When populism can work

One of the things that struck me the night of the Iowa caucuses was that all of the Democratic candidates were using the same kind of populist themes of “special interests vs. your interests” that worked so well poorly for Al Gore in 2000. And George W. Bush is always at the center of those special interests. I’ve defended the administration from the more outlandish set of charges. However, stories like the one in today’s Chicago Tribune on Boeing’s fueling tanker follies are going to hit home this fall. The deal would have let the Pentagon lease airplanes from Boeing to bolster its own refeuling fleet. By leasing rather than buying, the Defense Department was reducing costs in the short run but vastly increasing them in the long run. Boeing got its way, however:

Mitch Daniels, then President Bush’s budget director and now the Republican candidate for Indiana governor, thought the tanker deal violated government accounting rules. “The central problem was that the tankers were not on [the] Defense Department’s wish list until somebody [at Boeing] came up with this idea,” an administration source said. Faced with Daniels’ objections, Boeing did what only a handful of American businesses can do: It went over Daniels’ head and straight to Bush. Through a series of meetings among the president and his staff and key members of Congress–including House Speaker Dennis Hastert (R-Ill.)–Boeing applied enough pressure at the top to push its contract through in May. Today, however, those hardball tactics have backfired. The lobbying campaign is the subject of criminal, congressional and Pentagon investigations…. Inside the White House budget office, the political pressure applied by Boeing was keenly felt. “What made this thing to so very difficult was that it had enormous political overtones,” said one budget office veteran involved in the issue. “I’m talking about Boeing mustering up every congressman who had five employees in his district and beating on everyone in sight.”

If you read the whole thing, you’ll see that Democratic as well as Republican congressmen lobbied vigorously for the deal, so this ain’t just the executive branch and it ain’t just Republicans. And, to be fair, the system worked eventually, with the contract being withdrawn. Still, this is the kind of story that makes the populism angle work. And it’s going to hurt the majority party way more than the minority party. Populism always scares me because it’s joined at the hip to trade protectionism. If the economy continues to struggle with job creation, however, I fear it will be a more potent tactic than in 2000.