Ellis Krauss wrote:

Koizumi's postal privatization I think was multi-pronged...and it would help destroy what he perceived as the evil at the heart of Japanese politics--the old Tanaka/Takeshita faction...I think anyone who interprets Koizumi's goals as only economic is making a mistake...

RK:

I agree completely. I think he was more interested in political reform than economic reform (except insofar as Takenaka finally convinced him to fix the banking crisis). However, he failed to be a transformational leader along the lines of Roosevelt, Reagan and Thatcher, in the sense of constraining not only his own party, but also the opposition, to change their ways. A top aide to Koizumi told me that Koizumi recognized this failure. Sam Jameson's post adds to the evidence.

John Campbell cites Michael Cucek at
http://tinyurl.com/9vfddcc. But I don't understand Michael's logic. I fail to see how accomplishing something that the majority of voters hate is better than not doing anything if your main purpose is to get yourself and your party re-elected.

In my view, Noda did it because the MOF scared the pants off of him, as it had Kan before him: Japan could become the next Greece. This was no time for him to be egoistically thinking about his own career. From my conversations with officials back in 2010, I concluded that this "Greek tragedy" scenario was a view that many of these bureaucrats themselves did not believe to be true, but they thought it was a good selling point.
This spring, the MOF's Eijiro Katsu played Kissingerian shuttle diplomacy in getting the LDP to make a deal with the DPJ. For one man's opinion on the DPJ-MOF relationship, see
http://ajw.asahi.com/article/behind_news/politics/AJ201
204050061.

JC:

Until pretty recently I had thought that Noda's tax hike strategy would be a real plus and probably win the election for the DPJ...
RK:

My own cognitive bias was to give more weight to evidence showing the difficulty of passage than to evidence showing that it could pass.

When Kan campaigned on the consumption tax in 2010, I felt it would lead to electoral disaster. The line from DPJ supporters was that it was such a shrewd move because it took a campaign issue away from the LDP. A political scientist who knows Kan said he felt it would make the party look more responsible. Kan's approval rating dropped like a rock as soon as he made the tax hike his campaign centerpiece. Yet, even after the UH loss, many tax hike proponents insistently denied that the tax issue was a major factor in the defeat. Imagine how different today would be if Kan had managed to overcome the Ozawa-Hatoyama damage and given the DPJ a single-party majority in the UH.

I almost completely discounted the likelihood of a formal DPJ-LDP coalition--something being promoted by some DPJers--and in one of my more intemperate moments--wrote in December 2011 that the tax hike didn't have a snowball's change of passage. My logic was that the LDP had no reason to change as long as its stance as the "party of no" hurt the DPJ more than it hurt the LDP. Mike Cucek argued, correctly as it turned out, that the rise of Toru Hashimoto would change the basis for this logic.

While some people were saying that the LDP was changing its mind on the tax, I resisted the ambiguous evidence of this until mid-April. I then felt that the LDP reversed itself for a few reasons: 1) its obstructionism was now hurting it more; 2) the LDP leaders were fiscal hawks facing great pressure from the MOF who skillfully used the Greek tragedy scenario to scare them senseless; 3) the LDP leaders believed that, if the Diet failed to pass the hike now, it would not get another chance for maybe five years; and 4) the LDP figured it would be far better to have the tax hike pass under the DPJ's watch than under their own.

In any case, I maintained my view that it would be an electoral disaster for the DPJ, despite claims that people would flock to Noda's "politics that can make a decision." Note that he made a decision on one issue and has fudged other crucial issues.

Richard Katz
The Oriental Economist Report