 1990s, when the combination of the end of the Bubble era, a number of scandals and the actions of a group of younger, disaffected politicians led to the first non-LDP government in around four decades.

The end of the 1980s saw Japan enter a period of economic stagnation, as stock prices fell from their all-time high of ¥38,9757.44 on Dec. 29, 1989, and inflated property prices also began a long, steep drop. The consequence was dubbed Japan’s “Lost Decade,” in which jobs were more difficult to come by, confidence of lifetime employment dropped and businesses with huge debt burdens looked for bailouts or collapsed.

The 1970s and 80s also saw the LDP associated with a number of scandals, tainting the party and increasing the public mood for political change. The Lockheed bribery scandal connected Kakuei Tanaka to $3 million in bribes that were exchanged for political assistance in winning contracts with both military and civilian Japanese organizations. Many prominent politicians were also forced to resign after revelations of insider trading and corruption in the late 1980s after it emerged that they had taken favors from the company Recruit. Other scandals were to plague governing politicians over the next few years.

With little faith in politics after the scandals and a worsening economic situation, Ozawa and 44 allies left the LDP to form the Japan Renewal Party. After a July 18, 1993, election, that party was part of a “rainbow coalition” that ousted the LDP from power for the first time in its 38-year history. From this point onward, Ozawa would work to dismantle the LDP grasp on power.

CONSOLIDATING

The “rainbow coalition” did not last long. By the end of 1994, the LDP was back in power in alliance with the Social Democratic Party (SDP) and New Sakigakke. Policy differences proved to be much more powerful than the desire to keep the LDP from power.

The change of government, however, inspired a group of young lawmakers to work to move Japanese politics in a new direction. The LDP was also not out of trouble.

As the 1990s wore on, the LDP was to see another leader’s scalp claimed by the electorate when Prime Minister Ryutaro Hashimoto was forced to step down after losing seven seats in an Upper House election in 1998.

The mid-90s proved a difficult time for Japan, a banking crisis was exacerbated by events beyond the government’s control, and its reaction to those led to voter anger. The Great Hanshin Earthquake led to devastation the likes of which had been unseen in generations, the Aum gas attacks are still Japan’s worst-ever terrorist incident, and an oil spill and hostage crisis added to the gloom for the nation. During the same period, banks were not only refusing lend, but also attempting to claim back money they had already loaned to businesses and consumers.

Amid such circumstances, the factions to the left of the LDP went through a period of regrouping. While Ozawa was involved in the Liberal Party and New Frontier Party, Naoto Kan and Yukio Hatoyama launched the DPJ.

In its early years, the DPJ was a was dominated by Hatoyama and Kan, who passed the post of leadership between each other between each other between its 1998 inception and 2004. The party also grew in number over this period, accepting members from smaller parties and attracting young professionals who liked their message: Japan needed parliamentary reform, to reduce the number of bureaucrats and to create circumstances conducive for public political debate. In 2003, Ozawa brought his Liberal Party into the DPJ, by that time though, the LDP was in as strong a position as it had enjoyed in decades.

THE KOIZUMI ERA

As the 1990s drew to a close and the new century began, Junichiro Koizumi rose up the ranks of the LDP to become prime minister. After a series of leaders were taken down by scandals and dire opinion poll rates, Koizumi represented a breath of fresh air: he was younger, more charismatic and media savvy.

Prmie Minister Junichiro Koizumi was seen as a reformer, and with good reason. During his time as prime minister, Koizumi brought about reforms of the banking sector, lossened labor laws, started an initiative that aimed to privatize the Japan Post Office and put in place reforms that gave politicians more power over bureaucrats. He was immensely popular with the electorate because of both charisma and because he represented change, something the Japanese electorate badly wanted.

By 2005, Koizumi was moving toward reforms that aimed to privatize the Post Office within a decade, and received criticism from both opposition parties and a segment of the LDP. At this point, he called a Lower House election, and developed a strategy that ensured the LDP victory. Every step of the way, Koizumi made sure the debate was centered on bringing change to Japan and privatizing the Post Office. LDP candidates opposed to postal reform were ousted from the party and in their place “Koizumi’s assasins” - celebrities, business people and inexperienced populist politicians - were sent with the aim of keeping the seats out of the hands of opponents out of the prime minister.

The result was a landslide in favor of the government. The LDP won 296 seats, a gain of 60, while the DPJ lost 64 seats leaving it with just 114. The DPJ leader at the time, Katsuya Okada, resigned after the event, and it was but a year later when Koizumi left his post. By that time, it was clear that the Japanese public wanted change, but also wanted a leader that could handle media appearences and keep to his word.

Since Koizumi resigned in 2006, no prime minister has lasted more than a year.

LDP DECLINE

The Koizumi era was one in which the prime minister was the center of attention. Once he left, there was nobody to fill his shoes and some of his more market-friendly policies were questioned. Before the 2009 Lower House election, Shinzo Abe, Yasuo Fukuda and Taro Aso were all to last around a year. While media criticisms were on the whole based upon scandals involving such problems as lost pension records, gaffes and a perceived inability to lead, the fact was that all of these politicians suffered from simply not being Koizumi.

Where Kozumi had displayed a sense of humor, maintained a professional distance from media and managed to keep his personal life separate from his professional business, future prime ministers would fail to do so.

For Abe, the suicide of Minister for Agriculture, Forestry and Fisheries Toshikatsu Matsuoka proved a turning point. Matsuoka had been discovered to be claiming suspiciously high levels of expenses for utilities, was involved in a scandal involving bid-rigging and had become a pin-up for the media “money and politics” story. Abe, however, cited health reasons.

Fukuda took over only to receive a pummeling from the media. By this time, the Upper House was under the control of the DPJ, and the LDP government was been held up every step of the way by the opposition. Explaining the reason for his resignation, Fukuda said he believed his party would be able to deal with the divided Parliament better under a new leader. The public, however, were not sympathetic to Fukuda and opposition were quick to condemn the move as irresponsible.

Taro Aso took over as leader of the LDP and prime minister, but was to do as badly. Known as an outspoken politician from an elite family, the media condemned him for his expensive taste in restaurants, a series of gaffes - including one in which he said “even people with Alzheimer’s disease” could understand Japanese rice was more expensive than Chinese rice - and scandals over missing pension records, the role of Aso Mining in World War II and dour economic circumstances in the aftermath of the collapse of Lehman Brothers, the prime minister was to lead the LDP to the heaviest defeat by a governing party in Japanese history in August 2009. During his tenure, Aso was to see his support rate slip into single digits, and after electoral defeat immediately resigned to take responsibility for the LDP’s loss of power.

DPJ HEADS FOR THE HELM

The DPJ drubbing in what was dubbed the “Postal Vote” in 2005 was to be its last loss of seats in an election until 2010. After that defeat, Katsuya Okada stepped down as the leader of the opposition, and was succeeded by Seiji Maehara.

The reign of Maehara was to be cut short after a scandal developed in the aftermath of the Livedoor affair, which landed that company’s president, Takafumi Horie, in jail. In January 2006, the offices of Livedoor and several other locations were raided by police investigating securities violations by the company. For Livedoor, the investigation was disastrous, leading to the suicide of an executive at a partner company, jail sentences for executives of the company, including Horie, and a delisting from the Tokyo Stock Exchange. The DPJ also did badly from the affair.

As the opposition party, the DPJ was vocal in its attempts to link the governing LDP to Livedoor. Horie had run for office with LDP support in 2005 against Shizuka Kamei, who opposed Koizumi’s postal reform plan. Horie did not gain office, but his connection to the LDP was clear. A DPJ politician, Hisayasu Nagata, alleged in the Diet that the LDP had taken illegal funds from Livedoor, and that he had an e-mail to prove it. When the e-mail was discovered to be fake, however, the DPJ was forced to apologise, and Nagata resigned from the party. He was to commit suicide in 2009. Maehara, meanwhile, quit as leader of the DPJ after the embarrassment, and for failing to capitalise on such an opportunity for political gain.

Ichiro Ozawa was next to take the reigns of the DPJ, and led the party to an Upper House election victory in 2007. The DPJ gained 11 seats and was able to take control of the Upper House in a coalition with the Social Democratic Party (SDP) and People’s New Party (PNP). The vote came closely after an expenses scandal that had led to the suicide of the LDP Minister for Agriculture Toshikatsu Matsuoka, and the loss of millions of pension records had also hurt the governing party. Analysts also cited the absence of the charismatic Koizumi as a factor that led to the decline in the popularity of the LDP.

The DPJ, however, now had its first taste of power. In control of the less-powerful Upper House of Parliament, the party had the ability to block policy sent from the Lower House, and to delay the LDP in any plans it may have. After Abe resigned and Fukuda took the reigns of the LDP, controversy followed as details of a possible coalition emerged.

Ozawa offered to resign in the aftermath of talks that were held between him, Fukuda and the president of the Yomiuri media group Tsuneo Watanabe. At a meeting between the three, Fukuda offered to bring the DPJ into a coalition with the LDP. In exchange, the LDP would switch its stance on sending the Japan Self-Defense Forces overseas, the subject of fierce debate in Japan’s parliament at that time. The offer, and the fact that Ozawa seriously considered joining forces with the LDP, led to fierce criticism from other members of the DPJ, led by Yukio Hatoyama, but Ozawa remained in his position.

With the option of a coalition rejected, the next year of parliament was characterised by deadlock, with the DPJ taking steering debates on subjects they are considered to be specialists on, such as welfare and wasteful spending. Before the 2009 election, however, the party was to go through one more crisis, and Ozawa would be at its center.

OZAWA STEPS DOWN

The reign of Ozawa as leader of the DPJ was brought to an end in the first half of 2009, when it emerged that one of the politician’s secretaries, Takanori Okubo, had accepted illicit political donations from a company called Nishimatsu Construction Corp. Ozawa was not the only person to be hurt by the scandal, which saw Nishimatsu donate money in the hope of gaining public works contracts, but he was the prized scalp.

The Nishimatsu scandal initially broke in January of 2009, with Ozawa eventually tied to donations in March of that year. It would not be until May, however, that he left his post. By that time, widespread media coverage of the scandal had tainted Ozawa’s image, and also that of the party.

Yukio Hatoyama was to step in as leader, and would lead the DPJ to their first Lower House election victory, campaigning under the slogan “seiken koutai” (political change). Reforms of the bureaucracy, an end to wasteful spending, a new “more equal” partnership with the United States and more money for welfare, less for public works were all promised.

As Hatoyama and the DPJ were to find out, however, running Japan is no easy task.