Lost in the sea of financial panic was the recent ascension of new Japanese Prime Minister Taro Aso, the third Prime Minister Japan has had since the resignation of reformer and political savant Junichiro Koizumi more than 2 years ago.

While Aso's Prime Minister-ship might just seem like another turn in one of the most politically fluid situations in the developed world, his ascension does highlight several interesting developments in East Asia. Aso's election comes off of the sudden resignation of former PM Yasuo Fukuda, who could not deal with an increasingly hostile upper house of the Diet.

More importantly, Aso must fight to retain power for the Liberal-Democratic Party, as the incompetent, but increasingly powerful Democratic Party of Japan looks to mount a serious challenge to LDP rule come 2009.

 Japan is an interesting country to study if you're at all interested in politics. In many ways, it is a mirror image of our society. It features an ever-older electorate putting pressure on an ever-smaller work-force through pensions. It features an unpopular government whose pro-market reforms have mainly fell flat on their faces, and it faces a potential change of power in the near future.

Furthermore, the problems we have to face - from China to Nuclear Korea to Globalization, to budget deficits and social reform - are problems faced by the Japanese as well. The success of various policies in Japan could be a good indicator of the success of those same policies in the US.

More importantly, the policies of Aso will be important in the maintenance of the Balance of Power in East Asia. His predecessors, Yasuo Fukuda and Shinzo Abe, were known for continuing their moderation stances towards China and generally non-aggressive approach to the increasingly aggressive Russia. The actions of Aso, a man who once wrote a book essentially calling for Japanese Nationalism and the containment of both Putin's Russia and the People's Republic of China, will have tremendous impact on the region, if not the world.

Many people agree, Japan could develop nuclear weapons in months, if not weeks. A nuclear Japan in additon to an increasingly conservative and anti-American South Korea, an increasingly expansionist China, an increasingly important Association for South East Asian Nations (ASEAN) and an increasingly troublesome North Korea could throw the region into upheaval. The ability of Aso to deal with the crisis of the Japanese Economy, the public confidence in the LDP and his increasingly powerful neighbors will be the upmost importance in the next few years.

Likewise, the ability of the American president to deal with the same problems his Japanese counterpart faces, as well as the possibility of a militarized Japan, will be instrumental in determining the course of American power and geopolitics as a whole for the next decade.