 Okay, we're back, we're live for a clock, I'm Jay Fidel, this is Think Tech, and we're looking now to the East, and it's probably much more nutritious to look to the East, or at least instructive. Looking to the West, I'm not so sure. Or maybe it's Steve Zarka looking to his East. That's what it is. With the battery, we have to change the name of the show. Hi, Steve. Nice to see you smiling. Yeah, it's always a pleasure, Jay. I really enjoy getting together with you, and we have a very interesting topic to discuss today. Well, you know, the thing about it is that I don't think in the past, I mean, when you and I grew up kind of thing, we were focused, we were so attached to politics. We didn't see politics directly affecting our lives. It was out there, it was happening, it was an academic subject even, but it didn't have an effect on our lives. And I think one thing I've learned in the Trump administration is you better watch. You better watch going on in politics because these days, elected leaders or dictatorial leaders have a greater effect on your life than they did before, at least in our lifetime. And so the same in Japan. And so, you know, we have the three contenders, pretenders to the Prime Minister's job in Japan. Only one of the three could have a serious effect on your life and the life of everybody who lives in Japan, don't you think, more than now than before? Yeah, I certainly believe that to be true. Look at the relationship between Abe and Trump. That really influenced decisions that were made on both sides about economic issues and foreign political problems as well. So without that strong relationship between the two of them, the decisions made by the United States and Japan would be different from what they have been over the last four years or even longer because Abe's been in power or was in power for eight years or so. So yeah, I think I certainly feel that way, although I have to tell you, Jay, that I'm maybe a little bit of an aberration. I don't know why, but I got interested in politics pretty young. So I'm going to date myself here. I actually campaigned for McGovern in 72. I was I think only 13 years old at that time, but I was aware of the importance of politics back at that time. I tried to help. He was an important character. He was an important figure. Yeah. The election was a wipeout. Yeah. That was a wipeout. However, the whole thing was appealing to somebody young and progressive. Yeah. I liked him very much and thought he would be a good president. He would have been if he had won, but of course he didn't. But anyway, that's ancient news. So let's talk about what's going on in Japan. And first of all, just over a week or so ago, the current Prime Minister, Abe, decided to announce his resignation effective immediately. Basically he said that I am resigning, but I'll stay in power until a new Prime Minister is elected. So I read that he said that he was resigning for medical reasons, that he had some sort of ulcerative colitis. And you wonder about that. Yeah. He actually was a Prime Minister before back in 2007, I believe, six and seven. And he only stayed in power for one year because of medical problems. But at the same time that he resigned back then claiming medical issues, his administration was in serious trouble and his popularity had really tanked. So that may have been the cover story. And I think my own opinion is that I'm sure that he is having some medical issues and they kind of led up to this by having to visit the hospital and make it very public that he was visiting a very major hospital in Tokyo. But also right now, his popularity is very low. And his support even within the party is not so strong. So why are you coming? Well for one reason is how he's handled Corona, which has been terrible. He's been very hands off and kind of in the background. So he's picking up a lot of blame for Japan not doing a more effective job. Now we talked about before that compared to other countries, Japan has reasonably done much better. The infection rate, the mortality rates are far better than European countries and certainly the United States. But the credit for that is not going to him or the government. It's other social factors that we've talked about in previous shows. Just the use of masks as being a part of Japanese culture, the cleanliness of this country, the concern that people have for others here in a homogeneous society. So he's picked up a lot of blame for that. And then there's been a series of scandals, corruption. There was members of his party that were caught abriving voters by giving the money. And that money actually came from the LDP, which he is the president of. So there's been a series of scandals and also just in general. I think you might have seen this in the New York Times. I don't think he's viewed by people who really follow him closely, like academics like myself or others. He's not really viewed as being a success. He's been the prime minister for a very long period, the longest period of time ever. But if you look at what he's actually accomplished, even by his own measurements, in terms of revitalizing the economy, that doesn't happen. Restructuring the political system in Japan, he hasn't done that at all. So his womanomics, a big objective that he had when he started the second time as prime minister was to try and encourage women to be a part of politics, 30% level or in management. And actually, Japan is now ranked lower on gender diversity than it was when he started. So there were a lot of wins facing him. And I think the sense was it was probably time for him to leave. And then usually- I only ask you this question, Stephen. And it reminds me of two conversations that I've had recently. I asked one of our correspondents in India what he thought of Trump. And he said he liked Trump. Trump was his favorite. I said, why? He said, and I quote, because he is strong, end quote. Last night on PBS, there was an interview of a black family. And the grandfather said he didn't like Trump. And the grandson said he did like Trump. They were both sort of salt of the earth kind of people. And when the interviewer asked the grandson why he liked Trump, the grandson said, quote, because he is strong, end quote. And I wonder if the relationship that Abe had with Trump has with Trump, or Abe's the answer to whether Abe is, quote, strong, is that maybe people don't think he's that strong, at least vis-à-vis Trump. And in a world that we live in today, people are looking for, quote, strong leaders and maybe they don't see him as strong. Yeah. Yeah, his own wife actually doesn't feel that he's very strong. There was a quote that I read just a few weeks ago. And she said, if you look to the LDP, that's the dominant party. You find people that are very smart and that are working very hard. And she said, my husband is neither. I was in the press, so he's not regarded as being particularly smart. He's not a good presenter. I've been in the audience when he presents and not particularly hard working. The reason he's been the prime minister as long as he has is he has understood and be able to manage internal politics within the party, which is a key factor that keeps you in the prime minister role. But anyway, I think that the overall sense is that time had come for him to step aside and allow someone else to come up behind him. He still remains popular, though. His approval ratings personally, his party ratings are low, his cabinet ratings are low. But after his resignation, they did polls of his own personal popularity, and it's in the 70% range. So he's viewed positively by the Japanese population, although I think historians and others who look at what he actually did or did not accomplish over the last eight years, that he's not going to be considered to be a strong prime minister. Despite what President Trump said about him, that he was the best prime minister ever. I don't know if you caught that, Che, but he said, Shinzo Abe is the best prime minister that Japan has ever had. This was in the news maybe about a week or so ago. Well, hard purply is Trump's middle name. But other people feel that you don't have to get to that, that whatever Trump says, the reverse is true. Yeah, I think that would be actually a good way of listening to him that just assume the opposite, and you'll probably be right most of the time. But anyway, that's history now, because he's out the door. So we need to take a look at what's going to happen next. So as soon as he made that announcement, and probably even beforehand, because I'm sure the internal people within the party knew, that the actual day of his resignation, NHK, which is the state run news, leaked the story that he was going to be resigning that evening at Tika. Was it five o'clock that he made the announcement? So there are three candidates, three serious candidates. So if we can, yeah, put the picture up there. So these are the three guys that are being considered as possible replacements for Abe. So on the left, the guy with the fuller face, that is Ishiba. And he was a former minister of defense. And it's interesting, Jay, because he actually has been a critic of Abe, which is unusual. Abe has kind of quashed criticism of him or his policies, especially within the party. But he has spoken about Abe and said that there are things that Abe has done that have not been good for the country, which is true. But anyway, he represents the more kind of the left wing or the more liberal wing of the Liberal Democratic Party, the LDP. Whereas he stands on defense, you know, is he looking for a constitutional change to allow the Japan military to be more aggressive? Yeah, I think all of them, all of the candidates that you see up there are interested in doing that. Although the one distinction about Ishiba is that he seems to want to pivot Japan more towards Asia and less towards the United States, which Abe and that wing of the party, the more conservative wing of the party, is still very, very focused on building a strong relationship and in a sense being somewhat dependent to the United States in terms of foreign policy and also military. So the guy in the middle is Kishida and he is a part of one of the factions. There are seven major factions that make up the Liberal Democratic Party, the LDP. And he was Abe's favorite for whatever reason, but he's considered to be ineffective and not very charismatic at all. So the guy on the right, his name is Suga, and he's been the cabinet secretary, which is like the number two to Abe for the last six years. He wasn't in that position when Abe first began, but he's been in that role for a long, long time. What's interesting about him is that he is not really aligned with one of the factions. So normally a prime minister comes from one of these factions. He is not. But however, he's joined at the hip with Abe, and Abe seems to be picking him now, rather than Shida, the guy in the middle, who was his early favorite. So as of today, there's seven major factions within the LDP. Five of them have already pledged support to Suga, the guy on the right. And I checked with one of my inside contacts up in Tokyo. I said, what's the percent chance of Suga winning the Prime Minister's ship? This is the vote will be on September 14th, so just in a few days. And he told me 100 percent. It's already wired, back room wired. Yeah, yeah. So, yeah, my source is very well connected and has many contacts in the LDP. He's like a consultant in a way. So, yeah, this I think probably gelled or solidified maybe in the last five or six days. So it's going to be Suga. So it's just a show right now. But they'll have the election. And it's I have to explain to your viewers that this is. Japan is a parliamentary system, and this is not an election of the members of the parliament. This is an election of the members of the party. So it'd be like if Trump resigned rather than have the VP move into the president's role, the Republican Party would pick the leader. So it's straight party politics, backdoor maneuvering. And, you know, can I if I vote for you, can I become the minister of defense? You know, so all of those negotiations are going on right now. This is how it all works. Are people happy with that system? That is a good question. The LDP has been in power since the end of World War Two. So the Japanese people, I guess, accepted. I don't know if I haven't seen any polls or any information about what their opinion about how this is occurring is, in a sense, somewhat undemocratic. But that's how things work in Japan. And that's how things work in business here, too. There's a small group of people to decide what's going to happen. And then everybody else gets informed, you know, and in the election or how that's announced is basically for show. That's a very small, big part of Japanese business culture and certainly political culture as well, even at Kansai Gaidai. That's how things work there as well. Well, it's a matter of stability, isn't it? Stability is a high value characteristic and everybody wants that. So they don't make a wave. Yeah. So the election will be on the 14th. Suga will win it, probably, you know, with 90 percent plus. So that'll be announced. But he is filling in for Abe because Abe was on a three year term, right? So in Abe completed two years of his term, that means there's one year remaining. So what's beginning to surface now is that rather than just be a caretaker for that last period of time and then they would have a national election or all that where there that is democracy at work, where people actually vote for the party that they want to represent them. But in order to get out of a caretaker role or, you know, a transitional guy with, you know, who's lame duck on the very first day of his of his leadership. The rumors are beginning to start and my insight source is telling me that probably they're going to hold the snap election maybe sometime later this year, maybe in October, early November, so that he will be voted for by the people. But there is no real opposition in Japan. Unfortunately, there's no Democratic Party to the Republican Party. It's basically just the Republican Party, the LDP. So people will probably vote for him and he'll have a mandate and he'll be able to govern with that behind him and actually not be a caretaker. That seems to be what's evolving now. So what is he likely to continue obvious policies? I mean, where where are we going on this? That's I think that's one of the reasons why he's moved into the lead is that he demonstrates consistency. I mean, he's helped to to form obvious policies over the last six years. You know, he was the number two guy in the country. So nothing really happened without his approval. So whenever controversial issues would come up, it would be his quote. We're going to do this or we're going to do that. I mean, ultimately it was Abe as a prime minister, but he had tremendous power. So he's viewed as a consistent leader to carry forward with Abe nomics. So again, in my view, Abe nomics has not been a success, but it's a very effective political campaign tool, right? It's kind of propaganda. So let's continue the policies that Abe was was doing. Abe was doing a good job and now he's six, so he can't continue. Let's let his right hand man take over and continue those policies. So it's all very stable. But you know, it troubles me to to hear that Abe's need to connect with the U.S. is is a high priority. Oh, yeah. His successor to. Oh, yes. You were talking before about, you know, the need to spend a little time connecting with Asia and dealing with Asia. And I really think that Japan's better, better policy would be to do that. That's my feeling, my reaction, because Japan could be a leader around Asia and could be a containing factor for China, because China needs to have some pushback and right now Trump is not really pushing back. And China is doing whatever it wants. Yeah, but that's a difficult balancing act, because historically, Japan has always looked to the United States for leadership when it came to foreign affairs and back in the 60s and 70s, the Japanese miracle was dependent on Japanese products being sent to the American market. You remember that that was kind of like a marshal plan for Japan. And this is during the Cold War, right? So there was a Communist Party within Japan and the American State Department and the CIA. So we have to develop Japan economically, just like we had to develop Europe economically. So they wouldn't turn to the the dark side, to the Communist side. So there's a long history of economic dependency and then political interdependency as well between the countries. And I agree with you, Jay. I mean, if I was in a position where I could actually influence Japanese policy, I would say, hey, look, economically, the future is Asia. Right. So right now, I was talking to my class about this the other day. Right now, Asia represents 50% of the world's GDP. So 50% of the world's GDP is in this region, Japan, China, India, and so forth. In 2030, it will be 60%. And 90% of all new middle class people will be here in Asia. 90% Jay, it's all here. Economically, this is the future, not just of Asia, but of the world. And Japan should be hardwired connected into that. Yeah, what's clear is the United States is on a decline. I'd say Trump certainly is on a rapid decline. But even with Biden, it's on a decline. It's going to be very hard to recapture some of that forward momentum economically, socially, and so forth as a world leader. I think we've passed our prime. And yeah, I mean, if you just look at the growth numbers, just just outside of politics or anything else, where is growth? It's here in Indonesia, Vietnam, Myanmar, eventually. China's even with all the economic trouble that China's had, they're still growing at 5%. So India is having trouble, too. But their growth rate is probably in that range as well. So that's very clear. If you just look at it without any politics about economic opportunities, it's here. And China is still Japan's or actually China has become Japan's number two partner because of Trump policies with the embargoes and so forth. But over the last 10 years or so, China has been the most important trading partner for Japan without question. It's a bigger market than the U.S. Yeah. Yeah. So what about now? Suga has to deal with coronavirus and coronavirus is a thorn in Japan's side as it wasn't thorn in Abe's side. In this in this run up, you know, there's soon to be an election and everything. These guys are making public statements. Are they getting up and campaigning? Are they expressing platforms? Are they saying what they'll do? They making promises? No, no, because, again, Jay, the audience that they're paying attention to are the party members. That's who's going to elect him. So once he becomes the prime minister, then perhaps he'll begin to form an agenda. And certainly if they do hold a snap election sometime later this year, then then maybe there'll be some new policy statements that they'll put together. But right now it's all about horse trading, you know, and getting all the votes aligned and so forth. So it's a very kind of internally focused process right now. Doesn't that strike you as a slightly myopic in the fact that they have as much of a of a threat from the pandemic as anyone else? Yeah, well, in part, even though Japan has gone through a second wave, the numbers are beginning to go down somewhat. So it's not like India, India is having tremendous problems right now. I'm sure the government there is having to figure out what to do differently because the people are going to be very, very upset in Japan. The numbers have not been relatively speaking, all that terrible. And I don't I don't know anybody in my immediate circle who has become infected. My friends in California, I know a bunch. So I hear from my friends in California. I'm one of my best friends from my Hewlett-Packers age. She's become ill. So I hear from them about COVID as being, you know, getting into their into their lives and affecting it. But in Japan, most of us don't have that connection. So it's something that, of course, we're all concerned about. We all wear masks, but it's not something that's affecting us personally. The majority of Japanese, the baseball team that my kids go to, both of them. Nobody has become ill. None of the kids have become ill. So so it's not quite as stressful or a dramatic issue as it is in the United States. However, he will have to address that once he starts campaigning in the snap election. So that's when we'll find out if there's going to be any difference whatsoever between what Abe has done, which is kind of benign neglect and what Suga will do over time. And of course, Jay, yes, that's with any politics. They may say one thing and do something completely different. Oh, don't we know? All within 10 minutes. So what about the economy? What are what are the expectations? If if I talk to the man on the street or the academic at the university, say, what do you what do you expect from Suga in terms of addressing the economic problems of Japan? What kind of answer am I going to get from people? I think once the election picks up in the fall, probably there'll be some kind of program to continue government support for the industries that have been affected by covid. So the number of small businesses that are going to be going bankrupt over the next six months or 12 months is going to be quite significant. This is similar to the United States. So the government may step in and fund them. So that may be additional funds that the LDP will will run through the parliament through the diet so that those businesses can continue to work. So that I think be part of their campaign strategy is to try and continue life support for the companies that have lost their customers, the ones on the retail side and tourism and so forth. So there is a program that's supporting internal tourism and it's kind of mixed in terms of its results. But basically the Japanese government is subsidizing travel. So if I wanted to go to Hokkaido and fly there, they would pay for part of my airplane ticket. They pay for part of my hotel bill. So they've done things like that. And probably Suga, when he becomes Prime Minister and starts campaigning, will either embrace that or come up with additional programs as well. That is not a good idea. I mean, on the one hand, it touches a cultural nerve. You know, my my observation in Japan has always been that people like to people in Japan like to travel around Japan. Everybody's moving around. Yeah, this is such a beautiful country. And the other thing is that when you've got people travel, they spend money. And that's a stimulus package to have people spend money. Yeah. So there's I'm hanging out of my home today, but oftentimes my wife would be working at home. So I would go to a local hotel. It's a very fancy maybe four star hotel. And for the first four or five months of the pandemic, I would go to their lobby. I would be the only one there. I would set up my computer and my wireless connection and do stuff. But the last time I went, it was filled with people. So the program is bringing them into the hotel. So I was quite surprised that it's I don't know what their occupancy rate is. I'm sure when I was there, it was probably 10 percent. Now maybe they're up to 40 or 50 percent. But that's a big difference for an individual hotel. And this program that the Japanese government has been running is the reason why those people are there. Well, those people coming to Hawaii, you know, we've had tremendous problems in trying to reopen our tourist economy. And I don't think the Japanese are coming or can come. A&A just announced that they're going to start flights to Honolulu. They had suspended them. I think it's going to be this month. It's not that many. I mean, just one or two a month. And they're going to be flying 787. So but we still have the problems with the quarantine, right? So when Japanese people go to Hawaii, they're under two week quarantine. And then when they return to Japan, they're also under two week quarantine. So that's not going to encourage people to go at any significant numbers, unless you're going to be staying for a significant period of time. So we have to have some kind of testing regimen, which I know Hawaii has talked about. And Japan has also talked about. But right now in Japan, if you leave the country, you have to be tested. And then when you like, if I went to Hawaii, I'd have to be tested again in Hawaii before they would allow me on the plane to go back to Hawaii or to Japan. And then when I arrived in Japan, Japan, I'd be tested again. And then I'd have to do the two week quarantine. So technically Japanese people can go, but these quarantine regulations are just making it not very feasible right now. Jay, I want you to do the best you can. Make a few phone calls. Yeah, I miss going to Hawaii this summer, as you know. We make a call. OK. But, you know, one thing is, I'm assuming that in Japan, the experience of the individual and the businessman and woman is about the same as Hawaii. We stay at home, we do Zoom, we do telephone calls, we send email. But we don't go out much. We don't even go to the lobby of that hotel. Oh, really? Business, when we, you know, when we do business, we do business in a protected manner. And I expect the same thing in Japan. And this has got to be, you know, a long term thing, because it's going to be a while before there's a real vaccine. And yeah, so a constant guide, I just briefly, they were intending, like many American universities, to allow face to face instruction. And about four weeks ago, they completely reversed that. So all the students are taking their instruction online. All the professors are doing their online instruction from home. They never come to campus. So that's my education at my university. What you're describing, that's our life right now. And so that's got to affect politics. It's got to affect these three guys, or Asuga, as a likely successor. Yeah. In how they conduct their relations with other members of the party and how they conduct their relations with the public and the media. You know, I imagine it's more like what Biden does than what Trump does. They're probably wearing a mask. They're probably, oh, of course, zoom and all that. And that's the image they're putting out. And it's going to be that way for a while. It hampers them in terms of their political range. Right. Yeah. They're not going to be out on the streets campaigning like they normally do once they announce the snap election. So it'll be probably more Biden style. They'll be doing virtual things rather than actually what Trump wants to do and have these big conventions and so forth and put people at risk. Because if they do that and some Japanese people get sick, then the criticism will be very harsh, very, very severe. Well, that's I think Asuga's problem. He doesn't want to be pasted with the same criticism that Abe had. He wants to do everything good that Abe did and not do any bad things that Abe did. He doesn't want to be pasted with the same label of not having accomplished anything. And that brings me to my last question to you, Steve. What about TPP? What about TPP and multilateral trade arrangements? Yeah, Japan could be a leader in trade in Asia. Yeah, well, Japan is a leader. When Trump became president, as you recall, in January 2017, I think on the very first day or maybe the second day, he pulled the United States out of the TPP, just abandoning Japan. But Japan, to the credit, to Abe's credit, said, OK, this is not good news. Obviously, the number one economy is no longer a part of this deal. We're going to have to deal with China without the United States supporting us in this. So I think the bigger question is the new president. If Trump wins, then TPP from American perspective continues to be dead. But if Biden becomes president, even though the politics on this may be difficult, if you remember back in 2016, Clinton and Sanders, all the people running for the Democratic nomination were all anti-TPP as well. But I think that perhaps Biden, since he's a moderate and he certainly represents business interests, may reengage and may potentially come back into the TPP. And that would be a tremendous support to Japan. That would be a huge win for Suga, I mean, just huge. Because then he could say, hey, I brought the United States back in and they're helping us do battle against the economic expansion and military expansion of China, which is something that Japan and the United States share interest in. Yeah, well, it strikes me that if I were Biden or if you were Biden and I won or I was about to win or I believe I was going to win and I had a chance to talk to Suga about this, I would tell him thanks for paying attention to the U.S. and we're good. We're good. But we want you to also face to the West. We want you to face to Asia. We want you to help us help the United States reorganize and restate its foreign policy in Asia with China. We want to be together with you in containing China and in having a diplomatic effect on Asia. Wouldn't that be a good idea for Biden to use Japan as a way to express influence and self power into Asia? Yeah, absolutely. And that that was Obama's Asia pivot. So that was his strategy. That's why he pushed for the TPP so hard. We've had a four year hiatus with no policy whatsoever. And Japan's kind of been struggling on their own. And we've had COVID too, which, you know, threw everything up into the air. But if that kind of mutual agreement could be reforged between a new administration in the United States and a new administration here, I mean, both of them would be relatively brand new. Suga would come into power in the next few days. So in September, Biden, if he wins, would come into power in January. So it could be a fresh start for both countries. And I totally agree with your observations. That's the best way forward, not just for Japan, but also for the United States, too, again, because of growth. The United States needs to be hardwired into this region. It just has to be if it wants to continue to grow economically. Yeah. Well, Steve, it's great to talk to you. I know a lot of things are going to happen here as we run up to, you know, Suga's success and coordination. Yeah. And also, right. And also Biden. So there's a lot of things going to happen. It gets it gets more interesting every day, if you will. And I I can I can hardly wait for our next rendezvous. Anyway, so take care. Be well. Thank you. Stay well. Pleasure, Jay. A couple of weeks, and I'll make that call. OK. Yeah, thanks. Just put me on the list, whatever that shortlist is, so I can go without all the rigmarole. Bye, Jay. Thank you. Take care. Bye bye.