Economic Populism appears to be back in vogue. Given the fall of Lehman Brothers and the Wall Street machine, the economic banter clearly seems to be “the people” versus “the elites.

Economic populism involves an economic philosophy urging social and political system changes. In the current political and economic climate, the public concern over the inequity of wealth appears to be at a peak. There is a growing call by Senator Barack Obama and democrats to raise taxes on the wealthy to shrink the wealth gap. But is it true that the rich are getting richer? Or are the rich actually in danger of losing a significant portion of the nation’s wealth? Are the democrats worried about a problem that’s already being fixed by the markets?

Emmanuel Saez, the income-share expert and economics professor at the University of California, Berkeley told Robert Frank of the Wall Street Journal that during the Great Depression, the income and wealth of the top 1% of society fell drastically. (Read here for the full story). If history is to be believed then this will happen again especially if Obama becomes president.

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As retail sales decline, manufacturing slows and unemployment benefit claims rise, the economic situation looks more grim by the day. Rises in the stock market that show a glimmer of hope are invariably followed by dips. The housing markets declines steadily and the recession shows signs of lingering well into next year. George Bush has called for a mid November summit to discuss the international economic situation. (Reuters)

With the U.S. Presidential elections less than two weeks away, both candidates are heavily focused upon the economy as their chief task. The declining economic situation propelled by the fall of Lehman Brothers has certainly worked in Obama’s favor. People are associating the bad economy with Republican values. Both candidates have outlined an aggressive economic recovery plan.

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