Italian Prime Minister Matteo Renzi reacts after losing his constitutional reform referendum (Chris Ratcliffe/Bloomberg)

Do not be reassured by false hope. The center is not holding.

You could almost convince yourself it was after Austria's far-right Freedom Party went down to defeat in the country's recently-concluded presidential election. And if you tried a little harder, you could even talk yourself into the idea it wasn't that big a deal that Italian Prime Minister Matteo Renzi just resigned after losing the constitutional referendum he had staked his government on. But this is the triumph of seeing the silver linings instead of the dark clouds. The causes aren't always the same, but the effects are: Establishment parties are losing ground. Maybe not as fast a retreat as people feared, but a retreat nonetheless. And in their place are a new breed of nationalists who tend to be some combination of anti-elite, anti-immigrant, and pro-Putin.

The siege has not lifted. Liberal democracy is still facing its worst crisis since the 1930s.

In other words, bad news only seems like good news because it's not worse news. Indeed, think about what happened in Austria and Italy with a little less optimistic spin. In the first case, a party founded by Nazis, that still uses Nazi symbols, and that has made not-so-coded racial attacks on Muslim immigrants just did 0.5 percentage points better in its country than Donald Trump did in ours. This is what qualifies as a relief. Never mind that this was only a vote for a ceremonial position, and in the one that really matters, 2018's parliamentary elections, the Freedom Party is currently leading the polls.

Italy is a bit more complicated. It's true that there were good reasons for rejecting Renzi's proposed constitutional changes, which would have given him more power, that had nothing to do with right-wing populism. That's why "No" won with quite a different coalition than the older, less educated ones that brought both Brexit and Trump to victory. Instead, it was young voters who turned out the strongest, by a 60 percent margin, against Renzi. But, at the same time, it's also true that right-wing populists like the Northern League, whose leader tweeted "Viva Trump, viva Putin, viva Le Pen" in celebration of the results, and the Five Star Movement, which has regurgitated Russian propaganda and approvingly called Trump's election a "big f*** you to the world," voted against Renzi just to get rid of him as a rival. And now that he's about to step down, it's not clear how much longer his Democratic Party can fend them off.

None of this should be too surprising. Rich countries, after all, haven't been able to deliver the kind of rising middle class standard of living that people have expected for a long time now. The simple story is that we had the best and most broadly-shared growth in recorded history in the quarter century between 1948 and 1973, but have fallen off since. And no, this isn't about globalization or automation taking all the good manufacturing jobs. The opposite, actually. Technology hasn't improved enough for incomes to improve.

Countries covered this up by having women work more, people borrow more, or their safety net do more—or all three. Although it's worth pointing out that other policies like the minimum wage and unionization could and did make a difference in just how slow this slowdown was for the middle class. As economists Thomas Piketty, Emmanuel Saez, and Gabriel Zucman found, the bottom 50 percent have done much, much better in France than they have in the United States the last 35 years. But in any case, other than a burst of growth in the late 1990s, people haven't done as well as they thought they would. And now the financial crisis has taken away their coping mechanisms. All across Europe and the U.S., people have given up on the idea that their kids will be better off than they are.

Economic growth is what frees us from zero sum politics. When we're doing better than we used to, we don't worry so much about how everybody else is doing. We're more generous and tolerant of others who don't look, sound, or worship like we do. That, at least, is what economist Ben Friedman found in his classic book The Moral Consequences of Economic Growth. But when incomes don't grow as much as people hoped, they become jealous of what everyone else has—and worried that newcomers are taking what is rightfully theirs. Immigrants, of course, can face a backlash no matter the state of the economy, but whether that's confined to the far-right fringe or finds a wider audience depends, in large part, on how people think they're doing.

Now, maybe right-wing populists won't win power in Austria or Italy or even France, where Marine Le Pen is far behind in a hypothetical second-round matchup. But maybe they will. They're not that far off. And keep in mind, all it would take is for one of them to win for all of us to lose. That's because if any country leaves the euro like these right-wing populists have said they might, then there would probably be a continent-wide bank run and losses that, as economist Barry Eichengreen put it, would be the mother-of-all financial crises. So are you sure that the Freedom Party and the Five Star Movement and the National Front and the Alternative for Germany will all be kept out of power for, say, the next five years? You shouldn't be.

Things fall apart.