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Another Japanese Prime Minister? Seriously?

By William Pesek
November 14, 2012 10:26 AM EST

Japanese leadership, it's often said, is a revolving door, one that spits out a new prime minster every 12 months or so. You know something's wrong, though, when it's spun so far around that it begins churning out yesterday's castaways.

Such is the case with Shinzo Abe, the man poised to replace Prime Minister Yoshihiko Noda, who will dissolve the Diet on Friday. That paves the way for an election as early as Dec. 16. Then, Noda's Democratic Party of Japan is almost certain to lose power after just three years. That would put Abe's Liberal Democratic Party, which ran Japan for roughly 54 years until August 2009, back in control. Abe was an LDP prime minister (and a mediocre one at that) from 2006 to 2007.

As Tokyo's revolving door begins to spin anew, it's worth exploring how it undermines the third biggest economy. Next month, Japan will name its sixth prime minister since the September 2008 collapse of Lehman Brothers Holdings Inc. Ben Bernanke can look forward to shaking the hand of the 12th Japanese finance minister since he became Federal Reserve chairman in February 2006.

"Foreign investors rightly regard Japanese politics as a slapstick comedy centered on a rotating door of impotent prime ministers," says Nicholas Smith, a strategist at CLSA Asia-Pacific Markets Ltd.

As another recession beckons, and deflation deepens, Japan's to-do list is a daunting one: reduce the world's largest public debt without killing growth; sign global trade deals; increase competitiveness; prepare for an aging and shrinking population; increase immigration; learn to live without zero interest rates; encourage entrepreneurship; boost female participation in the labor force; and wean itself off nuclear power.

Ever wonder why none of these challenges ever gets tackled? Could it be that Japan's leaders spend so much time trying to keep their jobs that they have little time to actually do them? The nation should give its prime ministers a chance. Give the next one, say, two years or more to articulate a vision and implement it. As things stand now, leaders have no incentive to take bold steps for fear of losing public support. Taking that risk out of the equation would give Japan’s leader a fighting chance for the first time in ages.

It's time for Japan to offer less spinning, more change.

(William Pesek is a Bloomberg View columnist. Follow him on Twitter.)

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