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Thursday, October 11, 2012

Off topic : Spain in Crisis / Blame Game

Last week in the USA I had the opportunity to see the first presidential debate between president Barak Obama and candidate Mitt Romney. Although designed for a domestic audience, some way into the debate the republican candidate mentioned Spain in a very negative manner, in reference to government spending running wild. “I don’t want to go down the path of Spain”, he said. This as there is constant talk of a European bailout for Spain.

As a Spanish tax payer for the last 23 years, this is very close to home. As this is my blog, I’m going to vent my spleen and give my take on the situation.
I don’t want to go over the causes of the current crisis in details, suffice to say that the domino effect of the collapse of US investment banks, the rampant overbuilding and over-lending from Spanish banks prior to this, plus a generation of politicians of all denominations drunk on power who failed to save for a rainy day in the boom times. When we add to this mix the blind faith in the European community (let’s not forget the original design was for a trading area, not another level of politics/gravy train), which was great while money was flowing south but bad once it started heading east (our politicians lived splendidly, and continue to do so, but now the funding isn’t there). Then the Euro came, and suddenly rampant inflation as the price of a 100 peseta item became 1 euro (166 pesetas). Spain suddenly became uncompetitive, and relinquished control over monetary policy. The Spanish bubble, based on building, suddenly burst, leaving half built property, massive unemployment, unpaid mortgages and banks with more property of little or no value than actual money.

While this house of cards was falling down, the then government still had its head up its arse. Far from reducing spending, it constantly denied the crisis, rather preferring to increase spending. It even created new ministries such as the Ministry of Equality, designed to make sure that (as in the then government) positions in business would be split on gender lines rather than on merit. A sexist police, you could say. Totally unproductive. So government grew and grew, creating masses of nice cushy jobs that only added cost and produced nothing at all.

There were “jobs for the boys” too. There are so many levels of government (Municipal, Regional, State, European), and each municipal, regional, state or European politician needs his quota of advisors and consultants. Another army of non jobs, costing a lot, producing very little. Of course any councilor or senator worth his salt loves a nice jolly away-day with first class travel, 5 star hotels and fine dining, and of course must have all his staff come along. And he’ll need a nice expensive official car (bomb-proof of course) and a driver to take him to and from airports. Just so his town can be twinned with another for purposes of whoknowswhat, or whatever else they get up to at my expense. Each politician enjoys overblown benefits. Serve for one legislature and you have a life pension. You also usually get a nice place on the board of a multinational. Why? Well… have political influence. In exchange for money, of course.

Then there is corruption. The map below shows cases attributed to each party (so many they almost don't fit). It just seems that there is a culture of corruption being the norm, and they all have some kind of shady deal going on. But when you see that the justice system, the judges, are split down left and right political lines, it’s unsurprising that rarely anybody get put in the slammer or obliged to return ill-gotten gains. There’s a deal. I won’t lock yours up if you don’t lock mine up.

The blame game is becoming more and more tiresome. Spain is bipolar, and depending on which side of the fence you are on, you blame the other for everything. But this is ridiculous. There are towns and regions ruled by all different political parties. The state has swung between left and right. Everywhere is in a black hole. So how can it just be the other sides fault? The only time they ever agree on and have a unanimous vote, are when their own salaries are being raised.

I saw the other day that Germany has around 100,000 politicians and 90,000,000 inhabitants. Spain has around half the population, but an incredible 450,000 in politics. Is it therefore any wonder that, when there are fiestas, each town spends more and more on fireworks? (The Romans said “panem et circuses”. Bread and Circus. The phrase is used to describe the creation of public approval, not through exemplary or excellent public service or public policy, but through diversion, distraction, and/or the mere satisfaction of the immediate, shallow requirements of a populace). Or that nationalists are using the plight of their own making (of course they point the blame elsewhere) to stir up fabricated fervor for independence? This while all we hear is of cuts, cuts and more cuts.

So, spending is being cut – cuts that usually hit the needy. As a taxpayer I am happy to contribute to our welfare state. I’m willing to pay for people in need and for whenever I may need that service myself, infrastructure etc. etc. But when I see my income reduced because of an income tax rise, the price of goods going up because of a new rate of VAT, local poll tax going up by 10% a year, and that the Guardia Civil seems to have been given the sole mission of emptying wallets for trivial driving offenses, it becomes clear where the real issue is. Spain can no longer afford its political system and its politicians. It’s too big, too costly, and too much of an easy option for the lazy or shameless. Too much money and influence, too little real work. Too much bla bla bla into a microphone and too little substance. Too much blaming the other side. Too corrupt.

When the US presidential debate finalized, I was left with the feeling that, although the candidates disagreed on almost everything, there was a mutual respect, and a certainty that their opponent, although misguided, did have the best interests of the country at heart. I have not seen an incoming president place the blame for everything on his predecessor. Not something I have ever seen in Spain.

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