What Japan's Elections Mean For America

by Benjamin Domenech on 12:44 am August 31, 2009

Yukio Hatoyama leads the new Japan

What do Japan’s elections mean for the United States? Japan’s dramatic electoral turn this weekend, in which the center-right longtime ruling party of the LDP was rejected in favor of the DPJ and Democratic Party leader Yukio Hatoyama, is the subject of the latest forum of the New Ledger’s editors.

Bruce Henderson

Like so many things in Japan, it’s not cut-and-dry. Japan has been in a depression / recession since the mid 1990’s. They had a real estate fueled boom which imploded their economy, and they have yet to find a way out of the systemic problems that help cause that and the outcome of the speculation. Suffice to say, the banks have refused to mark to market all of their bad debt. As a result much of the GDP has gone to propping up the financial system. This is coupled with the fact that Japan’s aging population is not as productive as it had been, and the rising levels of prosperity in the 70’s and 80’s fairly well priced Japan out of the market for most things other that very high tech specialized engineering or internal products (such as agriculture). They exported the bulk of their manufacturing first to Taiwan and then to China. Now they are left with a population that is headed for retirement, reduced manufacturing within their GDP, and (by their standards) huge government debt from over a decade of pumping money into their shattered system.

Sound familiar? I am not sure why the Treasury went the Japan route – it did not work for Japan.

The Japanese are slow to make changes in the social structure (there are some Korean families that have been in Japan for 5 years and still have to register as aliens), so this move away from the LDP is a big deal. The real threat here is the DPJ will choose to externalize Japan’s problem (the LDP has internalized them). The DPJ has already given some indications they will at least do this to a minor extent.

This is a danger beyond what anyone (I think) realizes. Should Japan follow its cultural bias to become more nationalistic, you could see them start to blame all of their troubles on the rest of the world. This could possible lead towards a Japan that drops it’s pacifist veneer, re-embraces the Bushido way and in time begins to re-arm.

Some indicators of that would be less reliance on the US military to protect Japan’s interest, and a change in their internal monetary policy. The Japanese people realize that what they have been doing was not working to haul the country out of depression, so they are looking for whatever can get things going.

Japan, like the UK, is formidable once they are motivated, being able to punch way above their weight once they are rolling (not just talking military). The question is, can DPJ get them rolling?

Christopher Badeaux

I’d add a few notes to that excellent summary.

(1) Japan has the second-best bluewater navy in Asia (after us). Maybe the best. Because they keep it relatively close to shore and part of the JDF, most folks don’t know it exists.

(2) We count on that, whether it’s part of the Defense Forces or not, when doing our regional planning.

(3) The Democratic Party — which, is centrist in typical WSJ news desk fashion only — has a much more open approach, at least facially, to a rising China. I don’t think there’s much danger of the Democratic Party flexing Japan’s muscles where the other powers of Asia are concerned, for now. But this is maybe a step toward doing that.

(4) I’d note that the LDP was already starting to take steps out into the world, deploying the Navy abroad and openly floating balloons about rewriting the Constitution to allow that deployment.

(5) There are a lot of indications that the birth rate, when measured in 2010 or so, will be even lower, and heading south. There are about a billion factors at work here, but Japanese women don’t have babies any more. More accurately, they don’t have children out of wedlock (birth control and abortion take care of avoiding the social stigma), and they don’t get married, ergo, they don’t have babies. Things are going to get worse … well, I’d say before they get better, but I’m not sure they’ll ever get better.

Francis Cianfrocca

The Treasury has partly gone the Japan route. We say bad things about our fiscal stimulus program, but it’s pretty small beer by comparison. Ours is mostly transfer payments with zero or negative stimulative value. The tax cuts certainly fall into that category, but so does most of the programmatic spending, which has been used mostly to avoid payroll cuts in state and local governments. Also zero or negative stimulus.

The Japanese, by contrast, borrowed large and poured concrete and asphalt on every bit of the country. This is a classic case of the limits of infrastructure and investment as stimulus, because none of that shit is paying off. It wasn’t needed in the first place. The final demand generated in Japan is weak and non-growing. They can only generate growth if the rest of the world grows. They had a superficially-impressive second quarter (up 3-and-change percent, as opposed to Q1, which was down about 12%), but that’s only because China had a superficially-impressive second quarter, growing 8% on the back of (useless) infrastructure and investment.

The Fed, on the other hand, did take Japan’s lead. When Japan finally came out of recession for a brief period around 2003-04, the credit was given to their quantitative-easing program. Rather than waiting 10 years, our Fed got started into that almost immediately. So far, I’ll give QE in the US credit for maintaining the price of housing and mortgage interest rates at bubble levels, preventing a proper readjustment of the financial landscape so we can get a fresh start. But not much else. It certainly hasn’t fueled consumer demand for anything but first-time homebuyers using phony money.

Economically, Japan differs from the US because their system is structurally mercantilist. They don’t control their destiny. If we can ever convince Americans to stop voting for Marxists and start buying low-mileage light trucks and home improvements again, we’ll recover readily. But Japan doesn’t have an organic driver for an economic recovery.

Since we’ve already enacted an awful lot of protectionism in various pieces of legislation this year, it’s easy to see why Japan might look to recalibrate the relationship. I have a gut, however, that they won’t be too pleased if we dial back our military commitments in East Asia, which would be a very natural thing for the Obamans to do, once they find a way to muscle Hillary Clinton out.

Pejman Yousefzadeh

I find Daniel Larison’s comments on the subject significantly less persuasive than those of Dov Zakheim, who properly points out that not all campaign promises are delivered on once a party comes to power–especially not the most extreme ones (oh, by the way, would it be too snarky of me to state that we have seen with the Obama Administration an unwillingness to deliver on campaign promises like closing the detention center at Guantanamo Bay, reducing claims to enhanced Presidential powers, or making 180 degree changes in interrogation policy, the recent decision to put the FBI in charge of interrogations notwithstanding?).

Larison seems to undercut much of his own thesis when he states that “Japan’s seismic shift in government will not yield immediate, dramatic breaks with the past. There will be more continuity than change over the short term.” I would welcome a more militarily assertive Japan–the pacifism has gone much too far, and I imagine that soon, Japan will see it to be in its interests to become a nuclear power–but realist theory posits that a country’s foreign policy is more enduring than a mere change of government would suggest (however significant the change of government may be on the domestic level), and I suspect that realist theory will be validated in Japan’s case.

Outgoing Liberal Democratic Party head Taro Aso

Bruce Henderson

Fools! Do not let the Samurai come back. Any dim witted pundit who advocates this should study Bushido for a year or two. We were able to contain Japan in the 1940’s because our greater manpower and resources proved overwhelming to their military. Armed with nuclear weapons that can be mitigated. Japan is politically and culturally at a cross-roads. They are considering the weakness of the approach of the last 50 years, and if Japan should migrate carefully towards a set of national and cultural goals.

I wonder if people who wrote this have studied combat and it’s effect of politics. It has become en vogue to criticize the ongoing policy of protecting Japan even though they could protect themselves. That’s the point – we don’t want them to re-assert their warrior culture and decide they have to defend themselves.

This is the sort of thing that keeps me awake at night; that the impotent geopolitical axis of Obama-Clinton would either not recognize this, or if they do, dismiss this as outdated thinking.

Francis Cianfrocca

And who within Japan is having this conversation? Not the young women who are only interested in personal freedom, the young men who are only interested in comic books and video games, the businessmen who are only interested in comic books and fantasizing about adolescent girls, the older men who think only that everyone else is full of crap, and the older women who think only about their savings accounts.

Is this a conversation taking place among Japan’s elite? If they decide to go in a different cultural direction, how long will it take them to enact the change? A generation or two?

Against whom does Japan need to defend itself? Against the Chinese? A nuclear deterrent solves that problem and is well within reach without a deep cultural shift. If their militarism does reawaken, who will be threatened by them? Will they seek to colonize the Pacific Rim in order to secure markets for their manufactures? The whole conversation seems to require a fundamental change in the global trading system that Japan has done so much to benefit from.

We’re also assuming the answer to an important question, which is: does the US even have a continuing foreign-policy interest in Asia/Pac? This might seem like a stupid question, but we haven’t confronted any serious FP questions since 9/11, so we don’t really know where the country stands on the question. And we may no longer have the resources to pursue a robust FP anyway. Besides which, there are a lot of people in powerful positions today who don’t even think we should, and in the absence of a debate, their views are the de facto policy.

Bruce Henderson

Do you not foresee the potential hazards of a Japan that beings to view not just internally superior but externally superior as well? I personally don’t think the DJP is going to do anything radical, Japan just does not work that way if there is no external stress (real or perceived). But I worry that Japan may decide that the outside world has been holding it down for a while, to the detriment of Japan.

Do you peg the chances of a re-militant Japan over the next 50 years as low?

Pejman Yousefzadeh

I peg the chances as being quite low indeed. And that comes in large part from my belief that Japan’s actions on the security front will be driven by security interests rationally perceived, and not some internal Japanese belief that it is superior to others. If anything, events over nearly the past two decades have destroyed much of the Japanese belief in their supposed supremacy.

Bruce Henderson

I think this could be akin to driving up the California eastern Sierra to Mammoth Mountain. You see it’s a beautiful place, and there are no fountains of lava and tephra bursting out of the ground, so you decide the volcano is extinct and you want to buy real estate there.

You put your finger on the problem with great precision. Japan is very self-absorbed on the surface, but inside of their culture, the manga, the anime, the TV dramas there is this undercurrent of the unitary Japanese identity. Right now it’s not doing much of anything. The pivot point is when you start to see a resurgent tide of nationalism in Japan.

No conversation is taking place at all as far as I can tell – at least not yet. Japan no longer benefits as much from the global trading system as they once did. And we bring a very American perspective to this conversation. Japan does take North Korea and China very seriously. They know that both countries have a score to settle with Japan, and to some extent Japan may come to decide they have a job to finish as well. To us WW II seems like a long time ago and not worth remembering. In Japan, parts of Manchuria and Korea, they do not seem to have forgotten much at all. One of the reasons we inserted ourself there (and continue to be there) is to keep the tigers from fighting.

We (as a nation) are used to a late 1990s world order based on a post Cold War state. We (as a nation) think peace is the absence of war. We (as a nation) project our happy go lucky “get along with everyone” onto all manner of foreign cultures, setting ourselves up for a nasty surprise one day.

While on the surface Japan may seem distracted with all manner of things, it would not be tough to (over a period of a decade) to re-awake the “old way” that would be a threat to the world. No one would have to direct it, given the correct stimulus, the Japanese people are perfectly capable of doing it all on their own.

It is my firm belief that Japan does not believe they are superior, they know they are. And they do still to this very day. It’s not an outward “in your face” matter like we Americans do it. It’s a quiet thread that underlies every aspect of their society and government. It’s woven into their language and their everyday approach to life.

Pejman Yousefzadeh

Be that as it may, limited re-armament and a greater sense of responsibility over their defense policy will not pose a threat to us or to our interests. And it is not in Japan’s interests to engage in excessive militarism now or in the future.

Christopher Badeaux

As it happens, I think this is a false argument — Japan is already fully capable of self defense and limited power projection. “Rearmament” actually means “admitting what they already have.” Now, I’m a great fan of clarity in international relations, but I always thought the neorealist model has as its limitation the a priori assumption that everyone perceives his self-interest in the same way. China’s concept of self-interest is not the same as ours. Japan’s is not the same as either.

I add that Francis has a good point: This is a society with little outward interest except for export markets. Or, if you like, the Tokugawa period was not that ahistorical.

With that said, in the short run, this is a lively topic for debate. In ten years, it’ll be purely academic.

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