New year, new column, again Hatoyama. I am not a professional political analyst, but the man is too colorful and the situation is too exciting to resist. Every day brings in new twists and turns. What is happening at Nagatacho is crucial for the Japanese society and economy including consumer demand and business climate that make the base for all FCCJ members' business here.

When DPJ and the new Hatoyama government took over the reign last autumn, the business community was wishful that the historical Big Change in political power would bring in fresh winds also in economy, boost private consumption and help business, especially the SME sector that is responsible for 80% of the employment. Now, after just four months, the feeling has shifted into worries that the needs of the business world do not rank high on Hatoyama agenda. And that, in overall, actual progress is much too slow.

It all started to go wrong with the new government slicing off some USD 30 billion from the ongoing LDP stimulus spending as "wasteful spending". The negative effect was quickly evident and DPJ had to change course and rush in a new stimulus budget of its own worth almost USD 80 billion. It was railroaded through Parliament end January and will show its effect from April on. But the ensuing recovery has already taken a hit and the figures coming out show Japan now lags many other economies.

Finance Minister Fujii's musings that "strong yen is OK" proved poison to Japan's export oriented Big Business as they kept yen high despite growing concerns about government's weakening financial position, Naturally, we importers are thankful to him for that. To old man's credit, he did fight successfully to keep the 2010 budget proposal within the draft frame JPY 92 trillion and the new debt issuance within his promise by digging up over JPY 10 trillion extra from the bureaucrats' hidden coffers. That the 77 year old MOF veteran, had to resign for health reasons after that, was bad again for the new government and whole Japan image.

Despite Fujii's miraculous balance act, it is a testimony for government's precarious finances that less than half of the budget plan can be financed by tax receipts. This is the worst since 1946 and "typical for a country in war" as one analyst pointed out. It shows that the plans to get Japan public finance in balance are not progressing but regressing. Not unexpectedly, some credit rating agencies have already threatened Japan with a sovereign debt downgrade back to Botswana level where it was through the 90's.

Looking at the difficult macro atmosphere all around, I feel almost pity for Hatoyama. No "lift" is on offer as neither Japan nor global economy is recovering as well as expected, JPY remains high, local constituencies rebel against reduced spending, the national carrier JAL has to go through government guided bankruptcy process, and another national flagship Toyota is being humiliated around the world for poor quality. On top of all, money scandals have caught up with Prime Minister and party secretary Ozawa. So far both have managed to avoid prosecution, but it is rumored that Ozawa must step down to avoid further loss in party popularity. This week's figures showing that more people object to the government than support it, is a serious warning that the long expected DPJ win in July Upper House election could instead turn a rout. It took Obama one year to lose his popularity, Hatoyama has managed the same in just 4 months!

Both promised "CHANGE" and continue to talk much, yet both have failed to deliver results. It's not only economy and well being of the citizens, it's also many other things. In fact, looking back it is easier to say where DPJ has so far delivered what it promised: the 2010 budget drafting spread all open in public with bureaucrats hard challenged in television by DPJ crusaders made great viewing! Now Hatoyama is taking similar public hiding from LDP in live broadcasts from the parliament. What's going on remind too much of old LDP being hided by opposition DPJ. Where's the promised "change"?

Other than slow economy, even other risks spelt out in autumn on this column, have come to haunt Hatoyama, especially USA and Ozawa. As for doubts about inexperience, make that indecisiveness. Even the word "unreliable" has been thrown around - a very bad word in foreign politics and business. Procrastination on making a decision on one single base in Okinawa when there are tens of them around Japan is a case in point. Promises to hear all concerned from Obama to local town mayor, to make decision in January, then May, repeated contrasting statements from various government ministers, they all add up to an image that things are not under control. To spend all this energy on one small detail when the entire Security Treaty turns 50 years, must be renewed and a clear path in foreign policy, old or new, should be forged, is somehow even more twisted than all the hiding of facts from the public by LDP in the past.

Then comes Ozawa. As predicted, when people get the idea that it is actually the party secretary who leads the party and Prime Minister is only a galleon figure, the popularity polls have quickly changed for Hatoyama and DPJ. Unfortunately, the Iwate daimyo has not done his part to prevent that image coming out. It was a good idea that Ozawa stays away from government and concentrate to prepare DPJ for the final win in the July election, but recently it has seemed that this power game has taken upper hand over policy issues. When every move is subjected to what effect it will have on popularity, nothing that is even slightly unpopular gets done. While many Japanese people dislike US bossy attitudes and sympathize with Okinawans, the political play with Futenma issue has been too evident for many to accept. Now 67% worry about US-Japan relations.

That Ozawa took half DPJ parliament members to China for handshake and group photo with China president when US president was venting his impatience was an unnecessary snubbing in a sensitive situation. When even financial scandal has engulfed Ozawa now, it really looks like Ozawa's life time dream to smash his old LDP friends and rule Japan as "shogun" behind "emperor" Hatoyama might not come to fulfillment.

We all know that "politics is a power game in numbers" but that should be only the means to higher target of pushing through policies that the leaders think are best for the country, its people and economy. This is lost if all is meant to just serve the target of winning the next election. Visiting Finance Minister Jyrki Katainen put things in good balance in his recent presentation at FCCJ when he said: "All politicians know how to cure economy, but to do it and still win the next election is the art we need." For one, I certainly hope, this principle would soon become more pronounced in Hatoyama government policies.

JAL PROBLEM:

Poor Hatoyama, poor JAL! You could call it "GM of Japan", but that would be unfair. True, one big problem with JAL has been bloated pension costs like GM, and true, management has been lax not to make necessary changes quickly enough, like GM, but the worst has been the almost criminal interference by politicians into how the company was run. Too many useless airports have been built around country to serve local constituencies followed by requests to have JAL fly from these useless places with big losses. Not to stand up against such interference has been the old management's worst mistake and not to accept it any more will be the new management's biggest task. It is quite correct to fire the old management but the real culprits still continue to sit in the Parliament risking more similar disastrous ventures.

HATOYAMA MONEY PROBLEM:

Poor rich Hatoyama! If Prime Minister of Finland would say he never noticed that he was getting USD 150,000 "pocket money" from his mother EVERY MONTH FOR SIX YEARS, few people would believe it. Media would not only call him a liar but a filthy rich capitalist, unsuitable to be Prime Minister in time when normal people worry about their daily bread amongst high unemployment and shrinking incomes in "the worst economy in 100 years". Yet, in Japan, the admittance/claim to this effect by PM Hatoyama did not raise much ado. Especially not after Hatoyama said he had voluntarily paid USD 6 million gift tax that he "forgot" to do.

After all, Japanese people think, it was his family money that just changed from one pocket to another and not a case of corruption from, say, a greedy construction company to get a big juicy public works contract. The latter case apply to Ozawa. As it did to uncountable LDP politicians in the past. Now they are in opposition and demand their ex colleague's head. For Hatoyama case, the main point of interest is why little brother Kunio, who is one of the LDP leaders, got much less money from Mama.