Why Obama's Populist Policies Are Bad

NO country in the industrial age or information age has benefited from more government control and pandering to populist policies. Barak H Obama's speech in Houston on Tuesday was mostly that, pandering. For someone promoting change this is just the same old.

It is easy to buy into this because it makes you feel good. But there is a cost to this and that cost, including the opportunity cost is high. There is an alternative to populism and it has worked in the past and will work in the future (to a large extent).

Here is an excerpt from Greg Mankiw's blog

'Andrei Shleifer's new paper begins as follows:

The last quarter century has witnessed remarkable progress of mankind. The world’s per capita inflation-adjusted income rose from $5400 in 1980 to $8500 in 2005.Schooling and life expectancy grew rapidly, while infant mortality and poverty fell just as fast. Compared to 1980, many more countries in the world are democratic today.

The last quarter century also saw wide acceptance of free market policies in both rich and poor countries: from private ownership, to free trade, to responsible budgets, to lower taxes. Three important events mark the beginning of this period. In 1979, Deng Xiao Ping started market reforms in China, which over the quarter century lifted hundreds of millions of people out of poverty. In the same year, Margaret Thatcher was elected Prime Minister in Britain, and initiated her radical reforms and a long period of growth. A year later, Ronald Reagan was elected President of the United States, and also embraced free market policies. All three of these leaders professed inspiration from the work of Milton Friedman. It is natural, then, to refer to the last quarter century as the Age of Milton Friedman.'

Barak Obama's policies will not make us better. Why buy into the bull that makes you feel good? Why follow the herd? You know you are bing played by a sophisticated marketing machine that wants you to believe in what makes you feel good!