Back in November, we took a look at the link between austerity and anarchy.
Courtesy of RBS’ Alberto Gallo, we showed the correlation between budget cuts and riots, assassinations, and attempted revolutions. Here’s a look at the frequency of “incidents” versus the scale of expenditure cuts:
Why explore the link? Because the ascendancy of radical politics in Europe clearly suggests that some Europeans (i.e. those in the periphery) are increasingly fed up with austerity. The belt tightening that’s supposedly taking place in Spain, Portugal, Italy, and Greece has contributed to high unemployment and rising inequality. Meanwhile, growth remains stubbornly low. Here’s what RBS had to say:
Persistent low growth, high youth unemployment and increasing inequality have hurt Europe's young generation. Youth unemployment is in double digits in most countries. The wealth gap between the haves and have-nots continues to grow: people below 35 years of age only own 5% of all financial assets, according to ECB data - putting them far away from the windfall of QE. Domestically, one symptom of this situation has been the radicalisation of European politics, with the protest vote rising in most countries, from Greece to Finland.
Indeed.
In the same vein, BofAML’s Michael Hartnett has a simple question: Why, if we are truly seven years into a “recovery”, are populist parties and politicians dominating the political landscape?
Here's an eye-opening look at the rise of populism across the globe. Have a look and ask yourself whether voters' sudden affection for radical politics is compatible with the "recovery" meme.
Put simply: Main Street is angry.