In this edition of TPR News: The Diet session is extended again; the pension fiasco worsens as the LDP admits there is no chance it will live up to its campaign promise to sort it out by March; Tokyo hands a wad of cash to the countryside; Fukuda fails to explain fingerprinting; Japan drops a bit in OECD student assessments; the phrase of the year is chosen; milk prices go up and are joined by wholesale prices; there are too many suburban homes on the market; and consumer confidence is down.

Politics

The biggest political news of late has been the not entirely surprising decision by the ruling coalition, and approval by the Lower House, to extend the already extended Diet session again. Prime Minister Yasuo Fukuda of the Liberal Democratic Party and Akihiro Ota of the New Komeito agreed to keep the extended extraordinary Diet session going until January 15th in order to use the Lower House’s supermajority to override the likely Upper House rejection of the bill to extend the Maritime Self-Defense Forces’ refueling mission in the Indian Ocean, the Prime Minister having already assured NATO Secretary General Jaap de Hoop Scheffer that he was trying to get the mission restarted as soon as possible.

The extension will not only mean that there will be virtually no break before the beginning of the ordinary Diet session, but also that the Upper House, controlled by the opposition Democratic Party, will likely pass a non-binding censure motion against the Prime Minister in an attempt to force him to call a snap election. While an early general election would probably be bad news for the LDP, it could very well spell disaster for the New Komeito, hence the junior coalition partner’s insistence upon assurances from Fukuda that he will not call for elections.

During the plenary session in which the extension was approved, on Friday, DPJ member Taizo Mikazuki called on the Prime Minister to dissolve the Lower House, citing the Defense Agency scandals and massive losses of pension records. In response, Takamori Yoshikawa of the LDP called on the opposition camp to vote on the refueling bill as soon as possible.

The opposition camp also showed its displeasure with the ruling bloc’s actions and determination to block the refueling bill by symbolically voting against the Diet session extension. DPJ Secretary General Yukio Hatoyama criticized the ruling camp for waiting nearly two months after the July 29th elections before convening the extraordinary Diet session.

LDP Secretary General Bunmei Ibuki explained that Japan relied on foreign trade, the finance industry, and, thus international cooperation, and said, “The antiterrorism bill is necessary for international cooperation,” although he did not explain how.

While the Diet putzes around with the solely symbolic refueling mission in the Indian Ocean, a supremely unimportant issue by any sensible measure, it is all but ignoring the massive, rampaging elephant in the room: the pension debacle.

Despite the fact that the pension problem is possibly the primary crisis facing the nation at the moment, it has been overshadowed by sexy, showy issues of late, so readers will be forgiven for having forgotten some key details.

Last Spring, reports of 50 million pension accounts without identified owners surfaced. While the owners could be unidentified for a variety of reasons, all fingers are pointed at astoundingly shoddy record-keeping and lax practices within the Social Insurance Agency coupled with, by most accounts, disinterested or inept oversight from the government.

Shortly after the scandal was broken, by this observer’s rep, DPJ Policy Research Committee Deputy Chairman Akira Nagatsuma, in the run-up to the July 29th Upper House elections, the ruling LDP and then-Prime Minister Shinzo Abe vowed to identify and inform every account owner by March and pay every yen in pensions owed.

After Abe resigned, Fukuda became Prime Minister, the Cabinet was reshuffled for the second time in under a month, and Yoichi Masuzoe became Minister of Health, Labor, and Welfare, Masuzoe repeated the promise to identify all of the account holders and pay every yen owed.

A few days ago, it was revealed that, at best, the government will succeed in identifying close to 60 percent of the pension account holders by March 2008, falling far short of its pledge. Masuzoe did what politicians do and issued an apology by blaming the problem on the Social Insurance Agency, saying, “I am just flabbergasted that the many years of accumulated ills at the Social Insurance Agency had reached this level,” and that he never promised to resolve the situation by March.

He added, tellingly, that he and his colleagues “never imagined that it would be such a difficult issue.”

As if that weren’t enough, on Wednesday, Social Insurance Agency officials announced that about 1.18 million, and as many as 1.55 million pension payers would receive neither a pension nor a refund of the payments they had made, even if they continued to make payments, primarily because they had not paid premiums for the required 25 years. The current estimate is close to 50 percent higher than that of 2004 because pension payers between 60 and 64 had not been included in the 2004 survey.

What did Prime Minister Fukuda say of his party’s failure to live up to its campaign pledge? On Wednesday, he said they hadn’t broken their promise - that the dilatoriness of his party’s progress didn’t matter enough to be called a broken promise. When it was demonstrated that they had, he defended his fudging by saying that his party’s promise had slipped his mind. The opposition, of course, ate him for lunch.

This observer thinks he was telling the truth, though. Given the ruling coalition’s handling of what is arguably the single biggest problem facing this government, it seems that not only the campaign promise, but also the problem had slipped the Prime Minister’s mind.

In exchange for the central government’s support in his ill-advised bid to bring the 2016 Summer Olympics to Tokyo and a few other wishes, Tokyo Governor Shintaro Ishihara relented in his opposition to tax redistribution and agreed to allow the central government to redistirbute ￥300 billion of Tokyo’s tax revenue to cash-strapped local governments in rural areas. The move, it is hoped, will alleviate part of the growing gap between rich and poor, urban and rural. While called “temporary,” the continued subsidizing of failing localities and the lack of any sustainable, long-term revitalization plan for most of those areas makes it more than likely that this bit of wealth redistribution is far from the last.

In other tax news, the ruling coalition, viewing the consumption tax as being for specific purposes such as social insurance and health care, has said it is keeping a consumption tax increase on the table as part of its fiscal 2008 tax reform.

Also expected to be on the table for the ordinary Diet session, which will begin a mere two days after the current Diet session ends, is a permanent dispatch law for the SDF. Currently, a new law is required every time the SDF is sent abroad. Prime Minister Fukuda would like to institute such a law.

Fukuda also spoke, on Friday, of Japan’s new fingerprinting program for foreigners, mandated by the May 2006 revision to the Immigration Control and Refugee Recognition Law, which has drawn fierce protests from foreigners and civil rights activists.

Fukuda said that since the September 11th attacks (which we’d like to point out, did not occur in Japan), the world has turned to fingerprinting as a security measure (by this, he means the US), and that fingerprinting had been “proven effective” in preventing terrorism, which he neglected to explain, probably because the opposite is true.

As we here at TPR have not yet publicly stated a clear opinion on fingerprinting, we’ll take the opportunity to do so now.

It’s a disasatrously bad idea. Expensive, ineffective, shown to not work, nonsensical, offensive, discriminatory, and a decision taken in reaction to unrealistic, ungrounded racist and xenophobic fears stoked in the first place by the government and further fed through this program.

There has never been a terrorist attack, by a foreigner, on Japanese soil. Even if there had been, even if Japan actually did face a heightened threat of foreign terrorist attack, there is no evidence to suggest that finerprinting and photographing foreigners upon entry does anything to prevent such attacks. On the contrary, early studies of the program in the US seem to suggest that it is ineffective. Actual, verifiable effects of such programs include foreigners seeing a country as hostile and unwelcoming, leading to a decreased desire to visit, work, or study there, which is one thing Japan can absolutely not afford. Furthermore, the first few weeks of the fingerprinting program have shown that there are enough problems with the biometric equipment begin used to suggest that the technical capability to carry out the program might not be in place.

Worst of all is that the Ministry of Justice has not yet even attempted to explain precisely how fingerprinting is meant to prevent terrorism. As with every other half-baked idea or boondoggle pushed on Japan by its government, the government has decided on a bumper-sticker catchphrase, the punchline to an argument, and decided that’s all the explanation necessary. Fingerprinting prevents terrorism. Period.

Business and the Economy

Japan’s consumer confidence slipped to a four year low last week, according to data released by the Cabinet office. The consumer confidence index fell to 39.8, a score well within the pessimistic range. Speaking at a press conference after the announcement,a government spokesperson said, “This month’s decline is mostly due to consumers’ outlook that prices will rise due to high oil and commodities prices as well as the recent news reports about price hikes.”

It certainly seems as though prices are rising, especially with regards to food items. On Tuesday, it was announced that Meiji and Morinaga, Japan’s two largest milk producers, would be raising their wholesale prices for the first time in 30 years from this coming April. Both firms cited increased packaging costs at well as higher oil prices as leaving them no choice but to increase their prices. Other milk producers are expected to follow suit. Demand for milk in Japan has been on a steady decline over the past decade.

While retail prices are rising in some sectors, wholesale prices are certainly on the rise. The corporate goods prince index surged 2.3 percent in November, showing its largest rise in 14 months. Although firms have been reluctant to pass on higher costs to consumers thus far, many analysts speculate that it is only a matter of time before higher retail prices are seen in Japan.

The worry is that higher retail prices will cut into profit, especially at small and medium sized firms, where 70 percent of Japan’s workforce is employed. Wages have declined in nine of the past ten months. Earlier in the week, Fujio Mitarai, the Chairman of the Japan Business Federation (Keidanren) told reporters, “At companies that have strong finances, monthly base pay will be raised if wages are below average.” However, Mitarai made a similar statement last December, and declining consumer sentiment levels shows little confidence in this view.

The Nikkei is reporting that an oversupply of condominium units, especially in the suburban Tokyo area, has created a glut in the market and that several real estate firms are now in ‘crisis mode’ as debt levels at the nation’s largest five developers has increased by nearly 20 percent. In terms of marketing new condos, developers seem to be ending the decades-old practice of building model rooms to show customers, as they reportedly want to see the real, finished unit before putting down a down payment.

Finally, the Nikkei reported a potential large development in the auto industry on Saturday. It appears as though Nissan and Chrysler are in talks that could lead to an alliance between the firms that will allow them to mutually supply new vehicles. Chrysler, which is now split from the Daimler group and is part of US Private Equity firm Cerebrus, is interested in Nissan’s global market reach, while Nissan, which failed in setting up a business alliance with General Motors last last year, is reportedly interested in Chrysler’s truck production operations.

Society

The OECD’s rankings for student aptitude in its member nations were released on Tuesday. Japanese students continued their slide which was first clearly documented in the last Program for International Student Assessment (PISA) back in 2003. The PISA tests are designed to measure how much high school students have picked up during their years of compulsory education. 400,000 15-year-olds took part in the 2006 test.

The most recent PISA report (2006) showed that Japan has dropped from 14th to 15th in reading, from 6th to 10th in mathematical literacy, and from 2nd to 6th in scientific literacy when compared to 2003.

57 nations took part in PISA 2006, up from 41 in 2003. For the record, Japan’s 2006 score in reading was identical to that of 2003, so their drop from 15th place is attributable to the extra countries participating in this year’s survey. Science and math scores, on the other hand, dove 17 points and 11 points, respectively.

Flu season has begun early this year. Hospitals across Japan have reported surprisingly high numbers of flu patients so far this year, with the prefecture of Hokkaido leading the way. The National Institute of Infectious Diseases reported that this year is the earliest that the flu season has begun since 1987 when comparable numbers were first compiled by the institute.

The number of flu patients per hospital or clinic through the week ending November 25th was reported to be 12.64 in Hokkaido and 3.82 in Okayama prefecture. Okinawa rounded out the top three with 3.28 patients per facility during that same week.

The most popular phrases of the year have been crowned by a mystery selection body. “(宮崎を)どげんかせんといかん” (dogenka sento ikan), which can be translated as ‘I have to go do something’, a phrase used by the governor of Miyazaki prefecture, Hideo Higashikokubaru, and “ハニカミ王子” (hanikami oji) or ‘Bashful Prince’ in English, golfer Ryo Ishikawa’s nickname, were judged to be the most popular contributions to pop culture in 2007. Others phrases in the top ten include “消えた年金” (kieta nenkin), which in English might be ‘vanished pension money’, and “鈍感力” (donkanryoku), which is the noun for ‘the ability of insensitivity’. The former was muttered by Health, Labor and Welfare minister Yoichi Masuzoe in response to the ongoing scandal involving the laughable inability of the government to manage taxpayers’ pension payment records, while the latter is the title of a book by Junichi Watanabe.

“食品偽装” (shokuhin giso), or ‘mislabeling of food’, and “ネットカフェ難民” (nettokafe nammin) or ‘Internet café refugees’, are further reminders of the follies of 2007.

“そんなの関係ねぇ!” (sonnano kankeine～!), or ‘that doesn’t matter!’, which was popularized by half-naked comedian Yoshio Kojima and is now every elementary schoolboys’ favorite thing to shout, squeaked into the rankings along with “どん� けぇ～” (dondake～!), which can be loosely translated as ‘that’s too much!’ or ‘it’s gone far enough!’, and is applicable to a shockingly wide array of situations according to its creator, Ikko, a cross-dressing hair-stylist/TV personality who can be found perched in Shinsuke Shimada’s celebrity audience every Wednesday night on バリバリバリュー (baribari baryu–).

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