Monday, November 14, 2011

Buyer-beware. Is populism finished?

Has Populism peaked? Probably not. But it may have reached the end of it's beginning.

It's hard to be comfortable about any form of collective punishment, but the Italian people are about to go through a spot of it at the hands of Super Mario. It will take effect as a punishment for picking the wrong government. For allowing the shallow appeal of Berlusconi to trump other considerations, the Italian people have enjoyed a level of economic growth that was only worsted by Zimbabwe and Haiti. And that's only the beginning of a story that may take decades to play out.

It's the demagogic politics of bread and circuses. When a polity is dominated by the politics of purely emotional appeal - and almost nowhere has been immune to it -these democratic shortcomings lead to sub-optimal government. Vote stupid? Pay later!

Berlusconi himself was the protege and beneficiary of previous corrupt Italian governments, and the world is now conspiring to replace him with a technocrat. In Russia, the debased democracy that followed the collapse of communism resulted in a return to the dictatorship-lite of the Putin years.

But in the past week, US Republicans have learned that support from The Tea Party is a two way street that may cost them the Presidency. Let's hope so.

Super Mario's appointment is far from being a cause for celebration. His alleged deal to pull back from breaking up Berlusconi's media holdings is particularly worrying.

This is a crisis that is less rooted in bad economics than the bad democracy that results in bad economics. The EU and the IMF are wrong to allow Italy to duck this bullet and it does not bode well that, everywhere, the symptoms and not the illnesses are being treated.

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