Stimulus Hype: A Populist Plan? (Part II)
I said last week that I'd spent a fair amount of mental energy trying to decide what to think of the stimulus battle and that it's not an easy subject to unravel. One of the articles that puzzled me a little was by Greg T. Spielberg over at BusinessWeek. It left me uncertain as to whether I knew what a populist was, so I looked it up…
Populist \pä-pyÉ™-list\ – A political philosophy supporting the rights and power of the people in their struggle against the privileged elite.
The reason Spielberg's article puzzled me was simple. He examines a hypothetical "populist" stimulus package in which all 225 million American taxpayers would get a rebate check – not of $600 but of $10,000. The problem with that? Give me a moment…
Spielberg describes the problem with his hypothetical package this way: "…a prime hang-up for economists is the fact that many Americans just wouldn't spend." He goes on to say that a.) wealthy taxpayers would see that $10,000 as peanuts and would put it straight into their savings account and that b.) the poor would actually provide the best chance for kick-starting the economy.
So what's my problem with Spielberg? If his hypothetical plan was really populist, the wealthy wouldn't get a $10,000 tax rebate to toss in their savings account and the upper middle class America's who were reluctant to spend might not get the whole $10,000. Giving the same rebate to everyone is not populism. It's just politics.
Oh, and while Spielberg may not quite know what populism is, his conclusion seems to be that a truly populist stimulus package would work…
Photo courtesy of iStockphoto, Image# 5404247
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By Greg, October 23, 2009 @ 9:02 am
Greg,
Thanks for continuing the discussion. I think it’s important to note that populism is a political idea as well — one that, like many political ideas, is defined differently by different people.
I enjoy your writing.
Regards,
Greg