mises
Joined: 05 Nov 2007
Location: retired
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 Posted: Tue Jun 09, 2009 12:13 pm Post subject: Europe swings Right as depression deepens |
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The establisment Left had been crushed across most of Europe, just as it was in the early 1930s.
We have seen the ultimate crisis of capitalism -- what Marxist-historian Eric Hobsbawm calls the "dramatic equivalent of the collapse of the Soviet Union" -- yet socialists have completely failed to reap any gain from the seeming vindication of their views.
It is not clear why a chunk of the blue-collar working base has swung almost overnight from Left to Right, but clearly we are seeing the delayed detonation of two political time-bombs: rising unemployment and the growth of immigrant enclaves that resist assimilation.
Note that Right-wing incumbents in France (Sarkozy) and Italy (Berlusconi), survived the European elections unscathed.
Left-wing incumbents in Germany, Austria, the Netherlands, Spain, Portugal, Hungary, Poland, Denmark, and of course Britain were either slaughtered, or badly mauled.
The Dutch Labour party that has dominated national politics for the last half century fell behind the anti-immigrant movement of Geert Wilders (banned from entering Britain). It serves them right for the staggeringly stupid decision to force through the European Constitution (renamed Lisbon) after it had already been rejected by their own voters by a fat margin in the 2005 referendum.
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In Germany and Austria, the Social Democrats suffered their worst defeats since World War Two. I don't say that with pleasure. A vibrant labour-SPD movement is vital for German political stability. It was the peeling away of Socialist support during the Bruning deflation of the Depression years -- so like today's Weber-Trichet deflation -- that led to the catastrophic election of July 1932, when the Nazis and Communists took half the Reichstag seats.
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So, we may lose three or four governments in Europe in coming days or weeks -- or even worse, they may survive. The drama is unfolding as I feared. Half way through the depression, we are facing the exactly the sort of political disintegration that occurs in times of profound economic rupture.
Remember, the dangerous phase in the Great Depression was Stage II, after the collapse of Austria's Credit-Anstalt in mid-1931 set off a disastrous chain-reaction that Autumn (until then, most people thought they faced no more than a bad recession, like today).
Don't count on the political fabric of Europe holding together if our green shoots shrivel and die in the credit drought of the long hot rainless summer that lies ahead.
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http://blogs.telegraph.co.uk/ambrose_evans-pritchard/blog/2009/06/08/europe_swings_right_as_depression_deepens
To satisfy TOS, I clipped the article. But it is worth a read even if AEP has a habit of hyperbole.
So, is this an outlier or the start of a trend? |
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