I have argued it again and again – the continued crisis in the European economy is the primary source of political radicalisation, populism, extremism and outright fascism.
The French regional elections provided yet another sad testimony to that thesis. Here is the one-graph version of that idea.
The graph shows the support for the extremist/populist anti-immigration party Front National (FN) against the unemployment rate across different regions in France. Each dot represents a region.
The simple regression ‘model’ shows that a 1%-point increase in unemployment increases support for FN by nearly 5%-point.
So it might be that FN is helped by the recent terror attacks in Paris and by the ‘refugee crisis’, but this is mostly about a weak French economy.
So if you want to blame anybody for the electoral success of Front National you should point the fingers at Jean Claude Trichet who as ECB-chief in 2011 hiked interest rates twice and at president Holland who has done everything to worsen the already bad competitive position of the French economy since he became president in 2012.
HT: This post have been inspired by a post on the same topic on Bloombergviews by Leonid Bershidsky.
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The Market Monetarist 