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Sunday, Jan. 25, 2009
Poking fun at the ¥12,000 handout
The opposition parties' objections to the extra fiscal 2008 budget, which was put together to deal with the unexpected seriousness of the economic downturn, center on the ¥2 trillion in cash handouts originally conceived by the LDP's coalition partner, New Komeito, last summer during the final days of the Yasuo Fukuda administration. At the time, it was believed that a general election would be called in the fall, and the handout was seen as a sort of bribe to get the electorate to stick with the coalition, the premise being that if the opposition won the election there would be no handout.
With the election put off indefinitely, this reasoning no longer applies, but no matter. Surveys indicate that as much as 80 percent of the populace thinks the handout is a mistake. Few people seriously believe the ostensible reason for it, which is that it will stimulate the economy. Of course, that doesn't mean they will refuse it if it's offered. Nobody ever gets upset over free money.
Or maybe they do. Two weeks ago on the Nihon TV variety show "If I Were the Prime Minister . . . ," host Hikaru Ota of the comedy duo Bakusho Mondai proposed that the handout be increased to ¥300,000 per person, saying that the ruling coalition's idea of ¥12,000 (¥20,000 to kids and old folks) will not only be ineffective in recharging the economy, but is actually counterproductive. Ota's proposals on the show are usually outlandish, but because the format is based on parliamentary debate, with two sides arguing over the "legislature," some interesting ideas emerged.
Ota's side included comedians and even one presumably rebellious LDP member, but most of the arguing was done by Ota himself and gadfly Takuro Morinaga, who, having written several best-sellers about Japanese finance, has become the go-to guy for commentary ever since the economy tipped over into the toilet. The other side — meaning the side that supports the ruling coalition's handout scheme — consisted of coalition members, a few conservative pundits and some token celebrities to provide the jokes required on any variety show.
It is obvious that ¥12,000 cannot be considered "relief" by any stretch of the imagination, and as far as stimulating the economy goes, recipients would have to spend it on something other than daily necessities for it to make a difference. Ota's side claimed that such a goal could be achieved if the government increased the payments to ¥300,000 per person. Morinaga explained that the most immediate task is to "stop the economy from hemorrhaging money." He doesn't support the opinion that the ¥2 trillion would be better spent on social welfare. That's the government's normal responsibility, he said. Stimulating demand in such a dire environment is a completely different matter, and ¥12,000 per person just won't cut it.
The other side had no ammunition at all, and mostly talked around the issue, saying that the government didn't have enough money to pay ¥300,000 to everyone, and while ¥12,000 may not be enough to buy a SUV or even a refrigerator, people could donate it to charities or NPOs. Ota finished the debate with a red-faced rant in which he admitted that his proposal may not be practical ("it's a gamble"), but at least it didn't "insult" the electorate, who were likely to be more "depressed" over the ¥12,000 handout than encouraged by it since it clearly indicated how unprepared the government was to handle the crisis.
Though Ota and a few of his allies were less than polite toward their interlocutors (comedian Ryo Fukawa at one point called former Cabinet minister Kuniko Inoguchi "dumb"), no one mentioned the widely held assertion that the original reason for the handout was to persuade people to stick with the current leadership. So while the debate was more down-to-earth than anything comparable in the Diet, it avoided what was really insulting about the handout, which is that the ruling coalition believed that "throwing money around," as the Democratic Party of Japan put it, was the only way they thought they could win an election.
As it turns out, any debate that takes the handout at face value can still be a helpful distraction for the LDP and its supporters. Last week, the Tokyo Shimbun reported that a policy committee of the Ministry of Finance asked the government to withdraw the handout proposal. The request was strange in that the committee supported the scheme when it was originally announced, and, in any case, the MOF always takes the government's side. Though the committee stated that the reason for changing its position was the belief that the government should recognize the will of the people, Tokyo Shimbun smells an ulterior motive, saying that the MOF's most urgent desire is an increase in the consumption tax, which will be difficult in the current economic climate. By changing its mind about the handout, the committee adds fuel to the media debate about the handout, thus diverting attention away from the consumption tax, the economic topic that really deserves a serious discussion.
Is the media that easily distracted? Riko Ofuji, writing recently in Kinyobi, says that the mainstream press always changes its tack with the prevailing wind. She mentions that when former Prime Minister Yasuo Fukuda's popularity sank, current premier Taro Aso was boosted as the only national politician "popular enough" to lead. Then, when they discovered he wasn't popular after all, they declared his administration "on life support," at least until the second budget is passed.
By the same token, when the handout scheme was being worked out last fall, the media concentrated on trivial details such as who would receive it (the rich? the homeless? non-Japanese residents?) and what they would spend it on. Only now that surveys show people think the scheme is wrong does the media question its relevance.