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Spain Is Beyond Doomed: Unemployment Charts

theatlantic.com

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Re: Spain Is Beyond Doomed: Unemployment Charts

#51

Post by edderly »

auctiontheory wrote: post #29
lolcraft wrote: post #25

I 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"?

Pretty good background here: http://www.bbc.co.uk/news/magazine-13626046

TL;DR Jersey Shore (sometimes minus the tan).

Re: Spain Is Beyond Doomed: Unemployment Charts

#52

Post by return0 »

graeme wrote: post #26
raheemm wrote: post #22

It 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.

What's happening now is actually more complicated. The economies of the south are never going to take off with measures that are planned by a committee of 3 world institutions. The more the south sticks to the euro, the more complicated it's going to get. There is a good chance that a 'southern euro' might actually work, as the southern economies are all in similarly bad shape and in need of stimulus.

Re: Spain Is Beyond Doomed: Unemployment Charts

#53

Post by WalterBright »

robryan wrote: post #39
skylan_q wrote: post #30

Earlier quoted context omitted.

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…

How does declaring bankruptcy help creating more jobs? (Honest Question) Would seem to me that it would been even harder to get credit flowing once all your previous creditors have been wiped out. From an admittedly fairly uninformed position it appears to me that cutting spending is only going to further erode businesses positions and tax revenue, leading to an even worse position.

What bankruptcy does is reallocate resources from non-productive operations to productive ones. At least that's how it used to work.

Re: Spain Is Beyond Doomed: Unemployment Charts

#54

Post by mynameishere »

jiggy2011 wrote: post #24
raheemm wrote: post #22

It 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.

Pretty much. Iceland is about the same size as Stockton, CA, which is currently in Chapter 9 (IIRC). Iceland isn't all that much more important than a smallish US city.

Re: Spain Is Beyond Doomed: Unemployment Charts

#55

Post by anuraj »

Spain's problems are endemic; but most of Europe shows similar tendencies now - High level of entitlements, soaring deficits, lower cost efficiency and lumpen youth. Europe's post developmental problems need high level of innovation - but the youth do not seem particularly ready for it.

Re: Spain Is Beyond Doomed: Unemployment Charts

#56

Post by skylan_q »

robryan wrote: post #39
skylan_q wrote: post #30

Earlier quoted context omitted.

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…

How does declaring bankruptcy help creating more jobs? (Honest Question) Would seem to me that it would been even harder to get credit flowing once all your previous creditors have been wiped out. From an admittedly fairly uninformed position it appears to me that cutting spending is only going to further erode businesses positions and tax revenue, leading to an even worse position.

In the short-term it doesn't help the employment situation. Like in (software) engineering, there is no free lunch.

Here's another example in Canada of austerity working: http://articles.businessinsider.com/2010-06-07/markets/29978...

They have 5 bullet points, and I think only 4 really applies. But even then, Canadians weren't getting heavily leveraged, especially since the BoC had a single mandate of keeping inflation in check which means high interest rates (and no mandate to respond to labor market conditions, which usually results in more leveraging and higher inflation)

This austerity something most hated Chretien for, but people didn't make too much of a fuss. 10% expenditure reduction? grumble grumble... Today's reaction: sacrificing a 2.4% increase in the federal budget for a 1.8% increase? BRUTAL AUSTERITY DON'T YOU REMEMBER NAZIS???

Ontarians all hate Mike Harris. After he was done the deficit was gone and debts reduced, schools and medical care resumed as before and everyone had jobs. We brought in automotive emissions tests, many new provincial parks, many new lands for natives and the environment was much cleaner than when he showed up. He was hated because he made everyone do what they were supposed to do. As far as I've seen, people only like the politician that promises the moon and loads on debt that "someone else" will pay for. :(

From an admittedly fairly uninformed position it appears to me that cutting spending is only going to further erode businesses positions and tax revenue, leading to an even worse position.

Many people use their gut to voice their opinions on these things, and that's not to say that they're wrong. People often extend the concept of household finances to the economy.

Simple analogy might help explain where that notion might come from: Your parents are heavily indebted seniors that do some chores for you in order to live with you. You are working to support yourself and them, financially. Your company is having money issues and decides you are working 30h weeks instead of 40h weeks. (25% pay cut) Would you then take money from your heavily indebted parents to then buy product (economic stimulus) from the company so that their earnings increase just enough to be able to afford to hire you back to full capacity? Would you have your heavily indebted parents borrow more money to buy enough product? Not likely. You'd probably rather just look for other work or start a company and take the financial hit/cost of having to look for new work or starting a company. Basically starting over. You could also just tough it out and stick to eating cheap canned goods, cancel netflix, and slowing down repayment of your parent's debt and getting them the cheap diapers and only absolutely necessary meds (austerity option)

Applying moral of the story: If Spain doesn't go through bankruptcy, (or severe, short-term austerity) it's keeping the 30h work week while the parents are still saddled with huge debts while also trying to maintain the lifestyle that it could maintain working 40h weeks. So the less Spain spends today and tomorrow, the less it has to tax today and tomorrow.

The above is all for illustrative purposes.

Would seem to me that it would been even harder to get credit flowing once all your previous creditors have been wiped out.

For sure, no one will be keen on buying 30-year government bonds. This is a huge problem for the credit markets. We've seen some mixed results in Iceland, though. But a larger economy like Spains? Might not fare as well.

Re: Spain Is Beyond Doomed: Unemployment Charts

#57

Post by opminion »

lolcraft wrote: post #25

I 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…

duct-taped together, so it all works fairly well in the end

There is much talk about being worse than in the past. Of course, what they mean is being worse than what they expected from extrapolating past improvements.

One example is employment inequality: in the past it was taken for granted (you found a job first, it's your right to keep it). Now there is a growing sensitivity to the unfairness in that. Youth unemployment was always high, whereas now, while being even higher, it's also seen as calling for deep trouble. In that sense it is similar to the increased sensitivity to domestic violence.

Another example: In the olden days people would just moan about the disappearance of small shops when big supermarkets came to town. Now there are consumer groups (grassroots urban shopping cooperatives). Not the result of regulatory change, or of the dire economic situation (most advertise themselves as eco-friendly first, cheaper second) but of greater sensitivity.

Re: Spain Is Beyond Doomed: Unemployment Charts

#58

Post by barking »

AnthonyMouse wrote: post #47
barking wrote: post #28

Earlier quoted context omitted.

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.

The executive compensation thing is a red herring. People keep talking about it because of the manifest unfairness of allowing these people to wreck the economy and still take home 100 times what their victims do, but reducing their compensation wouldn't bring back any jobs. The problem is that a million dollars is a huge amount of money for an individual and a drop in the ocean for a government or a bank. Taking the…

There's a perception amongst the 'ordinary' people that those at the top scratch one anothers backs. The government spin is that we're all in this together but the reality seems to be different. It's not surprising when you see how politicians when they retire often go on to get directorships at banks. Or how in the case of our most toxic bank, the chief executive apparently used to personally handle loans to politicians and other influential people. Politicians have talked the talk but when it has come to punishing those responsible nothing happens. Constitutional property rights are cited. They'd love to do something but their hands are tied or it would spook the markets or to paraphrase you the effect would be negligible so let's not bother. Much more would be raised by milking the masses some more.

Re: Spain Is Beyond Doomed: Unemployment Charts

#59

Post by homosaur »

fixxer wrote: post #3
eksith wrote: post #2

The 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.

I feel you on this but the youth that are at breeding age are not going to really be down for that when they can't find work.

Re: Spain Is Beyond Doomed: Unemployment Charts

#60

Post by homosaur »

AnthonyMouse wrote: post #47
barking wrote: post #28

Earlier quoted context omitted.

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.

The executive compensation thing is a red herring. People keep talking about it because of the manifest unfairness of allowing these people to wreck the economy and still take home 100 times what their victims do, but reducing their compensation wouldn't bring back any jobs. The problem is that a million dollars is a huge amount of money for an individual and a drop in the ocean for a government or a bank. Taking the…

"stop with pussyfooting around and just put them in prison already."

I'd love to work on this but they either broke the law or didn't. However, it might make a bankster think twice when they understand that illicit behavior could cause all their ill-gotten gains to evaporate. It's not ideal but it's a start.

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