Nothing a little austerity can't fix, right? Time to fire more government workers.
Spain Is Beyond Doomed: Unemployment Charts
21–30 of 120 posts
Re: Spain Is Beyond Doomed: Unemployment Charts
#22It seems Iceland was in worse shape than Spain but they have managed to resolve their issues by revaluing their currency (similar to declaring bankruptcy?).
Why is Spain not able to do the same? I'm guessing it's because they are part of the EU and do not have their own currency?
Re: Spain Is Beyond Doomed: Unemployment Charts
#23The labor disparity between senior workers and young ones will lead to a lot more trouble. Irrational people take out their frustrations on the easiest target; irrational young people even more so. I'm not sure if the article's doom and gloom is actually reflected in reality though. Most people are averse to letting society collapse (especially when they've had a history of it standing upright and stable for a long t…
Spain needs to breed. Their median age is ~41 (US at about 37... ). Not as bad as Japan, but very ominous when you've got a society built on pensions. Ireland is about 35 and it shows (little pale kiddies running around everywhere). That is the only one of the PIIGS I'm betting on.
Was any part of the above comment offensive? I'm a little perplexed as to why I've been (I assume) banned...
I personally don't find my observation about Ireland's large population of pale children particularly offensive. I happen to be pale and half-Irish myself (mom from Cork), as well as married to a pale Irish girl.
As for statistics to back up my claim that Ireland is a good bet relative to the remaining PIIGS, here is the % of population under 18 (from 2007, http://childrensdatabase.ie/sonc2008/part1/): Ireland: 24.4 Italy: 17.1 Spain: 17.5 Greece: 17.4 Portugal: 18.7
Regardless, if I offended anyone, I apologize.
I still think youth is a strong sign of a resilient economy. True, Germany doesn't seem to be effected...I'd argue there are other issues there (a phenomenal capital market, for a start).
Re: Spain Is Beyond Doomed: Unemployment Charts
#24It seems Iceland was in worse shape than Spain but they have managed to resolve their issues by revaluing their currency (similar to declaring bankruptcy?). Why is Spain not able to do the same? I'm guessing it's because they are part of the EU and do not have their own currency?
10 points!
Iceland is also a lot smaller than Spain.
Re: Spain Is Beyond Doomed: Unemployment Charts
#25I don't know why journalists, when writing about economics, invariably pick the least adequate people to be interviewed. Some time ago, there was a feature about unemployment for college graduates in the US... which talked about a woman with a dance degree. Now it's about a fucking cani [1] whose major accomplishment in life is pasting some rubber and metal together, earning 1200 undeserved euros a month. Before that, he did the same thing, earning 2500€ -- that ridiculous salary is the reason his Social Security benefits are so high. For comparison, many engineers here consider themselves lucky for earning 1000€/month.
What I find missing is how entrepreneur-social culture in Spain is, basically, the least funny joke you'll hear in all Europe. 23.3% of GDP are black market operations. The European country with highest quantity of 500€ banknotes per briefcase. 10% unemployment for workers with tertiary education. Esperanza Aguirre wanting to exile the poor from Madrid (it's a long story). Widespread, also not very covert, abuse from employers. That sort of thing.
Fortunately, the country is sort of duct-taped together, so it all works fairly well in the end. Not at all as gloomy as pictured here.
[1] Like a chav, but Spaniard.
Re: Spain Is Beyond Doomed: Unemployment Charts
#26It seems Iceland was in worse shape than Spain but they have managed to resolve their issues by revaluing their currency (similar to declaring bankruptcy?). Why is Spain not able to do the same? I'm guessing it's because they are part of the EU and do not have their own currency?
That's a large part of it. Spain can't devalue it's currency easily, or get rid of their debt. Europe won't let them default and stay in.
They'd basically have to leave the Euro to do what Iceland did. And that would be complicated.
Re: Spain Is Beyond Doomed: Unemployment Charts
#27Earlier quoted context omitted.
Germany isn't completely innocent here though either, even though it can look like they were frugal during the boom years. From Michael Pettis [1]: The strength of the German economy in recent years has largely to do with its export success. But for Germany to run a large current account surplus – the consequence I would argue of domestic policies aimed at suppressing consumption and subsidizing production – Spain an…
It was certainly very convenient for the germans to have some takers for their cheap bonds, but the fact remains that nobody forced the peripheral countries to live beyond their means and to refrain from implementing necessary reforms.
The difference is that in the past, the peripheral countries were able to live beyond their means without such drastic consequences.
Too much debt? Devalue the peseta and drachma. Exports increase, imports decrease, unemployment adjusts. Lenders knows that they must charge higher interest rates to those countries.
That process can't happen anymore. So the same behavior that was mildly damaging before suddenly became very, very damaging. Neither Southern nor Northern European leaders fully recognized this problem when they created a single currency.
Re: Spain Is Beyond Doomed: Unemployment Charts
#28It's called bankruptcy. I'd get on it. Austerity is going to start civil wars at this rate. Oh yeah, and next time, don't bail out banks run by sociopaths.
This week the Irish government who now unwillingly own a huge chunk of bank of Ireland said it could do nothing about the chief executive's generous salary. This despite further losses at the bank. Meanwhile further cuts in the rest of the economy.
Re: Spain Is Beyond Doomed: Unemployment Charts
#29I don't know why journalists, when writing about economics, invariably pick the least adequate people to be interviewed. Some time ago, there was a feature about unemployment for college graduates in the US... which talked about a woman with a dance degree. Now it's about a fucking cani [1] whose major accomplishment in life is pasting some rubber and metal together, earning 1200 undeserved euros a month. Before that…
What, pray tell, is a "chav"?
Re: Spain Is Beyond Doomed: Unemployment Charts
#30What the is the precedent for austerity? What countries have used it successfully to get out of recession and improve unemployment?
What the is the precedent for austerity?
To have enough money left behind to pay the bills.
What countries have used it successfully to get out of recession and improve unemployment?
This worked in the (now seemingly ancient) past. Governments were a much smaller portion of the economy and taxes were much lower to begin with. These days, up to 50% of people can be employed by the government. When governments get that large, there is no possibility nor space for a recovery:
Stimulus: add more debt to an unpayable debt? increase taxes and chase out people who pay the largest sum of taxes?
Austerity: cut gov't pay and jobs? that leads to less tax revenue and higher unemployment... nevermind the fact that the party won't ever be elected again.
The only way to win at this is to not have an economy that depends so heavily on indebted government nor one that removes risks for the banking system. If a country is already at that point there is no moving forward. Declare bankruptcy, destroy your credit ratings and start over.