Cabinet vows to promote failed economic policy -- Akahata editorial, June 23 (excerpts)

The Council on Economic and Fiscal Policy chaired by Prime Minister Koizumi Jun'ichiro on June 21 presented the prime minister with a report calling for furthering the present "structural reform" policy.

Are we seeing any 'success?'

The initial "basic plan" outlined by the Koizumi Cabinet in June 2001 was based on the argument that small- and medium-sized businesses facing difficult operating during the economic recession should go bankrupt because it is inefficient for the economy to keep these businesses.

The 2002 "basic plan" proposed by the council extolled the results of the initial "basic plan" as a "success in prioritized redistribution of resources for production." It calls for advanced achievements in the goal of writing off bad loans held by major banks.

The 2002 "basic plan" calls for the industrial revitalization law designed to encourage corporate restructuring to be amended so that corporations find it easier to dismiss workers, coupled with a few temporary legal measures for this purpose.

"Need to respond to globalization" which the 2002 plan stresses, virtually comprises steps of deregulation which benefit major corporations in Japan and abroad. This will help major corporations to shift their production base abroad as part of their restructuring programs. It will aggravate Japan's industrial hollowing out. And it will cause domestic demand to shrink further because the policy will seriously hit the household economy and small business operation.

Unless the failed policy is abandoned, economic recovery will be impossible and bad loans will increase.

Evidence of incapacity

The series of economic policies which the Liberal Democratic Party governments pursued during the 1990s to prop up large corporations and major banks with additional budget expenditures on large-scale public works projects and the ultra-low interest policy failed miserably. The "structural reform" policy of the Koizumi Cabinet was proposed as the only alternative.

The government cannot but stick to this policy because it is the last resort, even though its failure is obvious.

The 2002 "basic plan" is the evidence presented by the LDP on its own, stating that the party has no means to control the Japanese economy. (end)