Hatoyama Looks Weak Like Hosokawa: Paul J. Scalise

Swept into office by an unpopular liberal Democratic Party (LDP), aided by the self-serving calculations of party defector Ichiro Ozawa, an inexperienced idealist at the helm hoists the reform banner onto Japan. Almost immediately the new prime minister's ragtag coalition is greeted by enthusiastic media attention abroad and unprecedented cabinet approval at home. Over and over again, one word is heard: "Revolution!"

Yet what starts as irrational exuberance degenerates into hopeless despair. The premier finds himself entangled in yet another campaign-financing scandal. Cabinet approval plummets. Interparty bickering ensues as the cabinet's agenda is bogged down by protracted ministerial discussions, regulatory uncertainties, and budget constraints. A demoralized premier, now beleaguered by an unsympathetic Japanese media, an impatient public, and a stalled legislative agenda, resigns in humiliation. So begins the long road to LDP rehabilitation.

No, we are not talking about the current coalition government led by Yukio Hatoyama's Democratic Party of Japan (DPJ)—though, let's face it, the parallels are striking. We are talking about Hosokawa Syndrome, so named after the former prime minister whose impractical love of abstract ideas both made and broke a government.

The rapid rise and fall of Morihiro Hosokawa's coalition government in 1993—the first non-LDP government since 1955—marked a missed opportunity in Japan's postwar history. Barely lasting a year, the Hosokawa cabinet was heralded as historic, but left behind an anticlimactic legacy.

Will history repeat itself in 2010? The evidence increasingly suggests an encore performance. Hatoyama's DPJ began its rule in September 2009 with 75 percent of Japanese strongly approving of the cabinet's performance (Hosokawa's earlier coalition enjoyed 72 percent) and ended the year with 47 percent feeling that way (Hosokawa had 50 percent). As was the case in 1993–94, Hatoyama's cabinet presides over a strengthening yen, stagnating export growth, falling asset prices, and the world's largest debt-to-GDP ratio. Deflation is back, and the Bank of Japan is no more willing to halt it today than it was 17 years ago. If these obstacles weren't enough, economists now forecast extended economic-growth lapses in January–March 2010. A protracted downturn will mean rising unemployment and personal bankruptcies among critical DPJ rural constituencies at precisely the moment when the ruling party will seek to shore up a majority in the crucial upper-house elections in July.

In moments like this, the standard rebuttal from ruling parties is a plea for gaman, or endurance. A government has no more control over the short-term business cycle than a ship's captain has over the changing tides in the ocean. But voters rarely see it that way. Either a scapegoat in government must be blamed or the government itself must project a faux strength. Neither is happening. Instead of showing leadership, Hatoyama remains the indecisive intellectual. And here is where contracting Hosokawa Syndrome can be a real problem. Few voters care to wait years for the spillover effects of "the vision thing" without concrete blueprints. Most want to be assured exactly how, when, and where they stand to benefit from promised consumer-welfare gains, job creation, and income growth.

For Hosokawa, this dilemma was wrapped in the rhetoric of kisei kanwa, or deregulation. "We may not know yet how, when, and where the benefits of deregulation will occur," he assured the electorate, "but we will deregulate. Your lives will improve someday." Someday. Hatoyama's DPJ also claims to care about "ordinary people." And while it may not harbor much love for deregulation, it feeds the electorate a steady diet of anti-Keynesian, anti-LDP, and anti-bureaucracy rhetoric. Tax revenues fall and expenditures rise, but Hatoyama refuses to go back to the LDP model of "wasteful spending." Consequently, fewer public works translate into fewer jobs in 2010.

The ability of the LDP to prop itself up in power was always a bit of a mystery. Former prime ministers were able to pump-prime the economy with minimal success while allowing the representative elites in the decision-making process to deliberate on policy for sometimes indefinite periods. If Junichiro Koizumi, a three-term prime minister, could do that for the LDP, can't, say, Hatoyama do it for the DPJ? It might well be too little too late, but without swift action the Hatoyama cabinet will likely go the way of Hosokawa's rather than Koizumi's. The clock is ticking.

Scalise is research fellow at the Institute of Contemporary Asian Studies, Temple University, Japan Campus