Japan's Old Guard Survives For Now

Liberal Democratic Party reformer Koichi Kato thought he had the votes, with the help of opposition parties, to sack Japanese Prime Minister Yoshiro Mori. Instead, Kato's 60-odd backers caved in an early-morning no-confidence vote on Nov. 21 after LDP faction bosses threatened them with party exile. Kato looked like a rank amateur as Mori sailed to victory by a wide margin.

It was bad political theater all around. But Mori and the LDP elders who back him are living on borrowed time. The gaffe-prone Mori is one of the most unpopular Prime Ministers ever. Two-thirds of the public want him to go. His Cabinet has been scandal-plagued. Nor does he boast the intellectual candlepower to represent Japan well on a global stage. The betting is that Mori will be granted a graceful exit by yearend. But the LDP is still in a fix. Kato's coup attempt, however inept, reflects deep anxiety within the LDP about the survival of a party whose political base is grounded in rural areas and sunset industries such as construction and farming.

Kato challenged the spendthrift public-works budgets of Obuchi and Mori, arguing they had done little for the economy other than run up Japan's budget deficit to Italian proportions. Now, with the Kato's reformist clique in ruins, the LDP will rush forward with $46 billion worth of more pork for special interests wrapped up in a supplementary budget expected to be passed next month.

Even so, a huge fault line has emerged in Japan's political world. The LDP-led coalition government, beholden to interests most threatened by globalization, wants to slow down Japan's transition to a more market-oriented economy with bailouts and handouts. Kato and the opposition Democratic Party of Japan counter that cathartic deregulation and fiscal restraint, though painful in the short term, will get Japan back into fighting shape sooner. Kato has the right message. But he really needs to work on his politics.

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