As Japan’s Shinzo Abe calls yet another snap election, this latest one on October 22, investors are assuming the Charlie Brown crouch.
Every few years, the character Charles Schulz made famous digs in to take another run at kicking a football. As “Peanuts” fans will recall, time and again Lucy promises she won’t yank it away, but Charlie Brown ends up in the mud, lamenting his gullibility.
Few metaphors better capture the highly predictable cycle of optimism-disappointment, optimism-disappointment that sends Japan bulls into the mire.
No prime minister in modern times inhabits the Lucy role better than Abe.
In December 2012, he pledged that, this time, investors can trust Tokyo to loosen labor markets, modernise tax policies, encourage innovation and deregulate industry. In September 2013, Abe visited the New York Stock Exchange, urging punters to “buy my Abenomics.”
Earlier this month, nearly four years to the day, Abe returned to capitalism’s most celebrated playing field to a far more skeptical reception.
Eyes rolled as Abe claimed he has “continued single-mindedly to take action to reform Japan’s economic structure from the foundation up.” News in July that wages fell the most in 25 months and bonuses were slashed was proof enough traders had fallen for Tokyo’s ruse – again.
The same will be true of October 22. Abe’s Liberal Democratic Party isn’t just skilled at yanking the ball away, it’s also the master of punting Japan’s challenges forward.
It’s telling, for example, that at the same moment Abe plots an election, his team is running the same old tired stimulus-package play.
If Abenomics is putting huge reform wins on the scoreboard, as the LDP claims, why the recently announced $18 billion spending plan?
If Abenomics is putting huge reform wins on the scoreboard, as the LDP claims, why the recently announced $18 billion spending plan?
The 2012 game plan, after all, was that, by now, Tokyo would’ve tackled bureaucratic headwinds, encouraged a startup wave, prodded executives to fatten pay checks, and gotten female workers “regular” jobs, not ones that pay less.
What’s Abe promising this time, other than trust me? Not much. Just vague talk and the same old pattern of stimulus package, election. Stimulus package, election.
Nothing in the LDP’s latest manifesto suggests fresh ideas or legislative energy are afoot to revitalise the economy, halt the rise in Tokyo’s debt burden or end its addiction to zero rates.
So far, Abenomics has been a big fake-out. Quite skillfully, Abe tricked everyone into thinking the action was over here (economic retooling) when it was really over there on Constitutional reform.
Abe’s endgame is rewriting a pacifist postwar document that right-wingers see as an affront to Japan’s national security interests.
That would be fine if Abe’s government were good at multitasking. Instead, gaffe-prone Finance Minister Taro Aso spends more time explaining away bizarre comments – including a penchant for complimenting Nazis – than scoring reforms.
Abe, too, saw support rates plunge earlier this year amid a spate of cronyism scandals. His bromance with Donald Trump, meanwhile, is backfiring as the U.S. president provokes Kim Jong-un with unhinged “fire and fury” chatter.
Granted, politics 101 holds that you pounce when opponents are down. But even by this logic, Abe’s snap poll is inspiring considerably more eye-rolling than enthusiasm.
Granted, politics 101 holds that you pounce when opponents are down. But even by this logic, Abe’s snap poll is inspiring considerably more eye-rolling than enthusiasm.
Sure, the Democratic Party, Japan’s main opposition force, is in a bad way. It just chose as leader the milquetoast Seiji Maehara, making it even easier for Abe’s LDP.
Maehara’s party has long been down, though. And Abe faces a bewildering array of challenges: North Korea’s missiles, Trump’s trade war threats, stagnant wages and cronyism scandals.
That’s creating an opening for Tokyo Governor Yuriko Koike and her new Party of Hope to take on the LDP.
Still, if ever there were a time not to call a pointless, expensive and gridlock-inducing election it’s now.
What’s more, Abe tossing yet another stimulus play onto the field is a tacit admission Abenomics is a dud.
And the dearth of new policy ideas to give the plan a second wind suggests Charlie Brown and Lucy are teeing up for another go at sending us into the mud.