Japan’s Financial Truant

TOKYO – When asked if he had ever read the classic economics textbook by Paul Samuelson, something almost all first-year students in the subject read, Japanese Minister of Finance and Deputy Prime Minister Naoto Kan replied: “I read about 10 pages.” Of course, no textbook can provide all the answers a finance minister needs in today’s post-crisis world, particularly to meet Japan’s daunting challenges. But many Japanese were dumbfounded to learn that their finance minister began to grapple with the basic principles of economics only after assuming office.

Kan assumed his current office in Prime Minister Yukio Hatoyama’s administration this past January. A civil-rights activist for much of his career, Kan is one of the few members of the Hatoyama government with previous cabinet experience, having served for 10 months in 1996 as Minister of Health and Welfare. An aggressive debater, Kan is often mentioned as a candidate to succeed Hatoyama should he leave his post – a live possibility, given the prime minister’s plummeting approval ratings and strained relationship with Ichiro Ozawa, the kingpin of Hatoyama’s Democratic Party of Japan (DPJ).  

Kan became finance minister after his predecessor Hirohisa Fujii suddenly resigned, citing ill health. But Kan stumbled out of the gate by calling, during his first press conference, for a weaker yen – a statement that drew an instant rebuke from Hatoyama.

Kan ’s international debut was equally inauspicious. At the G-7 meeting in Canada in February, the focus was on the Greek financial crisis and its international implications. Kan jokingly told journalists that he was glad the meeting was not addressing Japan’s public debt, which has now reached almost ¥900 trillion. The meeting, it turns out, was “all Greek” to him.