The streets of Tokyo are beginning to stink like New York did when I lived there in the 1980s." That's just about the worst insult you could deliver in Japan, but Yasunori Fukugawa, 47, a professor of urban planning, isn't the only one who sniffs trouble. In the shadows of Tokyo's futuristic skyscrapers, there are tent cities with hundreds of permanently homeless men. Mother Teresa's nuns have set up a soup kitchen in the second richest nation on Earth. The economy is shrinking, and the official unemployment rate has risen to 5%, highest in a generation. In recent weeks, the blue-chip stars of the country's manufacturing sector--the makers of computer chips, TVs and PCs, such as Toshiba, Fujitsu and NEC--have announced that they will shed tens of thousands of jobs.
Amid this gloom, the Japanese are placing their hopes on a Prime Minister who comes across like a rock star. Junichiro Koizumi is a 59-year-old career foot soldier of the Liberal Democratic Party, which, except for one brief period, has ruled Japan for the past 46 years. But Koizumi has shrewdly positioned himself as an outsider. "If my party tries to destroy my reforms, if they try to stand in my way, I won't hesitate to destroy the party itself," he said repeatedly while he was campaigning for parliamentary candidates this summer.
Koizumi's program is revolutionary. It amounts to a systematic unraveling of Japan's political and financial institutions. To help ease the burden of the government's debt, estimated to be as high as $5.5 trillion by some economists, he has proposed cutting the budget 10% and shifting spending from public-works projects to education, job training and environmental cleanup. Koizumi has set a three-year target for settling the balance sheets of Japan's heavily indebted banks. He has appointed a free-wheeling Cabinet that is younger, more female and includes more outsiders than any seen before. Most stunning of all, Koizumi has made a promise that he will have no trouble keeping: there's going to be a lot more economic pain before things get better. Such straight talk is endearing. "I wish he could be my father," coos Yoshie Hishinima, 30. "My own is nowhere near as cool."
Such sentiments are common. Every word Koizumi speaks is golden. Whether celebrating with a champion sumo wrestler, tossing a baseball back and forth with President Bush, or commiserating with leprosy victims mistreated for decades by the government, Koizumi has touched a downcast nation. A record label has released a CD of his favorite Elvis hits. There's a mint-flavored Koizumi chewing gum. Last week stores started selling a coffee-table book with snapshots of Koizumi in a bathrobe, Koizumi reading, Koizumi playing baseball, Koizumi eating noodles. "The whole country is depressed," says Masaaki Nagamoto, 45, a law clerk shopping for Koizumi kitsch one recent afternoon. "All our faith is in Koizumi."