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The economic cost of populism

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Re: The economic cost of populism

#31

Post by cstross »

willis936 wrote: post #13
nonrandomstring wrote: post #2

> We build a new long run cross- country database to study the macroeconomic history of populism. We identify 51 populist presidents and prime ministers from 1900 to 2020 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10% lower compared to a plausible non-populist counterfactual. Economic disintegration, decreasing macroeconomic stability, and the erosion of institutions typica…

That Nazi regime accomplished a lot of work. Hitler is history's most successful populist. Did he help Germany's bottom line?

It's decades since I read him, but per William Shirer, by 1939 the Third Reich was facing looming bankruptcy (by turning a firehose of cash on its problems—creating make-work jobs, running a massive rearmamanent program, building up huge armed forces, and bread and circuses). Indeed from one perspective the post-1938 expansion of Hitler's reich was driven by the urgent need to steal money and resources from the neighbours to stave off a total economic collapse.

Like turning to bank robbery to pay off the maxed-out credit cards. (Which works for a short while, right up until you hit a bank with a SWAT team waiting for you.)

Re: The economic cost of populism

#32

Post by AstralStorm »

willis936 wrote: post #13
nonrandomstring wrote: post #2

> We build a new long run cross- country database to study the macroeconomic history of populism. We identify 51 populist presidents and prime ministers from 1900 to 2020 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10% lower compared to a plausible non-populist counterfactual. Economic disintegration, decreasing macroeconomic stability, and the erosion of institutions typica…

That Nazi regime accomplished a lot of work. Hitler is history's most successful populist. Did he help Germany's bottom line?

Ultimately quite the opposite, and the only reason Germany got back up so well after the war is because it was subject to Marshall's Plan investment on the West, and on the East side was a demo of how good the Soviets are.

Re: The economic cost of populism

#33

Post by Fluorescence »

RandomLensman wrote: post #19
Fluorescence wrote: post #18

Earlier quoted context omitted.

Do they control for the fact that populists will have more electoral success during financial crises and such? AEA is the economic establishment so hardly the people I would trust to fairly judge those that challenge the status quo.

Is that even true on populist and financial crises?

I'd be curious about what the data shows.

I would describe it as the "conventional wisdom" account of how populism functions e.g. the Great Depression is described as a necessary context for Hitler's popularism to be effective i.e. economic grievance fuels anti-establishment / anti-elite narratives. You get the Occupy Wallstreet movement after a crash/recession, not during a boom.

Re: The economic cost of populism

#35

Post by amelius »

tomComb wrote: post #28
nonrandomstring wrote: post #2

> We build a new long run cross- country database to study the macroeconomic history of populism. We identify 51 populist presidents and prime ministers from 1900 to 2020 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10% lower compared to a plausible non-populist counterfactual. Economic disintegration, decreasing macroeconomic stability, and the erosion of institutions typica…

You’ve made a big leap in your assumption about how populism produced less economic activity. Maybe populism’s disregard for democratic institutions resulted in more corruption which hurt growth? Neither of us know.

GP is wrong, in populism people never get what they want because the populist leader uses fear to control them.

One result of this fear play is that these people don't take the right decisions and thus fail to make their personal finances a factor in what they vote for, leading to economic losses.

Re: The economic cost of populism

#36

Post by mark_l_watson »

So what? GDP is also increased with more wars, and other activities that enrich the elites and usually do much less for middle and lower classes.

I would like to see the “happiness index’ for populist vs. non-populist led countries. Since counterfactuals are used in the abstract, I will add one: normalize for each countries’ naturual resources.

Re: The economic cost of populism

#37

Post by eduction »

LAC-Tech wrote: post #21
hkpack wrote: post #17

Earlier quoted context omitted.

For the majority of cases, it just means "ignore the complexity of reality and go with the simple solution". Sometimes, populists do really believe in what they are saying and doing. And the simplicity is what makes them popular - hence populism. The problem is that reality doesn't care. I have yet to see the case when following a populist leader doesn't end up in a disaster.

Essentially a meaningless term then. Everyone in mainstream politics has to present some kind of simple solution that ignores the complexities of the problem, because you can't pass a complex solution through a media filter and get voters out the other side. So everything is populist. Again which makes the term meaningless.

It is not the fault of a “media filter”. It has been possible to bypass that filter for years but the direct media we see is plainly more dumbed down than what is in the press (YouTube videos, tweets, tiktok, candidate websites, elected official websites - AOC and Trump media are two examples from opposite sides of the spectrum of the shallowness that comes up without the “media filter” - I appreciate the direct raw thoughts but there is a lot of basically insult slinging, virtue signalling to their camps - you see very little in the way of deep policy - the only example I can think of is aoc’s green new deal video - which was made in cooperation with a media outlet)

Re: The economic cost of populism

#38

Post by hkpack »

LAC-Tech wrote: post #21
hkpack wrote: post #17

Earlier quoted context omitted.

For the majority of cases, it just means "ignore the complexity of reality and go with the simple solution". Sometimes, populists do really believe in what they are saying and doing. And the simplicity is what makes them popular - hence populism. The problem is that reality doesn't care. I have yet to see the case when following a populist leader doesn't end up in a disaster.

Essentially a meaningless term then. Everyone in mainstream politics has to present some kind of simple solution that ignores the complexities of the problem, because you can't pass a complex solution through a media filter and get voters out the other side. So everything is populist. Again which makes the term meaningless.

Term doesn't become meaningless even if everyone is doing it.

Current state of society influenced by tech progress is what causing the current rise of populism.

There are politicians who are rooting for reality, but it indeed becomes more difficult for them to survive.

Re: The economic cost of populism

#39

Post by ksey3 »

nonrandomstring wrote: post #2

> We build a new long run cross- country database to study the macroeconomic history of populism. We identify 51 populist presidents and prime ministers from 1900 to 2020 and show that the economic cost of populism is high. After 15 years, GDP per capita is 10% lower compared to a plausible non-populist counterfactual. Economic disintegration, decreasing macroeconomic stability, and the erosion of institutions typica…

What we are missing is industry. People and politicians by themselves really cant take on the financial sector. They are the modern day rent collecting feudal lords.

The Financial Sector(banks/insurers/real estate/stocks/bonds) has a much larger say on the allocation of resources (the economy) than anyone else including politicians and individual corporations.

The counter balance is not just people. It has to come from people+industry. The western industries have basically been hollowed out thanks to financialization.

Even Google and Apple bow to the shareholder. The shareholder doesn't do any actually work, but is sitting on his ass demanding greater rewards even if it means fucking others over, or even the entire system. Same thing with real estate and insurance. So we end up with monopolies.

Now the system is fucked, cause we have already peaked in terms of customers available to milk. Everyone is in debt to keep things afloat. The FED balance sheet has jumped from 900 billion to 9 trillion in mostly junk debt. People/Politicians we already saw during 2008 gfc folded, when they had a real shot at change.

Its in the interest of Google, Apple et al to use their influence to get on the right side of this.

Re: The economic cost of populism

#40

Post by notahacker »

LAC-Tech wrote: post #21
hkpack wrote: post #17

Earlier quoted context omitted.

For the majority of cases, it just means "ignore the complexity of reality and go with the simple solution". Sometimes, populists do really believe in what they are saying and doing. And the simplicity is what makes them popular - hence populism. The problem is that reality doesn't care. I have yet to see the case when following a populist leader doesn't end up in a disaster.

Essentially a meaningless term then. Everyone in mainstream politics has to present some kind of simple solution that ignores the complexities of the problem, because you can't pass a complex solution through a media filter and get voters out the other side. So everything is populist. Again which makes the term meaningless.

Not everyone's simplification of their solution boils down to "The $scapegoat is the cause of all your problems. The solution is to give me more powers. If you hear anything bad about me, it comes from $scapegoat" though...
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