[I don't know where she gets these bulk numbers from but they're kind of cool. It's like astronomy: billions of billions.]
Financial Times ; 29-May-2000
COMMENT & ANALYSIS: An electorate that does not yet feel the pain: Japan has squandered huge amounts through economic mismanagement. But voters still feel too well off to be angry
By GILLIAN TETT
People get the government they deserve, as the cliche goes. If this is the case, what is the explanation for the dismal state of politics in Japan? With an election for the Lower House of parliament looming next month, Japanese voters face particularly uninspiring options.
There is the ruling Liberal Democratic party, which has produced few policy initiatives and seems wedded to pork-barrel politics. Its leader, prime minister Yoshiro Mori, is so clumsy with his words that aides promise he will talk on "six to eight topics" only during the campaign.
Then there is the Democratic party of Japan, which mutters, quite rightly, about the need for deregulation and fiscal tightening, but is too ineffective to win. That leaves an opaque Buddhist group, and the Communist party.
All this might seem comical if it were not for the fact that Japan faces some extremely difficult policy challenges in the next few years. The economy is stagnating, while debt levels are at 130 per cent of gross domestic product and rising. Meanwhile, as tensions rise between China and Taiwan, the region is becoming volatile: some 30 per cent of Japanese recently admitted that they fear the prospect of war.
Yet most voters seem resigned to another four years of the LDP. The prospect does not greatly excite many Japanese, but nor does it alarm them. Japan is not a country about to take to the streets in anger; indeed, it can hardly muster a student riot. A recent survey found that only 4 per cent of Japan's 20 to 24-year-olds show any interest in politics at all.
Why such apathy? Some Japanese blame the voting system, which has such a strong bias towards the rural vote that it leaves urban intellectuals feeling disenfranchised. Others argue that since Japan's bureaucracy has run large swathes of the economy for 50 years, politics is largely irrelevant. A popular cultural explanation is that the Japanese prefer harmony, which can sometimes make them politically passive.
However, there may be an altogether simpler reason: economics. In other countries, economic mismanagement of the kind that has been seen in Japan in recent years would cause voters' anger. Newspaper headlines keep screaming that unemployment is at record levels, the economy is stagnating, and debt levels are surging - but many Japanese still feel comfortable enough not to rock the boat.
Even after 10 years of stagnation, Japan remains a rich country. True, it has recently squandered wealth on a scale barely seen before in the world. The Organisation for Economic Co-operation and Development, for example, has calculated that Japan has lost Y1,000,000,000bn (Dollars 9,340,000bn) - or 14 per cent of its assets - since the 1980s bubble burst.
The household sector alone lost Y450,000,000bn of wealth, one-sixth of its paper assets. But the country still has anything between Y1,000,000,000bn to Y1,200,000,000bn of personal assets, equivalent to Y10,000,000 per person. This is more than most other industrialised countries. It is also great wealth compared with the postwar poverty that older Japanese still remember.
A further, more subtle, reason for the apparent political apathy is that Japanese society has been effective at parcelling out pain in recent years. The egalitarian, collectivist ethos that has dominated much of postwar Japan means that when a "shock" hits the system, its impact is spread out in a relatively endurable way.
When companies needed to cut their wage bill, for example, they tended to trim everybody's bonuses, rather than fire a few unlucky workers. And as holes now open up in parts of the public finances, trickles of funds are quietly being found to plug the gap.
However, this situation is now changing. Statistics suggest that Japan is becoming far less equal in terms of its distribution of household wealth. Workers are starting to lose their jobs. In the corporate sector there are growing numbers of cases where the money has started to run out. Nissan Motors was one example. Yamaichi Securities was another.
More importantly, when the money has run out, this has triggered change. After banks such as Long-Term Credit Bank started to collapse, the country embarked on serious financial reform. When Nissan became engulfed in its debts the government was forced to allow a foreign company take a large stake in what is regarded as a jewel of Japanese industry.
But without a shortage of money, reform tends to be staved off. And large parts of Japan still have very little sense that the wealth is running out. Government debt might be surging, but bond yields are - remarkably - still falling.
Japan is not like South Korea whose economy fell off a cliff in 1998, and where the population feels an urgent need for change. In Japan the decline has been too gradual and well-absorbed to create a sense of panic among the populace.
Perhaps, in the next four weeks, Japan's voters will suddenly get angry after all. Mr Mori may stray from the six topics he is supposed to talk about, and make more gaffes. More scandals may erupt: the weekly magazines are already gleefully reporting Mr Mori's involvement in a gangster wedding a few years ago. And the DPJ is bravely trying to create some voter panic by pledging to fight the next election on a platform of emphasising how bad the fiscal situation really is.
"We have to tell the voters the truth," says Yukio Hatoyama, DPJ president. But this "truth" is unlikely to create demands for urgent policy change among voters - let alone the ruling LDP - without visible signs that money is running out.
If Mr Hatoyama wants to win on June 25, he would do well to pray for a bond market crash.
Copyright © The Financial Times Limited