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The political aftermath of financial crises: Going to extremes

21 points by MaysonL 11y ago

rm_-rf_slash 11y ago
My main takeaway is that financial crises affect everybody (ex: oil recessions from low cost tend to limit damage to oil producers and economy of cities reliant on them, whereas everybody depends on money and the availability of credit) and at greater levels than other kinds of recessions. When credit crunches, people who were on the margins or even comfortably in debt end up in precarious positions where there is little help available, and the only bailout beneficiaries are big banks. I suppose the reason far-right political groups benefit is because when people lose their possessions, all they are left with is their identity, and a lot of anger. This can feed resentment at any "other" group responsible for their travesty, whether it be a foreign power (WWI victors), internal distinct subgroup (Jews in Germany; Muslims in America/Europe; welfare recipients), or even religion (Arab Spring and ISIS being correlated with the global recession and rise in food prices). History shows that any extreme cannot last forever, but it can do damage that lasts for generations. The extreme right may be wrong, but the conditions make them attractive. And dangerous.
- lintiness 11y ago
  "the only bailout beneficiaries are big banks" is patently false. if the banks were the only parties to benefit, there'd be zero political will to aid. banks hold the nation's savings, and allowing them to fail meant multiples of pain for average people. if this crisis proved anything, it's that friedman was right (printing can stall a deflationary spiral). what remains to be seen is how the next act plays.
gtpasqual 11y ago
I'd be interested in understanding what they mean by 'far-right groups'. When ignorance and subjectivity comes in, people wrongly take Hitler, Mussolini and even Trump as far-right.
- geogra4 11y ago
  What is your definition of 'far-right'?
  - lintiness 11y ago
    "far" anything politically usually means totalitarian.
    - smhenderson 11y ago
      Or revolutionary when applied to the left..
- wfo 11y ago
  "Right" is a subjective weasel word that has no meaning. You have to draw it out from context in every different piece you read. In my experience any definition of it that doesn't include those three you named is purely academic and detached from reality and the way people use the word to the point of absurdity. Those are the essence of what it means to be "right", alongside say Rand, Nixon, and Joseph McCarthy. Though your experience is clearly quite different. The point is it doesn't mean anything.
lumberjack 11y ago
Some quick remarks: 1. "aftermath"? We are not post crises yet. Look at the economic performance of the Netherlands or Finland during the last year. And of course the south is still unable to employ a lot of the youth and Greece is worst than ever. 2. "Far-right" is not a good description of these parties. They are anti-immigration. That is the only thing they have in common. They disagree on other issues. 3. People turn to these parties because like in the US, the political landscape in Europe has shifted to the right, economically. A blatant example of this is that both the center right and center left are fully supportive of TTIP. The only other notable alternative besides the anti-immigration parties is the Greens but the Greens are highly opinionated about many things that tends to turn people off. Plus they have been there since forever and not achieved much so people do not see them as "change". 4. "The typical political reaction to financial crises is as follows: votes for far-right parties increase strongly, government majorities shrink, the fractionalisation of parliaments rises and the overall number of parties represented in parliament jumps. These developments likely hinder crisis resolution and contribute to political gridlock. The resulting policy uncertainty may contribute to the much-debated slow economic recoveries from financial crises." Way to spin that into a bad thing! A more decentralized more democratic government is a good thing. Less incompetent and corrupt members of the central parties that contributed to the crises through their mismanagement is also a good thing.
- vezzy-fnord 11y ago
  more decentralized more democratic government What decentralization are you talking about? None takes place. Party representation is increased in a central body. That's it.
- clavalle 11y ago
  Your comment is a perfect example of what they mean by 'Far-right' beyond just anti-immigration policies. Libertarianism is a far right ideology.
  - dragonwriter 11y ago
    > Libertarianism is a far right ideology. No, its not. Libertarianism is an ideology that sometimes coexists with right-wing (including far-right) ideologies, but also sometimes coexists with left-wing (including far-left) ideologies. People mainly familiar with American politics may be prone to confuse libertarianism with a far-right ideology, since the label is mainly used in the US by and about either the right-libertarian Libertarian Party or by a contingent within the right-wing Republican Party, a party which has more generally adopted, particulary over the last handful of decades, a lot of right-libertarian rhetoric.

21 points by MaysonL 11y ago

My main takeaway is that financial crises affect everybody (ex: oil recessions from low cost tend to limit damage to oil producers and economy of cities reliant on them, whereas everybody depends on money and the availability of credit) and at greater levels than other kinds of recessions. When credit crunches, people who were on the margins or even comfortably in debt end up in precarious positions where there is little help available, and the only bailout beneficiaries are big banks. I suppose the reason far-right political groups benefit is because when people lose their possessions, all they are left with is their identity, and a lot of anger. This can feed resentment at any "other" group responsible for their travesty, whether it be a foreign power (WWI victors), internal distinct subgroup (Jews in Germany; Muslims in America/Europe; welfare recipients), or even religion (Arab Spring and ISIS being correlated with the global recession and rise in food prices). History shows that any extreme cannot last forever, but it can do damage that lasts for generations. The extreme right may be wrong, but the conditions make them attractive. And dangerous.

lintiness 11y ago
"the only bailout beneficiaries are big banks" is patently false. if the banks were the only parties to benefit, there'd be zero political will to aid. banks hold the nation's savings, and allowing them to fail meant multiples of pain for average people. if this crisis proved anything, it's that friedman was right (printing can stall a deflationary spiral). what remains to be seen is how the next act plays.

gtpasqual 11y ago

I'd be interested in understanding what they mean by 'far-right groups'. When ignorance and subjectivity comes in, people wrongly take Hitler, Mussolini and even Trump as far-right.

geogra4 11y ago
What is your definition of 'far-right'?
- lintiness 11y ago
  "far" anything politically usually means totalitarian.
  - smhenderson 11y ago
    Or revolutionary when applied to the left..
wfo 11y ago
"Right" is a subjective weasel word that has no meaning. You have to draw it out from context in every different piece you read. In my experience any definition of it that doesn't include those three you named is purely academic and detached from reality and the way people use the word to the point of absurdity. Those are the essence of what it means to be "right", alongside say Rand, Nixon, and Joseph McCarthy. Though your experience is clearly quite different. The point is it doesn't mean anything.

lumberjack 11y ago

Some quick remarks: 1. "aftermath"? We are not post crises yet. Look at the economic performance of the Netherlands or Finland during the last year. And of course the south is still unable to employ a lot of the youth and Greece is worst than ever. 2. "Far-right" is not a good description of these parties. They are anti-immigration. That is the only thing they have in common. They disagree on other issues. 3. People turn to these parties because like in the US, the political landscape in Europe has shifted to the right, economically. A blatant example of this is that both the center right and center left are fully supportive of TTIP. The only other notable alternative besides the anti-immigration parties is the Greens but the Greens are highly opinionated about many things that tends to turn people off. Plus they have been there since forever and not achieved much so people do not see them as "change". 4. "The typical political reaction to financial crises is as follows: votes for far-right parties increase strongly, government majorities shrink, the fractionalisation of parliaments rises and the overall number of parties represented in parliament jumps. These developments likely hinder crisis resolution and contribute to political gridlock. The resulting policy uncertainty may contribute to the much-debated slow economic recoveries from financial crises." Way to spin that into a bad thing! A more decentralized more democratic government is a good thing. Less incompetent and corrupt members of the central parties that contributed to the crises through their mismanagement is also a good thing.

vezzy-fnord 11y ago
more decentralized more democratic government What decentralization are you talking about? None takes place. Party representation is increased in a central body. That's it.
clavalle 11y ago
Your comment is a perfect example of what they mean by 'Far-right' beyond just anti-immigration policies. Libertarianism is a far right ideology.
- dragonwriter 11y ago
  > Libertarianism is a far right ideology. No, its not. Libertarianism is an ideology that sometimes coexists with right-wing (including far-right) ideologies, but also sometimes coexists with left-wing (including far-left) ideologies. People mainly familiar with American politics may be prone to confuse libertarianism with a far-right ideology, since the label is mainly used in the US by and about either the right-libertarian Libertarian Party or by a contingent within the right-wing Republican Party, a party which has more generally adopted, particulary over the last handful of decades, a lot of right-libertarian rhetoric.