12 September 2018   Leave a comment

John Cassidy has written an excellent essay on the linkage between economics and politics for the New Yorker.   It is a review of a book by Adam Tooze, Crashed: How a Decade of Financial Crises Changed the World, which looks at the financial crisis of 2008-09 and how it led to the populist movements we now see in the US, Europe, and elsewhere. The Great Recession led to austerity policies designed to address the massive debts that were run up prior to the crisis, and those austerity policies led to widespread disaffection with the political systems that allowed the financial excesses to occur.  Cassidy quotes parts of the book to make a very simple point:

“Austerity policies, especially in Europe, added another dark twist to the process of political polarization. As a result, Tooze writes, the ‘financial and economic crisis of 2007-2012 morphed between 2013 and 2017 into a comprehensive political and geopolitical crisis of the post–cold war order’—one that helped put Donald Trump in the White House and brought right-wing nationalist parties to positions of power in many parts of Europe. ‘Things could be worse, of course,’ Tooze notes. ‘A ten-year anniversary of 1929 would have been published in 1939. We are not there, at least not yet. But this is undoubtedly a moment more uncomfortable and disconcerting than could have been imagined before the crisis began.’”

The US middle class has declined from about 61% of households in 1971 to about 52% in 2016, according to the Pew Research Center.  While the US economy has been doing well in terms of macroeconomic statistics, the evidence suggests that the economic activity is not equally shared.

Share of adults living in middle-income households is unchanged since 2011


The European Parliament has voted to censure Hungary for its violations of European Union norms regarding the treatment of the media, refugees, and minorities.  The measure passed 448-197 just barely above the two-thirds majority required.  Significantly, many members of Hungarian Prime Minister Viktor Orban’s party broke with him and voted in favor of the measure.  The vote is only the beginning of the censure process and several more steps need to be taken, but it seems clear that the European Parliament has decided to take a stand against the growing power of right-wing parties in Europe.  Needless to say, Prime Minister Orban rejected the move and claimed that it was a plot against Hungary led by liberals and socialists.  Orban said:

“We do have contentious issues and we will have in the future. We have a different picture of the nature of Christianity in Europe, about the role of nations and national culture. We think differently about the essence and purpose of the family and we do endorse radically different views on migration.

“If we mean that we want Europe to be united in diversity then these differences cannot be a reason to brand any other countries and for it to be excluded from joint decisions. We would never go as far as silencing those who do not agree with us.”

Some governments, such as Italy, supported Orban, but we will have to see how the process unfolds.

Posted September 12, 2018 by vferraro1971 in World Politics

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