An online reading list to accompany the meltdown of the financial system

  1. Overview of how financial regulation works in the US, so you know who to point the finger[s] at.
  2. Marginal Revolution is, in my lofty opinion, the best blog for following all the antics. It’s written by a couple of econ professors who normally talk about curiosities (similar to Freakonomics), but lately they’ve been doing a great job of consolidating (and generating) economic commentary on the various implosions and bailouts going on.
  3. The Conglomerate is giving some of the best coverage from a legal perspective.
  4. If you want something on a higher level, read Calculated Risk, which is what all the bankers have been reading (especially now that they have nothing else to do).

Any other recommendations to share?

An uncannily accurate prediction

I just finished reading the book Sketches From Formosa, a memoir by the English Presbytarian missionary Rev. W. Campbell, D.D., F.R.G.S., Member of the Japan Society in 1915. This is one of many wonderful facsimile reprint editions of old books concerning Taiwanese history (in both English and Japanese) published by the Taiwanese historical publisher Southern Materials (南天), which I picked up in their Taipei store. Towards the end of the book he gives his impressions of the Japanese takeover of Taiwan and their policies, and in that section (p. 325-6) was the following passage concerning Japanese efforts to eliminate opium use in Taiwan:

Those who favoured the gradual method of extinction felt that there were serious objections to an immediate adoption of the root-and-branch way of going to work. For example, they said-as many Medical Missionaries have also affirmed-that the latter course would entail unspeakable misery on the opium-smokers themselves, and that the enactment of stringent laws in such circumstances would necessitate a fleet of armed cruisers round the Island to prevent smuggling, with Police establishments and Prison accomodation on a scale which simply could not be hoped for.

Doesn’t this sound like a pretty good description of our current failed drug war policies, from a 1915 perspective?

TSA is on kabuki alert

America left its ticket and passport in the jacket in the bin in the X-ray machine, and is admonished. America is embarrassed to have put one one-ounce moisturizer too many in the see-through bag. America is irritated that the TSA agent removed its mascara, opened it, put it to her nose, and smelled it. Why don’t you put it up your nose and see if it explodes? America thinks, but does not say.

And, as always American thinks: Why do we do this when you know I am not a terrorist, and you know I know you know I am not a terrorist? Why this costly and embarrassing kabuki when we both know the facts, and would even admit privately that all this harassment is only the government’s way of showing that it is “fair,” of demonstrating that it will equally humiliate anyone in order to show its high-mindedness and sense of justice? Our politicians congratulate themselves on this as we stand in line.

That’s from Peggy Noonan‘s new book Patriotic Grace, as quoted here.

“No photos please, this is a press conference”

Occasionally, I witness an event so disturbing I have to post it on this blog immediately. Here is just such an event:

I was on my way home from work when I noticed a press conference outside the office (covering the Tokyo police force’s anti-drunk driving campaign with guest star Aya Ueto) . “Stop drunk driving once and for all!” read the signs. When I happened by, some boys in what appeared to be boy scout uniforms were speechifying about how they pledged to campaign against this serious public concern. Directly in front of the stage stood a tightly squeezed group of TV cameras and photographers.

So far so good until I noticed a security guard holding another sign: “No photography from cameras or mobile phones. We will remove anyone taking pictures.” No sooner did I appreciate the irony of ordering no photography at a press conference than an onlooker in a suit reached for his camera, only to be immediately approached by another man. The other man reached out and physically covered the lens of the camera with his hand. He was polite but firm: “No photos please.” I looked on in disgust and headed home soon after.

What a sad display. Here was a government-sponsored press conference and the public was not permitted to record the festivities, lest it cost a TV station some viewers or Dentsu (I am assuming) a bit of marketing power. In the US the police would have a prior restraint lawsuit on their hands. But even without making a free speech argument, it is simply pathetic to suppress citizen camerawork in favor of a media cartel.

Asia’s many legal systems

This just came out: an interesting survey regarding Asian legal systems. It was structured as a poll of regional corporate executives, and sought to find out which systems are perceived as the easiest to do business within.

In descending order, with 1 being the best score and 10 being the worst:

1. Hong Kong (1.45)
2. Singapore (1.92)
3. Japan (3.50)
4. South Korea (4.62)
5. Taiwan (4.93)
6. Philippines (6.10)
7. Malaysia (6.47)
8. India (6.50)
9. Thailand (7.00)
10. China (7.25)
11. Vietnam (8.10)
12. Indonesia (8.26)

No real surprises for anyone who’s familiar with these countries. But here’s a quick rundown of comparative Asian law to accompany the list:

Hong Kong and Singapore both retained the common law which applied to them when they were English colonies. The systems are so similar that Hong Kong and Singaporean solicitors can become qualified as English solicitors by taking a short transfer exam on professional conduct. The efficiency and transparency of these systems are key reasons for Hong Kong and Singapore’s popularity as international financial centers: contracts are generally enforceable, courts are generally predictable, and things work more or less as they would work in London or New York.

Japan built a civil law system in the late 1800s based on the Napoleonic Code as it had developed in France and Germany. Korea was subject to Japanese law during the colonial period, and while they carefully replaced the Japanese statutes with “native” statutes upon independence, South Korean law is still very close to Japanese law. The Republic of China apparently intended to develop its own civil law during the early 20th century, but was so preoccupied with other matters during its early history that it ended up copying Japan’s system instead. So all three systems are very similar to each other, and share common elements with the law of continental Europe (such as extensive codification and minimized judicial discretion).

The Philippines governs itself through a mishmash of Spanish and American law: family, property and contract matters are governed by Spanish-style rules, while constitutional, commercial and litigation matters are governed by American-style rules. Malaysia and India both follow English common law, with religious law (such as Islamic sharia) applying to family matters. All three countries suffer a similar basic problem: although their legal systems are based on good models, they are quite dysfunctional in practice due to corruption and bureaucratic inefficiency.

Thailand’s strong monarchy managed to keep its legal system fairly independent, but like Japan, Thailand tapped European experts to help write its statute books, so it ended up with a French-style civil law system. Although the system isn’t bad, it remains subject to the will of the monarchy or whomever else happens to be in control of the country at any given time, which isn’t very reassuring to people doing business there.

China is something of a basket case these days, operating under an intricate collection of statutes from different eras. The Republic of China adopted Japanese law, as stated above, but the Communists threw out these rules upon taking control of the mainland in the 1940s, and introduced a close copy of Soviet law. Since the 1980s, though, the National People’s Congress has overwritten most of China’s Soviet law with new statutes governing property, contracts and other basic private legal matters. Many of these are so vague that their practical application falls to bureaucratic discretion. Wikipedia has a chunky but interesting writeup on the subject which could use further development by experts.

Vietnam and Indonesia, at the bottom of the rankings, formally still follow Napoleonic legal systems introduced by their colonial powers (France and the Netherlands respectively), but in practice the rules are only enforced when the government is in the right mood.

Internet installation in Japan

I just moved this past Sunday from a crummy and tiny, but cheap and decently located apartment into a less convenient but far, far bigger and nicer actual house. NaturallyIwanted Internet access ASAP so I placed an order for DSL the following day. Japan is well known for excellent Internet service, particularly for low priced and extremely fast (as in 100mbps) fiberoptic service, but fiber is only available for an apartment if the building has first been wired. Therefore, like the first time I lived in an apartment in Japan (2006-7) DSL was my only option.

Setup of DSL takes almost exactly one month. First you place the order, then a couple of weeks later the modem is delivered by parcel, and then a week or two after that the installation guy comes from NTT to check your line and flip on the service. If, as in most apartments, there is already an NTT phone line, this is really all they do-and yet it still takes an entire month for someone to come and do it-and this is not due to a particular backlog, but because of a set four-week schedule.

Now that I’m in a house I can get fiber, which is way, way faster than DSL, for the same basic price, and includes a deal with 5 months free and some cash back in a few more months. I put in the order on the 20th, 10 days ago, and was given an installation appointment of October 3, or about two weeks from the date of order. Today the installer guys came by to do the outdoors portion of the work.

So, why is it that installation of a fiber optic line to a house can be accomplished two weeks from the date of order, while DSL takes four weeks, despite the fact that the fiber installation is multiple orders of magnitude more expensive and time consuming?

Aso cabinet should remember FSA’s success

Aso’s appointment of arch-conservative Shoichi Nakagawa as both minister of finance AND minister of state for financial services might seem, well, natural to the uninitiated. They’re both financial, aren’t they? For his part, PM Taro Aso has called the decision “more functional than dealing with [financial issues such as the Lehman bankruptcy] separately.”

Functional it may be, but I have my doubts that moving financial regulation back to the finance ministry will prove productive. Independent, prudent, and transparent financial regulations are part of what has allowed Japan’s financial sector to reap the benefits of late 90s deregulations and attract a base of foreign investors. That Japan has escaped the worst of the recent financial meltdown is a testament to the Financial Services Agency’s competence to regulate without the guiding hand of an all-powerful finance ministry. The Nikkei editorial board shares my concerns and has called any aims at reuniting fiscal policy with direct finance industry oversight “extremely problematic.” 

As FujiSankei Business-i explains, the initial decision to separate financial administration and law enforcement was taken in 1991 when Nomura Securities was found illegally compensating clients for stock investment losses. The Financial Services Agency was created later as the stand-alone financial industry regulator when the finance ministry itself saw its credibility devastated by corruption scandals. Currently, financial matters are divided thusly: FSA/SESC are the finance industry regulators, the Bank of Japan is an independent entity responsible for maintaining liquidity and monitoring inflation, and the finance ministry, as keeper of the treasury, has a more limited direct role and keeps an eye on exchange rates and participates in international meetings.
 
The arrangement appears to work well, except it is partially incompatible with international norms. The G7 meeting of finance ministers, for example, is attended only by Japan’s finance minister, despite his portfolio not extending to financial industry regulations (at the top of the current agenda). Predictably, an anonymous source in the finance ministry welcomes this turn of fortune as it represents a possible restoration of powers, regardless of Aso’s insistence that he chose people based on their dedication to “national interest” and not their ministry’s interest.
In his first post-appointment press conference, Nakagawa gave a somewhat muddled explanation mentioning that while he understands the debate of 10 years ago, fiscal and monetary policy are “two sides of the same coin” and should be handled together in “delicate” times such as these. 
As I mentioned above, on the face of it this doesn’t even look that bad. But getting financial regulation out from under MOF’s thumb has been an important step forward to achieving more normal financial services in this country. The ministry of finance was for decades the symbol of Japan Inc, the comprehensive term for the elite consensus that sustained Japan as a development state. But those days are over, and Japan has been in the process of adopting a more “mature” economy, a part of which was the creation of the FSA.
I have not made a comprehensive review of all the new government’s comments, but so far I have seen zero justification except the need to have someone responsible for financial industry regulation at the G7 finance ministers meeting. I hope they keep it limited to that. 
The FSA has established a reputation as tough but fair in the minds of the industry and the new administration, if it does get a chance to govern, would do well to respect that. 

What the Diet’s been up to lately, part 2: rethinking airport policy

For decades Japanese airports have been governed by an Airport Improvement Act (空港整備法) which apportioned control and funding of airport projects between the national and regional governments. Earlier this year, the Diet signed off on an overhaul of the statute which changes its name to the Airport Act (空港法) and focuses the law on promoting the competitiveness, rather than development, of Japan’s airports. After all, the country has already over-developed its airports in many areas ([cough] Osaka [cough]); now it needs to rationalize their existence.

Administrative matters

Under the old law, there were three “categories” of airports: the largest international airports were designated as Category 1, the main city airports as Category 2 and the smaller regional airports as Category 3. Category 1 airports were funded, constructed and controlled solely by the Ministry of Transport unless privatized. Category 2 airports could be centrally controlled, in which case Kasumigaseki would fund 2/3 of construction costs, or could be moved to local control, in which case Kasumigaseki would fund 55%. Category 3 airports were controlled by local governments and construction costs split 50/50 with the state.

The new law has reshuffled these categories a bit and made them more logical. Category 1 is now effectively gone, which makes sense since it has been obsolete for some time: three of the Category 1 airports (Narita, Kansai and Chubu) have been privatized and funded under their own respective statutes for some time, while the other two (Haneda and Itami) currently operate in roles more befitting of Category 2 status.

Categories 2 and 3 are now known as “state-administered airports” and “regionally-administered airports” respectively, and the small collection of regionally-administered Category 2 airports are now lumped in with the Category 3 airports. So now the system is a bit easier to explain: if the Transport Ministry runs the airport, the state pays 2/3 and the prefecture pays 1/3; if the prefecture or municipality runs the airport, costs are split evenly.

Policy matters

The new law also requires the Transport Minister to prepare and publish a Basic Plan (基本方針) for the country’s airports. While the plan is still in development, the Transport Ministry has given some preliminary comments on what will be in there. Among the more interesting specific points raised:

  • International terminal projects at Category 2-level airports such as New Chitose, intended to improve capacity as direct international flights to the regions become more popular. Chitose has really been overdue for some terminal expansion, in this blogger’s lofty opinion.
  • Improved airfreight handling systems to make Japan’s airports more competitive with Asia’s as cargo hubs.
  • More multilingual signage at regional airports, adding Chinese and Korean (and possibly Russian or other languages) to the existing Japanese and English. Some airports are already there but others are apparently lagging.
  • Soundproofing homes in areas adjoining airports–a huge policy issue already around Narita, Itami and other land-locked airfields.
  • Expanding Haneda’s international services to Beijing and Taipei, and permitting scheduled long-range flights from Haneda during the late night and early morning hours when Narita is closed.
  • Maintaining the current status quo in the Kansai region: KIX is the wave of the future for everything, Itami is suffered for as long as people want to use it, and Kobe is heavily restricted so that it doesn’t really compete with the others.

Provisions for “joint-use airports”

One interesting footnote to the new law is that it specifically contemplates joint-use airports; i.e. those split between commercial/private operations and SDF/US military operations. There are a few airfields, such as Misawa Air Base in Aomori, which already operate on this model. The real unwritten target in this instance seems to be Yokota Air Base, the huge US Air Force logistics airfield in west Tokyo: policy wonks and Tokyo politicians have been salivating for a while over the prospect of starting commercial flights there, and there’s even a note or two about it in the Transport Ministry’s planning materials.

Why does Japan need more foreigners again?

The health and labor ministry’s White Paper on the Labor Economy (link) came out last month. It’s stuffed with statistics, but today I would like to focus on what it’s got to say about Japan’s foreign workforce, and then think about what implications a major increase in the amount of foreign workers would have on the Japanese economy.

  • At the end of FY2006, there were 755,000 legal foreign workers in Japan, double the 370,000 in 1996 (A recent NYT article claims it’s actually “more than a million” in 2006 vs. 700,000 in 1996 but the author does not cite where he got that number… UPDATE: it appears to include the number of foreign spouse visas, which can be found at the justice ministry (PDF)). 180,000 are on “professional” visas and work as engineers, programmers and other specialized fields (This number includes 57,000 here on language teacher visas cultural/humanities visas (I am interested to see what the impact from NOVA’s closing has had on this number…) and 35,000 on technical/engineer visas). There are 35,000 Nikkei Brazilians working in factories, etc. 95,000 are here on the controversial technical trainee program. A whopping 110,000 foreign students are working part-time (15% of all foreign workers in Japan and 90% (!) of all foreign students).
  • The report points out that Japan’s rules on letting in foreign labor are actually quite liberal in the cultural cultural/humanities (mainly language teacher) and technical (engineer/programmer) categories. 62% work at companies with less than 300 employees, and 45% are non-permanent. 64.8% make an underwhelming 200,000-299,999 yen per month. 61% of technical visas go to “data processors” while 58.8% of cultural visa holders are language teachers or otherwise in education, leading the report to conclude that the country is not utilizing specialized foreign labor in core corporate activities such as development, design, and international trade.
  • The ministry plans to promote a system to facilitate permanent employment for foreign students after they graduate. A survey of companies found that the biggest reason that foreign students in Japan did not seek jobs was “limitations for foreigners to succeed in a Japanese company” (34.5%). On the other hand, companies surveyed cited a “lack of internal infrastructure (communication issues, etc.)” (44.9%) and a general “negative [stance toward] hiring foreigners” (43.8%) as reasons why they did not hire foreigners. Such companies’ views of foreigners included “strong self-expression” (42.6%) and a lack of “loyalty” (29.4%). Of the mere 10% of companies with experience hiring at least one foreigner, 80% said they would continue to hire foreigners in the future.
  • Ironically enough, two thirds of foreign students study humanities or social sciences, while two thirds of the labor demand from firms is in the hard sciences and engineering.
  • Citing larger numbers of foreign laborers as necessary to “bring vitality and internationalization to the Japanese economy,” the report calls on companies to reform their attitudes towards hiring foreigners and the structure of their labor management systems, and colleges to attract more foreign students based on companies’ needs.

In previous discussions on this blog and elsewhere, a general consensus seems to form around the basic lines of the above-mentioned NYT article:

With Japan’s population projected to decline steeply over the next decades, the failure to secure a steady work force could harm the nation’s long-term economic competitiveness.

… experts say that it will have to increase by significantly more to make up for the expected decline in the Japanese population.

I very rarely see an argument in the J-blogosphere to contradict this idea that Japan’s shrinking, aging population is destined to doom economic growth, bankrupt social services, and quite possibly cause social turmoil. Therefore, goes the argument, this situation must be avoided or alleviated by any means – encouraging people to have more children, employing the elderly, and last but not least bringing in more and more foreign workers.

Dean Baker, a liberal-leaning US economist, is critical of this approach:

The focus of the article is a village where Chinese workers are brought in to pick lettuce. Presumably, farmers would have to pay much higher wages to get Japanese workers to pick their lettuce. This could make lettuce growing unprofitable in Japan. The result would be that the land would be used to grow other crops, or it could even be left available for other uses. Since most farming is heavily subsidized in Japan, if land was pulled out of agricultural production, it could mean substantial savings to the government.

One of the other potential problem mentioned in this article is that a chain restaurant may be forced to cut back on its plan to triple its number of stores because it can’t get enough workers.

These are useful examples for showing why a declining population does not pose an economic problem. Japan has no special interest in maintaining its lettuce production, if it proves not to be an economically viable sector. If farmers cannot make a profit paying the prevailing wage to grow lettuce, then there is no obvious loss to the country if the lettuce industry is allowed to disappear. Similarly, Japan has no special interest in seeing this restaurant chain triple in size if the market conditions will not support this growth.

In the Nikkei Shimbun’s Economics Classroom (Keizai Kyoshitsu) column, Mieko Nishimizu, a former vice president of the World Bankand current fellow at a METI think tank, takes this basic line of argument into more detail as she outlines proposals to turn Japan’s demographic crisis into an opportunity to improve the lives of the citizenry. She sees three basic “silver linings” to Japan’s declining population:

  1. Progress in “capital aggregation” will dramatically boost productivity. Labor shortages will put pressure on producers to get more output from each employee. If the producers cannot count on foreign labor to fill that gap, all the better for Japan’s productivity growth. That growth, she says, will come from Japan’s advanced robotics technology as well as scientific and information advances. Knowledge industries will become an important source of economic growth.
  2. The nation will respect its older citizens more. Those over 60 will be seen as vaults of knowledge and experience, elements critical to knowledge based industries. Such pressures will likely end Japan’s system of retirement at a fixed age (65 now). The freedom to work will give the elderly the chance to choose when they want to retire, and those extra productive years will alleviate overall social security expenditures. For this to work in an era of advanced life expectancy, medical technology has to be ready to make those later years more livable, in a manner that’s fairly available to all citizens.
  3. Out of necessity, women will be required to balance work and child-rearing (no mention of men’s role in child-rearing in this essay). But that means Japan will finally need its women to work. If Japan can be a nation where women can exert leadership in companies with flexible management, competition for good talent will break all glass ceilings. In part to facilitate women’s participation in the workplace, companies will grow ever more eager to achieve employee satisfaction, by allowing more family time and permitting telecommuting. She cites studies that a happy home life leads to a more productive workforce. And happier home lives might just produce more children.

As she mentions in passing early in the piece, the implications of this scenario are that immigration as a supplement to the work shortage would just get in the way. To Nishimizu, hastily letting in immigrants poses “more than just an lost opportunity for Japan to make great strides, it would produce immeasurable costs.”

The point of managing an economy is to improve quality of life, she says, not to pursue a certain population number. The important thing is to work toward a society where people feel secure about the future. This will produce a justified feeling of belonging and work to stabilize the country.

To have a successful immigration policy, Nishimizu argues, Japan will first of all need to work toward improving quality of life. But Japan also must be ready to open up, to share its culture in a broader sense. Without that, newcomers will have no incentive for them to develop a feeling of “belonging” to their adopted home. They’ll just feel like unwelcome outsiders. But the desire to get a piece of Japan’s wealth will inspire more people to take citizenship and provide a long-term contribution to society.

Baker and Nishimizu argue that we should be a little concerned about the population decline, but let’s not panic and do anything rash. What are some of the doomsday scenarios of a 20-30% decline in population? Sure we might have to live with one Yoshinoya for every 126,000 people instead of every 42,000. And we might have to start consoldating the dozens of tiny, unproductive businesses that scatter Japan. But why not focus on fixing the problems instead of doing the same old thing again and again?

A visit to Losheng

Update: Photo gallery added on 9.23.2008. The new Flicker flash gallery has a fullscreen mode which is excellent for photos like these. Also added some additional comments by Mr. Chang.

I had meant to write a few days ago about what I’ve been doing in Taiwan, but my friend’s house mate forgot to pay the DSL bill and so I haven’t been able to get online all that easily, so tonight I finally broke down and paid the NT$100 (about US$3) for a 24 hour WiFly (WiFi service in every Starbucks, McDonald’s, KFC, etc. in Taiwan) access card.

So, today I visited Taiwan’s famous Losheng Sanitarium (樂生療養院), a leper colony built by the Japanese colonial government in Xinzhuang City, Taipei County. As in leper colonies throughout the world, Taiwanese victims of Hansen’s Disease were forcibly imprisoned in Losheng by the government, as they were in Japan by the government there. Although the leper imprisonment order was lifted in Taiwan in the 1950s (I believe someone today told me 1957), they have for the most part remained. With modern medicine the patients are no longer inmates, and no longer contagious, but nothing can de-cripple them or regrow their missing fingers and stumpy limbs. And they have nowhere to go, and no way to survive except by public welfare of some sort.

I had first heard of Losheng perhaps a couple of years ago, due to the wave of protests to the government’s plan to demolish the entire complex to make way for a train depot, as part of Taipei metro’s never-ending expansion plan. Although there are naturally no opponents to MRT expansion itself, there have been severe doubts regarding the sense of building the depot in this particular location, which apparently requires the leveling of mountain to create flat ground which naturally occurs elsewhere and is widely suspected of having been chosen to satisfy local political interests before practical considerations of engineering.

Primary opposition to the plan however, is due to a desire to preserve Losheng. The adage goes something like, you never really appreciate something to it’s gone, and it is born out time and again in the history of urban preservation. New York City’s historical preservation regime was established in the wake of the foolhardy and abhorrent demolition of Penn Station in the 1960s, and throughout the world preservationist activity is often triggered by the threat of imminent loss. The government’s plan to demolish the place made people realize for the first time that it was worth preserving, and recent protests have spurred a surge of interest in the hospital site and its residents that has gone beyond simple preservationism to community organizing attempting to integrate Losheng, which for most of its existence was in principle as isolated as a prison, into the surrounding community. This has led to large numbers of non afiliated visitors spending time with the patients for probably the first time in many years, if not ever.

Since I cannot process the files from my digital camera until I get home to my desktop computer, words will have to suffice for now in describing Losheng. it turns out that from the articles I had read in The Taipei Times, not to mention the briefer pieces I saw in Japanese media I had no idea what it was like. When I read about a hospital/leper sanitarium being destroyed to make way for MRT construction I had for some reason imagined a cluster of shabby old buildings on a city street corner. But of course a leper colony could not be in such a place, and is in fact built on slightly elevated and up-sloping terrain on mountain foothills of a part of Taipei county that, at the time, was mostly farmland. Less a modern style hospital or a prison, Losheng is actually a sprawling and rather pleasant, almost collegiate-looking, campus with abundant greenery and attractive brick buildings. The main hospital building looks properly medical, and the general sense of design reflects its Japanese period origins, with semi-exposed corridors reminiscent of the older buildings on the Japanese Imperial Universities of the early 20th century, such as today’s National Taiwan University or Kyoto National University (the two examples whose architecture I am familiar with). Most other buildings are also in the pre-war Japanese style common in Taiwan, with a few notable exceptions. The least Japanese buildings in Losheng are probably the Buddhist temple, which is in standard Taiwanese style, and the now shuttered Catholic Church, which is perhaps the most spartan Catholic church building I have ever seen, with only a spare cross on the roof and no writing of any kind on the outside, but with a green Chinese roof, oddly complete with dragon tiles on the corners, and outer walls painted in the Chinese temple fashion. It reminds me of nothing so much as the far more elaborate Tainan Catholic cathedral, which is constructed and painted completely in the manner of a Chinese temple, if you do not look too close at the paintings. Of particular interest are the residence buildings for patients (originally, remember, inmates) from particular parts of Taiwan, such as Penghu or Tainan, donated by the governments of that region.

I mentioned above activity integrating the Losheng campus into the greater community. This consists of various activities, such as holding lectures and community meetings inside Losheng, or educational programs for children. As chance had it, I happened to go on a day which was particularly active. Community activists are currently running a summer camp for children from various elementary schools in the area, using various Losheng buildings for different activities. I was taken to see the room being used for a week-long Japanese language class run by a Japanese woman studying a PhD in Urban Planning at National Taiwan University, in the room of the hospital building where the sickest patients were brought, connected by a locked iron door to the much smaller room where they were taken to die. This is either morbidly incongruous beyond belief, or an excellent symbol of the way in which the space is being reclaimed and repurposed from its grim past. But little of that darkness remains. The staff (mostly Taiwanese college students) had cleaned the room fastidiously, and it was festooned with child drawings illustrating various basic Japanese words and phrases.

Then I went to a much larger room, a sort of meeting hall I suppose, where the kids were being led in Japanese songs by some of the old patients who remember their Japanese well. One played the keyboard-no easy task with hands ravaged by Hansen’s Disease, while another sat in front of the stage in his motor chair, leading the children in Furosato.

After the class was over, I spent some time speaking to the old men, who seemed both movingly thrilled and slightly amazed to have so many young people, children, teenagers and 20-somethings, having fun inside Losheng and spending time with the patients as human beings, and not afraid of their no longer contagious disease. As is the case with many elderly Taiwanese, their first language is Taiwanese (aka Minnan, Hoklo, Fukkianese, etc.) Their Mandarin is generally weak and heavily accented, and most of them also speak Japanese to some degree, having undergone elementary education during the colonial period. I spent the most time speaking with one old man, Chang Wen-pin 张文贫 (can’t figure out how to type pinyin with traditional characters on this thing…), whose fluent Japanese was easily the best out of the group.

Mr. Chang, now 81 if my calculations are correct, went to a Japanese colonial elementary school in Taiwan and worked as, I think, a locksmith both under the Japanese and in the early years of the KMT, before he was interned. He was around 20 years old at the time of the 228 incident, and considers Chiang Kai-shek to be the worst thing to have happened to Taiwan.

To paraphrase, translated and from memory:

Taiwan’s history is full of tragedy. After WW2 Taiwan shouldn’t have been given to Chiang Kai-shek, but instead the allies should have occupied it. America, England and Russia should have managed Taiwan and then organized it for independence. If they had done that then we would have avoided the 228 massacre and noone in Taiwan would be speaking Mandarin (lit: guoyu) today!

He went on to mention that he suspected a war between China and Taiwan would involve Japan and the U.S., and expand into not just a nuclear WW3, but literally “becoming the battle of Armageddon as described in the Bible.” He mentioned his strong distrust of Ma Ying-jiu, and his worry that Ma and the other KMT supporters of unification with China would lead to the destruction of Taiwan.

When we were done speaking and I was preparing to leave, Mr. Chang and the others made me promise to come back and visit next time I come to Taiwan, and before I left he made me wait while he went back to his room and brought a copy of the photo and essay book about Losheng assembled by the preservationist activists, which he signed and gave to me.

Countless speakers have said that “A society is ultimately judged by how it treats its weakest and most vulnerable members.” (Based on a quick search, the source of this quote seems obscure.) The leper has always been a symbol for the lowest in society, and despite having no use for religion myself, I think I can understand why Mr. Chang finds his solace in Christianity, a religion in which the leper is a symbol not of disgust, but of redemption. It says a lot of a society in which lepers are no longer lepers, but patients, and the resurrection of Losheng from a medical prison into a park where children play may be taken as a symbol for Taiwan’s transformation from colony and then military dictatorship into the relatively free and effectively independent country that it is today. But the current metro expansion plan still requires the demolition of something like 30-40% of Losheng’s territory, with some buildings kept in place, a few relocated, and many destroyed entirely. Even the preservationists have abandoned their attempts to save the entire site, with construction of the nearby depot building already well under way, and their best case plan today is the “90% plan.” There is still room for improvement.