‘Kamei factor' gains currency

 It's buyer's remorse, Japan-style. A month after naming Shizuka Kamei financial services minister, Yukio Hatoyama must be wondering what he was thinking. Prime Minister Hatoyama's attempts to impress investors are being scuttled by Kamei's apparent contempt for them. Hanging in the balance is Japan's economic outlook.

Few thought the appointment was a good one. It's the kind of compromise you make to soothe egos within a coalition government. Yet in the space of a few weeks, Kamei stepped on the biggest reform in a decade — privatising Japan Post — and hurt stock prices by attacking the central bank and calling for a moratorium on debt payments by small and midsized firms.

Unwelcome test

Oh yes, that's what Japan needs: a new generation of zombie companies. Kamei is even blaming capitalism and Japan's biggest business lobby for increasing murder and suicide rates. For journalists, this erratic official is a gift, a wild-quote machine. Traders buzz about the "Kamei factor" in markets, which wince at his every utterance.

It's an early and highly unwelcome test for a prime minister struggling to stabilise Asia's biggest economy. The forces of global recession and deflation are challenge enough. Hatoyama also must deal with a bull-in-the-china-shop dynamic from a key economy czar.

If Kamei is fazed, he's not letting on. The 72-year-old former police official says Hatoyama "can't replace me" and that he has the premier's full confidence. That's doubtful. If true, the risks for an economy desperately in need of moving forward, not sliding backward, are high and rising.

Kamei is tapping into deep reservations about American-style capitalism. Watching the US economy unravel, Japanese are right to question priorities across the Pacific Ocean.

Yet Kamei is going too far. Japan doesn't need a Ronald Reagan. Many say Junichiro Koizumi, prime minister from 2001 to 2006, unleashed more of the former US president's free-market dogma than they ever want. Nor is it clear that Japan needs a Che Guevara.

Michael Casey's recent book Che's Afterlife explores the extent to which the world often romanticises the ideals of the Argentine Marxist revolutionary. Speaking truth to capitalists is one thing, but don't forget that few nations benefited more from global trade and capitalism than Japan.

The hunger for kinder economic policies is as understandable as it is palpable. It means filmmaker Michael Moore's Capitalism: A Love Story can expect to do very brisk business in Japan.

It's all a matter of balance, though. Over the last 20 years, we let the financial industry become larger and more influential than it ever should have.

Lehman shock

Japanese still talk about the "Lehman shock" like it was a massive tsunami that suddenly tanked their economy. Early on, many revelled that few of their banks had bet on the toxic assets that pervaded Wall Street.

The truth is more complex. Japan got roped into the crisis because of its reliance on exports and an antiquated system of cross-shareholdings. While the collapse of Lehman Brothers set Japan back, its financial model also played a big role.

That's what makes Kamei's ill-timed tirades so unwelcome. Japan needs to increase its global standing at a time when China is dominating Asia. It must prepare both for a fast-changing competitive landscape and an ageing population. Fresh and bold thinking is needed, not Kamei's brand of economic nationalism.

The change Kamei has in mind is backward-looking. Meanwhile, Japan's new finance minister, Hirohisa Fujii, 77, is leaving markets aghast with contradictory comments about his yen policies. No one has a clue what they are, including Fujii.

Kamei's capitalism-kills comments were hyperbolic. He said at a business forum in Tokyo that companies have stopped treating people like human beings, leading to more murders and suicides. The Japan Business Federation, known as Keidanren, "should feel responsible for this," Kamei said.

It would be nice if companies were altruistic enterprises. The world would be a kinder place. We don't live in that world, and the one we do is changing rapidly. If Japan doesn't change accordingly, it will be left further and further behind.

Yes, capitalism can be murder. That it commits murder in Japan is overstating the case more than a bit. Kamei needs to put away his megaphone and learn when to shut up.