Wednesday, February 11, 2026

Seymour Hersh. ICE: WHEN AN HONORABLE JUDGE MEETS A CORRUPT GOVERNMENT

WHEN AN HONORABLE JUDGE MEETS A CORRUPT GOVERNMENT

The ICE raids in Minnesota have brought about a conflict not envisioned by the Constitution

A federal immigration agent tackles a protester to the ground for arrest after a different protester broke windows on two of the agents’ vehicles with a hammer as they tried to leave the intersection of E. 27th St. and 14th Ave. S. in Minneapolis on February 3. / Photo by Alex Kormann/The Minnesota Star Tribune via Getty Images.

Jerry Blackwell was a winner. A Minneapolis kid, he went to a first-rate college on a scholarship, whizzed his way through law school, and went into private practice in his home town. At one point, the singer Prince was among his clients. He served as a pro bono prosecutor after the 2020 murder of George Floyd and delivered the opening statement and closing argument in the successful prosecution of Minneapolis police officer Derek Chauvin.

Blackwell was nominated in June 2022 by President Joe Biden to be a US District Court judge for Minneapolis. He was approved by the Senate and assumed office that December. He’s run a tight ship at a time of chaos in Minneapolis as ICE, supported by other federal agencies and President Donald Trump, began an all-out assault on suspected undocumented residents of the city. There have been mass arrests and violence, including two killings of protesters by federal agents. The protests are ongoing.

The issue before Judge Blackwell on February 3 was a narrow one, as the transcript makes clear. “The hearing this afternoon,” he announced, “concerns compliance with court orders; not policy, Just compliance. Nothing else.” There was no need to state the obvious—that the White House had decided to make a show of force in liberal Minnesota, with its large population of immigrants from Somalia, by doing what it has been doing elsewhere in America—bringing in ICE and other armed units to seize people of color. Since 1932, Minnesota has consistently voted Democratic in presidential elections, with the exception of 1972, when Richard Nixon won in a landslide.

Many immigrants without documentation in hand have been grabbed—literally forced at gunpoint out of a delivery car or van—and immediately deported, in Blackwell’s view, without any attempt to meet the legal and constitutional due process requirements.

There were two federal attorneys in Blackwell’s courtroom: Ana H. Voss, the experienced assistant US attorney in Minneapolis who would resign a few days after the hearing; and Julie T. Le, a young lawyer working for ICE in Washington who had been detailed to the Justice Department offices in Minneapolis, which were swamped with questions about illegal detainments. It was Le to whom Judge Blackwell complained about the failure of the Washington offices of the Attorney General and Homeland Security to release a detainee in Minneapolis whose age did not meet the minimum legal requirement.

The judge was pissed off by ICE’s failure to release detainees whose seizure did not meet constitutional requirements in the first place. He said: “I hope everyone here agrees and acknowledges that a court order is not advisory and it is not conditional. It is not something that any agency can treat as advisory as it decides how or whether to comply with the court order.”

After noting that the authority he cited is vested from Article III of the Constitution, Blackwell made a clear reference to the Trump-induced madness taking place on Minneapolis streets: “Detention without lawful authority is not just a technical defect, it is a constitutional injury that unfairly falls on the heads of those who have done nothing wrong to justify it. . . . When a release order is not followed, the result is not just delay. In some instances, it is the continued detention of a person the Constitution does not permit the government to hold and who should have been left alone, that is, not arrested in the first place.”

Blackwell turned to the lawyers’ explanation that there were just too many contested arrests for the federal government’s legal system to deal with. “If the government undertakes an enforcement action of this scale, one that results in the detention of large numbers of people, including individuals who are lawfully present in the United States, then the government assumes a corresponding obligation that each detention complies with the Constitution and court orders governing release. . . . But what you cannot do is to detain first and then sort out lawful authority later.

“In many instances,” the judge said, “I have had to not just issue an order, but another order, another order, another order . . . about seven or eight different touches sent to the government simply asking for the date, time, and location of someone who was ordered released, in many instances, a week or more in the past. . . . The requirements that the court has in place exist because individuals were being detained without lawful authority, they were being transferred contrary to orders, or released in ways that undermine the relief that was granted by the court.”

It took Le, the newcomer, to give the judge an inside view of what can only be seen as the Trump administration’s utter lack of regard for those seized illegally and later ordered released by a federal judge. She explained that she arrived from Washington to Minneapolis with no idea of what she was supposed to do on issues of due process. The judge, with what I hope was a smile, interjected. “Are you telling the court,” he asked, “that you were brought in brand new, a shiny brand new penny into this role, and you received no proper orientation or training on what you were supposed to do?” The answer was yes.

Le offered to share the documents she had been provided by the government regarding the case at hand with the court and was told that any information provided would need to be shared with counsel for the illegally seized person, known during the proceedings as “Oscar,” whose whereabouts were not being provided by the government, despite repeated efforts by the court to get him released. The judge said once again that the alleged illegal immigrant had no criminal record and had been ordered by the court to be released immediately more than a week earlier.

The judge said that for days there were inaccurate reports that the detainee was being scheduled for release and a flight back to Minnesota from El Paso, according to one message. A counsel for ICE later said that the detainee was in Albuquerque and was scheduled to fly to Minnesota two days later. During all of this back and forth chatter, the detainee remained in ICE custody, in direct disregard of the judge’s January 15 order that he be freed immediately. The detainee was returned to Minnesota and released on the afternoon of January 28. The official reason for the delay, Judge Blackwell said, was safety of the detainee amid never explained security concerns.

Where Oscar slept, if he did, and who fed him, if he was fed, is not in the court record.

It was during this period, Le told the judge, that she put in her resignation but remained on the job because no replacement could be found. And now, she told the judge: “I am here with you, Your Honor. What do you want me to do? The system sucks. The job sucks. And I am trying every breath that I have so that I can get you what you need.”

Blackwell’s response was empathetic and to the point. He told Le: “I want you to understand my goal in any of this is not to threaten you or anyone. What we really want is simply compliance, because on the other side of this is someone who should not have been arrested in some instances in the first place who is being held in jail or put in shackles for days, if not a week-plus, after they’ve been ordered released.

“And I know that the government has a concern about the growing number of requirements that the court puts in place upon release of individuals. That happens because of the things we learn. For example, if we say, ‘Release the person immediately,’ then we learn—having transported him back to El Paso or New Mexico, you don’t bring him back. We learn that somebody is put on the street with just the clothes on their back and have to figure out how to get back here when they never should have been arrested here in the first place, let alone flown halfway across the continent of North America.

“And then we say, ‘Alright. So you brought them back. We can’t have them released when it’s minus-fourteen outside. And now we have to address that. Don’t release them in the circumstances that might endanger their health or safety.’

“And so once that’s addressed, then we learn that they’ve been released, but now conditions have been imposed. That someone who should never have been arrested in the first place is now being told, ‘You’re going to be released if you wear an ankle monitor,’ which the court didn’t order because the person was unlawfully detained in the first place.”

The judge asked Le, “Do you understand that?”

She said she did and added: “And I share the same concerns as you, Your Honor. I am not white, as you can see. And my family is at risk as any other people that might get picked up. . . . But again, fixing a system, a broken system . . . I don’t have a magic button to do it.”

Somehow, amid all the suffering and fear that an irrational and ignorant president can create, here in the US and abroad, it is reassuring to hear an informed and honorable federal judge share his anxieties with a young federal worker in the wrong job in the wrong place, and try to reach a meeting point.

Julie Le, according to a report in the New York Times on Sunday, was fired from her temporary job in Minneapolis with the Justice Department. There was no immediate word about her permanent job as an attorney with ICE in Washington.

At the end of a long day for Judge Blackwell and the others in the courtroom, Kira Kelley, one of the public interest lawyers for Oscar, whose full name was not in the transcript, asked for a moment.

She had a lot to say about Oscar’s experience.

“Most of my clients,” she said, “are pulled over for how they look or where they are or for any number of things that don’t amount to probable cause. . . . His affidavit really just shows us what it’s like. . . . That he was without food. He was without clean clothes. . . . People are being treated like less than human. . . . I can’t tell you how many clients [once released] . . . who I had to go find who were left on the side of the road with no coat, no phone, no wallet, no hat . . . and it’s zero outside. We shouldn’t need a court order saying, ‘Don’t put someone’s life in danger.’ But here we are.”

Here we all are. 

Monday, February 9, 2026

Minneapolis Happenings on Superbowl Sunday

Sean Snow 2-9-26

https://www.facebook.com/ldz451/posts/pfbid0mWEtnQxRFzBp7YjBdwCYBSyyMQvuu1wN853fcF25paXYV72g5VTLt3Ge1MiePqyMl?rdid=fw6fimeIfmZ55sp0





The conflict in Minnesota has moved from the streets to the suburbs and school zones, as federal agents are continuing to target "sensitive locations" previously considered off-limits. In response, the community is building a parallel infrastructure of care, ensuring that when the government steps away from its duty to protect, neighbors step in.


Today is Monday, February 9, 2026, here's what happened yesterday in Minneapolis:


1. Parents Detained at School Bus Stops: In a shocking escalation of "sensitive location" enforcement, reports confirmed Sunday that federal agents detained multiple parents at school bus stops in Fridley and Brooklyn Center on Friday. Witnesses described unmarked SUVs pulling up as children were being dropped off, with agents questioning and detaining adults in front of elementary students. This tactic breaches long-standing norms against enforcement at schools and has sent a wave of panic through suburban school districts.

 

2. DOJ Threatens "Felony" Charges for Observers: The Department of Justice issued a stern warning on Sunday, stating that protesters who "track, surveil, or share" the location of federal officers could face felony charges for obstruction. This announcement appears to be a direct response to the success of the 30,000-strong civilian observer network in Minnesota. Civil liberties groups immediately condemned the threat, calling it an attempt to criminalize the First Amendment right to document public law enforcement activity.

 

3. Congressional Oversight Blocked Again: For the second time in three days, Representatives Angie Craig and Betty McCollum were physically barred from entering the Whipple Federal Building on Sunday. Federal officials cited an unspecified "lawsuit" to limit occupancy to only 13 people, effectively shutting out congressional members. McCollum slammed the move as unconstitutional, stating she has never seen an administration so brazenly obstruct health and safety inspections.

 

4. Retaliatory Surveillance of Observers: A new report from The Marshall Project released Sunday documents an escalation in federal harassment against community watchers. Legal observers in Minneapolis reported that masked agents have begun calling them by name and following them back to their private homes. Civil rights groups are calling these "terror tactics" designed to dismantle the community's capacity to witness state violence.

Enough darkness… here's some reasons to hope:

 

5. The "Grocery Brigade" Mobilizes: With thousands of families too terrified to leave their homes due to the bus stop raids, a massive mutual aid effort dubbed the "Grocery Brigade" launched on Sunday. School social workers and neighbors are using a fleet of personal vehicles to deliver weeks' worth of food and medicine to immigrant families in the northwest suburbs. Organizers say they are building a "mobile pantry" to ensure that no neighbor goes hungry because of federal intimidation.

 

6. Former State Rep. Hosts "Resistance Training": In a bold display of political defiance, former Minnesota State Representative Ryan Winkler announced Sunday that he is hosting "resistance training" sessions at his private home. Winkler posted a video alleging that federal agents parked outside his residence in an attempt to intimidate attendees, but stated firmly, "I will not be intimidated. None of us in Minnesota should be intimidated." The move signals that political leaders are now using their own homes as organizing hubs.

 

7. The "Whistle" Defense Spreads: While anyone who has watched videos of ICE enforcement hears the unmistakable sound of whistles, neighborhoods across the Twin Cities are pushing for greater adoption of the tactic. Reports from Sunday indicate that residents and clergy are distributing thousands of whistles to be used as an immediate alert system during raids. The piercing sound is designed to draw witnesses out of their homes instantly, ensuring that agents can no longer operate in silence or isolation.

 

8. Evangelical Leaders Break Rank: In a significant cultural shift, prominent evangelical leaders in Minnesota began speaking out on Sunday against the crackdown. The Star Tribune reported that leaders from institutions like Bethel University are publicly questioning the morality of the raids, calling them "unjust" and contrary to the teachings of Jesus. This fracture in a key voting block suggests that the "moral cost" of the operation is becoming too high for even the administration's traditional allies to ignore.

 

Here are some national news stories you should know about:

1. Clergy Arrested on Capitol Hill: In a massive show of solidarity with Minnesota, over 500 faith leaders from across the nation descended on the Senate office buildings in D.C. to demand an end to ICE funding. The "Pray with Your Feet" day of action resulted in 54 arrests as clergy refused to leave the rotunda, singing hymns and reading testimonies from families separated by the surge. The protest successfully forced a national conversation on the morality of the budget.

2. GOP Revives "SAVE Act" to Purge Voter Rolls: Congressional Republicans have fast-tracked a new version of the "Safeguard American Voter Eligibility" (SAVE) Act, a bill that would require every American to provide physical documentary proof of citizenship, such as a passport or original birth certificate, in order to register to vote. Voting rights advocates warn that this is a "solution in search of a problem" designed to disenfranchise over 21 million eligible citizens who lack ready access to these specific documents. The bill is expected to disproportionately purge young voters, communities of color, and millions of married women whose current legal names do not match their birth certificates, creating administrative chaos just ahead of the 2026 midterms.

 

Mend what is within reach


A great Mexican-American writer, Clarissa Pinkola Estés , said, "Ours is not the task of fixing the entire world all at once, but of stretching out to mend the part of the world that is within our reach." The resistance in Minnesota isn't about grand gestures…it's about the small, daily refusals to accept the unacceptable. Whether it is a whistle blown on a quiet street, a grocery delivery to a frightened neighbor, or taking action on educating others on important new legislation, these actions help mend the fabric of our community. We do not have to solve the whole problem to make a difference…we just have to protect what is in front of us. 


Sunday, February 8, 2026

Minneapolis Makes us Proud to Be American.

The Empire Crumbles During Commercial Breaks

The Empire Crumbles During Commercial Breaks

Super Bowl culture wars, ICE abroad, Trump’s Board of Peace grift, and Tulsi Gabbard’s classified lockdown


Good morning! Because America is now incapable of holding even a sporting event without turning it into a referendum on authoritarianism, the Super Bowl is arriving this weekend as a national culture-war potluck where everyone brought something unhinged. The official halftime show belongs to Bad Bunny, a global superstar, Puerto Rican icon, and yes, an American, the first solo Spanish-language headliner to take that stage, which should be a celebratory moment in a normal country. Instead, conservatives responded exactly as you’d expect, by treating a pop performance like a foreign incursion. Turning Point USA has organized an “All-American” alternate halftime show, because nothing screams patriotic confidence like counterprogramming an American artist in Spanish with Kid Rock and a prayer circle.

And the funniest part is that even the musicians are backing away from the MAGA music-industrial complex. Kid Rock’s own “Rock the Country” festival is already hemorrhaging artists. Shinedown, Ludacris, Morgan Wade and others have exited, and now the South Carolina stop has been outright canceled, with Shinedown issuing the devastatingly polite statement that their purpose is to unite, not divide. Translation: We are not playing the soundtrack to your grievance rally.

The same political stink is drifting across the Atlantic. At the Winter Olympics in Milan, JD Vance popped up on the big screen during the opening ceremony and was greeted with scattered boos, a reminder that outside the Fox News terrarium, Trumpworld is not universally adored. Protesters marched through the streets chanting “ICE out,” furious over the revelation that ICE agents were reportedly deployed to Italy as part of the security circus. Nothing speaks international goodwill like bringing America’s deportation force to the Olympics.

And in perhaps the most coherent American messaging of the week, skier Gus Kenworthy responded by urinating “FUCK ICE” into the snow. Subtle? No. Appropriate for the moment? Abso-fucking-lutely.

The Milan story didn’t end there. On Saturday, thousands marched again, and what began as a broad demonstration over the cost and environmental wreckage of the Games escalated into clashes with riot police, water cannons, fireworks, and arrests, the familiar choreography of a state responding to dissent with armor. Vance, meanwhile, was reportedly booed again at a hockey match before receiving a private tour of The Last Supper in a museum closed to the public. Protesters get detained, the vice president gets Da Vinci. That’s the Trump-era export: spectacle, repression, and VIP impunity, now touring internationally.

Back home, Trump himself is skipping the Super Bowl, which Seth Meyers noted is strange for a man who treats public attention like a controlled substance. Trump claims Santa Clara is “too far away,” which is a truly incredible excuse from someone with a private jet who has flown across continents to shake down allies and golf in Scotland. The real reason is obvious: he’s terrified of getting booed on live television, the way Vance just was in Milan, the way Trump has been at NFL games before. Authoritarians love crowds, but only the kind that clap on command.

Even Trump, who has spent the last decade treating political norms like optional terms and conditions, occasionally collides with the last remaining guardrail: public outrage. This week, after posting a grotesquely racist clip depicting the Obamas as apes, the backlash was so loud that the White House actually did the unthinkable and deleted it, blamed an unnamed “staffer,” and offered the familiar non-apology condemnation without ever managing the words I’m sorry. The shock wasn’t the racism, sadly on-brand, but that even Republicans like Tim Scott couldn’t wave it off as “fake outrage” this time. With midterms looming, Trump is being reminded that political gravity still exists, at least until the news cycle moves on and he goes right back to doubling down. For now, we have him on his heels!

Looming over all of it, like a rot under the stadium lights, is Trump’s desperate insistence that everyone stop talking about the Epstein files. Stephen Colbert tracked Trump’s latest demand that the country “move on,” delivered while he snapped at Kaitlan Collins for not smiling enough, because nothing says innocence like misogynistic rage at a woman asking questions about survivors of sex trafficking. Jimmy Kimmel, watching the suspiciously inflated audience score for the Melania documentary, joked we may need Tulsi Gabbard to seize the ticket machines and audit the popcorn buckets.

The BOP is back, and it’s somehow even weirder now that it’s real enough to have calendar invites. Trump’s self-appointed “Board of Peace” is scheduled to meet in Washington on Feb. 19, with the stated goal of raising reconstruction funds for Gaza, but with a charter that quietly expands its scope into something much bigger and much more ominous.

Critics are already pointing out what it looks like: a parallel international system built outside the UN framework, where Trump sits as chairman with veto-like authority and membership comes with a literal price tag, $1 billion contributions for permanent members, like some sort of geopolitical cover charge.

The guest list tells you everything. Orbán is already confirming attendance, and the roster is stacked with authoritarian-friendly partners and transactional allies: Hungary, Saudi Arabia, Turkey, the UAE, Qatar, Argentina, Pakistan. Meanwhile, major European allies like France are declining to join, signaling just how skeptical the traditional postwar alliance structure is about this whole thing.

And in today’s episode of Trump’s expanding parallel-universe foreign policy, the president welcomed Honduras’s newly sworn-in leader, Nasry Asfura, to Mar-a-Lago and declared the two countries were partnering to “counter dangerous cartels and drug traffickers” while deporting “illegal migrants and gang members” from the United States.

Which would be easier to take seriously if Trump hadn’t recently pardoned Asfura’s predecessor, former Honduran president Juan Orlando Hernández, convicted in U.S. court for effectively turning Honduras into a narco-trafficking pipeline. So the message is essentially: drug trafficking is an unforgivable threat to national security unless you’re politically useful, in which case you get clemency and a handshake at the resort.

And this is where it dovetails perfectly with Trump’s new “Board of Peace.” The Board is supposedly about “enduring peace,” but what it’s really building is a new ecosystem of transactional strongman diplomacy, where accountability is negotiable, allies are purchased, and corruption is just another form of leverage. It’s impunity diplomacy with a charter.

While Trump is busy founding his own international vanity project, the intelligence community is dealing with something far more immediate: a whistleblower allegation that the Director of National Intelligence, Tulsi Gabbard, may have intervened to suppress an NSA report involving a foreign intelligence-linked phone call with someone close to Trump.

According to the whistleblower’s attorney, the NSA flagged the call last spring, the kind of intercept that would normally trigger routine dissemination across the intelligence agencies and congressional oversight channels. Instead, Gabbard allegedly blocked the report from being distributed, took a paper copy directly to Trump’s chief of staff, Susie Wiles, and then instructed the NSA not to publish the intelligence report at all, keeping it sealed for months.

Eight months later, Congress is only now receiving a heavily redacted version, after the legal window for whistleblower transmission should have long since closed. Democrats are accusing the administration of trying to bury the complaint. Executive privilege is being invoked, which is essentially a flare signaling that this touches Trump directly. Lawmakers are now reportedly bypassing ODNI entirely and requesting the underlying intelligence straight from the NSA, because they no longer trust the political appointees sitting on top of the system.

This is real-time institutional capture: intelligence treated not as a national security responsibility, but as a loyalty-managed asset. The intercept doesn’t move through the proper channels; it moves through the Trump inner circle. The watchdog office gets staffed with partisan allies, the complaint gets locked down, and the public is left watching the architecture of oversight quietly rot from the inside.

Quick note of clarification: in yesterday’s roundup, I misstated a detail in describing Renée Good’s killing. I wrote she was standing beside her vehicle when she was shot. Most of you understood I meant her killer, Jonathan Ross was beside her car, but accuracy matters, so I’m correcting the record here. Not making excuses, but my grammar-checking app was not functioning and I was focused on commas, colons, semicolons and manually policing punctuation like it was 1850. Still, I should have caught my error.

So yes: welcome to Super Bowl weekend in 2026, where the halftime show has a shadow halftime show, ICE has a foreign deployment, Europe is booing the vice president, Trump is hiding from stadium crowds, and even Kid Rock can’t keep his lineup together. The empire is not only crumbling, it’s doing it during commercial breaks.

Marz and I are headed out for a rainy romp now that my flu-like symptoms have finally abated. We continue to send you love and gratitude during our moonbeam vigils each night. You know we’re thinking of you out there holding space with us, tired but unbowed against all of this chaos. And on a lighter note, Go Seahawks! 

Saturday, February 7, 2026

The Same Methods and the same Forces In Minneapolis and Across Palestine.



 

From Jewish Voice for Peace


For those of us who have been watching a livestreamed genocide in Gaza—and years of apartheid and occupation across all of Palestine—what’s happening in Minneapolis is not unfamiliar. 

 

The same tactics are being applied, the same technologies are in use, the same hate speech is in play, and the same profiteers are enabling and encouraging these atrocities.

 

In Minneapolis, a military force occupies the city, violating people’s basic rights and attempting to destroy the social fabric of the city. ICE has erected militarized checkpoints and is kidnapping people from their homes, disappearing them from the streets, arresting them at their places of work, and incarcerating them without due process or probable cause. Masked agents are killing protestors, deploying chemical weapons, and carrying out violence against civilians, medics and journalists.

 

The government is targeting observers and has labeled anyone standing against the occupation a t******t, without proof or legal standing, in a desperate attempt to justify its horrific actions. 

These are all tactics that the Israeli government has been using against Palestinians for decades. 

 

The Israeli military and ICE are using the same tactics and technologies, supplied by the same companies, and spewing the same hate speech to carry out their assaults. And the funding comes from the exact same source: The US government. 

 

From Minneapolis to Gaza, from Chicago to the occupied West Bank, the US government is using our tax dollars to carry out and enable state-sanctioned violence. We refuse to live in a society that profits off death, racism, and genocide. Just as speaking the truth about the Israeli military’s genocide of Palestinians is a moral obligation, so too is standing up against ICE killing and disappearing people in the US.

 

We refuse these authoritarian and violent actions wherever they take place 

Japan election: from stagnation to stagflation

Japan election: from stagnation to stagflation

by Michael Roberts

In Japan, a general election is taking place tomorrow, just months after Sanae Takaichi became the nation’s first female prime minister.  Takaichi is an arch-conservative, ultra nationalist and a devotee of Margaret Thatcher. She became prime minister last October by winning an internal party race for the presidency of the beleaguered governing Liberal Democrat Party (LDP), battered by two disastrous elections in as many years and currently without a majority in either house of the Japanese parliament. 

However,it seems that the LDP and its new coalition partner, the Japan Innovation Party (JIP), are on track to secure a landslide victory tomorrow, with the main opposition Centrist Reform Alliance (CRA), a new party formed by the Constitutional Democratic Party of Japan (CDP) and the former ally of the LDP, Komeito, projected to lose more than half of the 106 single-seat districts it held previously and retain only 32.  The LDP could take 243 seats, and combined with the JIP, get 261 seats, a comfortable majority in the Lower House of parliament.

Takaichi seems to have broad appeal, polling consistently well with women, young and old. She claims that she will be different from all past LDP leaders.  She wants to cut taxes for most people, in particular, the consumption tax which drives up prices in the shops.  And she seeks to increase government spending on social security and ‘defence’, even if it means higher budget deficits. Takaichi says she is going for growth – not dissimilar to the slogans of the ill-fated, short-lived British Tory prime minister, Liz Truss. Truss’s plans for big rises in the UK budget deficit led to a sharp rise in UK government bond yields and a run on the pound. Something similar is happening in Japan, if at a slow burn.  Japanese government bond yields are up significantly and the yen is near historic lows.

Does this mean that Takaichi will go down in flames like Liz Truss?  Probably not, but it does mean that all her talk of ‘being different’ will lead nowhere. As in all G7 economies, over the decades, Japanese governments adopted neoliberal economic policies aimed at reducing pensions and welfare benefits.  Richard Katz has pointed out that the LDP coalition lowered social security benefits for seniors from ¥2.9 million ($20,000 at today’s exchange rates) in 1995 to just ¥2.1 million ($14,500) now, a 30% decrease in price-adjusted terms.  In addition, government spending on healthcare for each person over the age of 65 has been reduced by almost a fifth over the past 30 years. At the same time, the corporate profits tax has been slashed from 50% to just 15%.  Profits have doubled from 8% of GDP to 16%, while corporate tax revenue for the government has tumbled from 4% of GDP to 2.5%. 

But those cuts in corporate profits tax have not led to improved business investment growth. Instead, companies have hoarded the cash or invested in government bonds and the stock market, with nearly 1 quadrillion yen in liquid assets, of which ¥270 trillion were in cash and deposits, ¥233 trillion in bills and accounts receivable, and ¥460 trillion in investment securities. Net of debt liabilities, nonfinancial corporations’ overall financial asset position relative to their total sales has shifted by more than 30 percentage points since the mid-1990s (or about ¥460 trillion). Put another way, the cumulative net saving of the Japanese nonfinancial corporate sector over the past 30 years is now worth about 80% of Japanese GDP.

The key to the failure of neo-liberal measures to boost corporate investment and so end the stagnation of the Japanese economy since the 1990s has been the decline in the profitability of capital investment.  Japan’s profitability of capital has fallen more than in any other G7 economy.

The big long-term issue is Japan’s population. It has been falling and ageing. That allows per capita income growth to grow more than total GDP growth; per capita Japan’s real GDP is up 10.8% since 2010, while real GDP is up 9.6%.  But even per capita real GDP growth has been slowing. Those in work are overworked.  Japan invented the term karoshi — death from overwork — 50 years ago, following a string of employee tragedies.  The large corporates are promoting the idea of a four-day week to relieve this pressure and increase productivity. But there is little sign that this or any other measure is working to raise productivity.  Productivity growth is now non-existent.

Japan’s corporations may have increased profits at the expense of wages, but they are not investing that extra capital in new technology and productivity-enhancing equipment.  Real investment is no higher than in 2007. Public investment (about one-quarter of business investment) is static.  Japanese capital’s image of innovating technology appears to be long gone.  The mainstream measure of ‘innovation’ , total factor productivity (TFP) has faded from over 1% growth a year in the 1990s to near zero now, while the huge capital investment of the 1980s and 1990s is nowhere to be seen. So Japan’s ‘potential’ real GDP growth rate is close to zero.

Prime ministers come and go: from Abe to Kishida to Ishiba, but nothing changes. Japan has run permanent government deficits, spending it on construction and other projects and yet Japan’s economy has continued to stagnate. With Japan’s corporate sector unwilling or unable to invest, Takaichi is now attempting to end Japan’s stagnation by fiscal spending, cutting interest rates and allowing the yen to depreciate in order to boost exports.  It’s a Truss-Trump type policy that has got the Bank of Japan and the financial institutions really worried, as well as foreign investors.

Instead of stagnation, the Japanese economy has now morphed into stagflation, with rising prices, flat GDP and consumer spending and falling real wages.  Consumer prices have risen 12% since 2021. At the same time, GDP is barely higher than it was in 2018. Spending, in turn, is stagnant because real wages are down 7% from their 2018 level.

Takaichi wants to boost growth with fiscal spending and monetary easing and ignore the resulting rising bond yields and falling yen.  In contrast, the BoJ wants to cap bond yield rises and keep fiscal spending down to cap inflation and stop the yen falling.  But here is the dilemma. The BoJ’s aim to reduce inflation via higher interest rates will worsen the stagnation, but Takaichi’s aim to boost fiscal spending and fund it by BoJ purchases will only exacerbate inflation. 

Takaichi correctly insists that Japan’s inflation is mostly supply-driven, but she thinks that is a transitory problem and so reckons restoring growth is more important than suppressing inflation. A year ago, she called the BOJ “stupid” (similar to Trump’s attack on the US Fed for not cutting rates) for raising its interest rate from zero to 0.25% (it is now at 0.75%).  Takaichi opposes interest rate hikes because she wants to help automakers and other exporters “at all costs”, particularly in light of the Trump trade tariffs on Japanese exports. 

Will Takaichi’s policies end up crashing the Japanese government bond market as Liz Truss managed in the UK?  I think not.  Most Japanese government debt is held by Japanese (88%), unlike in the UK. The risk of capital flight only lies in that portion held by private investors, the net debt. And the latter is smaller than it’s been in decades, mainly because the BOJ has bought so much of the debt since 2013. In early 2013, net government debt held by private creditors peaked at 144% of GDP. Today, it equals just 96% (see chart below).

Yes bond yields are up, but reduced net debt and previous ultra-low interest rates have lowered net interest payments at all levels of government to a trivial 0.03% of GDP in 2024, down from nearly 1% in 2012). This is easily manageable.

But what rising yields and a falling yen do show is that, as Richard Katz has put it: “the slow corrosion of the economy. Decades of submarket interest rates have kept zombies on life support at the expense of healthier companies. A stunning half of Japan’s GDP is produced in business sectors where (total factor) productivity is actually falling, not just decelerating.The chronic deficits are more the symptom of economic weakness than its cause.”

Letting the yen depreciate will not work. The 43% depreciation of the yen since 2021 has not boosted Japan’s exports. Exports in real terms are up just 5% in the last three years. That suggests Japanese exports are just less competitive in world markets. Indeed, Japan’s real trade surplus in goods and services is currently falling at a 15% annual rate. So Takaichi’s hope that allowing the yen to fall will somehow boost Japanese exports and kick-start economic growth is so much wishful thinking.

Nevertheless, Takaichi appears to be riding high for now on ‘making a difference’ as a ‘Thatcherite’ prime minister. And she has not wasted the opportunity to play the immigration card.  The number of foreigners working in Japan reached a record 2.57mn last year.  Immigrants have really helped to keep the economy going, as Japanese citizens age and the population falls.  But not for Takaichi.  She has called for immigration controls to stop any change in Japanese ‘culture’ and ‘way of life’.  Again, here she follows the Trumpist message.