I have written about this topic before. There are some really frightening parallels between the last decade and the 1930s. Just like in the early 2000s, the beginning of the 20th century was characterized by a period of hyperglobalization. Even more like today, labor was relatively mobile. The US, for example, received around a million immigrants on an annual basis at the turn of the 20th century, most of them coming fr the poorer regions in Europe, Italy, Scandinavia, and Eastern Europe. Trade flows and capital flows were relatively large as well. Eichengreen, for example, has documented how Europe received a lot of international credit, mostly of American origin, in the aftermath of World War I. However, the period of relatively high factor mobility and the economic boom also led to rising inequality within countries as a result of asset price surges. And the international monetary system was deeply flawed as a result of the gold standard, which ultimately led to a prolonged period of global deflation and an international economic downturn. The downturn also led to a series of. A long crisis, not only in the US but also in Austria and Germany, which caused a credit crunch in the countries in question and further exacerbated the downturn. The economic stagnation and mass unemployment led to the surge of right-wing nationalism, especially in Germany. And we all know how that story turned out.
So what about today? Well, for the first time we have a Nazi-sympathizer sitting in the White House, the unfortunate result of the electoral college, a flawed political institution that has failed a total of 6 times since the birth of the nation. Clinton received almost 3 million more votes out of about 125 million votes cast between the two candidates. Trump won as a result of about 80.000 votes cast in three key swing states, Michigan, Pennsylvania, and Wisconsin. These are three rust belt states that have lost out in recent decades because of deindustrialization, a result of automation as well as globalization, i.e. foreign competition. While economic anxiety can explain to certain extent the story behind Trump's election, it is not the entire story. It is very unfortunate that it is the year 2017 and many people still tend to think along racial lines. The median income of the Trump voter was actually higher than that of the Clinton voter. Blacks and Hispanics dispropotianately voted for Clinton, more than 80%. The Trump vote was entirely made up of the White middle class bar the liberal states on both coast, the so-called coastal elites. It seems that cultural anxiety was actually more important than economic anxiety. Bear in mind that the US economy has mostly recovered and for the first time in a decade is relatively close to full employment with the unemployment rate being close to 4%. It seems that the Trump phenomenon was really more about "us" vs. "them", an anxiety related to the fact that in a couple of decades less than 50% of the US population will be Caucasian, a reality already in a couple of US states and truly the horror story of every white nationalist. Maybe the Trump election was simply the inevitable backlash after the country elected its first black president, which led to the birth of the modern Tea Party and the birther movement, which is really how the Trump story started when a bunch of crazy people started to hijack the agenda of the Republican Party.
We also know now that there was Russian interference in the election with potentially hundreds of million American voters being targeted with fake news via social media, Facebook, Twitter, etc. We also know that people associated with Trump were colluding with Russia. We don't know exactly yet how high all of this goes, but I think the baseline assumption should be that Trump knew about it. So the fascist idiot in the White House was basically put there by a megalomaniac even bigger asshole who is currently presiding over Russia like some fucking Tsar and who recently engineered a military conflict just a few hundred miles East of the EU's border. By the way, there also seems to be some evidence, albeit not conclusive, that Russia also meddled with the Brexit vote. Screwing with the West seems to be relatively high on Putin's agenda.
Good thing that the backlash against Trump's nationalist agenda has already started. Democrats have overperformed in all special elections so far last year and Alabama, which is as red as it gets, just elected a Democratic senator for the first time in over 25 years. Any reasonable guesstimate suggests that the Democrats will win big time in the next midterms even though the electoral map, gerrymandering, and restrictive voter ID laws hugely favors the Republicans.
So what about Europe? Well, things are pretty bleak over here as well. The Eurozone performed much worse over the last decade than the US economy were the response to the financial crisis was more rapid and more fierceful. As a result, some European countries have experienced almost a decade of stagnation and high levels of unemployment. This combined with the migrant crisis, the IS terror in the Middle East, and a few terror attacks in Western European capitals had led to a big surge in right-wing nationalism also on this side of the Atlantic. The German company extremist party Afd gained a lot of votes in the recent German election, surely the result of the wave immigrants from the Middle East that has arrived in the country over the last couple of years. Right-wing parties have also gained in importance and to some extent have gone mainstream in other Western and Northern European countries like Austria, the Netherlands, Sweden and France. Interestingly enough, Spain has experienced no such surge despite being hit much harder by the crisis. People in Spain have rather swung to the left, which is mostly a more sensible choice than crude right-wing nationalism.
It is also terrifying to see that burning Israli flags and anti-Semitism has become fashionable again. Such incidences have occurred in Sweden and Germany. While some of this can be attributed to "imported" anti-Semitism, a few Muslims from the Middle East displaying their hate for the state of Israel and as well as all Jews simply by association, right-wing Nationalism seems to have made a spectacular also among Natives in those countries in question.
Things are even more bleak in Eastern Europe where a few countries are now openly moving away from democracy and towards a more authoritarian regime. This is especially the case for Hungary and Poland, which have moved towards authoritarian states. Orban, the Hungarian prime minister, recently blamed George Soros for the rising antisemitism in the country. Soros' Open Society foundation was forced to leave the country. Meanwhile, in Poland a judicial reform is threatening the independence of the judiciary system and the courts.
Countries in Eastern Europe have actually fared reasonable well in terms of economic performance in recent years. Thanks to access to the common economic market of the EU and billions of dollars of EU subsidies over the course of a decade, most of Eastern Europe has grown much faster than the rest of the EU and economic convergence has taken place, which was obviously the ultimate goal.
However, if those countries do not adhere to the same values and rules that were commonly agreed upon by the EU, there is no reason to subsidize those countries any further. EU leaders should think hard about imposing potential sanctions on Poland and Hungary if those countries do not abide by the same rules.
So what about today? Well, for the first time we have a Nazi-sympathizer sitting in the White House, the unfortunate result of the electoral college, a flawed political institution that has failed a total of 6 times since the birth of the nation. Clinton received almost 3 million more votes out of about 125 million votes cast between the two candidates. Trump won as a result of about 80.000 votes cast in three key swing states, Michigan, Pennsylvania, and Wisconsin. These are three rust belt states that have lost out in recent decades because of deindustrialization, a result of automation as well as globalization, i.e. foreign competition. While economic anxiety can explain to certain extent the story behind Trump's election, it is not the entire story. It is very unfortunate that it is the year 2017 and many people still tend to think along racial lines. The median income of the Trump voter was actually higher than that of the Clinton voter. Blacks and Hispanics dispropotianately voted for Clinton, more than 80%. The Trump vote was entirely made up of the White middle class bar the liberal states on both coast, the so-called coastal elites. It seems that cultural anxiety was actually more important than economic anxiety. Bear in mind that the US economy has mostly recovered and for the first time in a decade is relatively close to full employment with the unemployment rate being close to 4%. It seems that the Trump phenomenon was really more about "us" vs. "them", an anxiety related to the fact that in a couple of decades less than 50% of the US population will be Caucasian, a reality already in a couple of US states and truly the horror story of every white nationalist. Maybe the Trump election was simply the inevitable backlash after the country elected its first black president, which led to the birth of the modern Tea Party and the birther movement, which is really how the Trump story started when a bunch of crazy people started to hijack the agenda of the Republican Party.
We also know now that there was Russian interference in the election with potentially hundreds of million American voters being targeted with fake news via social media, Facebook, Twitter, etc. We also know that people associated with Trump were colluding with Russia. We don't know exactly yet how high all of this goes, but I think the baseline assumption should be that Trump knew about it. So the fascist idiot in the White House was basically put there by a megalomaniac even bigger asshole who is currently presiding over Russia like some fucking Tsar and who recently engineered a military conflict just a few hundred miles East of the EU's border. By the way, there also seems to be some evidence, albeit not conclusive, that Russia also meddled with the Brexit vote. Screwing with the West seems to be relatively high on Putin's agenda.
Good thing that the backlash against Trump's nationalist agenda has already started. Democrats have overperformed in all special elections so far last year and Alabama, which is as red as it gets, just elected a Democratic senator for the first time in over 25 years. Any reasonable guesstimate suggests that the Democrats will win big time in the next midterms even though the electoral map, gerrymandering, and restrictive voter ID laws hugely favors the Republicans.
So what about Europe? Well, things are pretty bleak over here as well. The Eurozone performed much worse over the last decade than the US economy were the response to the financial crisis was more rapid and more fierceful. As a result, some European countries have experienced almost a decade of stagnation and high levels of unemployment. This combined with the migrant crisis, the IS terror in the Middle East, and a few terror attacks in Western European capitals had led to a big surge in right-wing nationalism also on this side of the Atlantic. The German company extremist party Afd gained a lot of votes in the recent German election, surely the result of the wave immigrants from the Middle East that has arrived in the country over the last couple of years. Right-wing parties have also gained in importance and to some extent have gone mainstream in other Western and Northern European countries like Austria, the Netherlands, Sweden and France. Interestingly enough, Spain has experienced no such surge despite being hit much harder by the crisis. People in Spain have rather swung to the left, which is mostly a more sensible choice than crude right-wing nationalism.
It is also terrifying to see that burning Israli flags and anti-Semitism has become fashionable again. Such incidences have occurred in Sweden and Germany. While some of this can be attributed to "imported" anti-Semitism, a few Muslims from the Middle East displaying their hate for the state of Israel and as well as all Jews simply by association, right-wing Nationalism seems to have made a spectacular also among Natives in those countries in question.
Things are even more bleak in Eastern Europe where a few countries are now openly moving away from democracy and towards a more authoritarian regime. This is especially the case for Hungary and Poland, which have moved towards authoritarian states. Orban, the Hungarian prime minister, recently blamed George Soros for the rising antisemitism in the country. Soros' Open Society foundation was forced to leave the country. Meanwhile, in Poland a judicial reform is threatening the independence of the judiciary system and the courts.
Countries in Eastern Europe have actually fared reasonable well in terms of economic performance in recent years. Thanks to access to the common economic market of the EU and billions of dollars of EU subsidies over the course of a decade, most of Eastern Europe has grown much faster than the rest of the EU and economic convergence has taken place, which was obviously the ultimate goal.
However, if those countries do not adhere to the same values and rules that were commonly agreed upon by the EU, there is no reason to subsidize those countries any further. EU leaders should think hard about imposing potential sanctions on Poland and Hungary if those countries do not abide by the same rules.
