The Populist Advantage

I think it&#x27;s worth pointing out that the 2008 financial crisis came on the heels of another event that had already done much to discredit elites and elite-adjacent &quot;experts&quot;: the Iraq War. More specifically, the discrediting was caused by a combination of the deliberately dishonest or at best wildly inaccurate intel, the sense that pro-war elites in government and media were manufacturing consent for the war, and wrong predictions about how the war would go.<p>The Snowden revelations of a few years later did not have as great of an impact as I would have wished, but I think that they too played some role in further discrediting elites. Given how much Trump&#x27;s criticism of the Iraq War did to make criticism of that war a bi-partisan phenomenon, I find it unfortunate that he was too authoritarian to pair his criticism of that war with criticism of the NSA and that instead, he hinted that Snowden should be executed as a traitor.

&gt; one of my younger colleagues at the International Monetary Fund found it hard to get a good job in academia, despite holding a PhD from MIT’s prestigious economics department, probably because her work showed that trade liberalization had slowed the rate of poverty reduction in rural India. While theoretical papers showing that freer trade could have such adverse effects were acceptable, studies that demonstrated the phenomenon empirically were met with skepticism.<p>You don&#x27;t automatically get a &#x27;good job&#x27; because you&#x27;ve earned certain credentials. IMHO PhDs and other credentials are a dice roll and you could potentially work very hard on your studies for nothing. This is why people research their chosen profession before studying so that, at least, it wasn&#x27;t all in vain, and even then, the job market could be swayed against you when you&#x27;ve completed your studies.<p>People also need to look out for credentialism where people are overqualified for positions, or that PhDs etc are not even needed. Sometimes a simple aptitude test can filter out people who will lose you money when you&#x27;ve employed them.

&quot;Just vote for all of my self-serving policies, the benefits might not be obvious to your tiny brain but they will trickle down, I promise!&quot;<p><a href="https:&#x2F;&#x2F;wtfhappenedin1971.com" rel="nofollow noreferrer">https:&#x2F;&#x2F;wtfhappenedin1971.com</a>

<i>&gt;It is hard not to be pessimistic nowadays. In industrial countries, the pendulum has swung from excessive faith in the liberal orthodoxy to faith in populist policies, until their deficiencies become obvious once again.</i><p>The deficiencies are as obvious as they always were and people should communicate this more stronlgy. It&#x27;s actually insane how well the US economy is doing. Growth rates in countries that have a fraction of the per capital income of the US are now converging on similar rates before ever having gotten rich. Birth rates in most of those countries are tanking. People were claiming China will overtake the US economy in 2030, now that&#x27;s being revised further and further back with &#x27;not at all&#x27; becoming a distinct possibility. In Russia they&#x27;re unironically bringing Kalashnikov lessons to school students, Soviet style. Liberal societies had their problems in dealing with Covid but behavior was responsive and driven by more and more data coming in, in China they bolted people into their homes for a year and then pretended the virus didn&#x27;t matter from one day to the other.<p>Convincing people that liberalism still works basically only means pointing them to how the world factually really looks.

i’m completely lost as to the author’s intended takeaway. something like “[democratic] systems that are blind to second-&#x2F;third-order policy effects underperform”? so what do you do about that?

To give some context around RR&#x27;s essay, India recently initiated licensing requirements, mandating that all laptops sold in India need to be manufactured within India [0]. This comes on the coattails of bipartisan economic populism as 2023-2024 are election years in India.<p>RR was the reason India&#x27;s banks didn&#x27;t collapse in 2017 when a bunch of massive infrastructure loans were defaulted on, as the reforms he initiated during his tenure at the RBI helped banks like the IDFC, HDFC, ICICI, PNB, etc fix their balance sheets.<p>I&#x27;ve also had the fortune of attending a couple talks and lectures of his before he went to India. The man is definetly one of the sharpest economists at UChicago currently.<p>During election years with close margins, Indian parties succumb to populist tactics to ensure their victory. The last time India saw a similar economic and political climate as 2022-Present was in 2011-2014 under the INC. The economic decisions made during the 2011-14 period were not the greatest (turning into the 2017 banking crisis), and a similar crisis could be accidentally enabled as parties battle to the death (sometimes literally) in 2023-24.<p>Furthermore, RR has recently been arguing that an East Asian style mass manufacturing revolution wouldn&#x27;t help India succeed in becoming an upper income country, as Indian manufacturing skews either high value (eg. Cars, Pharmaceuticals, ONG) or low value (eg. Textiles, Cheap goods). According to RR, as Indian farm wages are high enough to meet middle income needs, there isn&#x27;t an outside factor to push rural workers in most states (UP and Bihar excluded) to decide to become migrant low income workers in factories.<p>In all honesty, I tend to agree. Agricultural income is tax free in India, so assuming you are not landless (ie. Most rural residents in most Indian states that did land reform), you can net around $2-4k&#x2F;yr in agricultural income, which means you&#x27;d need to earn $4-8k&#x2F;yr in wage labor. These salaries are too high to support mass manufacturing, meaning supporting small businesses along with subsidizing high value manufacturing (with high profit margins to tax) would be better served. This is the same path to industrialization that Thailand took, and the results have been positive: 0.8 HDI in 2023 - higher than China, Brazil, or Mexico, all countries that were in a similar boat to Thailand in the 2000s-2010s.<p>The above is a very heterodox argument in top economics programs in the US currently (excluding MIT), and RR and plenty of others have been facing flak for it, but has been gaining traction within ASEAN, China, and India ime, and is similar to FDR&#x27;s New Deal and LBJ&#x27;s Great Society.<p>[0] - <a href="https:&#x2F;&#x2F;www.reuters.com&#x2F;world&#x2F;india&#x2F;india-restricts-import-laptop-computers-govt-notice-2023-08-03&#x2F;" rel="nofollow noreferrer">https:&#x2F;&#x2F;www.reuters.com&#x2F;world&#x2F;india&#x2F;india-restricts-import-l...</a>

Extremely weird to call it &quot;the old liberal orthodoxy&quot; when its a system which is hardly even 60 years old.

The South Korean economist Ha-Joon Chang did an excellent job of documenting how protectionism was what allowed all industrialized countries to achieve their status. This rambling missive is just wrong and not insightful at all, based on cherry-picked examples and ignorant of history. In short, a classic piece from a conventional economist.

&gt; Argentina, an addict to populism, seems to be shifting its affections from the left-wing Peronists to a right-wing libertarian, who promises to cure inflation by, among other actions, adopting the US dollar (again!).<p>I knew it.<p>Just one more ignorant poor sod who will talk about Argentinian politics without actually understanding the context at all.<p>Stop trying to fit your left-right Anglo worldview to everyone else.<p>It&#x27;s pathetic and incredibly tiring. Go throw temper tantrums about your Tories and your republicans like you love to and leave the south American country politics to people who actually know them in depth or live their realities.<p>Edit: pointing out Milei as populism while implying the &quot;so called left peronism&quot; isn&#x27;t is laughable to the extreme. The quip about &quot;adopting the dollar (again!) Shows a fundamental misunderstanding of the maneuver by Carlos Menem to force a constant parity between the ARS and the USD.

I find it funny that when we talk about something like the constitution and how you can&#x27;t change it even with popular support people talk about democracy, how democracy is important, how a people should be able to change the rules with a 51% majority, but as soon as they don&#x27;t like wyat the people want its no longer democracy, its populism.