The Rise of Populism

No Presidential race in many, many years has seen the explosion in populist rhetoric and candidates than this one. Nor is this rush to populism confined to its usual party, the Democrats. In fact, many of Republican Mike Huckabee's positions, and clearly his record as Governor of Arkansas, are decidedly populist and liberal.

Populist positions most often target economic and business issues. The best case for the economy at this moment is that we are in a mid-cycle slowdown that will re-accelerate at some point. The worst case is that we will have a recession. Some are arguing that we are already in one.

When the economy is balanced on the edge of a knife is when populist policies are most dangerous. That is because economic populism further damages the economy in exchange for protecting a relatively small number of people. But when people are faced with economic uncertainty, the rhetoric of populism is at its most alluring. But while the rhetoric appeals to fear the policies are devastating.

Populist policies call for the restriction of free trade, government imposed price and wage controls, increased regulation on business, and retaliatory trade practices against our trading partners. The facts are rarely on the side of the populists. In fact, these policies either slow the economy further, and make recovery much slower, or in fact accomplish exactly the opposite of what they are meant to achieve.

The most virulent populist on the campaign trail is John Edwards. Barak Obama is close behind him. Hillary Clinton's obsession with seizing government control of the health care industry is well known. Mike Huckabee is a Republican Jimmy Carter - a folksy populist governor with a strong religious belief system from a southern state.

It has been 31 years since Jimmy Carter was inaugurated, and passed on to Ronald Reagan an economy that was in shambles and a military that was gutted. Hopefully next January will not be the inauguration of the next Jimmy Carter.