hit counter
Friday, January 21, 2022
Home Politics Anti Establishment Revolt in the U.S. and Europe

Anti Establishment Revolt in the U.S. and Europe

Anti Establishment Revolt in the U.S. and Europe

Anti Establishment Revolt in the U.S. and Europe

The year 2016 will go down in history as the year of unraveling political order. Thanks to Donald Trump and Bernie Sanders, public discontent with “the political establishment” has reached deep into both parties. Regardless of their fate in the primaries, Trump and Sanders are about to rewrite the political architecture of their parties — and possibly of American politics in general.

Anti establishment sentiments are strong in America today, but they are not an isolated phenomenon. Europe is subject to a much more painful uprising against the political status quo.

Seth Klarman’s 2021 Letter: Baupost’s “Never-Ending” Hunt For Information

Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More

Is this a coincidence? No. The two continents share a common experience that can explain this simultaneous political insurgency. The economic recovery from the Great Recession is lackluster. The U.S. economy is finally crawling out of the recession shadow, but Europe is still stuck in stagnation and industrial poverty.

Anti Establishment Revolt in America

Close to a decade of economic slump and stagnation takes its toll on voter patience with incumbent leaders. Left-leaning critics of President Obama’s economic ineptitude rightly suggest that his policies have left middle-class families behind. Young people can get jobs, but career opportunities are fewer and farther in between than a generation ago.

The economic crisis has also inspired conservative Obama critics. While they often exaggerate the intrusiveness of his presidency, they do make good points on environmental regulations and health reform. These critics, extending their resentment to the Republican Party, rally behind Donald Trump.

Anti Establishment Revolt- Europe vs america

Europe is experiencing a similar rise in two-pronged voter discontent. The European economy remains in a state of stagnation, with youth unemployment above 20 percent and GDP growth below 2 percent. Left-wing parties capitalize on widespread economic frustration.

Even though criticism of government over-reach is not as articulate in Europe as in the United States, nationalist parties successfully exploit general popular hostility against politically intrusive and unaccountable EU institutions.

Here, the similarities between Europe and the United States come to an end. The American anti-establishment wave is, essentially, an opposition within the current constitutional system. A Trump presidency may very well satisfy anti-GOP conservatives and Sanders radicals may settle with creating a “tea party” movement within the Democratic Party.

Europe does not have the self-stabilizing political system. On the contrary, to a large degree Europe’s leftist and the nationalist movements share a disdain for the very political and constitutional construct that we know as the EU. Their movements are not going to stop at simply gaining more power within the walls of that union. In many cases socialists and, even more so, nationalists want to dismantle the EU, or at least get their own country out of the union.

As these movements, especially the nationalist ones, gain more political influence (Germany’s nationalist Alternative fur Deutschland now polls above 10 percent, and Poland has a new nationalist government) tensions will rise dramatically over who will get to draw the political architecture of Europe’s future.

Anti Establishment Revolt – Three factos in Europe

To make matters worse, three factors work to multiply the instability and uncertainty about the future brought about by rising nationalism:

1. The failure of the euro zone. Once a “gold standard” currency, the euro has been reduced to slush cash with negative interest rates on bank deposits. Some German financial institutions are beginning to revolt subtly against the useless euro, and the currency itself may be only one French presidential election away from the grave. The problem is that nobody really knows how to revert Europe back to national currencies without an all-out currency war, rampant monetary inflation and a financial crisis (a real one this time).

2. President Putin is cunningly exploiting Europe’s instability. Russian banks are openly funding French Front National leader Marine Le Pen’s presidential campaign, and NATO insists that Russia is funding several nationalist movements. If those investments pay off, European nations could soon have leaders with stronger indebtedness to Russia than allegiance to Brussels and Washington.

3. Last year’s migration wave shook the EU to the core. The Schengen Agreement, suspending passport controls between member states, fell apart when several countries resumed border checkpoints. Then member states refused to cooperate under the Dublin Accord for refugee settlement. In response, the EU rushed back to the negotiating table with Turkey, which has long had EU membership aspirations. The Turkish government can now basically dictate the conditions for its membership without having to slow down the flow of migrants.

The migration flow, which has increased 300 percent in a year, directly fuels Europe’s nationalist movements. As nationalist movements gain strength, the EU itself is weakened.

There is no doubt that, despite an anti-establishment year in American politics, our Republic will land on its feet. The question is where Europe is heading. The only safe bet is to leave all options on the table, including civil unrest, even war, under a crumbling EU, expanding migration and growing Russian influence.

Updated on

No posts to display