The snap election (Jerusalem Post, December 12)
On Sunday, Japan will go to the polls for a general election. Why? Because Prime Minister Shinzo Abe felt that would be a good thing to do.
The Japanese political system, as reconstructed after the Second World War, is based on a parliamentary democracy — at least the Americans didn’t impose their wretched presidential system on them. It also incorporates the British concept of the Prime Minister being the one who calls the shots politically, including the power to decide to go for new elections pretty much whenever he feels like it.
Interestingly, the British themselves changed that aspect of their system a few years ago, so that now their parliaments must run for five full years and the premier cannot cut that period short and call a snap election for tactical political reasons (or any other). How that will work out in practice remains to be seen, especially when the upcoming British general election, in May next year, is set to produce an unprecedentedly complex political map, with both major parties falling short of absolute majorities and being forced to negotiate coalition arrangements with smaller entities.
Fortunately, by then there will be numerous unemployed Israeli former senior politicians who will be able to offer their knowledge, expertise and unparalleled skills at the difficult business of forming and managing multi-party coalitions. But back to Japan where, as noted, Abe could and did call a ‘snap election’ — which is being held within a month or so of his decision. In Britain, under the old system, a ‘snap election’ was held three weeks after Parliament dissolved itself. But In Israel, a supposedly snap election still requires three and a half months of tedious, useless and largely meaningless sloganeering until people (i.e. the shrinking number of those who actually bother) cast their votes.
On the other hand, if you can survive the nail-biting drama and tension of the Israeli election campaign, at least there will be considerable doubt as to the outcome, with numerous potential scenarios and permutations of coalition arithmetic. In Japan, by contrast, there is no doubt as to who is going to win — Mr Abe. The only question to be resolved is the margin of his victory.
That, in fact, is what the election is about. Abe’s Liberal Democratic Party (LDP) held 294 seats, out of 480, in the outgoing parliament — a comfortable majority in its own right. Together with the 31 held by its small Komeito ally, it had 325 and thus exceeded the two-thirds majority required to override opposition to legislative proposals by the Upper House, in which the LDP does not have a majority and where elections are not due until 2016.
Yet, despite this super-majority, Abe wants to renew his mandate and lock in a further four years in office. Why? In part, in order to forestall attempts from within his own party to replace him — remember, this is Japan, and most premiers last only two years, so Abe, who won office (for the second time, after an earlier brief and unsuccessful spell in 2007) is past his sell-by date on that basis.
But the real reason — and the underlying cause of any potential intra-party revolt — is because his signature policy initiative, ‘Abenomics’, is in trouble. The proximate cause of the election initiative was the shockingly bad data showing that the Japanese economy shrank again in the third quarter of 2014, after plunging in the second quarter. The latter had been expected, because the massive hike in the national sales tax in April, from 5% to 8%, had pulled forward demand to the first quarter and ensured that private consumption would crater in the second.
But the third quarter was supposed to see a recovery. The fact that it did not showed that something was seriously out of kilter with the whole program. This contained three key elements — the ‘three arrows’, as Abe termed them. The first was a massive program of money injections by the central bank — QE on steroids. The second was fiscal stimulus, tempered by the effort to start getting the budget deficit under control — which was the reason for the sales tax hike.
Third was structural reforms, to open up the large swathes of the Japanese economy that are protected from competition and therefore wildly inefficient. In this respect, Abenomics was a total dud, because Abe proved unable — maybe unwilling — to overcome ingrained opposition in his own party, which is supported by the agricultural and domestic businesses who stand to lose most from reform.
If Abe wins a larger majority, as he and his aides think possible, he may then be able to ram through a genuine reform agenda and begin to change Japanese society, as well as the economy. But if, as the polls and most analysts predict, he loses a net 30-40 seats, then he will have gambled and lost.
If your response to that is ‘so what’ then consider this: Abenomics was a gamble to reshape the world’s third largest economy. It looks like it has instead driven it off the rails and unleashed enormous volatility into an already unstable global financial system. This tsunami may start in the distant Pacific, but it will strike every country in the world.