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International

Economic Distress in North Atlantic Could Be Worrisome Politically

640px-Euro_coins_and_banknotes(International) Economic distress – when an economy is in such a woeful state that fear becomes a prime motivator in politics, is nearing critical mass in many north Atlantic states. It is the stuff of dangerous right-wing dictatorship.

The euro area continues to follow a now-discredited policy of austerity, even as it continues in recession – with several countries expected at best to remain in recession for quite some time longer. Unemployment is at record levels in the euro area, and it is reported to be over 25% in a few southern European states. Worse, unemployment among young workers is reported by several countries to be near 50%. These kinds of dreadful statistics are of Great-Depression proportion, and they are blamed by many economists and historians for the wave of fascism in Europe during the 1930s.

At the end of WWI, the British economist John M. Keynes, disgusted by the punitive peace-treaty terms because he believed that they would lead to future impoverishment of central and southern Europeans, presciently warned of future calamity. Within merely two decades of the peace, many countries in Europe succumbed to fascism, and another European war started – eventually engulfing the entire world, demonstrating that once events get out of rational policymakers’ hands, they have a tendency to snowball out of control quickly.

There is growing unease as Europe exhibits parallel tendencies to the 1930s. Far-right parties are increasingly credible to the distressed peoples of Europe, including the peoples of western Europe. These parties often use rising sentiment against the euro and the EU to garner support among both a fearful middle class and young workers.

The anti-EU, right populist party of Great Britain – the UKIP, achieved 25% of the popular vote in local elections, recently. At the same time, the ongoing crisis situations in Cyprus, Greece, and Spain do not bode well for the future political stability of these countries.

The US is not immune by default from such concerns, either. During the 1930s, we had our Huey Longs and Father Coughlins – dangerous rabble rousers with very large followings. Many influential Americans at the time made positive statements about fascism, for example Charles Lindbergh. And the recent rise in the US of the Tea Party speaks to the same political base of the radically populist right, even if the message is diluted.

The longer that economic distress continues – whether in Europe or the US, the larger the risk grows that one or more countries could succumb to a radically populist message from the right. It is incumbent upon policymakers to take to heart the message that US President Franklin Roosevelt (D) delivered during his first inaugural address in 1933: to ruthlessly combat fear through vigorous government action.

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