Testing Japan’s new leader

When a country has a bicameral legislature controlled by opposing parties and lacks leaders capable of bridging partisan gaps, coming up with a strategy for ending an economic crisis is devilishly tricky. If you think this kind of gridlock is paralyzing Washington, consider Tokyo.

Japan on Tuesday elected its sixth prime minister of the past five years. Rick Perry he is not; former Finance Minister Yoshihiko Noda, who is conservative by Japanese standards, is a lifelong politician whose extreme humility raises some eyebrows even in Japan, where modesty is a political virtue. In his acceptance speech after being elected head of the Democratic Party of Japan, he compared himself to a mud-dwelling fish, saying his looks wouldn’t win his party any votes but promising to work hard anyway. “Sweating ineptly, but with all my strength and all my heart, I will advance this country forward,” he said.

Japan faces severe economic challenges, with the most worrisome debt-to-income ratio in the industrialized world (its debt amounts to 200% of the country’s gross domestic product, compared with about 100% in the U.S.). It must cope with massive reconstruction costs in the wake of the March 11 earthquake and tsunami, its social security system is teetering as the population ages, and an uptick in the value of the yen is pummeling the country’s manufacturers. Tokyo’s response to these problems will reverberate here and around the globe because of the importance of Japan’s export-driven economy to the worldwide economic outlook.


Noda has spoken in favor of raising the national sales tax as a way of reining in the debt crisis, though he has been unclear about specifics; on the other side are politicians who want to rebuild quake-ravaged areas by issuing more bonds. The details of the solutions may matter less than finding something that can pass muster not only with Noda’s party, which controls the lower house of the Diet, but with the Liberal Democratic Party, which controls the upper. The split, which former Prime Minister Naoto Kan was unable to overcome, has led to paralysis and all-too-frequent leadership shifts. The government’s failure to come up with a coherent policy prompted Moody’s to downgrade Japanese bonds last week to a level below those of European trouble spots Italy and Spain.

Can Noda overcome the partisan squabbles? Of the five candidates in the leadership race, he appeared the most open to cooperating with the other side. The question in Tokyo now is whether the other side will work with him. For the good of the Japanese and everybody else, we hope their opposition party is more open to compromise on taxing and spending than ours.