"Populism has been a prominent feature of Latin American politics and economics. It is traditionally understood as a form of “personalistic leadership” that mobilized diverse popular constituencies behind statist, nationalistic and redistributive development models. A closely related concept is that of economic populism, which entails economic policies aimed at redistributing income and typically marked by fiscal indiscipline. Despite being regarded as leftist in nature, economic populism has been practiced by both left- and right-wing regimes in Latin America. The former aims to redistribute wages more equitably whereas the latter is closely linked to developmentalism wherein the government gives massive subsidies to businesses to enable them to grow and expand output and employment.
Policies usually involve increased wages for workers in both the public and private sectors, increased employment in the public sector, nationalization of industries, increased tax breaks and subsidies (to the private sector), and artificial valuation of the currency. Also, money creation in order to finance the increased government spending worsens inflation. Economic populism is seen as the main culprit behind hyperinflation in Latin American countries. Most political economists believe that the nature of populist politics is such that inflation is innate in a populist regime. However the populist experiences in Argentina, Chile, Bolivia, Peru and Venezuela contradict the proposed supposition and show that inflation is not inherent to periods of populist rule."
Consulted by jeanne December 28, 2008.
Frank Rich, New York Times, December 7, 2008.
In our current financial quagmire, there have also been those who had the wisdom to sound alarms before Rubin, Summers or Geithner did. Among them were not just economists like Joseph Stiglitz and Nouriel Roubini but also Doris Dungey, a 47-year-old financial blogger known as Tanta, who died of cancer in Upper Marlboro, Md., last Sunday. As the Times obituary observed, “her first post, in December 2006, took issue with an optimistic Citigroup report that maintained that the mortgage industry would ‘rationalize’ in 2007, to the benefit of larger players like, well, Citigroup.” It was months before the others publicly echoed her judgment."?
Joseph Stiglitz -
A Justice Site
jeannecurran@habermas.org
