range, y know, eating grass whenever they want in the unmanaged fee for service world. and transfer resources across those three buckets. : bob's proposal is not in any bill right now. just on the word of the

competitive billing andedicare advantage. there are two options in the book. there are one next to each other back-to-back. one would be competitive bidding just among the private plans and that saves money essentially by having less people in medicare vantage an more people in fee for service. that's essentially how it saves money and that's what is going to b presubly in the finance committee bill. by my life that's not competitive bidding and that progm is not part of the bidding and that was why the monstration was killed in the '90s, right? bob reich proposed in the past, i don't know if he's still for it. some versions of competitive bidding where everybody in medicare wouldet the same voucher and they would pick where they would go into a private plan or the public government-run plan. it makes you wonder how the public option for everydy else would evolve over time. if you really want competitive bidding, dit for the whole program.

>> lete put a plug for the book coming up pretty soon and then we'll ask chip to ask his question. i don't remember the title, but it's making this point. a bo by roger feldma brian dowd and bob cullen coming out some te this fall. >> actually, i just want to make a point of clarification. i' sta off by saying that i am with len and am a supporter of reform, but i think in the house bl and in the coming bills we have to be more careful about our numbers. i n't have them committed to memory, but the hospital number in theouse bill is about 15 in terms of savings and frankly, they're the old-fashied kind of safings with some exceptions maybe for re-adssions that we can talk about. in the senate bill they'll be about the same and ithe house bill for medicare advantage was, i think, 158 or 160. so -- which as have been

discussed and then the numbers obviously on pharma will vary between the two bills. so i only want to point out just as a point of clarification that the hospitals aren't sitting by as a representative of hospitals and not ctributing and also say that i think it is unfortunate that we have to go through this sae process of trying to get savings the old-fashioned way, but those are the only savings cbo is going to count and hopefully we willet some refo out of the bills, bui don't think there's that much in there if we actually alyze it and part of the problem, i think, that so much of this is improvement. the idea of these accountable health organizations, they may be great. i remember in 1997 we had something called psos, provider sponsor organizations and they we going to chae the world and there were two of them. they cannot chang the rld. so we have to be very modest and

humble about the potential for medicare as a change agent. i mean, i've been involved in medicare polic for many yea and i think dlg served an incredible function and they don't always work. sometimes they cause bigger problems than we would have had otherwise. so i think we still have to be modest and humble about wt we can achieve and that's the only part of the presidens speech that bothered me a bit is it sets an expectation that we're goingo be able to change the world with dramaticay dealing with fraud and abuse and delivery reform and sort of been there, done that and we oug to keept it, but i don't think there'secessarily any given answers here that will solve all our problems. >> chip, i agree. thanks for clarification about the numbers. i would just say, let us not forget the ct of doi nothing is going up every day. >> i know you're with me, but to say that therefore, we d't

know therefore we should do nothing is a pretty extreme conclusion. >> thawasn't chip's -- >>eah. okay. >> actually, we have a television schede to keep. i think we probably have to close up the discussion right now. oh, norm. do you have a -- norm, quickly. ididn't see him. >> the question ithis, how much of a cost driver really is defense medicine and how much prospect is there? >>f you had a setf best practices that proded some cover for doctors if they're sued, if they follow those best practices. is that realiically something that could work as a major part of malpractice reform and could bring the cost down. is there a lot there? >> well, i'm going to say quickly, there may be some, but

doors,n my opinion, develop practice patterns as a result of their training and experience. i would be very surprised if they would dramatically change at as a result of what you're talking about. a new generation of doctors coming in might have a different view just as think we are seei some differences in many ways, in new physicians' approach to the practibe than we've seen those that have been out there for some time. i'm not saying there are no savings,ut i sure wouldn't count on a lot of them. i think thas the genal concensuthat this is small, but it could growvery time, but you throw in a few bells and whistles which are quite ntroversial which is what i we h practice guidelines if you followed them. you would have a safe harbor. you know, over t long run that could have, i think, a very significant impact, but once again, we don't have the information we need to develop these at this point.

we'r talking 10, 15 years, i thk. >> actually. there already is something like that great harbor if y deviate greatly from the standard practice, wherer itame from in your community you wil have trouble in court whereas you can say, in essence, this is what all of the gastroenterologists do. we can't do any more in that local court. that going to fly. so we're really already there. i don't think tt will have a gigantic impact until you get some better idea about what to do. that's the hard part. we really have run out of time for formal estions. we have solved every health reform problem and i appreciate that because i had my doubts out this, b we're there now and the only problem is i don't believe any memberf coness

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>> [inaudible conversations] >> thank you, all, for coming. to this first talk of the year in school foreign service asian studies program series. i am jordan said, the chair of the east. it is aleasure to introduce our colleague, michael green to enlighten us about the jpanese elections. mike and associa professor of international relations here at georgetown. he's also the japan share at the center for strategic and international studies. mike has worn many hats, and has a remarkable career both and

academics out and i guess we call it the real world and politics. he is the author of "hermene japan" 1998, and more recently "japan's reluctant realism to" 2003, and numerous other publications on the japanese policy and international relations. he has served in several capacities on the national security council, was a fellow for the -- in the council for foreign relations. he's also been a stafford in the japase national diet, which means we are hearing from a person who can speak from the inside as well as an expt from the other side of the pacific on toy's topic. he's a journalist for numerous newspapersboth in japan and re. fulbright fellow at tokyo university, and t list could go on.

t i have to tell you that mike myriad's legend preceded all of this in mywn career when i was starting out in graduate school around 1990, 1991. i ve not met the man, but he was already kwn as the victor in an international debate competition heldn the japanese language along teamsf nonative japanese speakers in which the legendary mike green wiped out the canadians and the italia and the fearsome nada nationality team and was a victory and everybody was talking about his achievements in japanese because we were all struggling with the language of the time. so i have known michael greene just as a figure in the very long time and have gotten to know him as a colleague and i am ve eager to hear it as i am

sure you all are how he will enlighten us on this intesting moment in the japanese party politics. perhap theost interesng moment in our lifetime at least michael's and mine. soithout further ado, i give you chael greene. [applause] >> thank you, jordan, very generous. for those of you here that for my students i can tell you you can find the tape of the show and it does not -- it is indefinable. am glad to see that japan is gathering so much attention and so much interest. this is a really fascinating elecon and fascinating kind in japanese politics. it is also i think a good chance for us to remember how important you often hear this phre japan paing these days and worry that china is getting all the attention anpeople don't care about japannymore. there's a lot of good reasons

why that's the case. japan got a lot of attention in 1988nd 99 in the united states because people thought japan was major threat and there were pools where four americans said japan is a threat than the soviet union, our major in any of theay today, americans in polls like the ccago council or her pew rate japan as the third most trustworthy cotry in the world after great britain and ca. so, and some ways the lack of tension japan hasn't been because japan is it important, it's because things are going pretty well but this election has added spice and excement as a time to rembe how important japan as. i wa to get into debate about purchasing power and other things but japan is still the second or if you like the third largest economy, second largest contrir to the world bank imf all the major institutions

that uphold e new liberal system. the basis for american presence and engagement in asia and quietly one of the closest partners the united states has been the key 20 process and the g-7 process. and in the security council when pan is on the security council. at i wt tory to answer today are four questions which are on everyone's mind i think, rst how did this happen? how did the ldp go from 300 seats and the lower housethe 480 seat which is the more powerful house, the part of the diet that besides the prime minister, how did it go from 300 to 119? and how did the opposition democratic party go om 112 seats to 308 basically switchg positions? condly, what does this mean for the future of japanese politics? at the beginning of the end,

the end of the beginning, this revolution, where does this put us in terms of the next epoch in japanese politics? third, wt doeshis mean for japan's foreign policy relationship with the united states with asiand the japanese economy, and fourth, is true that mrs. yukio hatoyama was sent to zas on a space ship where she met with o weeks with tom cruise? [laughter] i will begin with i don't know. but it's one of the more -- she is a former television personality and has gone out an said she was in fact abducted by aliens. mr. yukio hatoya said she had a dam. it's one of the more colorful aspects. in the united states we often have presidents with brothers or mothers who are colorful and interesting and we have here finitely interesting character in the japanese political world. to start on why this happened in a lot of ys you can answer

this one would be to look at the post or ructure of japanese politics the so-called 1965 system called the 1955 system because that is the year the liberal party and democratic party came together and formed, you've got it, the liberal democratic party which to confuse you ithe conservative party in japan. the ldp survived and basically dominated japanese politics until this election. they fell out of power once in 93 briefly and interesting precedent to look at when we look what's happeninghis time but they came right back and dominatedhe political world and japan. sometimes people compare to the pri or the du in germany or democratic party on the united states before world war ii but it was in many ways even more dominant than those examples. if dominated because it had a

fairly simple governing philosophy which is aligned with the united states opposed communism and grow the economy and what the bureaucracy and business show their excellence. and in many ways the ldp benefited om the fact that it reflected the international structure. the bipolar structure where in asia the u.s. is dominant and when t cold war ended, it w quite logical that the domestic politics were also change because it was a reflection of the collision between commtnism d democracy betwee socialism and free markets and so fth. the ldp did collapse thin a few years of the end of the cold war, and prime minister formed th government in '93 byulling together a variety o smaller

parties, new parties and defectors fro the ldp and he stayed in power about two years before he was felled by scandal an the ldp came back in collusion with their enemi as socialists. and that lasted about a year and then the ldp down to the socialists and dominated anderson's butt in many ways, when the cold war ended, the liberal decratic party was a dead manalking, was a corpse that was like a chicken with his head cut o, still moing. it was increasiny corrupt, bankrupt for n ideas, tied to an economic model that wasn't working in any more particularly ter the collapse and the lost decade in chinese economic history. the ldp started getting in trouble. bodies started to sag and started to go down in the le 90's and then they were safe and the rty was saved by the

incredibly fasciting line and mant street talking prime minister who worked for me as a research assistant andrilliant guy. he did get elected this time to his father's seat. one of the few ldp candidates that made it easier to t ldp by running against it. he was aaverick and got elected in april, 2001, not in the traditional way tt leaders we elected to talk show litics but by appealing to the rank and file members of the party and public and he stayed in pow of the factional balance but public opinion, dynamism, his popularity is what kept him the prime minister, and he left quite popular. said he would leave in 2006 and he did and his popularity is quite high but the key was he ran agaithe party. he didn't care if the ldp died. he wanted to reform and change the party. he wanted to break the old

dinosaurs. he wanted to bring more fluidity to the japanese politics, yoger politicians, when an. precisely the kind of hp& , allood men with good ideas but one fundamental flaw, they dn't run against the ldp. they referred to the o style of factional politics.

they were a huge mistake popularity when th were elected and they waited and waited and the popularity went down and in all three cases was in the teens or 20s and than they had to step down. had anone of those three politicians mediely called election this most recelt election might not have happened because the ldp would have had for years of contr. the reason they didn't is because they were afraid of losing theirajority. the hat to a third majority which allowed them to override the upper house, which was controlled by the opposition after 2007. an they were thinking things would get better as the water steadily filleup a the next guy came so was almost inevitable as they were palyzed afraid to call an election until last mite to basically required by the constitution. forced to push bills through

with enormous political capital and years two-thirds majority the upper houscould block them. it was almost inevitable this would happen. it was made even wor by the economy, 1.9% average gdp groh since 91 the gap between the ch and poor in japan looks pretty good. it's gone up b it's not gone up as much as most of the modern industrial countries. such asrance where it's gone down below japan petraeus o.d. cooration when you look at it on the chart it goes up a little bit but not as much the u.s. or u.k. or other countries. but japan where the ldp success was a part based on the ideaconomigrowth would benefit everyone, the gap was g enough to start to cause a backlash especially against his reforms which started to become popular. people wanted change. but they began to wor that too much change, too much market

reform and market principles was creating these on just gaps of inme in japan and the democratic party capitalize on that. on the financial crisis alsos you can imagine was a huge blow to the government of japan, the economies shrank more than any other in the oecd. you can't win elections given all the other problems you can't win whenhat is happening. is the economy people vote on. so, the japanese people wereed up as thewere fed up when he came and promised reforms and big change and breakinup the old system. but they didn't trust ldp to do that anymore and wanted to throw the bumsut. to give you some numbers that bear ts out, 69%, can't read my and writing, 69% of the voters said recently in one poll the change of government was a good thing. 69% means a lot of people who voted for the ldp also said, you

know what the change of government as a good thing. this had to happen. the old system wasn't working fgr u ..

>> they want the two-party stem. 46% said the democratic party will not change jape politic s. 66% said the dpg won too big, too much. what the japanese public careerly wand was to throw out the old ones and create a competitive dynamic two-party system. the poll suggest they wouldn't necearily be unhappy. they just don't want the same ldp as one friend of mine put it,

regime change in jan, dot, dot, dot, details to follow. this was mostly about throwing out the old, breaking up the system. opening up japanese pitics. the ldp was not delivering. it was not in my view an overwhelming endorsement. the japanese public has real questions about the dpj can deliver. that goes for many of the people. but they wanted to deal a real blow. so in one sense there is a revolution. the japanese people for the first time have really cut through the ballot b, fced regime change. 1992 was different. 1993 was in diet. coalitions formed, it was a not popular vote in the change. this is a popular vote creating regime change. so in that sense, it's a real revolution. but there were questions about what really changed. so the next thing is the question of what will change? what's new in japanese

politics? i thi there are going to be some important changes, at least in politics. polici is another question. but in politics there will be some changes i think. first the democratic par ran one of their principal themes was antbureaucracy. it got a ltleingly too ties. but the plics really frustrated. especially t bureaucracy that manages tension. they are not a unhap with defense or finance. buthey are pretty darn unhappy with the bureaucracy that manages tension the dpj is going to make constitutional changes. they have announced they are eliminating what i called the meaning of deputies. the top an parliamentary system e top are politicians.

but the administrative vice minister, what we would call the deputy secretary in this parliamentary system, is the top bureaucrat. and the politicians come and go. but the bureaucracy kind of runs itself. especially eachureaucracy h its own corporate powerful ethic or what some people call stove piping. what former national security advisors calls cylinder ofs of cellence. very strong bureaucratic signs. some japanese sciensts have argued that it has been a feudal society witharring clans. expect now they ar bureaucracies. 200 years ago it was samurai, but it bureaucracy. but the clan culture is more powerful some argue than modern western institutionalization. it's a little overblown. but there is something to it.

the dpj wants to break that. which is the meeting of the vice ministers. and in this meeting the vice minister of trade and finance and farm city and health and welfare, y cide what goes to the cabinet. typically they have a veto. especially the powerful industries. they come out with a conclusion i'm not going to touch your rice bowl if you don't touch my rice bowl. there are a lot of issues today that are hard to solve because of this stoveiping. and the dpj says no more. from now on the politicians will meet and we will decide how we're going to relve these disputes. and we're going to forca bureaucracies to work together. we are going to take power and ve it to another. that's going to be real shock to the japanese bureaucracy. they've also said they are going to put 100 appointees in. at first a lot of people worried

that they would be chopping off the top 100 bureaucrats. and as much as bureaucracy is popular in japan, the reality is japan has no strong think tanks. the dpj has with few exceptions never been in goverent. they won't beble to run the country. if they had fired 1, it would have been absolute chaos. as one friend of mine said like monkeys trying to fly an airplane. which shows you what the bureaucrats think of the potician what they are goi to do is not invite all the bureaucrats but have lots of politics watching over them and keeping tabs on them. and the bureaucrats won't like it. and it's going to force them to respond more and more to these political appointees. there are about 70 now, so 100 while it sounds like a lot.

the politicians will be there. who had a much cozier relationship. the dpj has created or will createhe national strategy buy or. the nfc, the national economic council, and putting them in one office under the prime minister. why? so they can control decisions. and the first thing it will do is decide on the budget. they are going to have to decide over the course of the fall what the budget priorities are. right away they are going to be from the requirement office telling the bureaucrats the funny priorities. now theureaucrats have already put forward the proposals. it's not clear how much they will change. it's no doubt the ruling party will want to make its mark.

the head of the knew bureau is deputy prime minister. and so it will have a lot of power. another thing that's going to probably change is the ldp. you don't lose an electio this badly and just sort of keep whistling past the grave yard. i don't think he's going to tie or go away. but it is going to have to rejuvenate itself. and they will have their own election for their new leader. and one thing to watch for is whether they pick somebody young and dynamic. people talk about older or more younger leaders. the ldp is probably going to have to change because of this it's going to remain competitive. which the japanese people say they want. big business is going to have to change. the business federation has been

extrely cozy with the ldp. they started giving money to the democratic party when they realized they might win. for most of this 1955 system they gave major funding to the beral party. mainly to be left alone as much as possible. let the ldp gerrymander, keep thr majority by keeping the rule voters happy, and big business will continue exporting and focusing on production over consumers so is that they continue growing the japanese economy. that was the basic dl. the dpj is back b the federation of labor unions. labor unions at least for now in big business out, this new center, the national strategy council, will be replacing another, a previous group in the

prime minter office that was mostly made up of business aders and economics. it was supposed to chart the policy. it appears that the new national drag beau will have no business federation. it's out in the cold. that's not necessarily. it's a bad thing in some ways. it's a bad thing because the dpj is talking about some policie that are prolabor union and bad for business. banning pt-time labor. and the business leaders have said if you say we can't hire part-time workers the result is not going to be thate hire more full-time, we're going to set up shop in indonesia. it is a proem. another one is climate change. it's a good thing that japan is going to be active. the the proposals for cutting

emissions are aggressive. if they are yeted that's going to drive offshore. one of the proems is@@@j&s hing that i

think will come out of this that will last is that the process, the policy process, is going to be more mpened up. no matter whether the ldpomes back or not. this was a vote foriffere kind of process. i think in japan where civil society has been in korea or taiwan where civil society has been slowero grow. they are goingo be very supportive in terms of changing tax laws, empowering, tt's a good thing i think for japan. i think women are going to have a more active role in the dpj. it's going to break open some of the holds on political promotions and political participation. immigrants in japan, korean citizens living in japan or

koreans with japanese citizenship. new immigration. i think the likelihood is the dpj is goi to be more open. it is going to open up new leadersh. that's all good. although it is entirely possible that this time next year is giving a talk. the ldp is within striking distance. and the economic forast isn't great. the dpj is going to have a problem. and it is quite possible that in the upper house election next summer the dpj will find itself in the ldp blocking bills forcing the dpj to unravel and resolve. i think it's likely to continue. it doesn't mean the dpj will be the ones who in the end benefit or implement them.

policy, the dpj put out a manifesto, it's policy platform. it was the third one of these they put out. it was by far the most moderate and fuzzy on foreign policy and defense. but it still had s things that are going to be a headache for the obama administration. reviceing t status forces agreement that governsow our troops are treated and their legal recourse an japan. reviewing or blocking to change u.s. bases moving about past the marines that are there too guam. things like declassifies agreement between u.s. and japan. most of it dates from before i was born. they are trying to find a bureaucrat to blame. they can't find someone alive that was involved. but it's going to be a problem

for the obama administration if this new government starts declassied secret agreements. not that aone cares that much about nuclear agreements from 1959, but the whole idea of throwing out all of the reements is not going to build new agreements or sharing. proposals to -- that is not manifesto, but it's part of the earlier promise to pull japan's ships out of the ocean. any and all of these if really pushed would be a major headache. the obama administration doesn't have the bandwidth to deal with right now. they have not pushed hard, the dpj since being e effect willed. and his pho call he was very general inis meeting with o ambassador. he didn't do with any of the specifs. on the other hand, a few weeks

ago, he put an article in the "new york times" bashing globalization, blang the economic crisis on the united states and promising japan would be recalibrate. which if you are are in the white house, that does not look like, although it's not specific, it does not look like an ambitious or positive agenda. there are mixed signals coming out. the dpj has also got to maner its coalition partners. it doesn't have majority on its own. needs to rely on socialist. the socialist came into government a decader so again. they changed it out. it dropped all of their opposition in the u.s. bases. then the ldp dumped them. then they had noolitical base. their successor partq, the

democratic socialist party, the social democratic party does not want to depete that mistake. they are demanding the dpj holds to the promise to pull out on the war on terror. and in the introparty negotiations, it's interesng to watch how it has moved away and promised to continue talking abt these things in the uted states, but not pressing that hard yet. but the socialist party and the japan new party won't drop these. so dhey have to manage their coition. antenumber of senior political figures in the dpj have said that they will pull out of the ocean, they will block the u.s. japan agreement. they've said these things. you know, obama administration made a lot of promises he didn't keep. and it was okay. you kw, t difference between japan and governorring is big. a lot of people are advicing the

democratic party to find ways to keep moving to the center. they a still remaining big. i think their general consensus in the party is not to push. but not to drop them either. and to hope that as the president meets obama they wl develop a good relationship and obama will say he's a good guy. we don't need your hips. okay. we'l redo the agreement. it's increasg evidence that this is wishful thinking. the aeement was negotiated by secretary of defense gates under the bush administration. who is the secretary of defense for president obama, what do you know, it's mr. gates. there's not as much give. but the good news is rather than come out of the gate, they are at least going to try to build a relationship with obama. a couple of figures worth keeping in mind here, althoug

he in h "new york times" article and domestic speeches have put out the thes, that is not why they got elected. and that is not where the japanese ublic is. in the cabinet, the government pollg most recently, 7 of japanese said they feel close to the united states. 66% they did not feel close to china. 72% said a japan clash china alliance would be a big idea. 76% said thathe u.s./japan alliance is important. you will often hear younger japanese don't say. for 20 to 29 year old,79% said

it's imptant. there's not a big push for the government to move away from the u.s. the japanese people in the most recent poll, 71% say they want to succeed and they are backing him. that by the way is almost the exact number all of the others ended up with when they started and went out with 15%. but 71% isn't bad. how much japanese support obama? 72%. so there's very little political hate to make fighting with. so why are they doing this? why is this theme out there? pa of it is trying to capture and tap the japanese resentiment about their situation economically. and try to sort of blame their last for being too pro u.s.

with a good campaign slogan, it's not going to be something they can govern on. also because they were out of power for so long, and because there aren't strong think tanks, a number of advisors have shaped this narrative. they are friends of mine. i know them all. jordan probably does too. interestingdy, they are all quit affectionate and spent time in the u.s. these are not anti-american people. but they are definitely pushing the steam against globalization and moving toward asia. he was famous after he graduated from the university of michigan. he wrote a book called "beyond capitalism" arguing that japan had developed a new reform of what he was cled procentric. moving he went to an american univsity. which was saying the asian

values wer different. collective goods were more important. and japan's economy, this is in the early the '90s. still people had new development model that took care of the people. he had in the ministr proceeded throughout the course of the 1990 to have struggles with the clinton administration about the future of global finance. the united states was incredibly strong in the 1990s. wi the class of the soviet union and when the asian financial crisis struck in '97, '98, the clinton administration was slow to respond. they championed the asian fund. so he's a fascinang figure. he is a product of the mor ideological commiions when we thought we had total different economic models and were adversaries. another prominent adviss who

was in brooking instituti for a long time. again, fluent in english lots of american friends, very knowledgeabl about the u.s. i would not call him anti-american at all. he adviced in the early990s, and i think it was based in part of the time span that japan needed to increase its leverage. coming out of the early '90s when clinton administration was really pressing japan to change its economy. in that context, he started arguing that japan needed to align to balance u.s. influence. and for a while when he was prominent as the leader of the dpj, he sort of liked this idea. and you can see, i think quite clearly in this "new york times" and the other argues that he's using about anti-globalizion, yo can see, especially those of us who lived through it, i was a

graduate student. you can see a fascinating nostalgic repay of the old u.s./japan ideological debates when we really were clashing. the thing is in the g20,7w in ray pack, the u.s. and japan arelessly aligned. the japanese public sort of gets it. i'm not sure how much of this is campaign mode. i worked on john mccain's campaign. without being specic, let's say some academics save some idea that re never going to be policy. e same was truth for barack obama. i'm not sure how much of this current flavor of anti-globalition and moving to asia is just campaign rhetoric or how much meet he will put on the bone. he needs a good relationship with the u.s. the public is not interesting in

changing alliancehat much. there's frankly nothing that japan would do that the u.s. would object to. if japan would improve relations, that's in the u.s. interests. the u.s. needs, japan was our most significant ally in asia. we need japan to have good relations. there's nothing bad about pushing and emphasissing lations with asia. i'm hopeful that this will all sort itself out. andhe issues will not get in the way of the allnce. but to be honest i'm worried about the mortgagens. because i'm not se the dpj has never had to resolve these. and i'm not sure how they are going to do it. this is frankly o other reason why i think that forgn policy will change fairly little. because the dpj was e elecicitied to changolitics first and to do something about the economy second.

and the manifesto the party put out has 55 key recommendations, five of em on foreign policy@@@i

because of the aging of society, you can't keep getting revenue when your society is aging. u have to tax consumer goods. it's regressive, but you have to do it if you're going to maintain your revenue. but they are saying they won't touch it, thepj. increasing pension befits, stimulus packas, money for children for families with children. yes, it varies, but adding somewhere between $72 and $200 billion a year to the japese economy annutedding many people to expect japan's ratio will go to 200%. which will be people in glass houses should not throw stoning. and j.'s debt is pole% of its held by the japanese in contrast where much of it is held by

japan and china buit is going to be a problem. it's not sustainable. but it makes a lot of political sense. if you want to keep together a low legislion that's devices on security and defense and you got to win an election next year in the upper house, you can afford for one year to just throw carve at people and make big pmises and beat up the bureaucracy. so it's good news,/bad news. th good news is don't create too much trouble. you have to look like you are competent. make people happy. it may not work. the japanese economy may not turn around in time do that. that is going to be a real test is the upper house. and the man who's the real power behind the democratc party, the one who is calli him carl rove doesn't do justice not because

like carl rove, but because he's more powerful. he had to step down as leader of dpj because of scandal. he's the architect of this victory. a hundred and 20, 30 of the new people brought in for picked by him. when people talking about the the children, they are his chdren that owe their seats t him. he is clearly the power behind the throne. interestingly, he's a veteran of the faction of the ldp. which was famous for being the power behind the throne for many japanese prime minister. he wrote a book which argued for many o when he pushed for, a more dynamic japan taking risk both abroad and at home. his core philosophy. although he has been very problematic. he never visited the u.s., he visited china win and he was

critical of the u.s. but in my view, he was all optimistic. he could- let's just leave it at that. he wouldn't poison, but he is th ultimate. i worked for the local newspaper and i saw him up close in elections. and let's just say hes the ultimate machiavellian. he's going to do what he has to do. he's also in the long run going to i think have a very power oriented view. once he's secured the majory he's going to have the per inrview of the system. it's not gng to fall for sort of dreamy ideas of the left. and my guess is if he wins in the upper house he will dump the socialist in the left like cold soup or cold piz.

so watch ozawa. 's not going to help the united states solve problems. he's goingo want to keep distance. he's eoing to be the keelhat while we may not love him, he's going to keep the government focused i think on progressmatic solutions and good governae, i hope. it's ironic that the big hope for those of us is the one guy that gave us the most trouble, because hs the machiavellian official. in the long run, and il end with this, i see this revolution as being a revolution of the political structure and process. not a change in japan's trajectory. in fac i feel fairly comfortable predicting that in a few years if we were to father and talk about what happened in retrospect, that what we will

see is that there's a tilt to the left because of the result of this election. the sociast comento coalition. their ideas are tested and fail. andn subsequence elections this party and japanese politics move back to the right or center or center right, and that's, i think, the general trajectory. you may look back on this election and say there was a tilt to the left, but it actually was a poison carrot for theeft. what people call the normalization using the self-defense forces considering seriously chaing article 9. this election, people may point and say that election is what did end the opponents precisely by bringing them into the coalition and doing to them what happened to the socialist in '94 and '96 testing their ideas

forcing them to confront reality. that's where i'll leave it. i guess i'm optimistic it's going to be a bumpy couple of weeks, months,ears, on the whole this is a good thing. even those who didn't vote, i think they are probably right. thank you. [applause] do you want me to just call on people. i think we are going to 1:30. i'm curious, but in some ways there's not much evidence that we should be optimistic that japan can develop a par system or much more accountable government. what would you say would have t happen structural before we could regard japanese politics

as operating more closelyo a standard western model? >> it's a fair question. i think there will be mobe accountability a transparency. especially on social, welfare, economic, and other issues is going to be reduced in the role and other groups is going to be increased. that's going to be a lasting change that the japanese people will expect. the two-party system, which moved japan's lowest house election districts into a new system, the old system was something like germany. in one district you would have three or four seats elected. they shifted from that to

singleeat district. so in every election you're voting for one candidate. a certain number can get elected. which was demanded by the smaller parties. but the universal expectations was that this wld foster the growth of the t-party system. in the district with three or four seats, it's enough to get elected if you have the agricultural vote. or if yo just have the labor vote. and it reinforces pork barrel and spending to certain constituent groups. where a man o y mano. we do have a change of parties. there is a two-party system taking shape

in some ways it's beeless than expected. there are very different policy views, speciallyn national security. you can go to someone likeage on the right and be about as far apart as the right wing of the democratic party. and there are about 30, 40, 50 poticians in each camp. this new group, no one knows where they will go. they will go where they are hold to go. a lot of people, including me, expected that big problemsrise the china, the north korea crisis. in some ways that's happened. in some ways it hast. within each of the district the support group for the liticians don't want their guys changing side.

in many districts, the shinzo are backing because the ldp is being backed by a new 20th centy rigign that the older relion view as a threat. so some of these politicia like -- couldn't take the support group with tm. so some of these rigid battlelines within groups are so rigid that national policy debate sometimes makes it impossible for politicians to switch. that said, i still have you're going to see some realignment. ifs ldp were to win, you may see

people break off. there needs to be more political realignment. i think some of it will happen. it will not be two-party system in the sense we think of. but even we are learning. we showed democrats weave a three-party system. en we are not the model of two-party democracy. thanks. next? >> that disappointed us. and, you know, to use it true, the -- so many groups function in the ldp, but, you know, it's

so different from the party run on the ldp and as of the transition. and also, you know, the ldp made up quarrels with the other party. and in kind of the dilemma, maybe house of this is the house official. i made a real key point. but things are very pessimistic? >> i'm not pessimistic. i'm quite optimistic. for all of the reasons you just said because of some of the basic public opinion pol, you know, when 80% of japanese 20/20 think the alliance is important.

when 75% say they feel close tied to the u.s. that means something. you don't even need to look at the polls. just look at what's happening in asia with the nuclear threat, with china's rise. there's a certain facics and frankly there's aost nothing we are fighting about, big issues. weir not fighting about -- wre in general agreement, the u.s. d japan governments and will be in the epj about all the big issues. climate change, stimulang and recovering the economy in g20, north korea policy, and the u.s. japan alliance itself. what makese less optimistic in the short run, not pessimistic, but a little bit worried about how well this will go, the dpj had the luxury of saying

[speaking in a foreign language] >> saying yes, the alliance is importance. but they ar#@@ l

50%, but they were danger. if they lost anyone, his government probably would have fallen. or if anything had happened, he wa taking big risks. the democratic party i think many member supported japan. but a lot of them, former sociists and others on the left, hated it. and i tnk for the dpj it was very natural and convenient to say we support the alliance, but this is too much. they couldn't even agree on whether to oppose it on the principals. we oppose the indian ocean because theonsultation process with the die was wrong and things like that if the dpj had opposed it he had

faultered, they would have ce into power. although for many, it was sin siere. but it is in a time they didn't think ey coul win. they were threing to make him pay a political price. especially when they took control of the upper house. so that to renew the operations or to pass a bill to do the relocation, they h to use the authority. and the japese public don't like that. just the like the american public is not going to like it if the obama administration using 50%. they inposed a cost on the lpd. nowhey have to govern. and they have to figure out what to do. the majority doesn't wt to do damage to the alliance in the naonal and political interest. i don't think they figured out

how to drop. that par makes me nervous. i'm generally confident that they will have a good relatiship a they will find ways to deal with the socialists and sort of they'll say things like we're going to study the agreement or we'd like to set up a blue ribbon panel. they will find a way out, i think. but i'm not sure about that. i'm t 100% sure. i'm 75% sure. and it is possible that because they've never been in government, and they've never really had to arbitrate the issues and because he may have trouble, and the leadership is

debilluated, it maybe thecan't reach a conclusion. and you have mixed signals. on something like they have to decide on the end of the year, they can't decide and it pulled the ships back. he said he's like to, because he said he would. for the most hatoyama administration has been very careful. if weapon don't lay done some markers, the dpj is going to lay out positions. but it was delivered in the pentagon to say we need the ships. that going to force thepj to have a whole nother round. they need to be thinking aut something else that the credible that shows that japan is not retrieving with this new government. not just for the u.s., remember these ships are refueling

coalition. we're talking australia, france. this is how the well world especially the advanced democracies through japan. and i don't think he will want to be seen as a retreating country right now. the pentagon by throwing down that glove,t'soing to force them to have a lot more debates internally. and it's a tough thing for the obama administration. i think they probay see this in the long run as positive. they clearly don't want to provoke a fight. so they are being patient. but if they just wait forever, me of these decisio may not get made. sorry for the long answer. i think like most japanese in the poll, this is necessary and good for the politics, including the ldp. a little bitorried out about how it's going to work out. >> so peopl are not happy about

the bureaucracy, however, they are kind of smart against their neighbors. we don't think it's made good politics. what do you think the idea of getting about the elections in japan? >> this is a dilemma because while the japanese bureaucrats are very easy to beat up, they hav the training, the information, the skillset, to make policy and policy 15 lot more complicated now. all kinds of pies, climate change, technology, security, it's more complicated than it ever was. in some ways it takes more leadership at theop. you can't sve problem like climate change in stove piped bureaucracy. you ed national strategy. it is going to be a good thing. and i think it is a trend i japan politics thatill now be

accelerated. but you can't judge or make decision ifs your entire policymaking apparatus is made up of politics giving speeches, shaking hands, driving around in trucks saying i need your vote. that's nessary, you need civilian control, you need political leadership, but it's hardly sficient. they are going to need the bureaucrats. if the dpj does it, the pure bureaucracy will destroy them. my guess is the press, including shinzo. if they are miss managing, he's not going to say it's okay. he's going to turn the page and

whack them. and the bureaucrats they are masters of information, a that includes leaking information. they will do in the party if the party tries to attack. it's going to be mutually assured destrtion. and my guess is that the bureaucrats that deal with social welfare, pensions, that kind of thing, they are going to get the worse of it. the finance ministry trade, they will probably be okay. because this is about the economy, and things that directly effect people's lives by next july. we'll see. the other thing is japan needs, japan needs expertise outside of e bureaucracy. theoliticians themselves will rely heavily as they do in the most demis. wen the united states, do you

know how many thinkanks there are? 1500. that includes like one guy with a mailing address. but that's a lot. we probay have that my. maybee can export some. [laughter] may for health care. but japan doesn't have enough. it has a lot ofmall ones. but it doesn't have a real independent. hopefully changes in tax laws and ldp experiencing opposition. politicians wl support the tax laws and other things that empower civil society and think tanks more. it won't beike the u.s. hopefully it will be a bit more like australia or cada that havehink tanks independent of th government. >> my question is:what will japan's role be in the national stage? jan has done very well i wonder what that will be

like? >> well, he was a rising star in the ldp he was deputy chief cabinet which is one of the key most and in he was our g to guy for beef, citrus, he was smart,nd he was an eert at finding what's called the falling down place. the place where the debates can end up. he could watch the debate and figure out this is where this is going to end up and say to the bureaucrats, i think this is where it's going t end up. and thereby sort offoe resolution. so for the u.s. embassy and the clinton administration, bush administration, excuse me, george herbert walker bush, he was the fixer for the u.s. japan relationship. rethen wrote a book for japan

ich argued that the old sle of japan decision makes was all mess up. he talked about going to the grand canyon and seeing that there were guardrails and in other places ther weren't. and he thought about it. and he thought in japan there would be guardrails saying please be caref. and he said the americans expect ri. theycct a certain amount of individual risk. and this is the problem in japan. japan needs more accountability and needs toe more normal country. ozawa has gravitated and he's now echoing the logic about how important it is to keep the panese -- i makes me wonder

if he wrote the first bk or someone wrote it for h. it may say mor about ozawa that he has a clear world vision. to the extent he does, it's basically conservative. it's about japan's reputation, japan's influence, and that's why i think he's not going to once he consolited, he's not -- he's going to pull the party to the center would be my guess. a lot of his sho at the u.s. have been opportunistic to sort of quizhe ldp morehan they have revived the governorring. it's probably the one they descbed. >> two more questions.

>>] the question is could the -- and mr. okay ya, correct? it is likely to be the mister, and he is at the -- so my qution is how can you predict the tractory oft? >> i know him very well. he'sn attractive politician. he's actually in previous poles -- polls he was popular. he has a definite future. if he struggles, it probably

comes down to a choice. he's a important figure to begin, and will probably become more important. >> he has said no things tha have gotten attention in the u.s. and he has -- he's one of the ldj figures that talks about moving closer to asia. it's very big. i don't think people are too worrie about it. there's nothingpecific. as i said, if japan really works on strengthening, it's not necessarily bad for the u.s. that could be aood thing. people are nervous about some specific things he's said in the past, in recent past. he's called for nuclear free northeast asia which sounds good. once you get north korea to coopere. he's very specifically, he's been doing a lot of work on nuclear weapons and he's been

interacting with the idealtic left. he's called for the u.s. to adopt the policy of no first use % ))clear weapons. opposition party

y noget to see the secretary of state, but they will get to see the deputy secretary of state and work on al the issues and talk to them that we are working on it with the government. i w in charge. we did that when he was in the government. we had exchangening. we didn't make policy. but we were as open as we could be. we'd like do this. and exse me, he said i'd ver much like to do that. and we'd like to develop that kind of capacity and that kind of alliance, and bipartisanship and so forth. we were very excited. and he lost his position. so we never really were able to follow through. that shows you he has some basic

pragmatic views. al i've been watching with interest as he deals with the socialist party and the japan new party. d the signals he's been sending out are important. there questions about how or whethehe would try to implement the ideas. i ao think he has arack record with at love american officials that give him some confidence that he understands the big importance of the u.s./japan allianc >> one last question perhaps and we'll wrap it up. >> thank you for your esentation. and i'm very impressed about how you predict the deparent in japan in the near future. and my question is do you think that many policy natives in washington, d.c. now over the administraon -- >> on he obama administration?

>> yes. you heard earlier when i said i worked on e mccain campaign; right? >> yeah, i'm just curious how much they know about the japan and the sittion and the poticabackground in japan? >> that is an important question. :

i went out and battled all these guys for obama one at a time going up to level two and three and all of them are now in government for their sins. [laughter] so, jeff is the hd of nfc asia, ekert campbell, good friend of mine is assistant secrety for east asia, chip is sistant secretar for asia d.o.t., derek mitchell work for him. weent at it in these debates. there wasn't a whole lot of big disagreements on the foreign policy with reect to iraq, iran a issues like that. on asia, disagreements on trade. the team supported the fre trade agreement and the ama caaign didn't. differences on north korea we

were a lite tougher although now the obama administration is as tough as mccain ever sounded because thanks to the north koreans. but when it came to the u.s.-japan relatns we had these debates and then it would become aove fest when it came to japan. there was total agreement. part of thiss because japan is noa controversialopic in mainstream american foreign policy. which is good for the nation and bad for japan schlars and away. part of it is because there had been enormous fights about japan policy in the late 80's and early 90's, ugly fights, which when we were grade school we checked our heads down as our seniors fought revisionists verses the chrysanthemum club of fundamental arguments whether japan was a threat or japan's economic model was a threat or convergenceas possible. huge debates that they found a way to take advantage of but not

get killed. a lot of people who lived through that whoared about the alliance wanted make sure that we didn't repeat that. so in 2000 in the election campaign between bush and core richard armitage, a republican and jul formed a group i was in. republicans and democrats and indendents and we kind of made a manifesto if youill, sort of an agenda for the alliance and essentially we didn't sign in blood or anything buwe promise to ever won, the guy in power would support the guys in power of japan and bush won so armitage, jim kelly, terkel patterson and i went in and kurt and frank on the democratic side of the senate and joe mauney, all of them were tremely supportive with ideas and energy on the u.s.-japan alliance, and

that sort of bipartisanship i think id's still is alive. and when president obama -- when back obama won the election and the asian jobs could populated the more populated by people focused on japan and who knew and had a history with japan having worked in t clinton administration to strethen the u.s.-japan alliance. i had been impressed with how much they know. they had been doing a huge amount of research poring over the poles. i then asked to talk a couple of times in the administration. there isn't much i can tell tm they don't know. it ia senior level so they are watching this vy closely. they've also for theear leading up to the election there were a number ofrips to japan of the various research and study groups and other things bipaisan. so jim steinberg deputy secretary of state, eckert campbell and others made

frequent trips with people other side to get their meeting with the ldp and the dpj to show that there's bipartisan support to exchange views so people like jim steinberg deputy secreta of statend others repead meetin over the past year or two, invested a lot andorging of bipartisanship so they know em pretty well. the dilemma for the obama administration i think is the balance between being patient anpositive and optimistic on the one hand and then the other hand the need tsay this is the bottom line. and the indian ocean is a classic emple. the s. and the question need support in afghanistan the problem is getting harder and it's not just a u.s. problem. canada, britain, france is taki casualtie large numbers for the small countries. there have been increases in

efforts by eve cntry, not decrease and in that context, if the japanese government, which has every rit to do it, if the japanese government sa we are gone, thanks and pulls back it is n only going to be jim damaging operations to the coalitioof swing to be politically embarrassing for the politicians who've taken a risk to be in afghanistan with aretas thank you sarkozy more gordon brown or barack obama or kevin rot in australia. if japan is he only oecd country wiout boots on the ground which franklys the case and without ships at sea the pullback is going to be embarrassing for leaders who've taken a risk and frankly embarrassing for japan. but on t other hand the obama administration doesn't want to apply for an pressure on japan so they don't want to say you have to do this and i thinkhat they would prefer is the dpj review policy and say here a things we can do.

the problem is if the dpj says we've thought about it,e have a big plan for afghanistan, we are going to make postage stamps that say afghanistan is important and sell them to the post or get a bunch of money to build an airpo, you know, if they come up with something that's easy it is going to look to the world like japan is pulling back, so you are in a sort of bickel and i the bush administration we had this problem, the bush administration ordered japan to send ships to the ocean and to send troops to iraq. it's not true. we went with the decision before and pressure is over so we had these sort of new discussions in the u.s.-japan relations where we s here is the problem, here is a list of thgs we think would be helpful. what are your ideas, and frankly the foreign ministry and the defense ministryer encountered this and for a while they were lost but they emptied

the ship refueling, that was a mission generated on th panese side after the u.s. and other coalition countries briefed on the problem and said here are 25 areas where we are in big trouble and could use help, where can japan play a role so there isike a first date, you kno aittle bit of fed who goes first problem and i think the obama administration is wondering whether they shouldn't do a little bit more leasing down of expectations because if the dpj doesn't figure out its way of arbitrating the different views on security they may not iake any decisions, and so that is the dilemma. and i think it is inhat context yesterday the dpj said we neeships in the indian ocean. and a minimum it will force of the dpj to say wow okay. people are starting to think because some u.s. academics were

singing don'torry about it, starting to ink ty could get away with pulling back and leaving it up that. it's going to force them to think wow if we don't want to keep doing the ships would be credible, and what i have urged friends in the dpj to do is don't listen the u.s., listen to the u.s. but don't just listen to the u.s., go to nada, talk to the indns talk to the gulf states because they will say we really want japan in the gulf, in the iian ocean. we want the defense, we want japan's eight. japan and bbc is the most respected in theorld especially outside of asia. but alsond large swaths of ia. and e other cntries on a global scale, they want to see japan there. show the flag, however you put it so i encourage friends if the dpj don't just take the measure of washington, talk to the indians andakistan d the gulf, talk to the europeans, talk to chile.

[laughter] find out what the world thinks of jan, have an inpendent foreign policy in the u.s. interest to have that credility in the interest and the measure of that isn't just what washington thinksnd it will also help i think it away from the narrow bilateral what dpj has been stuck in. anyway, thank you. [applause] >> thank you for coming. [inaudible conversations] @