NEWSWEEK Cover: The Thinking Man's Guide to Populist Rage
In the March 30 issue of Newsweek (on newsstands Monday, March 23): "The Thinking Man's Guide to Populist Rage." Six essayists examine the perils of populist rage and look at whether it's bad for capitalism or presents an opportunity. Plus: How Obama's ethics rules may be driving away the best candidates for government posts; a Gitmo guard who converted to Islam; Saudi King Abdullah's reforms; Zakaria talks to Brazil's Lula da Silva and progress on stem cell research. (PRNewsFoto/Newsweek)
NEW YORK, NY UNITED STATES
Newsweek Looks at Perils of Populist Rage in a Series of Essays
The Best Way To Respond is To 'Treat Americans as Partners in the Grand Enterprise of Governance,' Writes Michael Kazin
Robert J. Samuelson, Eliot Spitzer, Rick Perlstein, Robert H. Frank, Joel Kotkin Look at Whether Populism is Threat to Capitalism or Opportunity
NEW YORK, March 22 /PRNewswire/ -- 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, writes Michael Kazin in an essay in the current issue of Newsweek. "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."
Kazin, an author and professor of history at Georgetown University, writes that as Congress and President Obama rush to balance solidarity with a new wave of populist anger alongside the need for smart policy during a crisis, "they might reflect on how well previous politicians fared at the task. History does not repeat itself. But sometimes it does hum a familiar tune." Kazin's essay is one of several that make up the March 30 cover package "The Thinking Man's Guide to Populist Rage" (on newsstands Monday, March 23). The package examines how populist rage, while it can be cathartic, can also lead to bad decisions. But it can also present opportunity. In the cover package:
Author Rick Perlstein writes that populist anger in America is the anger of dispossession. "That's how most Americans are thinking now about the bonuses paid to feckless financial engineers," Perlstein writes, adding that we "do not like to reward those who do not produce." He writes that the meltdown is complex as is the decision making. But if it happens only in "antiseptic back rooms, government experts negotiating with corporate experts, proud to tune out the public's righteously simplifying indignation, those policies will fail... Take away taxpayers' sense of ownership stake in an issue (especially, as with AIG, when taxpayers literally own the company) and their rage will not go away. It festers ... And that's when the 'bad' kind of populism -- the hateful kind; the violent kind; the demagogic kind -- can flourish."
Newsweek Contributing Editor Robert J. Samuelsonwrites that great reform waves often proceed from scandals and hard times and that the outcome of the present populist backlash may not be benign. "The parade of big companies to Washington for rescues, as well as the high-profile examples of unvarnished greed, has spawned understandable anger that could veer into a vindictive retribution... If companies need to be rescued from 'the market,' then why shouldn't Washington permanently run the market? That is a dangerous mindset. It justifies punitive taxes, widespread corporate mandates, selective subsidies and more meddling in companies' everyday operations."
Author Robert H. Frank writes that anger over the AIG bonuses is spilling onto a broader range of targets. "And unless we're careful, we'll shoot ourselves in the foot. Even before AIG's moment in the spotlight, angry populists had begun calling for executive pay caps at 20 to 25 times the average American worker's salary. If applied to the financial-industry executives who steered the economy into the ditch, such caps would be defensible." There are also many executives in other industries whose pay, at least in hindsight, was vastly greater than any reasonable measure of their value added. "Yet any broader effort to cap executive salaries would do more harm than good."
Chapman University presidential fellow Joel Kotkin writes that populism is far from dead and "represents a force that could shape our political future in unpredictable ways... The critical issue facing the new administration is finding useful ways to channel this disenchantment." He writes that populist rage creates the political support for taking far bolder steps against Wall Street. "A good first step would be to allow the TARP - backed giant banks to come under some sort of federal control, or bankruptcy process, effectively wiping out the holdings of the financial malefactors and decimating any hopes for future bonuses."
Former governor of New York, Eliot Spitzer, writes that "anger-fed populism now is no better a policy compass than libertarianism masquerading as capitalism was during the Bush administration. This may become evident all too quickly as public rage -- generated by the catastrophic risk-taking of many Wall Street traders -- is fanned by Washington legislators desperate to make up for their own decade of neglect." He writes that the economic cataclysm we are living through now is the consequence of 30 years of intentional destruction of the rules needed to keep capitalism on track. "Just as democracy needs rules or it descends into anarchy, so capitalism needs rules to guide the behavior that becomes wealth creation. What we should be seeking, and what has not emerged from the cacophony of Washington, is a principled guide to the intersection between government and the market."
