Kim Lane Scheppele sends me an update on the political situation, shown below the fold.

UPDATE: DEPRESSION AND DEMOCRACY, REVISITED

Kim Lane Scheppele

In light of readers’ comments on my original post, I wanted to explain how Hungary got into this situation and whether Hungarians have gotten what they voted for.

Yes, the 2010 election was free and fair, but that doesn’t mean Hungarians got what they voted for. Fidesz did not campaign on a platform to change the whole constitutional order. And Hungarians do not approve of the constitutional changes that Fidesz is making. Fidesz has lost more than half of its voters since the election in April-May2010, so that its popularity is now less than 20%:

Note: Fidesz is in orange. The Socialists are in red. Jobbik (the far-right party) is in black. And a new youth protest party called “Politics Can Be Different” (LMP) is in gray.

But as Fidesz’s popularity has fallen, no other party seems to have picked up Fidesz’s voters. The largest political party in Hungary these days consists of “undecideds” combined with “don’t knows.” Even at the time of the election itself, Fidesz did not attract majority opinion of the general electorate. They won because many of the “don’t knows” stayed home.

So why did the 2010 Fidesz “landslide” happen?

Hungary was saddled with communist-era debt that was the largest per capita of any of the former Soviet satellite states. It has not been able to get its books in order since. The prior Socialist government, elected in 2002 and reelected in 2006, was mired in scandal and became hugely unpopular. But then economics made things worse.

Hungary had a housing bubble, fueled by mortgages that Hungarians took out in euros and Swiss francs. The world economic crisis, combined with economic mismanagement of the prior government, resulted in a sharp fall in the forint (Hungary’s national currency). As a result, Hungarians’ mortgage payments suddenly doubled and even tripled. The numbers tell the story:

The volatility of the forint forced the prior government to install a technocratic prime minister, who quickly stabilized Hungary’s finances, with the help of an IMF loan.

But the electorate was angry. At the next opportunity, they voted for the primary opposition party, Fidesz.

With less than 20% approval now, Fidesz is wrecking Hungary’s prior constitutional order and no one inside the country seems to be able to stop it. Opposition to Fidesz is not well-organized; no other political party is strong enough to mobilize the unhappiness. And the next election is not until 2014.

Paul’s column generated a huge reaction in Hungary. And the Fidesz government has responded by proposing to amend the rules of parliamentary procedure so that no law needs to be debated publicly if 2/3rds of the parliament introduces the law. And Fidesz, with its lock-step 2/3rds majority, can now push through the rest of its political program without any opportunity for anyone to object.

Paul was right in his column last week to link depression to democracy. Hungarians went through a huge economic shock, earlier and deeper than most of their neighbors. And they turned sharply to the right, politically.

But the party they elected wants to entrench itself in power for the foreseeable future. Hungarians don’t want this, but they can’t stop it. Hungarian politics has been hijacked.