Japan’s Prime Minister Shinzo Abe skillfully used his miraculous economic salvation plan, a religion lovingly dubbed Abenomics, as a platform to catapult his party, the LDP, into power. With the LDP controlling both houses of parliament, real changes, after years of dickering, might now finally be possible.

Abenomics is being implemented. The core element, the Bank of Japan’s frenzy of printing money and buying assets, has been kicked off in April. Government spending on corporate welfare projects has been increased in the new budget. The nuclear power industry, despite strong opposition from the people, is gradually being returned to its former omnipotent glory. Asset bubbles are being inflated. Prices for many consumer items are jumping. Inflation overall is up. Wages are not. But hey, life is good at the top.

The LDP isn’t new at this. With the exception of four years, it has ruled Japan since 1955. If the economy has been in trouble for two decades, it’s the LDP that has gotten it there. But now it’s time to move on to the next stage. No longer being threatened by an effective opposition, the government can show its true colors. So Taro Aso, Finance Minister and Deputy Prime Minister – and former Prime Minister – one of the key figures in designing and implementing Abenomics, gave a select group of people a glimpse of his vision, and how to get there.

So, he is now flagellating his arms while contorting himself into linguistic knots trying to retract his speech after it leaked out and came under withering attack from the Japanese media. Korea and China shot broadsides across the water. The Simon Wiesenthal Center, an international Jewish human rights organization, was upset too. Some wrote it off as a gaffe; in trying to put his best foot forward, given the people he was speaking to, he’d ended up with it solidly stuck in his mouth, an excuse with which he’d gotten himself out of trouble before.

But it wasn’t a gaffe. And it wasn’t in casual conversation, overheard by a nosy reporter. He was speaking in Tokyo at a seminar that had been organized by the Japan Institute for National Fundamentals (website in English). The conservative think tank has called for revising Japan’s constitution to make it more militaristic and to introduce more public order and government control at the expense of civil rights. The organization has also been vocal about denying that the Japanese military forced women to work in brothels during the war – the “comfort women.”

There were about 200,000 of them, women from China, South Korea, the Philippines, Indonesia, and Taiwan. The topic continues to ensnare Japanese politicians. In May, it was Toru Hashimoto, Mayor of Osaka, co-leader of the Japan Restoration Party, and rising political star, who broached the topic. “A comfort women system is necessary,” he said. “In the circumstances in which bullets are flying like rain and wind, the soldiers are running around at the risk of losing their lives. If you want them to have a rest in such a situation,” they need to have sex. “Anyone can understand that,” he said, inexplicably. This caused worldwide angry mocking. The light of this rising political star has since dimmed.

So, a seminar sponsored by an organization that is denying the existence of “comfort women” was the occasion where Mr. Aso spoke. He was addressing the LDP’s long struggle to change the pacifist, US-imposed constitution. In 2005, the LDP had proposed its own version. It nixed the prohibition against keeping a “military” (a somewhat rubbery concept, as Japan’s “Self-Defense Forces” have fighter jets and all) and emphasized, critics argue, “social order” over civil rights. It hit a wall of resistance at home – and caused outcries overseas where the atrocities committed by Japanese troops have not been forgotten. So how could the government get around that opposition? The Finance Minister chose a historical model.

At first, he was just going out on a limb. The Weimar constitution, “the most advanced in Europe” – Germany’s fragile post-World War I effort at democracy – hadn’t been able to prevent the Nazis from taking over, he explained. He was confronting the notion that the only barrier that kept Japan from regressing into a military dictatorship was its constitution. Even if the constitution were changed, he implied, there were other things that would keep Japan from sliding back. Then he ventured beyond the thin end of that limb:

“We should proceed quietly,” he said according to transcripts of his speech. “One day, people realized that the Weimar constitution had changed into the Nazi constitution. No one had noticed. Why don’t we learn from that technique?”

“What ‘techniques’ from the Nazis’ governance are worth learning – how to stealthily cripple democracy?” wondered Rabbi Abraham Cooper, associate dean of the Los Angeles-based Simon Wiesenthal Center. “The only lesson on governance that the world should draw from the Nazi Third Reich is how those in positions of power should not behave,” he pointed out to the Finance Minister.

Wild backpedaling ensued. Aso re-explained what he’d meant. Chief Cabinet Secretary Yoshihide Suga, the government’s main spokesman told reporters that he didn’t believe the comments merited Aso’s resignation. And he wanted to “stress that the Abe administration does not perceive Nazi Germany in a positive light.”

But Aso’s comment wasn’t about the Nazis. It was about how the LDP could get around the resistance to a new constitution. He isn’t an outlier. He is part of the power structure, the inner sanctum of the LDP. Abenomics has been designed by these guys (where are the women in this government, by the way?) and is being implemented by them. His thoughts are not unique within that group. And his words could be a sign that beneath the printing and borrowing binge and the asset bubbles and the desire to cover up past and present fiscal sins with bouts of inflation, there percolates a darker notion of how Japan should mold its future.

But already, one of the primary objectives of Abenomics – the devaluation of the yen to create a trade surplus and crank up the real economy – is failing miserably. Read….. The Systematic, Unrelenting Deterioration Of Japan’s Trade.

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