What followed was described by Christian Caryl in his article in Foreign Affairs:
"Under the Liberal Democratic Party (LDP) -- the party whose cadres ruled Japan almost continuously from the party's formation in 1955 to its defeat in a general election two years ago -- politicians, bureaucrats, and corporate leaders developed a powerful web of patronage and interconnected interests, which ended up funneling taxpayer money into public works projects of dubious justification.
"But " Japan's political culture began to change ten years ago, when Junichiro Koizumi, then LDP's leader, won a remarkable election victory by vowing to dismantle his party's entrenched establishment and the vested interests that propped it up. (On the eve of the election, Koizumi famously declared that he would "destroy the LDP.") He pushed through a vital restructuring and privatization of Japan Post, which is not only Japan's postal service but the world's biggest savings bank by assets and the source of much of the funding for public works."
When Koizumi met with resistance, he vowed to "discipline" opponents. When the Upper House of the Japanese Diet did not pass his privatization bills, he dissolved the Lower House and called for a general election. A few weeks later, his postal privatization plans passed both chambers of the Diet.
The privatization plan was begun in 2007 and was supposed to end in complete privatization of Japan Post by 2017. Caryl observes:
"Among its other effects, Koizumi's reforms expanded the political and cultural space for a genuine two-party system -- an opening that was seized by the Democratic Party of Japan, which had gradually evolved into a credible force since its formation in 1998. The DPJ is now led by Prime Minister Naoto Kan, who since the start of the current crisis, has failed to give an entirely convincing performance. He has oscillated between forceful displays of leadership and indecisiveness."
The indecisiveness of the DPJ and its leader was evident in their handling of Japan Post. The DPJ appointed Shizuka Kamei, the leader of a junior coalition party called People's New Party, as the minister responsible for the post office. Mr. Kamei then proceeded to freeze the postal privatization.
Michiyo Nakomoto, writing in the Financial Times on April 5, 2010, said, "There was always going to be disagreement between the DPJ, whose core members believe the post office's bank and insurance companies should be scaled back to revitalize the private sector, and Mr. Kamei's PNP, whose prime goal is to expand the post office's influence."
But Mr. Kamei and his junior party clearly had the upper hand. Mr. Nakamoto wrote in the Financial Times on September 20, 2009:
"Mr. Kamei . . . has been particularly vocal about the need to reverse course on postal privatization. . . .
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