Treating government like mom-and-pop shop will be Tokyo's undoing
March 8, 2009
 By William Pesek
Then Koizumi got to the real point of the heavily attended press conference: oh, here's my son, Shinjiro Koizumi, who should succeed me in the job.
It was a numbing moment for observers who once saw Koizumi as the change agent the second-biggest economy desperately needed.
It was a stark reminder that even those supposedly committed to improving Japan treated the government like a mom-and-pop shop.
Parents owning fruit stands, shoe factories or trading firms often hope to pass the torch to their children. They don't call it a "family business" for nothing.
What happens, though, when politicians treat their country the same way?
Since Koizumi left the top job in September 2006, Japan has had three prime ministers, none of them remotely up to the task. Stress did in Shinzo Abe (September 2006 to September 2007), political gridlock sank Yasuo Fukuda (September 2007 to September 2008). Widespread voter dissatisfaction will soon nudge Taro Aso from power. And not a second too soon.
Other than a knack for botching the job, Abe, Fukuda and Aso have something important in common: they are part of family dynasties.
It's a key characteristic of Japan's history - from the emperor's 1 400-year lineage to the father-son inheritance of Kabuki theatre roles. The cabinet chosen by Aso, the grandson of one ex-prime minister and the son-in-law of another, fits a similar pattern.
Descendents
Among Aso's original line-up were descendents of former members of parliament for 11 of 17 positions. That beat Fukuda's eight such appointments.
Even Koizumi, who in 2005 used outsider candidates to win 68 percent of lower-house seats, turned around and gave nine cabinet posts to legislators' relatives.
The penchant for recycling family members is holding Japan back at a time when it needs to be planning for the future.
Nothing short of a political earthquake will alter this dynamic.
Japan's obsession with seniority doesn't help. A legislator doesn't matter until he or she rises through the ranks decade after decade. Once true power is granted, that politician has been co-opted by a system that serves itself, not the people.
The idea of a 47-year-old junior legislator akin to US President Barack Obama becoming Japan's prime minister is unthinkable. Perhaps it's possible when that smart, articulate Japanese Obama is 67.
Yet Japan doesn't have 20 years to wait for a fresh-faced leader. Its massive public debt load, fast-ageing population, shaky pension system and waning competitiveness can't wait that long.
A fast-deepening recession raises the stakes. Even the vaunted Toyota Motor is seeking government loans.
The government plans to tap its foreign exchange reserves to help a state-run bank increase loans to companies operating abroad. Aso's focus isn't the economy, but keeping his party in power.
Kaoru Yosano, Japan's new finance minister, is in damage control mode, not looking-five-years-ahead mode. Yosano must clean up after his predecessor.
Tired playbook
Yosano is opening Japan's tired playbook. He ordered a study into ways to bolster stocks with government funds. It's better to do the opposite: implement sound policies that cheer investors.
Japan's we-are-family governing system has a counterpart in the private sector known as amakudari. The practice hands out executive posts to former public officials. It also explains why government policies are skewed towards huge, politically connected companies, not start-ups that might reinvigorate the economy.
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William Pesek is a Bloomberg News columnist. The opinions expressed are his own
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