By Tyler Durden
Authored by Ronald-Peter Stoferle via The Mises Institute,
The vote for Brexit and the election of Donald Trump has baffled the main stream and the establishment. Most market participants and observers didn’t believe ex ante that they were possible, and as a result were completely surprised when the unexpected happened. Ever since the term populism has become socio-politically relevant in modern-day public discourse.
Google Trends illustrates that there was a veritable explosion in search queries for the term “populism” last year:
But, populism – regardless of its political flavor – merely represents a symptom. The generally surprising results were consequences of the economical erosion of the past years.
Although there are idiosyncrasies in every country that foster the rise of populist movements, the ailing foundation of the economy provides the fertile soil and is the major driver of people’s dissatisfaction and the associated voting decisions. To assert that populism is the reason for this process of political change is in our opinion far too simplistic. An analysis of stating that economic erosion is responsible for the rise in populism is supported by by a McKinsey study, which examines the trend in real household incomes in 25 industrialized nations.
McKinsey arrived at the striking …read more