Posts tagged with: Populism

Venezuelan President Nicolás Maduro

Venezuelan President Nicolás Maduro

Venezuela has been at the top of the news lately because of violnent demonstrations and government abuses (for background on the situation in Venezuela, check out Joe Carter’s post). Director of research at Acton, Samuel Gregg, has written a special report at The American Spectator commentating on Venezuela as well as Latin America as a whole:

Given Venezuela’s ongoing meltdown and the visible decline in the fortunes of Argentina’s President Cristina Kirchner, one thing has become clear. Latin America’s latest experiments with left-wing populism have reached their very predictable end-points. There is a price to be paid for the economics of populism, and no amount of blaming nefarious “neoliberals” can disguise cruel realities such as food-shortages, electricity-blackouts, endemic corruption, the disintegration of rule of law, utterly insecure property-rights, and wild inflation — all of which have helped Argentina, Venezuela, Bolivia, and Ecuador achieve the ignominious distinction of being categorized as “repressed economies” in the 2014 Index of Economic Freedom.

Certainly it’s not clear that Nicolás Maduro’s regime in Venezuela will lose power. As the Wall Street Journal’s Mary Anastasia O’Grady has underscored, the Castros who run the prison camp otherwise known as Cuba will do whatever-it-takes to try and prevent that. Nor is it certain that Argentines won’t vote for yet another Perónist who promises to solve everyone’s problems via government decree when presidential elections come due in 2015.

But if crises are indeed opportunities, now is the time for those Latin Americans who recognize populism’s flaws to think seriously about what comes next. One mistake would be to imagine that all that’s required are different economic policies. (more…)

In his essay on the eurozone crisis Estonian President Toomas Hendrik Ilves claims there is a misunderstanding about the nature of criticism by “populists”:

That I submit is a problem, a serious problem and a threat to Europe we have only begun to realize. When we still talk about new and old members, we still talk nonsense about “populism” in all the wrong ways. Indeed I believe that the “populism” and the “specter of the 30s” that all kinds of pundits unknowledgeably appeal to has nothing to do with the populism we see in Northern Europe. That is not a populism of the dispossessed, the unemployed. It is a populism more akin to what Calvin and Luther appealed to than what the fascists of the 1930s appealed to. It is, like most populism, based on resentment, and resentment at unfairness. But the unfairness is, as it was in the 16th Century, a resentment of those who flaunt their flouting the rules by which others abide. Resentment on the part of those who take commitments seriously regarding those who do not: Is that the “specter of the 30s”?

As Mark Movsesian of the Center of Law and Religion notes, this isn’t merely a divide between Protestants and Catholic worldviews since some fiscally responsible countries that Ilves praises, like Austria and Poland, are historically Catholic. “Still, one can’t help noticing,” says Movsesian, “that the ‘frugal’ countries happen to be mostly northern and historically Protestant, and the ‘profligate’ countries tend to be southern and historically Catholic (or Orthodox).”

(Via: First Things)

Over at National Review Online, Acton Research Director Samuel Gregg recaps President Obama’s State of the Union address:

There is always something surreal about a Chicago politician talking about “fairness” and “playing by the rules.” There is something even more bizarre about a president talking about the need to expand energy production after his administration has generally undermined significant progress in facilitating energy development for three years in the middle of a recession. And who would describe Detroit as “on the way back”? A stroll down the ghost town otherwise known as downtown Detroit — which is teetering on the edge of being put into administration — would suggest the opposite. It’s not often that I agree with very much said by the New York Times’s Maureen Dowd, but this State of the Union speech illustrated that the lady was dead right in describing the Obama presidency as a bubble within a bubble.

Read it all on NRO.

My recent Acton commentary, Latin America: After the Left, has been republished in a number of Latin American newspapers. For the benefit of our Spanish speaking friends, Acton is publishing the translation of the article that appeared today in the Paraguayan daily, ABC Color. The translation and distribution to Latin American papers was handled by Carlos Ball at AIPEnet.com. Commentary in Spanish follows:

Fracasos de la izquierda latinoamericana

por Samuel Gregg

La izquierda confronta grandes problemas en América Latina. La reciente elección de Sebastián Piñera como primer presidente chileno de centro-derecha en varias décadas se debió a la incapacidad demostrada por la coalición de centro izquierda que gobierna en Chile desde 1990. Y en toda América Latina se nota el desmoronamiento de la izquierda que por mucho tiempo sostuvo las riendas del poder.

Los futuros historiadores probablemente determinarán que esta transformación comenzó con la negativa del Congreso de Honduras, de su Corte Suprema, del Defensor del Pueblo, del Tribunal Supremo Electoral, de los dos principales partidos políticos y de los obispos católicos a que el ex presidente Manuel Zelaya violara el orden constitucional, al estilo chavista. (more…)

Blog author: sgregg
Wednesday, January 27, 2010
By

This week’s Acton commentary:

The left is in trouble in Latin America. Sebastián Piñera’s recent election as Chile’s first elected center-right president in decades owes much to the inability of the center-left coalition that governed Chile after 1990 to rejuvenate itself. Yet across Latin America there is, as the Washington Post’s Jackson Diel perceptively observes, a sense that the left’s decade of dominance is unraveling.

Future historians may trace the beginning of this decline to the refusal of Honduras’s Congress, Supreme Court, Administrative Law Tribunal, independent Human Rights Ombudsman, Supreme Electoral Tribunal, two main political parties, and Catholic bishops to allow ex-President Manuel Zelaya to subvert Honduras’s constitutional order “from within” Chávista-style in 2009.

In truth, however, the populist-left is wilting because their economic policies are collapsing. The most prominent example is Venezuela. Hugo Chávez’s regime was recently forced to devalue the currency, thereby undermining the purchasing power of ordinary Venezuelans’ bolivars in an already recessionary inflation-riddled economy. He is also rationing basic commodities such as electricity. (more…)

In “The Real Culture War Is Over Capitalism,” Arthur C. Brooks argues in the Wall Street Journal that the “major cultural schism” in America today divides those who support capitalism and, on the other side, those who favor socialism. He makes a strong case for the moral foundations of free enterprise and entrepreneurship and points to the recent “tea parties” as evidence that Americans still favor the market economy. Brooks, the president of the American Enterprise Institute, says Americans are revolting against “absurdities” like the bailout of General Motors that will be financed with ballooning budget deficits and trillions in new federal debt. He writes:

… the tea parties are not based on the cold wonkery of budget data. They are based on an “ethical populism.” The protesters are homeowners who didn’t walk away from their mortgages, small business owners who don’t want corporate welfare and bankers who kept their heads during the frenzy and don’t need bailouts. They were the people who were doing the important things right — and who are now watching elected politicians reward those who did the important things wrong.

Voices in the media, academia, and the government will dismiss this ethical populism as a fringe movement — maybe even dangerous extremism. In truth, free markets, limited government, and entrepreneurship are still a majoritarian taste. In March 2009, the Pew Research Center asked people if we are better off “in a free market economy even though there may be severe ups and downs from time to time.” Fully 70% agreed, versus 20% who disagreed.

He also points out that the government has been increasingly “exempting” Americans from paying taxes, an intentional strategy to create a larger class of government-dependent citizens.

My colleague Adam Lerrick showed in [the Wall Street Journal] last year that the percentage of American adults who have no federal income-tax liability will rise to 49% from 40% under Mr. Obama’s tax plan. Another 11% will pay less than 5% of their income in federal income taxes and less than $1,000 in total.

To put a modern twist on the old axiom, a man who is not a socialist at 20 has no heart; a man who is still a socialist at 40 either has no head, or pays no taxes. Social Democrats are working to create a society where the majority are net recipients of the “sharing economy.” They are fighting a culture war of attrition with economic tools. Defenders of capitalism risk getting caught flat-footed with increasingly antiquated arguments that free enterprise is a Main Street pocketbook issue. Progressives are working relentlessly to see that it is not.

Read the “The Culture of Charity,” the Spring 2007 interview with Brooks in Acton’s Religion & Liberty. Watch a 16-minute video interview with Brooks recorded at the Acton Grand Rapids office in May 2008

Via The New Editor, a restatement of a basic economic rule that we all need to remember as government in America swings back to the left. Clive Crook, in the course of reviewing Robin Williams’ Man of the Year, notes the potential unintended consequences if an anti-business mood overtakes our representatives:

Case by case, the merit in these proposals varies from substantial (executive pay) to less than none (taxing profits), but put the merits of the individual policies aside. What they have in common is a fallacious premise — namely, that the cost of a new fiscal or regulatory burden stays where you first put it, with the companies concerned. The idea is very appealing: If businesses are told to give their workers more-generous benefits, or to pay higher taxes, or to use alternative fuels that reduce their greenhouse-gas emissions, or whatever it might be, the rest of us — workers and consumers — get that benefit at no cost.

But that is rarely, if ever, true. In the end, the costs of those policies, as well as the benefits, mostly find their way back to voters at large as higher prices or lower wages (and this is to say nothing of the dynamic effects on incentives to grow and innovate). In short, business is not a separate segment of society that can be squeezed to advance the interests of the other segments. Economies are not built that way.

A very basic idea, to be sure, but one far too easily overlooked by populists who promote governmental intervention and regulation on behalf of “the poor” or “consumers” or whatever other group happens to wander into their line of sight. And having worked in political offices in the past, I know all too well the pressures that politicians face to “do something” when economic problems begin to mount. But we all need to step back and remind ourselves that in many (probably most) cases, governmental action to correct perceived economic injustices ends up penalizing not only the intended target of the action, but also the intended beneficiary.