ASIAN AFFAIRS ON JAPAN
Noriko Hama - Research Director - Mitsubishi Research Institute
THE FAILURE OF JAPAN
Without doubt the Asian crisis of 1997-98 could not have come at a worse time for Japan. Already reeling under the impact of what had amounted to a total implosion as well as the erosion of its internal systemic coherence, the Japanese economy suffered much from the turmoil caused by the financial crises of its neighbours.
Yet there is equally little doubt that Japan itself had much to answer for in bringing about those crisis conditions in emerging market Asia. While the internal structural problems of emerging Asia itself that culminated in the crisis are by now very comprehensibly documented, it is nonetheless fair to say that had not Japan been in the state that it was in at the time, the overall crisis would not have taken on the proportions that it actually did. For it was the weakness, both of overall economic conditions in Japan as well as the yen’s exchange rate against the dollar, which precipitated the collapse of the pegged exchange rate systems of the relevant economies, thereby leading to the highly contagious financial demise throughout emerging market Asia. Already inflation prone by the large capital inflows, not least from Japan itself, the dollar-pegged system became increasingly unsustainable for the Asian economies as the yen started to lose value vis-à-vis the dollar.
While the 1997-98 crisis may be looked upon as a problem of growing pains for emerging market Asia, what Japan was simultaneously suffering from at the time may be termed shrinking pains. It was the juxtaposition of those two very different kinds of pain that so deepened the crisis. The time had come for emerging market Asia to adopt a new style of economic management, better suited to its stage of development, which was rapidly outgrowing the erstwhile model of pegged exchange rates and strong reliance on foreign and mostly short-term capital inflows. Meanwhile, Japan was struggling to find a way of shrinking itself out of the bubble economy, but as painlessly as possible, and therefore with predictably little success.
The lost decade
Indeed so disillusioned have the Japanese become with their dismal economic performance of the 1990s, that they have taken to calling this period “the lost decade”. GDP growth rates over this period certainly substantiate the sentiment. From 1989 to 1999, Japan’s real GDP grew, in calendar year terms, by a meager 1.3% per annum. This includes one year of negative growth in 1998, when the economy suffered a setback of 2.5%. In fiscal year terms (starting in April of any given year and ending in March of the next), which is the more customary way of discussing the economy in Japan, both 1997 and 1998 were negative growth years.
Not since the depths of the oil crisis induced world recession of the mid 1970s, had the postwar Japanese economy experienced negative year on year growth thus far. A two year consecutive contraction had been unprecedented in that period, both in fiscal as well as calendar year computations. The 1.3% growth for the decade contrasts with 3.9% in the 1980s, 4.6% in the 70s and the immediate postwar recovery of 10.1% per annum in the 1960s. Without doubt, all evidence points to the 1990s as the worst performing decade in the postwar economic history of Japan.
Not withstanding the no less than eight special fiscal packages that were brought in to stimulate the economy between 1992 and 1998, the economy simply showed no sign of responding to the treatment by a return to sustained expansion. The private sector economy just simply kept on shrinking. It was as though a curse had been placed on the economy so that no amount of calorie intake could make it grow again. Indeed, the economy began to display a clear inability to absorb to good use the high-caloried fiscal stimulus that the government tried increasingly frenziedly to shove down its throat. The shrinking man looked beyond salvation.
Japan’s initial efforts to counteract the aftermaths of the bubble economy was to go in for the dieting without a parallel concerted support effort to reform the underlying institutions. As a result, the dieting process culminated in a self-feeding spiral of shrinkage, whereby deflation begot deflation, business sector shrinkage led to consumer sector loss of incomes, which in turn led to the contraction of the very market that businesses were trying to serve more efficiently through their dieting efforts.
Individual Wisdom, Collective Folly
What was truly frightening about this whole proceeding was that it had become a typical instance of individual wisdom leading to collective folly. For in the face of what looked to be crisis conditions, one and all were responding in ways that appeared to lead to survival, and yet in so doing were in effect leading the economy as a whole down the road of spiraling deflation. Under the circumstances, it made perfect sense for companies to cut costs, so that they could reduce prices. The general level of prices measured at the wholesale level had been falling almost non-stop year on year for the better part of the 1990s. Companies could hardly be blamed for trying to lower their cost thresholds. Yet cost cutting could only lead to pressuring suppliers into cut throat competition, and even to resorting to imports when the occasion to do so presented itself. It would also impel employers to hold down wages, and to employ fewer people. Thus and only thus were companies able to achieve the cost cutting that would allow them to keep in business.
Yet in following this line of reasoning, what the same companies were effectively doing was to reduce the buying power of the very people whose demand they hoped to better capture by offering cheaper bargains. For given reduced earnings and prospective job losses, again it made perfect sense for people to tighten the purse strings and rein in spending. People were certainly not apt to go on a spending spree when their incomes were not growing and job security was starting to look increasingly perilous. And so it was that the Japanese economy was locked into a process of self-impoverishing productivity gains, which threatened to downsize the economy into eventual nothingness.
This pattern of individual wisdom culminating in collective disaster manifested itself in most chilling fashion in an incident which shook the nation in early 1997. This was the case of three small business owners in the automotive sector committing a suicide pact by hanging themselves in adjacent hotel rooms into which they had checked in together. The cause of this tragic event was that the bankers with whom these people did business suddenly decided to withdraw credit from them.
Nowhere is the small business community as heavily dependent on bank credit as is the case in Japan. Japanese small businesses run their everyday operations on the implicit assumption that loans would always be rolled over and that extra credit would always be forthcoming so long as they kept on the right side of their local bank manager. The banks in turn are ensured a secure and unshakable business base, once they have established ongoing relationships with the local small business community. The small businesses would forever be indebted to the banks, but in so doing, they could plan ahead, buy new equipment, hire new people and keep their operations going without ever having to worry about whether they would be able to secure the finance or not. The arrangement may not earn the banks very much, but what they got to compensate for the low profitability was a captive market that they could confidently call their own more or less ad infinitum.
Imagine the shock to the typical small business, so used to thinking along such lines, when of a morning they receive an announcement that loans would be forthcoming no more, and even worse, existing debts are to be called in. What were they to do about the equipment that they had already ordered in? How were they to pay out wages to their employees? Everything had been planned for and put to practice on the assumption that loans were to be had for the asking. Banks’ willingness to generally throw money at small businesses had become even more manifest than previously in the bubble years as financial institutions in Japan jostled intensely for position in what had suddenly become a fiercely competitive market. Startup finance was the only exception to this new bubble-induced attitude of accommodative banking. Companies with any kind of track record found themselves at the focal point of the lavish attentions of their bank manager. Yet now that the party was over, the carpet was to be swept so abruptly and so cruelly from under the feet of those small businesses, by now so used to regarding bank loans more or less as their own money. It is small wonder that those three people were driven to ending it all by hanging themselves . The more conscientious you were, the bleaker and blacker the future was apt to appear.
From the point of view of the bankers, it had indeed become a matter of survival for them to shed inefficient ties and to rebuild their finances which had become woefully fragile as a result of their lending binge of the bubble years. Banking scrutiny began to grow much more exacting as the extent of the non-performing loan problem gradually started to be uncovered. The situation became such that there was really no way of knowing the true extent of the problem. The truth could indeed have lain anywhere between the 30 trillion yen that was officially talked about, and the 100 trillion yen that more sober analysts were apt to put forward. The lack of formal transparency, which made it difficult to arrive at a precise assessment was, of course, a major part of the problem.
In this atmosphere of uncertainty and increasing alarm regarding the health of the financial system, banks in Japan suddenly found themselves in the position of having to meet lending standards and comply with capital adequacy ratios that they had never really given thought to in the past. Otherwise they were threatened with exposure, censure and maybe even eventual failure. They had no alternative but to cut their losses. Yet in so doing, they were driving their customers towards destruction, even to the extent of their actually taking their own lives. The resulting shrinkage of business, and even more seriously, the actual losses resulting from bankruptcy would further damage the banks’ own finances. It was in such a fashion that the bankers and their borrowers followed the path towards collective doom, even as they struggled, each in their separate ways, to stay alive.
Banks at Peril
One very alarming problem for the banks was that it was becoming increasingly more difficult for them to comply with the mandatory capital adequacy ratios of 8% for institutions engaged in international activity and 4% for those with domestic operations only. This was due, in major part, to the fall in equity values as the result of the bursting of the bubble. The intricate and elaborate network of cross share holdings that had been built up over the postwar period had made equity values a critical element of banks’ capital make up. With those values falling spectacularly, banks had little hope of maintaining their capital adequacy ratios at acceptable levels without slimming down their lending base.
Consequently, the kind of loan cutbacks that led to the tragic suicide pact incident began to proliferate. It was not only small businesses that suffered from these bank moves. Even the largest of the largest in corporate Japan began to have to resort to the issuance of straight bonds to raise cash, because the bank credit was forthcoming no more. While there was never any question of their being driven to the tragic extremes suffered by their smaller counterparts, it was nonetheless a strange new world that the corporate establishment encountered as a result of the banking sector’s newly found frugality. Just how serious and how extraordinary the situation had become, is well illustrated in the fact that Japan’s credit multiplier, the figure which indicates the degree to which any given amount of money creation has led to successive credit creation, thereby magnifying the overall purchasing power of the economy, started to decline in 1993 and has to this day not quite recovered the stability that a normally functioning economy would be expected to have.
Increasingly, it became apparent that unless drastic measures were taken to forestall such an eventuality, a systemic crisis was what the financial sector in Japan was headed for. Such was the situation as the government of the now deceased Keizo Obuchi came into power in July 1998. The sheer severity of the problem induced the newly appointed cabinet to move extraordinarily swiftly to adopt legislation designed to combat the impending crisis. This took the form of two laws, one of which is the Financial Restoration Law, which established the procedure for dealing with failed banks. The other, The Early Strengthening Law was designed to prevent others from failing through “early corrective measures”. It was an indication of the depth of the crisis, that in introducing these two legislative measures, what the law makers were effectively saying was that banks in Japan had either failed already or were about to fail. Indeed, in the language of the early corrective measures legislation, all banks except those that had filed for bankruptcy were referred to as “pre-failure” banks.
It was under the Financial Restoration Law that the Long Term Credit Bank of Japan became nationalized, subsequently to be sold off to the investors group headed by Ripplewood Holdings and to gain a new lease of life as the Shinsei Bank. Similarly, Nippon Credit Bank will be sold to a consortium led by Softbank, that increasingly financially stretched champion of new economy Japan style.
As for the early corrective measures approach, the pillar of this formula was the 25 trillion yen worth of capital injection into the “pre-failure” banks so that they could get on with writing off their non-performing loans without seriously undermining their capital adequacy positions. Banks that had managed not to go bankrupt were divided into four categories according to the state of health of their finances, with the types of corrective measures to be adopted stipulated according to category by the newly created Financial Reconstruction Commission. Under the FRC’s directions it fell to its administrative arm, the Financial Supervision Agency to set the operational wheels in motion.
An important feature of the capital injection measure which has all too often been misunderstood as well as misrepresented, is that it was never designed to encourage banks to keep on lending. This was all too often the assumption made by politicians, who would bring pressure to bear on banks to maintain lines of credit to many a construction company with seriously damaged balance sheets, now that the banks were to have a dose of fresh capital supplied to them out of government coffers. Moreover, there was a tendency even among the financial press and other sources who ought to have known better, to represent the capital injections as precisely having that effect of preventing banks from cutting off lines of credit to ailing borrowers.
As attractive as this reading of the policy measure may have sounded, it was not an accurate one. The capital injections were to take place, precisely so that banks could stop their ineffective and ultimately destructive lending to non-performing borrowers. In writing off non-performing loans, not merely in terms of beefing up the provisions for them, but to actually remove those loans from its assets, a bank would have to sell off those loans at a heavy discount from their original value. A loan asset of 10 billion yen in book value would probably only go for a tenth of that value. To offset the resulting heavy losses, the bank would have to draw down on its capital, and find itself in an unsustainable position of capital shortage, unless it had provided amply for the eventuality, which was very rarely the case within the banking community in Japan. It was so that this particular and specific problem could be circumvented, that the capital injection measure was put in place.
As such, the more faithfully it was administered to both its letter and spirit, the Early Strengthening Law was a piece of legislation that of its very nature would lead to the worsening of the credit shrinkage process. Yet such were the drastic measures required if the pitfall of collective folly into which the post-bubble Japanese economy had fallen was to be eradicated, once and for all. The important saving grace of credit shrinkage taking place under this legal framework would be, that it would be the really non-performing loans that would be removed from bank balance sheets, and not those that the banks themselves regarded as relatively expendable. Thus, while non-performing borrowers with clout would no longer receive preferential treatment, well-performing borrowers with less clout would not be protected from undue victimization.
Japan, the reality averse.
The only way out of the situation was to look for surgical solutions. Fundamental and far-reaching reappraisals were called for. The crisis was a crisis of institutions. Without a change in the framework within which the economy operated, there was little hope of escaping out of the deflationary spiral.
Mr. Keizo Obuchi now deceased, whose government it was which went ahead with the initiative that resulted in the two pieces of financial legislation discussed above, was not in any way a courageous teller of the bitter truth. In fact, he took to referring to himself as Mr. Obuchi-mistic, hoping, somewhat in vein, that people would recognize the pun on optimism. He liked to speak of the “affluent recession”. The connotation was that all the dire talk about the economic skies falling upon us amounted to nothing more than the moaning of people so used to living the dolce vita that the slightest breeze tends to send panicky chills down the collective spine. Mr. Obuchi was intent upon obliterating such gloom and doomist mentality from the Japanese psyche.
And so, Japan’s initial efforts to counteract the aftermaths of the bubble economy was therefore to go in for the dieting without a parallel concerted support effort to reform the underlying institutions. As a result, the dieting process culminated in a self-feeding spiral of shrinkage, whereby deflation begot deflation, business sector shrinkage led to consumer sector loss of incomes, which in turn led to the contraction of the very market that businesses were trying to serve more efficiently through their dieting efforts.
What was truly frightening about this whole proceeding was that it had become a typical instance of individual wisdom leading to collective folly. For in the face of what looked to be crisis conditions, one and all were responding in ways that appeared to lead to survival, and yet in so doing were in effect leading the economy as a whole down the road of spiraling deflation. Once individual wisdom and collective survival start to contradict each other, it is indeed very difficult to stop the shrinking process. The only way out of the situation was to look for surgical solutions. Fundamental and far-reaching reappraisals were called for. The crisis was a crisis of institutions. Without a change in the framework within which the economy operated, there was little hope of escaping out of the deflationary spiral.
In the circumstances, it did not help that throughout the crisis period, policy makers in Japan persistently shied away from looking reality in the eye. Indeed, if the shrinking man syndrome was the manifestation of the curse of anachronism on the existing framework, that curse had to be confronted squarely and unflinchingly. It was certainly not advisable to keep consuming yet more high calorie junk food so that the shrinking symptoms could be stemmed temporarily.
In fact, one of the many lessons to be learned from the lost decade of the 1990s is that it is always better to tell the story as it is. However bad the situation, knowing the extent of the problem is always better than knowing nothing about it at all. To know the nature and the size of the beast that one is up against is half the battle. Far better to look the beast in the eye than to be forever jumping at its shadow lurking just around the corner. Far better to say that the Titanic is sinking at an early stage of the calamity than to look the other way, only to start looking for lifeboats when the very effort has become a futile exercise. If a crash landing is in sight, the crew of an airplane might as well tell their passengers about it and ask them to get out the life jackets rather than telling them to relax, sit back and continue enjoying the flight. The less transparency before and during a crisis, the more panic, the more jumping at shadows, the more loss of confidence and policy credibility.
Nevertheless Mr. Obuchi was absolutely correct in pointing out the affluence of the Japanese economy. After all, Japan is the largest net creditor nation in the world. To that extent, it is Japan money that makes the global economy go round. Yet this is precisely the crux of the problem, the heart of the matter.
In past years, it was the accepted wisdom to say that the Japanese economy was a flow-based economy with very little stock. That is to say, while it was capable of growing very fast, it had very little in the way of accumulated wealth. Thus, the workaholic Japanese would peer with envy out of their rabbit hatches at the Europeans sitting elegantly back on their accumulated laurels and living in vast mansions.
This wisdom holds no longer. The Europeans remain, as ever, their elegant selves, even though they seem increasingly to have been taken with e-commerce and the new economy. Japan on the other hand, found itself moving throughout the 1980s from the erstwhile flow based economy towards a stock based economy. It was no longer the case, that Japan could grow fast but had no accumulated wealth to speak of. A feature of the crisis-ridden 1990s was that Japan found itself in the position of a country with plenty of accumulated wealth and yet had somehow lost the knack of growing. Hence, the shrinking man syndrome. Yet because of the accumulated wealth, the shrinking process was not immediately apparent to the eye. This is the true nature of the affluent recession. It was not so much that pampered people were whining at nothing. It was more of a case of people not noticing the severity of the recession because the economy had become so large and so affluent. The sheer size of the boat and the sheer extent of the exuberance in the first class cabins, that nobody caught sight of the gaping hole at the bottom of the ship until it was too late.
Lessons from the past
In this respect, policy makers in Japan would have done well to learn from their own history. For there was a time when those responsible for policy management were able to be absolutely candid about the nature of the world they were facing. Such forthrightness from government bodies, which seems almost like a contradiction in terms in this day and age, is to be found in the very first “White Paper on the Japanese Economy” to be published in postwar Japan.
To give it its formal name at the time, “The Report on the General Economic Condition” compiled by the Centre for Economic Stabilization in 1947 begins its analysis of the situation with these bold remarks: “In its effort to reconstruct our devastated economy, it is the intention of this government to so inform the general public that each and every one of its members comes to understand the national economy as if it were their own household”. It was perceived, only too rightly, that without such well-informed consent on the part of the public, what was about to follow in the way of stringent controls and reform could not be implemented, let alone achieve the results aimed for. The determination and honesty, with which policy makers of the time took to revealing the extent of the problem that they and the public were up against, are breathtakingly refreshing.
Established in 1946, the Centre for Economic Stabilization was reshaped into the Economic Consultation Agency in 1953, subsequently to be renamed the Economic Planning Agency in 1955. This is the name under which it operates today. Half a century on from the publication of that first report on the economic condition, the EPA is now busily engaged in promoting the notion of a self-sustaining recovery that is firmly and irrevocably in place. The sheer overt enthusiasm with which they are doing this is enough to make one suspicious.
As welcome as a self-sustaining recovery would be under any circumstances, that is really not the issue. In fact nothing could be worse than a false dawn that lulls people into thinking that they can emerge out of the lost decade intact, without having to go in for structural reforms. It is the business of government to tell the story as it is. Again the postwar policy makers were faithful to this mission. Having established the need for a full disclosure of the horrors in store, the Report on the Economic Condition goes on to identify the gory details with surgical clarity: “It is not as though the economy suffers from a missing finger or a broken leg. The problems are far more physiological. It is more of a case of blood poisoning or the malfunctioning of internal secretion mechanismsÉ”. Without prior knowledge of the source, one could easily assume that these words were directed at the Japanese economy of today rather than that of 50-odd years ago. Except that such openness and graphic imagery seem no longer to form any part of policy-making language.
The continuing need for reform.
Are the crisis years now behind us? The recently returned to power government of Mr. Yoshiro Mori would have us think so. But again, it has to be reiterated that that is not the point. Recovery or no recovery, the fundamental issue of institutional reform remains. The existing Japanese system is one of intense central management. And this made good economic as well as sociopolitical sense in the early postwar years. The Centre for Economic Stabilization was itself the very manifestation and the centre of gravity of that system which worked so well in bringing Japan back onto its feet in the postwar years, in the most efficient and least time consuming manner possible. But Japan is now half a century away from where it was when that system served it so well. An economy of Japan’ s maturity, size, and complexity cannot be expected to function well within a framework whose purpose it was to put a war-devastated economy back on normal footing.
While the systemic crisis in the financial sector look now to have been averted, structural reforms in the industrial sector still have a long way yet to go. Again, the Obuchi government did introduce a legislative framework to encourage the process through tax breaks and generous accounting provisions making it easier for companies to scrap down excess capacity. Companies will need to make extensive use of such measures to lighten their load. What has now come to be known as “the three excesses”, i.e. excess capacity, excess people and excess debts still bear down heavily on large portions of the manufacturing sector.
After all, companies had grown so accustomed to building up their production capacity on the assumption of a 4 to 5% real term growth per annum. This was the business psychology that became ingrained in the 1980s. In the lost decade, that growth path had turned into one of barely 1% on average. It takes a long time to eliminate this kind of gap between the perceived need for production capacity and the really far less capacity that the economy in reality has now grown to require.
So the economy still needs to shed excess capacity. Over and beyond that, there is the need to move away from the system of central management referred to earlier. The financial sector, which has been the cause of so much of the problems of the lost decade, is a typical product of that system. The postwar Japanese financial sector was something of an effectively quasi-public sector institution rather than a part of the private sector market economy. Its mission was to provide a persistent flow of funds to the industrial sector of the economy so that growth and development could take place in an orderly and rapid manner. So long as the credit lines were intact, no embarrassing questions were asked about the banks own financial positions, and no tedious obligations such as transparency and accountability needed to be met.
But that is a system that works no more for the large and mature Japan of today. For the very fact that the existing system worked so well to make Japan what it is today, it is uniquely ill fitted to take Japan into the 21st century. All the factors that stood for stability in past years are now turning into elements of rigidity. All that stood for security can now spell only stagnation. That which ensured efficiency now locks the Japanese economy in the grips of uniformity.
Central no more.
To break away from the mould of central management towards competitive diversity is what is needed for the Japan of today. It is not without reason that the citizens of Tokyo applauded definitively the recent decision of its maverick governor Shintaro Ishihara to introduce local taxes specifically targeted at the larger banks whose headquarters are located in the capital. Apart from it being the indication of just how unpopular banks have become in Japan, the popularity of the measure was a sign that Japanese people are becoming increasingly suspicious of that very style of central management that is at issue here. They would like to see more local autonomy, greater power to the regions, and more space for smaller communities to make up their own minds about where they would like to go.
It is to be hoped that such pressures for an institutional renaissance will allow Japan to enter a world, where once more, what works for the individual works for the collective whole, and vice-versa. Then and only then, could we embark on the journey that would take us back, away from rigidity towards flexibility, from stagnation to revival, and from uniformity to creativity.
It will be new players and new actors with a taste for adventure that will take Japan down that path towards rejuvenation. Meanwhile old Japan in the form of established industries will still continue to struggle with restructuring, and those that really take the bull by the horns will no doubt succeed in carving out a formula for survival. Yet it will ultimately not be such people who take the leading roles in Japan’s process of renaissance. It will be the new breed of entrepreneurial small businesses, local community based operators, and such new types of actors who will make the most of the changing environment. The really most impressive way in which Japanese women are empowering themselves of late is just one indication of the potential for a grand metamorphosis that is building up in the aftermath’s of the lost decade. New wines require new wine skins. So does a new era demand new architecture designed by new people.
Undeserving politicians and the deserving public.
For one final word on the outcome of the recent Lower House elections. People are supposed to deserve the politicians they get. As wisely put as it is, it is really a little too cruel to apply this epitaph to the Japanese electorate. For however much of a gourmet one tends to be, those sophisticated taste buds have no way of manifesting their abilities if there is only one restaurant in town and the cooking staff there has the worst skills imaginable, and the menu is of a meagerness rarely encountered in the civilized world.
On the face of it, the election results look inconclusive at best, with the coalition government returned to power with an absolute majority. Yet it is nonetheless true that the largest opposition party, the Democrats did exceedingly well, gaining some 34 seats on their original position. They now hold 127 seats in the Lower House. Meanwhile, Mr. Mori’s Liberal Democratic Party, the leading party in the ruling coalition, has come down by 38 seats to 233 seats in total. This is only a hairbreadth away from the deliberately low threshold of 229 seats that the leadership of the LDP had set for itself as the dividing line between victory and defeat.
It does the opposition parties no credit that they were unable to exploit to its fullest extent the golden opportunity that Mr. Mori himself had handed to them on a plate with his persistent gaffes about Japan the divine nation, and his hope that floating voters would stay in bed on the day. The easy victories that second generation candidates were able to seize are a clear sign that the old system of village politics remains alive and kicking. Yet in spite of it all, the fact remains that a lot of people actually did turn out to vote for change. Full aware of the wretchedness of the menu, they nonetheless went out to concoct an a la carte meal for themselves that they could just about stomach as citizens in a democracy.
Yukio Hatoyama, the leader of the Democratic Party, came embarrassingly close to losing his own seat in the constituency vote. Yet more significant than this would-be humiliation of his, is the fact that he actually managed to get in, notwithstanding his campaign pledge to rein in public spending if brought into power. This was no music to the ears of his constituents in Hokkaido, an area renowned for its dependence on public works as a source of livelihood. In Hatoyama’s own words, it was “the wisdom of the voters” that earned him his seat. The restaurant of Democracy Japan Style remains in woefully bad shape. Yet that does not stop the restaurant goers from cultivating an increasingly refined taste for democracy. The political establishment in Japan would do well to heed that warning.
