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Chapter Seven
Period of President Miki's Leadership

In the wake of Prime Minister Tanaka's abrupt resignation, Takeo Miki was chosen as the Party's 7th President on December 4, 1974 and formed a new "Clean Cabinet" (Kuriin naikaku).

Miki made it clear that he intended to conduct politics through "dialog and cooperation" and pursue broad objectives such as "conducting clean and honest politics," "securing social justice in the midst of inflation," "overcoming the recession," and "modernizing the Party."

The year 1975 was important in that it marked the 30-year anniversary of the end of the Second World War and the 20-year anniversary of the Party's establishment. Unfortunately, during this period of time the Miki Cabinet was facing serious problems both at home and abroad. The global economy was mired in the worst inflation-induced recession in postwar history. And of course Japan, too, was struggling to cope with unprecedented levels of inflation and fiscal strain. Overcoming these difficulties was an urgent political task of the highest priority.

In addition, in the context of an emerging multi-party political system, opposition parties had yet to develop a strong sense of responsibility. Because of this, much of their time and energies were spent competing for dominance amongst themselves and pursuing their own individual interests and objectives. This type of behavior was especially bizarre and disruptive in the House of Councillors where a tenuous balance of power existed between opposition and ruling parties. In spite of Prime Minister Miki's dedicated efforts to strengthen public faith in parliamentary politics through "dialog and cooperation," the management of the cabinet and the Party was not an easy task during this period.

"Purifying politics" and "securing social justice" remained cornerstone political objectives of the Miki administration throughout its two years in office. Efforts to realize these goals included the cabinet's sponsorship of three key bills during the 75th Ordinary Session of the Diet in 1975. The first involved revisions to the "Public Office Elections Law" (Koshoku Senkyo-ho no kaisei) that rationalized the number of seats allocated to House of Representatives electoral districts, expanded the public management of the election system, and strengthened regulations on excessively materialistic campaigns. The second concerned revisions to the "Regulation of Political Funds Control Law" (Seiji Shikin Kisei-ho no kaisei) that tightened controls on political donations from businesses and labor organizations. The third consisted of changes to the "Anti-monopoly Law" (Dokusen Kinshi-ho no kaisei) that were designed to increase order in the free-market economic system and establish ethical practices in corporate activities.

In sharp contrast to smooth deliberations on these bills in the House of Representatives, subsequent discussions in the House of Councillors, where there was a greater degree of parity between opposition and ruling parties, proved far more difficult. Bitterly opposed to provisions for strengthening restrictions on campaign flyers that were contained in the bill to revise the Public Office Elections Law, the Communist Party and the Komeito resorted to violent obstruction tactics during Diet proceedings. As a result, deliberations could not be concluded on revisions to the Anti-Monopoly Law, treaty ratification issues, or a number of important bills related to the welfare of the general public.

Fortunately, Prime Minister Miki was able to overcome the stubborn resistance of opposition parties to the passage of substantial revisions to the Public Office Elections Law and the Regulation of Money for Political Activities Law. These important achievements in Miki's long struggle to realize his dream of clean politics were indicative of the high caliber of his administration and are undoubtedly worthy of high praise.

Prime Minister Miki was similarly committed to pursuing social justice despite severely strained public finances and high rates of inflation. Placing a high priority on welfare policy, he succeeded in raising welfare pensions by 60 percent and public pensions and compensatory payments to relatives of soldiers killed in wartime by 38 percent. In addition, the Miki administration was keenly aware of the difficulty experienced by many people in obtaining affordable land for residential home building. Recognizing that this problem involved issues of social justice, the Miki administration created the Public Housing Land Development Corporation (Takuchi Kaihatsu Kodan) to provide the general public with affordable, quality real estate at low rates of long-term interest repayable in yearly installments. Another prominent example of the efforts and progress the Miki Cabinet made in this area was the enactment of the "Special Measures Law to Promote the Provision of Residential Housing and Land in Major Metropolitan Areas" (Dai Toshi ni Okeru Jutakuchi to Kyokyu Sokushin-ho) that did much to increase residential land and associated infrastructure in and around urban population centers.

As yet another important component of his long-term political agenda, Prime Minister Miki introduced a "Life Cycle Program" (Shogai Sekkei (Raifu Saikuru) Keikaku) in July of 1975 that included the creation of a special committee within the Party to discuss and promote its objectives. This bold initiative was designed to make it possible for each and every individual to be able to enjoy a meaningful and secure life within the context of a society undergoing a rapid shift from high to more moderate levels of economic growth. It was thus extremely unfortunate that fiscal realities at the time eventually made it impossible to implement this program as had been planned.

In addition to the many challenges it faced in its dedicated work to "secure social justice" and "prioritize welfare," the Miki Cabinet was also charged with the important task of battling the recession. Measures put into place by the Tanaka administration to control aggregate demand were more effective than expected, slowing the rise in consumer prices to 8.6 percent at the end of the 1975 fiscal year. In spite of successes in this area, however, serious concerns developed about employment instability in the midst of the recession.

To cope with this growing problem, the Miki Cabinet and the Party made the decision to shift from a policy of controlling aggregate demand to one of creating it through government fiscal initiatives. Efforts to spark an early economic recovery began with the compilation of a large supplementary budget in 1975. They continued into the following year with the issuance of government bonds to cover 30 percent of a 24,290 billion yen budget - the largest in Japanese history.

Then, in February of 1976, the "Lockheed Incident" occurred. This developed into a major political issue and was used unscrupulously by opposition parties to further their own political interests and objectives. As a result of their refusal to participate in deliberations on the budget and other bills for a period of approximately 50 days, acceptance of the budget was delayed for 40 days into the new fiscal year. The passage of special fiscal legislation that was inseparable from the budget as well as revisions to fares for Japan National Railways and telecommunication charges were delayed for an even longer period of six months. As a result of this, the positive effects of a budget that had been designed to promote the country's economic recovery were greatly reduced and the economy continued to stagnate through to the end of 1976.

In August of 1975, Prime Minister Miki traveled to the United States to meet with President Ford. The success of their agreements on Korean security and the maintenance of the Japan-U.S. Security Treaty framework opened a new chapter in the history of cooperation and mutual aid between the two countries. In addition, the Prime Minister represented Japan at two summits attended by the leaders of the world's industrialized nations - one held in Rambouillet, France in November of 1975, and the other held in San Juan, Puerto Rico in June of 1976. The various proposals concerning the maintenance of stability in international currency markets, the expansion of free trade, energy issues, and solutions for North-South problems that he submitted for discussion during these occasions were of considerable importance.

Prime Minister Miki also enjoyed considerable success in revitalizing the Party's finances. In response to revisions made to the Regulation of Money for Political Activities Law, Miki created a new system for raising funds through the hosting across the country of "Politics, Economics, and Culture Parties" (Seikei Bunka Paatii) by LDP executives and cabinet Ministers. In particular, these events contributed significantly to the fiscal health of the Party's regional and local branch offices.

However, political fallout from the Lockheed Incident was substantial. Criticism within the Party of the Miki Cabinet and the LDP leadership over their management of the Diet and delays in the passage of the budget and key fiscal legislation continued to intensify. In June of 1976, six members of the LDP decided to leave the Party and form the New Liberal Club.

When the Lower House arrived at the end of its term and a general election was held in December of the same year, the Lockheed Incident was still the focus of considerable public criticism. Largely as a result of this, the Party was unable to secure more than a bare majority of 261 seats even when those captured by conservative independents were added to the total. Prime Minister Miki chose to assume full responsibility for these disappointing results and announced his decision to resign from office on December 17, 1976. In doing so, he expressed his sincerest wishes for the Party's revitalization.

When he left office, however, Prime Minister Miki left a proposal for the modernization of the Party - a task that he had unfortunately been unable to accomplish while in office. This consisted of three major points - (1) a return to the LDP's founding principal of serving the country as a progressive, populist party, (2) a concerted effort to do away with money politics and factional infighting, and (3) the introduction of a new system for electing the President that would allow for the participation of all members of the Party in this decision. This proposal, which had considerable positive impact on subsequent Party reform, served as the final brilliant contribution of the Miki Cabinet to the LDP and Japanese politics.

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