Newsweek on "populism"

The 06/30/09 03/30/09 issue of Newsweek featured several essays on "populism". I was intrigued to see how various participants defined it.

Rick Perlstein:

The habit of messily dividing the world into "the people" and "the elite" - whether it's left calling out right, or right calling out left - is distinctively, ineluctably American. It's not going away. And there's much more to it than the name-calling of angry political factions. It is the governing folk wisdom of a nation without an inherited aristocracy, distrustful of privilege that is not "earned." It is our American common sense.

Michael Kazin:

At its core, populism in the United States remains what it has always been: a protest by ordinary people who want the system to live up to its stated ideals—fair and honest treatment in the marketplace and a government tilted in favor of the unwealthy masses. The best way for big men, and big women, to respond to such protests is to try to do what is moral, as well as popular—and treat Americans as partners in the grand enterprise of governance.

Joel Kotkin seems to think that "populism" is just another word for anger in politics:

The notion of a populist outburst raises an archaic vision of soot-covered industrial workers waving placards. Yet populism is far from dead, and represents a force that could shape our political future in unpredictable ways.

People have reasons to be mad, from declining real incomes to mythic levels of greed and excess among the financial elite. Confidence in political and economic institutions remains at low levels, as does belief in the future.

Robert Samuelson isn't necessarily trying to define populism. Instead, he seems to think that there is a mass wave of demand to abolish capitalism altogether:

The story of American capitalism is, among other things, a love-hate relationship. We go through cycles of congratulation, revulsion and revision. Just when the latest episode of revulsion and revision began is unclear. Was it when Lehman Brothers failed? Or when General Motors pleaded for federal subsidies? Or now, when AIG's bonuses stir outrage? No matter. Capitalism is under siege, its future unclear.

Joseph Schumpeter, one of the 20th century's eminent economists, believed that capitalism sowed the seeds of its own destruction. Its chief virtue was long term—the ability to raise wealth and living standards. But short-term politics would fixate on its flaws—instability, unemployment, inequality. Capitalist prosperity also created an oppositional class of "intellectuals" who would nurture popular discontents and disparage values (self-enrichment, risk-taking) necessary for economic success. [my emphasis]

Fareed Zakaria also doesn't try to define populism, he just knows it leads to limits on "free trade", one of the sacrosanct concepts among the Beltway Village:

I'm certainly not going to defend those AIG bonuses. But the trouble with populist outrage is that it bubbles over, sweeping from one justifiable issue across to many others. Waves of populism are now working their way through the American government on several fronts. The area I'm most worried about is trade, where populism leads to protectionism. The scandal of the moment, the bailout bonuses, will pass; in a year or two (one hopes) the U.S. government will no longer own banks and insurance companies. But protectionism and trade wars, once started, are hard to reverse.

Niall Ferguson frets about those picked-on financiers being pushed around by politicians (as if!):

Nothing would be easier than to blame everything on the bankers. I blame them for much of what has gone wrong, but I blame the politician more. It's just too easy to heap opprobrium on Wall Street. And if you noticed, that's exactly what the politicians do. Could it be that they're trying to divert our attention away from Washington's own responsibility for the debacle?

John Steele Gordon pretty much agrees:

Wall Street is not an institution, it's a collection of individuals, inherently susceptible to the madness of crowds. Blaming Wall Street is like blaming the atmosphere for thunderstorms. It's going to happen. Washington is supposed to be the guys with the striped shirts. They make up the rules and enforce them. And then they sometimes change the rules to accommodate some of their friends.

Robert Frank thinks that whatever the market does about executive pay is something akin to divine guidance:

Executive pay is much higher in big companies because those executives' decisions—good and bad—matter more. Despite the occasional mistake, the people they choose are a remarkably talented lot. The highest-paid people in each domain are paid such large amounts because they are worth that much to the organizations that employ them. That's good for them and for the country, too. Capping executive pay would just encourage talented potential managers to choose careers as personal-injury lawyers or hedge-fund managers.

Especially, he says, "Anger at AIG must not cause us to lash out at those whose talent and effort have made the country so wealthy."

Glenn Greenwald at Salon (The virtues of public anger and the need for more 03/21/09) has his own take on the current bout of "populism" that so disturbs our Beltway pod pundits:

Obviously, mass rage can entail its own excesses and, and if unchecked, can lead to mob rule, a form of majoritarian tyranny (as Armando notes, its isolated, unrepresentative excesses (death threats!) are already being exaggerated to discredit the underlying anger itself). But we are far, far, far away from the point where unchecked public sentiment plays too great of a role in how our political institutions function. Rather: we're a country that, for the last decade, acquiesced meekly and quietly as our Government transferred huge amounts of national wealth to a tiny elite; launched a devastating war based on purely false pretenses; tortured, spied on us and literally claimed the right to invalidate law and the Constitution; and turned itself over to the highest bidders.

The overarching question is not: why is there so much public rage? The overarching question is: why has there been so little? A political establishment that can function without any fear of the citizenry will inevitably trample on its interests. That is what has been happening more than anything else. And it is why we need far more public outrage, and fear of that outrage more deeply implanted in the minds of our political and financial elites.

Tags: populism, us economy