The Inept Captain of a Sinking Ship

It would have taken little short of a miracle for Aso to avoid the fate of Fukuda, Abe, and the party itself. Opinion polls consistently show that the public values "the ability to get things done" most highly in its governments: The electorate wants pensions, healthcare, welfare reform, economic growth, and jobs. The LDP has been disappointing in these areas.

The Abe government was defeated in 2007 in large part due to its mishandling of a scandal in which the social security agency was found to have lost tens of millions of pension records. The healthcare system is strained, especially in rural Japan, where there is a shortage of doctors. Rural Japan has been economically stagnant since long before the global financial crisis. The government's finances are in shambles as a result of the LDP's pork-laden attempts to escape Japan's "lost" 1990s, constraining the government's options in responding to the current economic crisis and providing a better social safety net.

The LDP and political commentators have blamed the DPJ, which controls the upper house, for hamstringing legislation on these crucial issues. But the LDP's supermajority in the lower house means it can pass legislation over opposition objections. Blame for the policy paralysis rests squarely on its shoulders.

Members of the LDP are also pointing fingers at each other -- and Aso seems incapable of stopping the party infighting. To be sure, the LDP has long been characterized by its internal divisions. Between the 1950s and 1990s, these disputes were often over how to divide a growing pie and involved crosscutting alliances of politicians and bureaucrats. After its temporary exile in 1993, the party, facing a stagnant economy, an aging population, and an ineffective administrative structure, really started to split. Reformists wanted to rebrand it as an urban, "neoliberal," consumer-focused party -- rather than a traditionalist, business-focused, conservative one.

This battle intensified with the election of reformer Koizumi as LDP president and prime minister in 2001. He promised to "destroy the LDP" and in doing so transform Japan. Instead, he merely intensified the internal battle. The reformists, many of whom owe their seats to Koizumi, have been increasingly isolated from senior government and party posts, but remain forthright advocates of far-reaching political, economic, and administrative changes. The hidebound Aso is now facing an open rebellion, with some reformists calling in public for his resignation.

The result has been chaos within the LDP -- an identity crisis with severe consequences for Japan as a whole. For years, the LDP has endlessly and ineffectually debated how to solve Japan's most pressing economic and social problems. And while the party has dithered, serious, interlocking problems have grown inexorably.

Japan now has the highest debt-to-GDP ratio in the G-8, despite Koizumi's efforts to cut spending. Social security spending, not surprisingly, constitutes an ever greater share of the budget. Tokyo's population continues to grow as areas outside the capital shrink and stagnate. The percentage of nonregular workers, ineligible for benefits, has nearly doubled. In aggregate, this means that a permanent underclass -- with few opportunities for social advancement and none of the protections normally afforded to workers -- has emerged. The Japanese public is distressed about these developments, but the LDP has been too mired in its own contradictions to make substantial progress on reform in any area.

The party apparently cannot change itself, giving the electorate little reason to believe it can change public policy or, ultimately, Japan. With the LDP stalled on the way to transformation, the public is ready to give another party the opportunity to implement reforms. And there is nothing Taro Aso can do about it.

Epilogue:

Chaos continues to engulf the Liberal Democratic Party (LDP), which has ruled Japan for much of the past 50 years.

As anticipated by polls, the LDP (and Komeito, its partner in government) were defeated in last Sunday's Tokyo local elections. The public overwhelmingly favored the more-liberal Democratic Party of Japan (DPJ), which won 54 seats and emerged as the chamber's largest party. It and other opposition parties combined won enough seats to take a majority -- thus denying the LDP its widely broadcast goal.

The embarrassing loss spurred Japanese Prime Minister and LDP leader Taro Aso to act decisively for perhaps the first time since taking office. Before his rivals got their bearings, he reached an agreement with senior LDP and Komeito officials on a snap election. Japan's House of Representatives will dissolve July 21 and the general election will be held August 30.

Calling the general election the day after a humiliating local election defeat was a wise maneuver on Aso's part. He headed off LDP members seeking to depose him in a moment of weakness. A long lag between the local election defeat and general election would have given time for anti-Aso reformists to unseat him and choose a new party leader. But now the party machinery needs to gear up and focus on the national contest, leaving his critics with a rapidly closing window of opportunity.

But Aso's decision to call an election has also intensified the party's Balkanization -- an ultimately counterproductive development. Party reformists unable to unseat Aso have but a few, unpleasant options: Leave the party and join the DPJ or the nascent reformist party formed by Yoshimi Watanabe; make a shame-faced peace with Aso and the LDP leadership; or continue fomenting dissent against Aso within the LDP. The longer they wait to make their decision, the harder it will be for the LDP to unify around a single platform.

In the meantime, the DPJ is finalizing its own manifesto -- and can barely contain its glee that Aso will be leading the LDP into the general election. At this point there is little for the DPJ to do but mind its own ranks. The LDP is doing more than enough to undermine whatever claim it has to being, in an oft-used phrase, the "responsible government party."

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