Will the Hatoyama Administration Really Improve People's Lives?

The Hatoyama administration began on September 16. The Democratic Party of Japan has been basking in euphoria since the election victory. The mass media has also shone an admiring light on the administration. Yet at the same time, anxiety is growing that this new administration will further the recession. More people believe that a DPJ administration will pull the economy down further and worsen unemployment.

Some readers may be surprised to learn that the DPJ has neither the policies to combat the recession nor a strategy for economic growth. It hasn't conceived of how the government can help industry and companies. Moreover, it is said that the party plans a large reshuffle of this year's supplementary budget. Confusion is inevitable. If this reshuffling gets stalled, then next year's budgetary process is likely to be delayed as well. And public works are apt to be reduced. If this is the case, then it will take even longer to overcome this recession.

On top of all this, the DPJ is pushing a policy of dismantling the bureaucracy, which is sure to sap the energy of government officials. A clash between politicians and bureaucrats will result in stagnation.

Yukio Hatoyama gave a speech on September 8, just before he officially became prime minister, in which he said Japan would reduce emissions that cause global warming to 25% below 1990 levels by 2020. The overly ambitious target puts an added onus on Japanese companies. And it penalizes electricity and steel manufacturers trying to compete with China and other countries, setting those industries back by as much as several hundred billion yen. The government ends up putting an added burden on itself and Japanese industry by setting an unrealistic goal just because it wants to make a good impression with the EU. This is what I call the "Lone Nation Self-Admiration Principle."

The sky-high target puts pressure on corporate management. It could lower salaries as well, which would lead to a deepening of the recession and a further rise in unemployment. In fact, there's hardly anything in all of the Hatoyama administration's proposals that will directly fuel economic recovery and growth. The DPJ would do well to listen closely to the growing concerns about its approach.

The DPJ should focus on lowering unemployment, stabilizing the economy and setting it on a path for growth. These are the top priorities. But instead it wants to redo the supplementary budget, dismantle the bureaucracy and set unreasonably high goals for emission reductions -- all these policies have elements in them that could hurt the already ailing economy. If this new regime gives us a worse recession and increasing unemployment, the public is likely to wake from its dream in an extremely bad mood.