E.J. Dionne comes out today and says yes, populism works!
The sound you are hearing in response to the AIG payoffs — excuse me, bonuses — is the rancorous noise of their arrogance crashing to earth.
Yet there is much hand-wringing that this populist fury is terribly perilous, that the highfliers who could not control their avaricious urges have skills essential to repairing the damage they caused in the first place.
Beware populism, we are told. Honor those AIG contracts. Forget about any moral reckoning and just fix the economy.
This view is wrong on almost every level, especially about populism.
Dionne is referring in part to some of his own Post colleagues, liberals who regard the populist outrage against AIG with disdain. And he’s right that their argument – that Congress and the Obama administration should swallow their outrage, forget the bonuses and move on because “the law’s the law” – does indeed seem not only politically unwise, but far from the realist, pragmatic course they think it is. Politics isn’t just about making bureaucratic gears mesh, delivering services, and the like. Political leadership is about justice, equity, morality.
In America, capitalism has been effectively divorced from either concept for the past generation because, well, it was a huge cash cow and thus ideologically unassailable. But as Dionne points out, that masked a lot of problems, both practical ones and political ones. Today’s outrage isn’t just about some bonuses (a pittance in the overall scheme of what’s going on) but an expression of anger and frustration at the ridiculousnessness of this business as usual approach. And hence, entirely legitimate as a political and policy issue. The idea that the law is the law and the bonuses are untouchable is absurd. The “law” under fire in this case isn’t the provisions of contracts (which are, of course, almost always conditional and negotiable one way or another). It’s the ridiculous system of compensation that has enriched the financial sector beyond anyone’s wildest imagination and put us all in the ditch.
Populism can be ridiculous, an appeal to emotion to move votes (Joe the Plumber, or the technocratic Al Gore’s 2000 stump appeal, “the people vs. the powerful”). Now, though, it can be an effective fuel for reform. However, it doesn’t look like the Obama administration, which clearly regards the issue as a headache and distraction, intends to exploit it as such, which seems a misreading of the public mood.