Season's greetings!

Japan is now on a watershed in many ways: its alliance with the United States, prospects of its economy and general direction of its civilization.
Last summer we had a totally new government with Democratic Party of Japan (DPJ), an amalgam of socialists, die-hards of students' riots in late sixties, labor unions and non-partisan voters who were hit by the austere reforms by premier Koizumi.

Under the economy which has not grown for these twenty years, people are adamant in finding the culprit and denying everything under LDPJ (Liberal Democratic Party of Japan). It just reminds me of the Soviet Union in late eighties, when the Russians attributed all their mishaps to the Communist Party of the Soviet Union.

Though entire Japan after the Pacific War has enjoyed the economic fruits emanating from the alliance with the U.S.A., people are now saying that the alliance served interests of the "establishment" of the society. They do not realize that the freedom, which they are enjoying now to the fullest extent, would not be possible, if Japan start drifting from the post-war values of civic society.

Sure, I have to note that the silent majority of the society firmly support the alliance with America, and even among the members of DPJ the view of Mr.Hatoyama, the prime minister, is not widely shared (by the way it is hard to know what Hatoyama really thinks about our security policy. ).
And today the government has finalized main points for next year's state budget, and things may come back to the right orbit more or less.

But still we have to reach a wider understanding on our security policy ( it is good that through the new rule of DPJ people are learning the function and the rules of the government. More transparency and more persuasion), and have to see what the next year's lucrative state budget (almost half of it is to be financed by new issue of governmental bonds) will lead to: high inflation or Keynesian economic recovery.
(In fact the issue of more governmental bonds works as a kind of "rotated borrowing and pumping" of un-used savings of the citizens. To a certain degree it should work.

I voted for DPJ just out of curiosity to see what would happen. It turned out to be too scary.
At one time I am in despair, thinking that Japan is heading toward a fiasco, and yet next moment I come back to my mind, thinking that perhaps our tenacious manufacturing companies will save us all, anyway.

So, this is my year-end feeling. I wish you the best of all lucks for the coming year of (paper) tiger.
Akio KAWATO
www.japan-world-trends.com