November 25, 2014
Most news outlets try to make sure that their commentators at least have some idea of the topics on which they comment. Apparently this is not the case with Reuters, which gave Hugo Dixon the opportunity to condemn the economic populism that is gaining support across Europe. (The NYT reprinted the piece on its website.) Dixon tells readers:
“The cures proposed by the populists, however, are worse than the disease. UKIP wants to pull Britain out of the European Union. The National Front wants to destroy the Union. The Five-Star Movement wants to yank Italy out of the euro. Podemos wants to audit part of the national debt before writing it off. Syriza wants to write off half of Greece’s debts.”
All of these plans would involve considerable uncertainty. However, the disease — the economic prescriptions coming from the European Union– imply mass unemployment for the rest of this decade and much of the next, according to the projections of their proponents. It would be hard to do much worse and Dixon certainly does not argue the case, he just indicates that he doesn’t like the populists’ platform.
Certainly there are more and less effective ways to design a populist agenda. For example, one that focused on attacking the rents earned by the wealthy would be a great way to both hurt the people most responsible for Europe’s plight and to bring about “supply side” reforms being pushed by the European Union. But the blanket dismissal of a populist agenda when the alternative is an extended period of double-digit unemployment seems unwarranted.
Dixon shows the nature of his misunderstanding of the problem most clearly when he tells readers:
“But even if the economy is fixed, that won’t be the end of populism. Look at Britain, where growth is strong but so is UKIP.”
Actually, in Britain wages have been falling throughout the recovery so that the bulk of the population has seen none of the gains from economic growth. It’s not clear why Dixon thinks people should care about growth when they get none of the benefits.
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