Koizumi won another election , this time achieving a majority with his Liberal Democratic party. It was previously a minority government.

The LDP maintained government in the Diet from 1955 until 1993, when it dropped to minority status in 1993. It was part of the many minrotiy governments which appeared in the 1990s, until Koizumi became Prime Minister in 2001. Since then Koizumi has manouvred elections in an attempt to regain a loyal LDP majority in the Lower House. After he was re-elected to head the LDP, he dissolved the Lower House. The recent elections were for the Lower House, which Koizumi called after his reform packages were defeated in the Diet.

Graphs and maps of the Japanese election . I couldnt find any information as to what type of voting system is used, first past the post, or preferential.

It's been a bit lost in the swarm of corruption scandals in the last week, but we recently made a security agreement with Japan. It seems to me it is a mature and strategic policy move by the government. It's compatible both with the doctrine of regional engagement according to national interest, and the Great and Powerful Friend doctrine that has long led Australian foreign policy. We are no fans of the latter at SSR, but it's to the Howard government's credit that their fondness for US power did not blind them to more lateral opportunities.

The United States was of course also pleased by this agreement, but it seems foolish to dismiss it on those grounds. Similarly, the relationship with China is based firmly enough on mutual interest that hackles shouldn't be raised too far.

The SMH notes Japan has applied to buy fighters which are, according to our esteemed defense minister Brendan Nelson, not up for sale.

The Five Articles Oath was the basis for political, social and economic modernisation of Japan. Prior to the Five Articles, Japan had been ruled by the Tokugawa Shogunate which repudiated technological change, and had been largely, though not perfectly, isolationist.

Article I

Deliberative assemblies shall be widely established and all matters decided by public discussion.

Article II

All classes, high and low, shall unite in vigourously carrying out the affairs of the state.

Article III

The common people, no less than the civil and military officials, shall each be allowed to pursue his own calling so that there may be no discontent.

Article IV

Evil customs of the past shall be broken off and everything based upon the just laws of nature.

Article V

Knowledge shall be sought through the world so as to strengthen the foundations of imperial rule.

The Shogunate form of government had largely sidelined the political power of the emperor who was rabidly isolationist. Many of the Shogunate leaders of the early 19thC had moved between isolationist policies and opening up Japan to western science and production.

But each liberalisation would be met with the next leader reforming toward a peasant and yeomanry economy which has definite limits of growth. The added problem was this form of social organisation, and the arbitrary application of power from the Shogunate government, steeped as it was in social inequality, meant that peasant riots were common.

The European powers were also trying to open Japan to trade in the same way that Britain opened up China to the globalising economy - through force. And this threat of force ultimately came through America and Admiral Perry.

There were other internal political dynamics at work. The emperor and conservative supporters were getting stronger; the Satsuma and Choshu clans ultimately came to a coalition agreement; modernisation had been slowly chipping away at Japan's entwined social and political structures; and the Tokugawa Shogunate was unable to stop the "imperial restoration".

The coal powered cruisers and battleships of America and Europe, as well as the large artillery guns the ships carried also impressed the Japanese into understanding their military organisations and methods were obsolete.

The articles were produced by the samurai of the Satsuma and Choshu clans after they had taken the palace over from the Tokugawa, but before all Tokugawan resistance had been quelled.

The articles became statements of principle as to how the new government would govern. W. Scott Morten argues that the first article, while appearing to proclaim democracy, was mainly to keep the other clans happy, thinking they would have a say in the new government. He notes once the new government established itself, it stopped conferring.

The second and third statements were announcements that feudalism would be abolished and social mobility would be based on merit, not class.

The fourth statement is a repudiation of the Tokugawa Shogunate, and everything it had done. While the fifth was an embrace of modernisation, the scientific method and the economic theories of the enlightenment.

Futures trading came out of Edo (Tokyo) at the end of the Tokugawa Shogunate. It was actually a response to over-taxation, and the daimyo's, in order to generate revenue, forward sold rice at a fixed price to the markets.

Apparently, around the same time, the Edo markets developed the department store. Where merchandise was organised under the one roof by department; ie clothes, food, etc. Presumably, prior to that, it was merchants selling just one type of merchandise from the one shopfront.

Edo at about that time had approximately one million people in it and was three times larger than Osaka. It was a bustling metropolis with plenty of wealth - especially as it was the city of the Tokugawa.

It is interesting to note that after 1850 Japan got caught in treaties which prohibited trade barriers being put up. It was not until the early 1900s that they could turn to protectionism; yet in that time, Japan went from Shogunite isolationism, to an industrialised trading nation.

One of the ways it dealt with that, while still seeking protectionist advantage, was through the tyranny of bureaucracy and inspection. Exporters had no difficulty getting their goods there, but getting them to market was different. One of the tales is that nails were hammered into baseball bats to make sure they were wood. Effectively destroying it as a sellable good.

It appears however that Japan was able to modernise in the late 19thC under a free trade policy.

It appears the Reserve Bank will up interest rates in a couple of weeks out of concern that inflation is becoming too high. One of the statements from the Prime Minister is that the core inflation is still between two and three percent. The problem with core inflation is that it is an inflation reading with all the stuff that is inflating taken out. Also known as inflation ex-inflation.

Barry Ritholz has an interesting post on the history of core inflation as a metric. It comes from the US Federal Reserve in the 1970s when America was facing heavy inflation pressures. The Chairman of the Federal Reserve asked for inflation with the volatile energy figures taken out of the CPI. Then as each differing part of the economy went into wild inflation they removed those from the CPI too. Quote of a Quote:

As a result, the Fed failed to spot the breadth of emerging inflationary pressures throughout the economy. It looks unlikely to make the same mistake this time . . . Prices took off in the 1970s largely because of serious policy errors. Policymakers now understand that rising inflation harms growth, and independent central banks are more likely to stamp on inflation swiftly

Statistical Process Control Engineers use exponential weighting on their time series charts when their system is out of control or on the point of going out of control. It dampens the volatile readings and brings them into some kind of order for the eye. Core inflation is a similar device. Because the inflationary components of the CPI are being stripped out of the number it will mostly give a figure lower than the CPI.

It was New Zealand in the 1980s that pioneered a policy of focusing on inflation first and foremost in monetary policy. Nearly all independent reserve banks follow those policies now.

Global dynamics have placed Australia in a curious economic position. If it was not for the China Effect we would have had much more serious inflation issues before now. This is not just true of Australia, but the US, Europe and any other nation that imports Chinese manufactures.

The other curiosity is when Japan's economy went deflationary they set their interest rates to 0%. It was only in July last year that Japan raised their interest rate to 0.25%. This has meant the world has been awash in cheap Japanese money to finance all manner of growth including housing speculation.

Chinese goods are only going to get more expensive as the labor force becomes more specialised and experienced. Japan wont be in a deflationary funk forever so cheap interest rates won't be permanent.

However, nearly every other aspect of economic life has been inflating heavily; energy, housing, food, education and health. In the US they have all been in double if not triple digits over the last decade - outstripping the CPI handily. Australia has been no different though education and health is partially hidden to the consumer in Australia, but not the Treasury which has noticed the inflation in those sectors and isn't happy about paying for it.

The institution of an independent Reserve Bank is an excellent one. It is also good that the Howard Government is not interfering with it politically in order to get political outcomes. A temptation they have not been able to stay away from in other executive departments. I don't see any cause for concern (IANAE), the oddities of an awakening China and a delfationary Japan won't exist forever, and the Reserve Bank is good hands to have monetary controls in.

It was not that long ago that Indonesia removed its subsidies for oil. They were subsidising it to the tune of 3% of Indonesia GDP. Suharto had tried to remove the subsidy and this, in part, led to the social instability that over-threw his junta-like dictatorship. As a liberal democracy the subsidy was removed without social disturbance. Another sign of how Australia's northern neighbour is maturing as a social and political entity.

Japanese architecture can be quite challenging, especially the modernist buildings that seem to spring out of the small spaces in the Japanese cities. For instance this house has the bottom story open via a glass wall into the street. The street becomes and extension of the down stairs living space. It is hard to imagine an Australian or American house giving up that aspect of privacy to open the house to the outside urban world.

The back of the house is beautifully designed; opening out into three stories of airy outdoor areas.

The patios probably come close to doubling the space.

Via rc3, a fascinating article on Japanese preparedness in the face of their geographical susceptibility to natural disasters;

The overwhelming response of Japanese engineering to the challenge posed by an earthquake larger than any in the last century was to function exactly as designed. Millions of people are alive right now because the system worked and the system worked and the system worked.

That this happened was, I say with no hint of exaggeration, one of the triumphs of human civilization. Every engineer in this country should be walking a little taller this week. We can't say that too loudly, because it would be inappropriate with folks still missing and many families in mourning, but it doesn't make it any less true.

Like the Australian Bush Fire Brigade this is probably from years and years of societal and governmental expectations being honed in the wake of each disaster and increasing threat.

If you compare the American fire brigades to the Australian ones it doesn't compare and mainly because locally Australia is geared toward supporting, supplying and constantly professionalizing the Bush Fire Brigade.

Australian bush fires tend to be local, for Japan and earthquake, the after shocks and the tsunami's can be national in devastation. It is in the interest of Japan society and its institutions to evolve in such a way to handle these type of large disasters with relative ease. Quite remarkable.