The Great Reset: Japanese edition

The leader of Japan's Democratic Party, Yukio Hatoyama, celebrates in Tokyo on August 30 (Junko Kimura/Getty)

America’s great reset began almost precisely one year ago when the collapse of Lehman Brothers and the election of an African-American Democrat as President signaled a major turning point in the nation’s economic and political affairs

Now America’s great Asian ally begins its own epochal Great Reset.

The Liberal Democratic Party, which held a choke hold on Japan’s political life for more than 50 years, which protected special interests, carved up the spoils of incumbency and never managed to reinvigorate the nation after the collapse of the “Japanese miracle” in 1989, finally collapsed in defeat Sunday, a spent, bloated and demoralized political force. Its demise was long overdue.

The opposition Democratic Party or Minshuto not only toppled the LDP, but seems likely to garner a two-thirds majority in the Lower House  of the parliament, or Diet –enough power to pass bills without the help of the minority.

DPJ Wins 308 Seats To Topple LDP From Power.

This was less a victory for the Democrats than it was the final reckoning against a doddering and bloated political machine, the sort that put old Chicago Mayor Richard J.  Daley to shame. This defeats signaled a massive protest vote by millions of disaffected Japanese who saw the LDP as being simply unable to articulate a future course for a deeply troubled nation that has never really risen up and recovered from the crippling deflation of hte 1990s.

Alas, it is not yet clear that the Democrats, and their party leader Yukio Hatoyama will have the strategic vision and political discipline to lead Japan out of the wilderness, either. On the campaign stump, Hatoyama promised a retreat from “market fundamentalism” –an ironic choice of words in a nation whose economy is heavily managed through government intervention — and a new foreign policy more independent of Washington.

It isn’t clear how much of this Hatoyama really means. The Japanese foreign policy establishment has long been leery of Democrats in America, feeling they are so beholden to labor unions that they will never stand up for Japanese interests.  Yet it was George Bush — not the Democrats — who forced the Japanese to offer logistical support for the U.S. war in Iraq, something the majority of the Japanese people opposed — and despite a pacifist Japanese constitution that expressly forbids war-making. In choosing to go along with Bush, the Japanese were not acting in their own self-interest, but reflecting their slavish devotion to the USA and to the long-held notion that if Japan supports the U.S. military, the U.S. will protect Japan’s economy.

Now the world looks different than it did a year ago.

In principle, Hatoyama could work closely with an Obama administration to recalibrate Tokyo’s troubled relations with China and Korea, and develop the terms for a post- Cold War alliance with Washington on issue ranging from humanitarian relief to climate change.

The last time an opposition won an election in Japan, however, the new government it formed lasted only about 10 months. So it’s too soon to predict how stable the Democratic government will be. The problems they will inherit, however will be profound.

On the eve of the balloting, national unemployment was officially reported at 5.7 percent — a record, but in fact far less than the real number as millions of workers have been reduced to part-time work, or arbeito without benefit of benefits, overtime or job security.  The nation’s birth rate has collapsed, as young women refuse to bear children meaning that Japan is on course to become so old and grey that it will make South Florida look like a hippie commune. And the nation’s debt amount to around 170 percent of yearly economic output

Hatoyama is no magician…and the Democrats mostly lack a coherent policy agenda. But for once the Japanese people have concluded the risk of doing nothing was more perilous than the decision to put the reins of power in the hands untested newcomers.

Let the Reset begin…