"The Lehman Shock" and "The Crab Canning Ship"

I've been asked by several media organizations for my take on the words or phrases of 2008. I chose "The Lehman Shock" for the world and "The Crab Canning Ship" for Japan.

The world entered a difficult era on September 15, 2008, when Lehman Brothers collapsed. This triggered a global collapse in stock prices just as a management crisis in the world's largest corporations bubbled to the surface. Bankruptcies spread and unemployment soared. The world was thrown into a recession.

This was the year when the US lost its status as sole superpower. The world has entered a chaotic era. As the US collapses, other countries around the world find themselves inextricably caught up in the mess. The trigger for this global collapse was the fall of Lehman Brothers, or the "Lehman Shock." I told the reporters that this was the one incident above all others that captured the spirit of 2008.

For Japan, I chose the 1929 novel The Crab Canning Ship as my phrase of the year. Japan has fallen into a situation where a great depression looms, large bankruptcies are occurring and unemployment is ballooning. There is nothing in the postwar experience of Japan that compares. Workers are susceptible to the same sort of cruelty that was portrayed in a novel written 80 years ago by Takiji Kobayashi. This is the distinct characteristic of today's Japan.

In 2009, we need to overcome both these problems. We'll need strong spirits to live through this predicament. Let's make 2009 a year when the Japanese people show they still have plenty of life in them.

Sheer Hypocrisy

We need to increase public spending if we're going to stem corporate bankruptcies and the rise of unemployment. The country's finances will be strained by more spending and the fiscal deficit will rise, but it is something we can no longer avoid. People are having difficulty coping, and a majority of households are running into debt. The same is true with corporations. The only entity left to take on more debt is the government -- there's no escaping this fact.

The longer road presents the quickest path to economic revival. Those who advocated direct fiscal reconstruction have failed. They achieved the opposite of what they intended, grinding economic growth to a halt and ballooning the fiscal deficit. We can't bear any more of their ill-advised policies. Instead, we need policies that will bring us back to economic growth. To do that, we need more public spending.

There are some newscasters on TV that insist on drowning out anyone advocating more public works or lower taxes. "It's just more pork-barrel politics," they cry. "Don't leave a bill for future generations! Do you think it's OK to leave the nation in debt?" Kurotani, the newscaster for Fuji TV's "Hodo 2001," spouts at the viewing audience with a barely contained rage toward public works. Can't he be more level-headed and objective?

It's true that we shouldn't leave a bill for future generations. But we can't just think in terms of public spending -- we have to consider the whole economy and society at large. The real crime would be leaving behind a failed economy for our children.

Japan Left Behind by Its Leaders

The Lehman shock of September 15 and the ensuing world financial crisis that began in the US has had a crushing impact on the old way of doing business. It has unleashed an economic crisis that is global in scope. Nations around the world are entering recessions at the same time. A great depression approaches.

The threat of war also looms. India and Pakistan are a hair-trigger away from a crisis. If a war were to break out, it would involve nuclear powers. This is a crucial situation. We need to end the fighting in Iraq and Afghanistan as soon as possible.

The US government bears much of the responsibility here. President-elect Obama has said that he wants to continue and even intensify the war effort in Afghanistan, but this is a big mistake. When he assumes power, he should immediately call for a cease fire. Now is the time to conceive of large, significant changes. We need to change from an American-centric, neoconservative, market fundamentalist way of thinking and concentrate on avoiding a great depression by switching to a form of modified capitalism. This is the Keynesian New Deal approach.

There is one more thing Japan must learn. It must stop its Americanization process and switch to a system based on Japanese values. Japan needs to shake off its addiction to Republican-style thinking on war, survival of the fittest social policies and neoconservative thought. In this era of historic change, we must unflinchingly realize that the long list of abuses Japan has suffered comes from not only the Liberal Democratic Party and New Komeito but also from members of the opposition Democratic Party of Japan who have sided with former Prime Minister Koizumi and his policies.

We should be bringing about a government that stands for peace, independence and harmony. Prime Minister Aso's government is headed in the opposite direction. So is the DPJ. The citizens of Japan need to forge a third way.

Defend the Rights of Part-Timers, Seasonal Workers and Temps!

The economy has come to a scary place. Part-timers, seasonal workers and temps are suffering through an extremely cruel round of massive layoffs. Large corporations are dismissing these workers mercilessly, stopping their employment by not renewing their contracts.

Temporary workers are forming a union in response.

I would like to see strong support of this move. I, for one, will make every effort to support them. I've been very dissatisfied with the weak-kneed approach of the Japanese Trade Union Confederation. At the rate it is going, it won't be able to defend the rights of workers. Without a fight, no new avenues will open.

The confederation needs to reorganize around the local chapters of industrial unions. This would create a grass-roots base that could propel a unified protest of this massive unemployment.

My Election Predictions

An election special showing on BS 11 entitled "Otana No Jiyu Jikan" (Nov. 27 and 28 at 7 pm) posed the question, "If the election were held today, how many seats would each party take?" After analyzing each of the 300 electoral districts, the program then interviewed three people: election planner Hiroshi Miura, a member of the BS11 general election reporting team and me.

I made predictions for each of the 300 electoral districts as well as the proportional representation seats and came out with an even split between the ruling and opposition parties. I was genuinely surprised by this result.

I predicted that the Liberal Democratic Party would take 209 seats and its coalition partner New Komeito would take 26 for a total of 235. On the other side of the aisle, I had the Democratic Party of Japan taking 205 seats, the Communist Party taking 12, the Social Democrats taking 10, the People's New Party 6 and New Party Daichi 1 for a total of 235. I also predicted 10 independents would win.

My predictions lead to a situation where neither leading party can claim a majority and the tie-breaking votes will be made by the independents. That's the situation. Of course, this is only my prediction. But I was surprised once again when the BS election analyst's predictions were very similar to mine. Mr. Miura predicted that the DPJ would be able to pull out a slim majority.

It's only a prediction, but if after the House of Representatives vote no clear winner has emerged, a political realignment will ensue. In my view, political realignment would probably bring about a grand or midsize coalition.

A Policy to Stop Stocks from Plummeting

Below is an urgent proposal. I especially want politicians to read it. The plunge in stock values is not stopping. There is no way out.

Last Thursday night (Nov. 20), I visited an economist, former politician and executive of my generation at his research center and heard him express the opinion that if stock prices are left to decline much further, it will create an extremely dangerous situation for the Japanese economy.

So what can we do? The only option left is for the government to start purchasing stock. To do this, we need to set up as quickly as possible an institution that can handle this task. That's what my acquaintance argued.

Politicians from all parties need to get together and promptly discuss this crisis to stabilize our economy. We can't continue to be contentious.

My request to politicians from both camps: Quickly get together and establish an organ that can begin purchasing stock!

Don't Forgive the Dissolution Dodgers

The political attempts to avoid dissolution of the lower house have grown quite flagrant. Avoidance of this issue will only intensify the people's distrust of politics. Much of the responsibility for this should be placed directly on the shoulders of Prime Minister Taro Aso and his fellow leaders. Dissolution and a general election are important events for Japan. Leaders of the ruling and opposition parties should begin discussions to put an end to this politics of avoidance. The prime minister shouldn't fiddle around with this important event any longer. He should take immediate steps to bring leaders of the two sides together and discuss a political schedule that includes dissolving the lower house. This would bring some normalcy back to the political world. I'd like to see our politicians return to the state of the new candidate. Dissolution shouldn't be used as a bargaining chip; discussions should give us a clear sense of when the house will be dissolved.

Article 41 of our Constitution says, "The Diet shall be the highest organ of state power and shall be the sole law-making organ of the state." It is abnormal behavior to play with the timing of the dissolution of the most powerful house of the Diet, using it like a bargaining tool with the opposition. This is an attack on the citizens' power to choose its representatives. The Diet needs to clearly explain to the voters the coming schedule for dissolution of the lower house and the next election to put an end to this unusual mess. The political instability caused by the lack of a concrete schedule needs to come to an end. The lead actors in a general election are the voters. There are no more than 10 months left in the terms of the current lower house representatives. The Diet should decide when the next election will be held, and it should clearly inform the voters of the schedule. It should stop waiting for the prime minister, who can't make up his mind on the issue.

Most of the responsibility for the current confusion falls on Prime Minister Aso. He needs to show some leadership to put a period on this messy political situation and make things right. To do this, he needs to withdraw his statements that "dissolution is my decision to make. I will make it when the time is right," and entrust the decision to the Diet. The government should take emergency steps to reach an agreement among parties on the dissolution of the lower house and the next election. Prime Minister Aso needs to stop talking like the issue is up to him and find a way through discussions with the opposition to bring some clarity to the recent political muddle in Japan.

Resisting Civilian Control of the SDF is an Unforgivable Act

Former Air Force Chief of Staff Toshio Tomogami has been continuing his resistant stance toward the cabinet. This should never be forgiven by the SDF's leaders. It's a clear affront to the idea of civilian control of the Self-Defense Forces. He should not be forgiven for this. The Diet should pursue this in a thorough manner.

When the SDF begins to act of its own political volition and the government allows them to, Japan's pacifistic and democratic standards will crumble from their very base. This is a serious issue -- it's the same as the military moves before World War II.

This Tomogami Incident stirs up the same discomfiting memories of the army's reckless acts before World War II. The SDF is a military body. It's a military force. If a group within it adopts an extreme ideology and begins a movement led by the former Air Force chief of staff to disregard civilian control of the military, it would create an inescapable mess for Japan's international diplomacy. This problem should be nipped in the bud as quickly as possible.

Baby Boomers Give Ozawa Too Much Leeway

I've been criticizing Ichiro Ozawa, the head of the Democratic Party of Japan, ever since October 7, 2007, when he was interviewed in the November issue of general news magazine Sekai. He was quoted in the magazine's pages as saying that "If I end up running the government and setting diplomatic and defense policies, I would like to have Japan participate in ISAF," which is the International Security Assistance Force in Afghanistan. I am strongly opposed to having Japan enter in the Americans' war in Afghanistan.

Ever since I started criticizing him, I've been getting emails and letters telling me to stop it. The messages were so intense that at first I brushed it off as the work of some particularly devoted Ozawa acolytes. But it turns out to be more than that.

I've noticed that within the Japanese populace there is a particularly virulent strain of thought that says, "What's so bad about having the SDF in Afghanistan? What's so bad about having them be part of ISAF?" I've learned that a lot of Japanese people think, "What's the big deal if we go to war?" At some point, this argument between me and Ozawa became an argument between me and his supporters. I've been answering their question — "What's the problem with going to war?" — in recent writings. And I've come to realize that Ozawa has become to proxy for those people who don't fear war.

A few days ago, I was talking to a former newspaper reporter and an old acquaintance who took an aggressive stance on the subject: "Even if the Ozawa cabinet decides to dispatch troops to Afghanistan, that would still be preferable to having Taro Aso and the Liberal Democratic Party in power. It would even be true if Aso were to decide to stay out of Afghanistan. It's no big deal if Ozawa joins the war in Afghanistan. I've had enough of LDP governments. I would support Ozawa even if he followed through with the pledge he made in that issue of Sekai."

I believe that everything else being equal, the government that won't lead us into a war is preferable.

There are more and more Japanese people who share my friend's sentiment about being fed up with the LDP. A lot of people are hoping that a new group will take control of the government. The election will be a referendum on the government of the past. But that's not all the vote will be about. It will also be a referendum on our future. The citizenry needs to both criticize the past and look to a peaceful future.

The current DPJ is entrusting every political decision to Ozawa. If the party were to take power after the next election, everything would be decided by Prime Minister Ozawa. This new premier's cabinet would reinterpret our right to exercise collective self-defense without bothering to revise Article 9 of the Constitution. A DPJ-led government would lead to the absolute rule of one person, who would decide to take military action in spite of Article 9. Once the Ozawa government takes over, he can take military action without worrying about the nuances of Article 9.

I am against this politics of despotism and warmongering. A lot of baby boomers support Ozawa, but I ask them to think more seriously about the meaning of war and peace.

The Upper House Should Take the High Road

The upper house should not turn away from its role of exercising good judgment by abusing its privilege to censure the prime minister. This is especially true when the censure is a ploy for pushing the premier to dissolve the lower house. It's natural for the opposition to urge the Aso cabinet to quickly dissolve the lower house, but it goes against the fundamentals of our two-tiered parliamentary system to have the upper house censuring the prime minister to force his hand on the lower house's status. This move will only make the upper house more like the lower one; it will become a bastardized version of the lower house and corrupt the political process.

Simply put, the upper house should not play power politics.

There are some within the opposition who are pushing the idea that if Prime Minister Taro Aso isn't inclined to dissolve the lower house quickly, he could be prodded to do so by a threatened upper-house censure. The opposition leadership shouldn't rush into this. It's a bad move.

This sort of thinking is based on the mistaken idea that the authority to dissolve the lower house rests with the prime minister alone. In fact, this idea is wrong on two levels: For one, it's based on the faulty premise that authority to call for the lower house's dissolution rests with an individual — the prime minister. This is just not correct. Second, some may argue that the Constitution gives the cabinet the authority to dissolve the lower house, but this too is wrong. The answer is in Article 7 of the Constitution, which describes the acts that the Emperor shall conduct for the nation. The third item listed is "dissolution of the House of Representatives." "The Emperor shall, with the advice and approval of the Cabinet ..." is how it is worded. The Emperor's state activities are formalities — he is serving as a symbol and should not be involved in exercising political power.

Political change is near. Once a new regime takes over, it should renew our understanding of the Constitution.

Ever since the surprise dissolution of the lower house by the Yoshida cabinet at the end of August 1952 and the subsequent general election in October of that year, the mistaken idea that the power to dissolve the lower house resides in the cabinet has prevailed. The new regime should correct that, making it clear that the power to dissolve the lower house resides in the House of Representatives itself. When it comes to dissolving the lower house, we should honor the authority spelled out in Article 69 ("If the House of Representatives passes a no-confidence resolution, or rejects a confidence resolution, the Cabinet shall resign en masse, unless the House of Representatives is dissolved within 10 days"). A new regime must correct this distorted interpretation of the Constitution, which propagates the idea that it's the prime minister's job to decide when to dissolve the lower house. A proper interpretation shows that the House of Representatives alone should decide when to dissolve itself. This is not an issue that concerns the upper house.

The House of Councilors needs to monitor political power as it is exercised in the lower house and correct things when an offense is committed.

The lower house has the priority because it can name the prime minister. This is the chamber for political power struggles to take place. The upper house should not get involved. The House of Councilors is predicated on good judgment, not power. I ask the opposition to show some self-respect.

Irresponsible Leaders Won't Call for What We Really Need

The Bush administration is still planning to continue the Iraq and Afghanistan wars. It doesn't even think about stopping them. The lameduck president's term is over in January 2009, but if a Republican administration remains in the White House, both the Iraq and Afghanistan wars will continue. If Obama wins and a Democratic administration takes over, the Iraq war may end, but fighting in Afghanistan will continue. Even if the US has an Obama administration, it will continue to wage war.

Wars are very expensive. American economist Joseph Stiglitz recently published a book which argues that the real cost of the Iraq War is $3 trillion (The $3 Trillion War, Japanese translation from Tokuma Shoten). At the exchange rate as of October 9, 2008, that is the equivalent of 300 trillion yen. The US has spent an enormous amount of money on the Afghanistan War alone.

The financial crisis begun by the US poses a serious challenge. The American government is asking other countries to help bail it out, but as long as it continues its Iraq and Afghanistan wars, giving the US money would be like pouring water into a bottomless bucket. Even if Japan and several other countries agree to US requests and offer large loans to help end the financial crisis, there is a very good chance that one way or another, the money will be used in the war effort. That means Japan's money would be financing the wars, and we'd be bogged down in a quagmire.

Let me repeat: If the Japanese government gives in to the US government's request and adopts a policy of loaning money to the US to quell the financial crisis and if both the Iraq and Afghanistan wars continue, it would be like pouring water into a bottomless bucket. This is so basic that even a child could grasp it.

But there is no one in this country arguing this very point. It's not only the government, the Liberal Democratic Party and the New Komeito Party that are running from this issue — the Democratic Party of Japan and the mass media also remain mute. It's as if they are making efforts to block both the Iraq and Afghanistan wars from their minds.

The first thing we should do to calm the current global crisis is to end the wars in Iraq and Afghanistan. It will prove impossible to solve the financial crisis without ending the wars.

Deal with the Urgent Issues before Calling for Elections

Creating an Economic Policy to Halt Bankruptcies
Calling for dissolution of the lower house and the subsequent election is a high-priority political issue. But there's one big obstacle that needs to be grappled with before an election is scheduled: the current economic downturn. While this is a global crisis and not one that Japan can solve by itself, the government needs to at least enact policies that would prevent massive bankruptcies. Once that is taken care of, the lower house can be dissolved.

As the US-led financial crisis deepens, Japan's corporate community is in danger of falling into pandemonium. A lot of companies are having trouble securing financing for the year-end — and it is not only the smaller companies that stare bankruptcy in the face. A chain of bankruptcies would have serious consequences. We should take whatever steps are necessary to stop a potential wave of corporate failures. The government needs to mobilize to protect companies on the financial and credit fronts, and it should do this before calling for elections.

Defend Our Livelihood through Lower Taxes, Public Works
A lot of families are facing bankruptcy too. Their incomes haven't gone up, and they must bear increasing financial burdens. Prices are on the rise, stretching family budgets. Financial institutions are demanding more debt repayment. Credit card companies are beginning to limit card usage. If nothing is done, it's very possible that we'll see a huge spike in personal bankruptcies.

We need emergency policies that defend our livelihood. The government needs to turn around its financial policies and start lowering taxes and relying more on public-works spending.

Political Parties Should Have a Policy Debate
The world has entered a difficult period. Japan must begin to discuss how we will live through this. As the age of Pax Americana comes to an end, Japan should re-examine its alliance with the US.

We can't shy away from debating which direction to take: neoliberalism or modified capitalism. We must also have a serious discussion about all aspects of the wars in Iraq and Afghanistan and whether the Japanese people want to live as a peaceful nation.

All this should be done before we hold elections. The current political debate is far too small in scope. The election should be an occasion for charting Japan's new course.

First Things First

Prime Minister Taro Aso was correct when he said, "The people want us to put priority on economic policies, not Diet dissolution." The problem is whether or not the Aso administration can come up with an effective policy. A majority of the Japanese people are very much in favor of taking urgent measures to revive the economy. If we don't do anything, there's a very good chance that many small and midsize businesses, including mom-and-pop shops, will not be able to hold on. The government must find a way to avoid this outcome. A lot of businesses need help preventing bankruptcy between now and the end of the year. This is the government's responsibility. Let me repeat: We must stave off a collapse of the Japanese economy. This is the government's most pressing concern. Dissolution of the Diet can occur later.

Stretching out the timing of the general election in a bid to postpone the inevitable is not wise. But the government should take at least two months to put all its effort behind urgent measures to boost the economy. The supplementary budget the government is focused on now is like a few drops of water on parched soil. For a supplementary package to have a positive effect, it would have to be much larger. The administration shouldn't hesitate to enact deficit spending to cover our shortfall. Politicians shouldn't restrain themselves just because of the foolish target of having a primary budget surplus by 2011. Instead, they should be focusing all their efforts on the urgent measures needed to steady our staggering economy. Bold action is the secret to success. Let me repeat: Japan's politicians should be focused on defending the nation's economy.

The Media Spins Koizumi's Retirement

Impressions of the media coverage
Once former Prime Minister Junichiro Koizumi announced his retirement from politics, several media organizations ran with stories exploring the "merits and demerits of Koizumi politics." This is odd because there weren't any "merits." It was all "demerits." I think the mass media mentions the supposed merits to justify its role in stoking "Koizumi fever" during his reign.

A summary of my comments to several news organizations
Koizumi has left Japan deeply scarred. First, his administration facilitated the destruction of Japan's good traditions and way of life. It is no overstatement to say he destroyed Japanese society. The end result of his structural revolution is to have created a society of haves and have-nots. Thanks to him, the majority of the Japanese people are struggling. He abandoned the provinces. His policies crushed Japan's social welfare (medicine, pensions, nursing). They pushed many young people into the category of the "working poor." Hope has disappeared. Morals have declined. Japan's fate has been intertwined even tighter with the fate of the US. There is nothing redeeming about Koizumi politics. The Koizumi Revolution was nothing more than a forced march toward US Republican-style neoliberalism. Japan became a proving ground for Republican theories.

The looming general election is going to be a day of reckoning for Koizumi and his legacy. Candidates still trumpeting the Koizumi way are likely to be judged harshly by the voters. The Koizumi sympathizers, whether they be in the ruling coalition or the opposition, need to be thrashed at the polls.

There will soon be an opening for Japan to truly turn away from Koizumi, American neoliberalism and the US in general. As the real Koizumi escapes, we need to corner his legacy once and for all. Judgment day is near.

The Government Japan Needs

Neoliberalism and democracy can't exist together. It's time for us to stress democracy.

Japan has a democratic political system and a capitalist economy. Modern Japanese society consists of people acting in both the political and economic realms. Each one of us is a free citizen. We are also consumers and investors.

A capitalistic society becomes stable when capitalism is balanced against democracy. But because our capitalistic system has been driven recklessly toward a kind of market fundamentalism, the balance is completely off and the citizens are less free. Unions have lost power. Many workers have lost their jobs. Social welfare programs have been greatly reduced. The structural reform that hid behind the name of "deregulation" took aim at the weakest of us and forced more hardship upon them. The strong have profited from the changes, but the weak are made more miserable.

Japan must revive its brand of democratic capitalism. Citizens must recover their basic human rights. The Bush administration has made the majority of us unhappy with its beautiful sounding neoliberal globalism — a series of structural reforms that bring us market fundamentalism, small government, deregulation and less social welfare. Neoliberal globalism brings misery to the people while also destroying capitalism. The downfall of Lehman Brothers points to the defeat of neoliberalism.

We must turn from the reckless course neoliberalism has put us on. To do that, we need to resuscitate our democracy.

A new government replacing the LDP-New Komeito coalition must be dedicated to reviving democracy. It must promise to defend our basic human rights and Japan's Constitution. And it must act on that promise.

Stark Contrasts

I visited Fukushima City on September 7 to give a lecture and met two old friends who hold seats in the upper house for the Democratic Party of Japan. One of them, who was once a Diet member for the Liberal Democratic Party, had this to say: "Ozawa is a genius. He predicted that the lower house would be dissolved within this year, setting the stage for a general election. He nailed it. Ozawa really is a genius. If the party unifies behind him, it will win. No problem." He was full of confidence that party Chair Ichiro Ozawa held the key to victory. There is a group of true Ozawa believers within the DPJ who support the party chief wholeheartedly. If a majority of the country feels like these party members, then a DPJ victory certainly seems possible. The key is whether Ozawa can inspire this sort of support from the Japanese people.

Later at Tokyo Station, I met another old friend who is a DPJ Diet member and has been with the party since it formed. Here's what he told me: "I read your website, Morita-san. I share your concerns about Ozawa's statement in Sekai magazine that Japan should join ISAF in Afghanistan. I believe we should protect Article 9. Under an Ozawa administration, I fear we will join the Afghan War."

The statement he was referring to appeared in the November 2007 issue of the general-interest magazine Sekai. Ozawa was quoted as saying, "If I am forming an administration and setting diplomacy and defense policy, then based on the situation in Afghanistan today, I would like to have Japan join the International Security Assistance Force."

I had hoped that the DPJ would hold an open party election where a variety of ideas could be discussed, but the party chose not to hold such a race. If this discussion had taken place, then the issue of joining ISAF and the oft-criticized idea expressed by Ozawa that the UN reigns supreme could have been aired before the voters. It's a shame that the party remained silent.

The party executives declare that the members fully support Ozawa, but my informal survey indicates that just below the surface, there is a lot of arm-twisting going on. A large majority of the DPJ is remaining mum on this issue. but several DPJ members have told me that Ozawa's aides are making everyone toe the line.

Prime Minister Yasuo Fukuda watched the DPJ evade its own party election, then made his move. He resigned as prime minister and LDP president and set out to restore his party's reputation by having it hold an open election in stark contrast to the DPJ. The fate of the LDP-Komeito coalition rests on this gamble.

"Even so, this doesn't change the advantage the DPJ has," said a friend of mine who is an elections expert. "The burden left behind by Koizumi's structural reforms will prove too big for the LDP. The trend among voters to want to change things once and for all won't go away."

At this point, I see the race as even.