As the campaign for the Liberal Democratic Party's presidential election draws to a close, all four candidates, including Prime Minister Junichiro Koizumi, continue to avoid tough questions about economic policy issues. In offering "carrots" but no "sticks," they are projecting, wittingly or not, a populist image. Typical of this is the passive way in which they are dealing with deflation -- a broad decline in the prices of goods and services.
All four stress the need to "get rid of deflation," but they have said little about why prices continue to fall and what needs to be done to reverse the trend. Fighting deflation is Mr. Koizumi's policy priority. It is also a major campaign theme of his three rivals: former Transportation Minister Takao Fujii, former LDP Policy Affairs Council Chairman Shizuka Kamei, and former Foreign Minister Masahiko Komura.
What is lacking in the debates are specific plans to cope with falling prices. In this regard, a comment by Mr. Hiroshi Okuda, chairman of Toyota Motor Corp. and Nippon Keidanren, or the Japan Business Federation, is instructive. A major challenge for Japan's economy, he says, is to "deal positively with deflation, not just escape from it."