Save Our Fair City, Bring Back The Clown!

One of the ironies of the global age is that some of its most cosmopolitan capitals are still run by quirky local characters. A strong case in point is Yukio Aoshima, the former cross-dressing comedian who is stepping down as governor of Tokyo. When Aoshima took office four years ago, be was best known as "Pesky Grandma," a 1970s television character who took grandkids to porno flicks. Elected as an independent, he vowed to rein in public spending, which infuriated the established parties he had just defeated. They got revenge in the local assembly by blocking his every stab at fiscal reform--from hiking school fees to cutting social services and revoking free subway passes for the elderly. In the end, the 66-year-old governor lost popularity and decided not to run for re-election this April, saying, "I have nothing to regret or feel ashamed of."

Unfortunately, Tokyo does. Just as the American bull market has propelled the career of New York's volatile mayor, Rudy Giuliani, Japan's slump made it all but impossible for Aoshima to go on. Today his office in Tokyo's gleaming, 48-story town hall still looks down over a metropolis crisscrossed by the world's most efficient trains, graced by impeccable parks and surrounded by affluent suburbs. Yet behind the armies of street cleaners, there are signs of imminent municipal rot. Pore over Tokyo's balance sheet, and you see shades of New York in the '70s, a proud capital trying to stave off the shabby humiliation of cost-cutting and decay. Last year Tokyo ran a $3.9 billion deficit--its first in a generation. Worse, the city owes nearly $60 billion in long-term debt, leaving it in its worst financial crisis since World War II.

Tokyo's woes are emblematic of a system gone sour. In the go-go 1980s, as tax revenues boomed, local leaders spent billions revamping Japan. And why not? Japan appeared poised to surpass the United States as the world's dominant economy, and Tokyo was its nerve center. Local and national officials built lavish public buildings, as if to congratulate themselves. That skyscraper of a town hall, for instance, cost a cool $1.3 billion. And the free spending did not end with the onset of recession in 1992. The $1.5 billion Tokyo International Forum, a performing arts and convention center, opened two years ago. Tokyo's $41 billion city budget is now roughly equal to India's national budget.

Aoshima tried to change the city's course, but its foundations were slipping beneath him. Tokyo's population aged rapidly, stretching welfare services to the breaking point. Industrial giants that once employed thousands ratcheted back production and built factories overseas, to cash in on the rise of the yen. The collapse in land prices hobbled the real-estate market, stalling the local economy. And central government dialed back revenue sharing, further hobbling Aoshima's administration. At one point last year, Aoshima threatened to declare Tokyo bankrupt, a move that would have embarrassed the ruling Liberal Democratic Party and forced a central government bailout. "When you come riding in on a white horse," says Keith Henry, a Japan specialist at the Massachusetts Institute of Technology, "it gets dirty very, very quickly."

Aoshima paid with his job. Now, several heavyweight politicians are lining up to make sure Tokyo does not fall, once again, into the hands of a nonconformist. The ruling Liberal Democratic Party has already turned up two rival candidates for the April 11 election. Former foreign minister Koji Kakizawa and former U.N. under secretary-general Yasushi Akashi both declared their intention to stand last week. They will face fierce competition from the current front runner, Kunio Hatoyama, who hails from a family known as the Kennedys of Japan.

It is symbolic of how times are changing for Tokyo that Hatoyama, the consummate insider, now talks very much like Aoshima, the departing outsider. The son of a former prime minister and founder of the LDP, Hatoyama left the ruling party and is now deputy leader of the opposition Democratic Party of Japan. More than any other candidate, Hatoyama has been explicit about his goals for Tokyo. He's going to cut spending, just as Aoshima tried to do. Specifically, he vows to fire up to 20,000 of 192,000 city employees to cut the city budget by 30 percent. "I don't want Tokyo turning into Manhattan" of the 1970s, he says.

If that sounds like vindication for a certain former comedian, it is. Hatoyama knows that in the last election, Aoshima defeated a candidate backed by the four top political parties, showing that many voters are tired of the establishment. This time, Hatoyama faces the maverick candidacies of a former teacher, a television commentator and a university professor. And even the ruling-party bigwigs are talking about "restructuring," or budget cutting. It seems that now, every candidate is following the comedian--a decision that speaks volumes about the kind of leadership Tokyo needs in a time of crisis.