Japan Asks: Who Will Fall On Sword for the Economy?

Japan's economic troubles know no end. After eight years of stagnation, unemployment is growing, companies are cutting salaries, and bankruptcies are reaching record levels.

The result is a sense of gloom that reminds Minoru Morita, a silver-haired political analyst known for avoiding overstatement, of the days following Japan's defeat in World War II. "I was just a boy," he says, "but I felt that sort of feeling during those three months after August 1945."

What broke the malaise then, Mr. Morita continues, was the announcement of democratic reforms by US occupation authorities. What will dispel Japan's sense of despair today, however, is less clear, but plenty of people are willing to offer one suggestion: How about a new prime minister?

Ryutaro Hashimoto's public approval ratings are sagging. The number of people calling for his resignation is rising. Some pundits are saying it is only a matter of time.

And yet Mr. Hashimoto hangs on. The political opposition is divided, his own party has no obvious replacement handy, and a huge new government spending package ought to mollify important constituents.

Beyond the political calculus, hardly anyone thinks that replacing Mr. Hashimoto will make much of a difference economically. A majority of Japanese are either uninterested in politics or too frustrated to care who or what party is in power; voter turnout rates in elections for national office are below 50 percent and declining.

Still, there is reason to care about who rules Japan. As the world becomes more economically intertwined, the vibrancy of the world's second-largest economy becomes increasingly important. For example, American officials pressured Japan and Hashimoto in particular to cut taxes and boost government spending so that this country can contribute to economic prosperity in the US and recovery in Asia.

Politicians serve themselves, not public

But the feeling is widespread here that politicians are much more interested in politics than policy. "Politicians only think about themselves, they don't think about the future of the country," grumbles Yoko Matsumura, a legal assistant in Tokyo.

At least one reason for her frustration is that the ruling Liberal Democratic Party is very good at thinking about itself. From 1955 to 1993, Japan was essentially a one-party state, with the LDP so firmly in power that the only excitement lay in tracking its factional squabbles. Popular outrage over bribery scandals, along with the defections of several youthful party leaders, resulted in the LDP's loss of its parliamentary majority five years ago, but since then it has pretty much regained its old position of dominance.

Just yesterday Morihiro Hosokawa, the most glamorous and alluring of the young defectors, said he would resign from politics. Mr. Hosokawa served an eight-month term as the prime minister of a reformist government that aimed to undo the "money politics" practiced by the LDP. But he too had to step down from the top job amid allegations of political funny money, opening up the way for the LDP to inch its way back into power.

A key vote

Since mid-1994 the party has regrouped and now controls 261 seats in the 500-member lower house of parliament. It lacks a majority in the upper house, but elections for half the seats in that body this July give the party a chance to replace that brick in its battlements.

The political opposition is trying to coalesce, but analysts say there is little chance they can topple the LDP. Hosokawa was vague when he was asked why he was leaving politics, but it may be that the prospect of staying in opposition did not appeal.

Hashimoto's future may depend on other events. Most analysts say his job is secure until the upper house elections, and, if the LDP does better than expected, perhaps until later this year. Hashimoto is expected to go to Moscow this fall for a summit meeting with Russian President Boris Yeltsin, and there is some possibility the two could resolve a longstanding territorial dispute and conclude a WWII peace treaty - an accomplishment the Japanese leader could take into the history books as he vacates his job.

One puzzle for analysts is why the economic despair isn't generating more interest in politics. "That is a big question," agrees Yasunori Sone, a political scientist at Tokyo's Keio University, adding, "The present government has made so many mistakes people can't identify one issue to get angry about."

Another explanation is that Japan's most organized and influential voters - the construction workers, farmers, small businesspeople, and fishermen who have long backed the LDP and been rewarded by the party - tend to work within the system. When they get upset they complain to the party, rather than taking to the streets or the soapbox, Morita explains. More immediately, a recently announced $127 billion government tax-cut and spending package may go directly to some of these constituents and ease their concerns.

There are few signs so far, but Morita says there is a chance that a worsening of the economic situation could turn malaise into momentum for sweeping change. Such outbursts are rare in Japan's modern political history, he says, but the conditions may be present for another one. That would not bode well for the LDP.