the issue is that the banks are being bailed out at the cost of everyone else. the deep cuts mean that people aren't spending, so the rest of the economy is collapsing. so, if you ask protestors whether they would rather see the banking system collapse or the entire rest of the economy, i think they will be very quick to tell you how they think this all should have been handled.
but the real reasons why spain had so much toxic debt are really due to the corruption and huge, white elephant projects that resulted. banks were corrupt enough to grant loans on massive scale unsustainable projects, there were clear from the outset that they were unsustainable and the debt would be highly radioactive.
the responsible government minister should be put in jail. but also, banks that are so corrupt should not be propped up at the expense of everyone in the entire country as far as the protestors are concerned.
I guess I can see that, but I think that's a false choice because it assumes that you can let the banks collapse in some type of vacuum where it doesn't destroy the rest of the economy. The economy would collapse if the banking system collapsed, not really the other way around (what I mean to say is there have been cyclical recessions with for the most part a healthy banking system, but rarely do you have a healthy economy with a bad banking system). Severe recessions are generally preceded by crises originating within the financial sector, either through a credit bubble, debt load, etc
( ... )
I could be way off in my reading of the situation, who knows. It's all pretty messed up.
i think are indeed quite a bit off in starting to talk about worker's right and pension plans etc, when that was not the cause, at all, of the economic collapse. yes, they become unaffordable in a recession, but once the recession is over, those kind of hard fought for rights, become impossible to claw back. and as is always the case, while the workers are asked to give up their rights during a recession, bankers who got everyone into the mess are still learning millions.
I guess I can see that, but I think that's a false choice because it assumes that you can let the banks collapse in some type of vacuum where it doesn't destroy the rest of the economy.that statement might be true for some countries and some banking systems. you can't generalise like that. and for Spain, this is not the case. if Spain bails out the banking system, they risk the whole nation of Spain endangering its own solvency and pushing the entire country into default. that
( ... )
Reply
but the real reasons why spain had so much toxic debt are really due to the corruption and huge, white elephant projects that resulted. banks were corrupt enough to grant loans on massive scale unsustainable projects, there were clear from the outset that they were unsustainable and the debt would be highly radioactive.
the responsible government minister should be put in jail. but also, banks that are so corrupt should not be propped up at the expense of everyone in the entire country as far as the protestors are concerned.
Reply
Reply
This is pretty much it!
Reply
Reply
i think are indeed quite a bit off in starting to talk about worker's right and pension plans etc, when that was not the cause, at all, of the economic collapse. yes, they become unaffordable in a recession, but once the recession is over, those kind of hard fought for rights, become impossible to claw back. and as is always the case, while the workers are asked to give up their rights during a recession, bankers who got everyone into the mess are still learning millions.
I guess I can see that, but I think that's a false choice because it assumes that you can let the banks collapse in some type of vacuum where it doesn't destroy the rest of the economy.that statement might be true for some countries and some banking systems. you can't generalise like that. and for Spain, this is not the case. if Spain bails out the banking system, they risk the whole nation of Spain endangering its own solvency and pushing the entire country into default. that ( ... )
Reply
Leave a comment