Anyone else exhausted already with Japan's latest Mr Fixit-but-not-just-yet? Anyone else looking past Prime Minister Junichiro Koizumi and wondering whether Japan will ever produce a serious set of policies to pick itself up off the floor?
Some investors surely fit this description -- especially those who bought bank stocks after Koizumi took office in April with promises to force financial institutions to start disposing of bad loans. The Tokyo market's banking index has lost 19 percent since then. Shares in two of the biggest bank holding companies -- UFJ Holdings Inc and Mizuho Holdings Inc -- have fallen 37 percent and 30 percent respectively.
It's hard to believe Japan was declared a "buy" after Koizumi's sudden rise in the governing Liberal Democratic Party.
But that's what you get for believing a Liberal Democrat when he says reforms are right around the corner.
Today, when the opposition Democratic Party of Japan unveils its platform for legislative elections due in July, those frustrated by another round of the LDP's empty political posturing should find some needed uplift. Having reviewed this document, I find it startling. The translation to be made public at the Foreign Correspondents' Club in Tokyo represents the first comprehensive strategy Japanese politicians have ever produced for prying the nation out of its 11-year malaise.
Assuming you're more interested in serious thinking than Koizumi's taste in hair styles and rock music, the proposals are not to be missed. They consist of seven broad reforms -- ranging from public-works spending to education and social security -- and 21 specific policies. The latter cover everything from child care to energy efficiency, crime, foreign policy, taxes, and financial reform.
"This is the result of an extensive research effort by our policy staff," a DPJ operative tells me. Which is part of the point: One of the party's key political ambitions is to shift control of policy from the bureaucracy to elected politicians.
There are a couple of other things worth noting about "A Fair Deal for All," as the manifesto is called. First, it represents a complete vision. It sees the whole, and there is no other way to address Japan's problems with any hope of moving forward.
The running theme is interrelated policy. Improving the social safety net, to take a prominent example, is politically essential if Japanese voters are to accept the kind of change that thorough economic restructuring will require. There's a straight line between pension reform and the party's determination to hack away the decades of accumulated pork in the Japanese system. "The uncertainty people feel about social security is a major source of mistrust in politics," the DPJ document says.
Second, the Liberal Democrats' most serious challengers have the right idea about the immediate way forward with the banks and the corporate sector. It's recovery first, then reform.
This means recognizing the deflationary risk in Koizumi's badly conceived pain-for-gain plans, which are based on a swallow-it-whole neoliberal approach. The prime minister is politically paralyzed on this point precisely because he has made the wrong promises. In a fragile economic environment such as Japan's, forcing banks to write off huge amounts of bad debt can too easily produce a chain reaction of corporate failures and rising unemployment that sends Japan into a full-fledged depression.
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