Capital Markets

Pick Your Populism

Learning to fight the right elites


Casting about for an explanation of the baffling resistance among Republicans in the House of Representatives to the $700 billion Wall Street bailout that every well-informed, sensible person in the country supported, The New York Times settled on populism. The Republican Party "is increasingly populist," reporter Jackie Calmes averred, and "populists do not favor bailouts of Wall Street."

Evidently that assessment was meant as a put-down, since Calmes described the House Republicans' recalcitrance as a "rigidly ideological stance at a time of economic crisis." Yet in mainstream American politics nowadays, populism is less an ideology than an attitude, a rhetorical style pitting regular people against powerful elites, and it can be adapted to diametrically opposed political causes.

While the anti-bailout movement did have a populist flavor, there were reasons to be wary of this massive economic intervention (including concerns about its cost, its fairness, its effectiveness, and the precedent it sets) that went beyond antipathy toward Wall Street fat cats. Furthermore, supporters of the Treasury Department plan to buy up mortgage-backed securities also cast their position in populist terms.

At last week's vice presidential debate, Republican nominee Sarah Palin, while paying lip service to "personal responsibility," said the "Joe Six Pack[s]" and "hockey moms" who took out mortgages they could not afford were "exploited and taken advantage of" by "predator lenders." She said "the corruption and the greed on Wall Street" created the "toxic mess" that the government must now clean up at taxpayers' expense—not to help special interests but to protect "the Main Streeters like me" who would otherwise be hurt by tight credit resulting from the degraded assets of financial institutions.

Palin also tried to put a populist spin on John McCain's tax policies, saying the government should "lessen the tax burden on our families and get out of the way and let the private sector and our families grow and thrive and prosper." She thereby obscured a point emphasized by Joe Biden, her Democratic rival: The biggest direct beneficiaries of McCain's tax cuts would be rich people.

By the same token, Biden obscured an important reason for that: Rich people pay a lot more taxes to begin with. In 2005, according to the Tax Foundation, the top 1 percent of American earners received a fifth of total income but paid two-fifths of federal income taxes. In Biden's view, making that burden even more disproportionate is "simple fairness."

It will always be easier to make a populist case for taking from the rich and giving to the "middle class" than it is to make a populist case for letting the rich keep more of their own money. But other policies that traditionally have been seen as populist, including protectionism, farm subsidies, and maintaining Social Security in its current form, can plausibly be portrayed as favoring special interests at the expense of a less affluent and less influential majority.

The relevant question is not whether a policy benefits an elite but whether the elite is thereby unjustly enriched. Whatever your political perspective, then, there are good and bad kinds of populism. But one variety we should all agree to oppose is the mindless, anti-intellectual populism to which Biden and Palin resorted during their debate.

If you want "a good barometer" for the economy's health, according to Palin, you shouldn't look at statistics or consult economists; you should "go to a kid's soccer game on Saturday, and turn to any parent there on the sideline and ask them, 'How are you feeling about the economy?'" If you want a detailed comparison of McCain's economic, educational, health care, and foreign policies with those of the Bush administration, according to Biden, you shouldn't pick up a newspaper or do research online; you should "walk into Home Depot with me" and "ask anybody in there." This is the sort of populism that insults voters' intelligence while trying to flatter it.

© Copyright 2008 by Creators Syndicate Inc.

NEXT: Ode to Joy

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Delivered in her hokey, folksy, obnoxious catchphrases, dripping with sarcasm, and coated in a general disdain for stupid smart folks who managed learnin' nothin' from their years in college that regular hockey moms and joe sixpack didn't already know, Palin managed to make Biden's stomach turning, vomit-inducing and markedly cynical populistic statements comparatively palatable. The debate had more cringe-inducing moments than a Red Asphalt marathon.

    Thank God the presidential candidates chose to stay somewhat on topic and respectful last night, ignoring Obama's occasional whines about the time format and McCain's painful attempts at humor. Brokaw's incredibly obnoxious nagging about the time were even worse than the last moderator's flaccidity, though, if that's possible.

  2. Is it not an oxymoron to say "bailout that every well-informed, sensible person in the country supported, The New York Times settled on populism"? Or is the NYT saying that there are two classes of people, themselves and the dumb ones in flyover land? They need to read THE WISDOM OF CROWDS by James Surowiecki.

  3. It's called sarcasm, Ivan.

  4. "go to a kid's soccer game on Saturday, and turn to any parent there on the sideline and ask them, 'How are you feeling about the economy?'"

    "walk into Home Depot with me" and "ask anybody in there."

    Obviously the candidates are much better than I in masking contmpt for the average American's intelligence and critical thinking skills. You'd have to be an imbecile to use those mewthods to gather important economic information.

  5. There's a reason that only Republicans know how the economy is going. Everybody knows that Democrats don't have kids, at least not kids that interact with others at normal sporting events. The few kids that slip by unaborted play satanic games without any parental supervision. No soccer games, hence, no vital economic information.

  6. Obviously the candidates are much better than I in masking contempt for the average American's intelligence and critical thinking skills. You'd have to be an imbecile to use those methods to gather important economic information.

    Right on! Consult the experts, who sixty days ago were predicting $20/gallon gasoline, even before the Third Coast storm damage. 😉

  7. Wow, candidates appeal to ignorant morons with populist messages?

    I'm shocked.

  8. Lamar,
    Preachin to the choir brother. preachin to the choir

  9. The movie, "idiocracy"(populism), is now ,verifiably realtime.Step back, lower the bar.

  10. Populism and technocratism are both extremely dangerous.

  11. Eh, could be worse. Unemployment could be at 20% like it is in France.

    Obama could accuse McCain of having a bastard son and making his entire campaign revolve around that point.

    Things could always be worse.

  12. What is about Sarah Palin that drives the staff of Reason and Andrew Sullivan mad?
    Is it because she is pretty and smart and a good dresser?
    A lot of guys can't handle a woman who is both good looking and smart and a lot of gays can't handle a woman is good looking, smart and dresses better then them.
    That's it, isn't it!(?)
    PS Just at of curosity, are there any gay or lesiban staffers at Reason?

  13. Terry, I think it is the fact that the not-smart part of Palin is bigger than the smart part.

  14. To appeal to the broadest and basest sentiments is how the democratic game is won, no?

    By the way, if you're at a loss for why someone might not like Sarah Palin, you might be a Republican shill.

  15. Shabadoo,
    Which state are you governor of, again?

  16. The problem isn't the top 20%, it is the top .5 percent. Something has changed here in the US in the last twenty years. The income gains of anyone not in that .5% have been sluggish. The incomes of the top .5%, however, have skyrocketed.

    The 80 to 99.5 percentile ranges largely consists of moderately successful small businessmen and women, middle-managers, and professionals such as doctors, lawyers, scientists, dentists, professors, etc. The incomes of these groups are really going nowhere. Until last year, quite a number of people managed to get into these levels speculating on real estate, but obviously that bubble has burst.

    The top .5%, however, has seen incredible income growth. Executive pay, in particular, has spiraled out of control. Given my experience in corporate America, here is how I would estimate it works. Imagine you have medium-sized Fortune 500 company with 11111 employees, in five levels. 1 CEO, 10 VPs, 100 upper managers, 1000 lower managers, and 10000 regular employees. Who gets paid how much?

    The pay of the regular employees is highly variable, anywhere from $30k for a secretary to upwards of $200k for a senior lawyer, scientist, etc. Lower managers are on the order of $150k, upper managers probably on the upside of $200k. Then you have VPs swinging in at 2+ million and the CEO raking in 8 million or more. Why the huge jump at the top? What can justify this? It beats the heck out of me. I have met executives before, and frankly, I couldn't tell you the difference between them and the horde of middle-managers and senior non-management professionals that worked at my companies, yet got paid a tiny fraction of the amount.

  17. The top 1 percent of American earners did not /RECEIVE/ one fifth of America's income - they EARNED it.

  18. There are plenty of smart, pretty women out there in the world. Take Sharon Stone for example, certified genius. Doesn't mean I have to agree with every asinine statement she might make. Even if Palin qualified as "smart" by any measure found outside gradeschool, the better question would still be: why do drooling idiots have such a hard time disagreeing with a pretty woman?

    Let me put this out there, and you know, I'm not claiming to be psychic or anything, but let me just say this: Sarah Palin is not going to have sex with you. Not even if you vote for her, not even if you help her turn the United States into the Barbie Doll Plastic Republic. Consider a candidate who has some kind of grasp on history, economics, energy, technology, hell, someone who knows something about cats. Just as long as you're not basing your votes on repressed sexuality, but rather on what you consider to be safe, sane, well-informed policy decisions, you're okay by me.

  19. @Andrew: when they "earned" that money, or a portion of it, by evading tax laws, violating worker's rights, market manipulation, insider trading, or simply by inheriting old wealth without lifting a finger, did they really "earn" it? In any sense outside the same that a mafia don or a prince in a monarchy "earns" their wealth? That every extravagantly wealthy person earned their wealth through the value of their effort is fallacious. Using that fallacy as de facto justification of protection of their income is as wrong as using the reverse fallacy - "behind every great fortune is a great crime" - as justification of arbitrarily depriving them of it.
    The fact is much of the wealth in this country is due to situations arising from unfair and unjust legal structures that put the already-wealthy at significant advantage. Abolition and reform of government subsidies, tax loopholes, etc. and letting the market properly balance itself is probably a better solution than taxation and wealth redistribution, but the statistics on income are a definite sign of a problem, not a healthy free-market economy.

Please to post comments

Comments are closed.