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 understand why they are angry, but they did vote for Zapatero and the PSOE twice. Were there protests against all the expensive projects undertaken under that administration? I don't keep frequent tabs on European news outside of Italy, so I'm not certain, but I would doubt that there were. It just seems like -- and this is the sense I get from reading about the Greek and Italian problems too -- is that it is plainly evident that this lifestyle, these labor and pension laws, etc are completely unsustainable and cannot withstand any severe downturn that depresses tax revenue, but no one wants to admit it. I mean in Italy you have rioting because a company might actually be able to fire someone without getting sued or having to still pay them anyway, or that people will no longer be able to retire at age 42 with a full pension. Some reforms will be painful (I happen to agree with most of the pension reform and labor laws I've seen proposed in Spain, though), but not accepting that the relatively generous system has been exhausted and that severe changes need to be made is simply setting up for more failure and pain. Maybe there are people do accept it, but many of the proposals I've seen that I consider for the most part reasonable when looking at the rest of Europe are overwhelmingly unpopular. I could be way off in my reading of the situation, who knows. It's all pretty messed up.
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 is worse than a collapsed banking system - even though a collapsed banking system is a terrible thing for a country's economy. there are worse things for Spain.
Now, things get complicated though. The Spanish government has a huge deficit it needs to cover. So it needs to borrow money. Who on earth will lend Spain money right now? Only Spanish banks... that is... the ones being bailed out. When the bailout money was coming from ESM that meant Spain could get a direct line of credit really. But giving the banks money that they want to then get back from the banks with interest to pay on that money they borrow... is. fairly. ludicrous.
the whole this is pretty messed up, i agree there. but all the talk of "banks cannot collapse or the economy is doomed" isn't helpful, because it allows such absolute bullshit to go on as it going on now in the name of sanity? when it is anything but sane, certainly not sensible and definitely not reasonable. and then asking the workers to pay for it all while all this bullshit is still going on and nothing has actually been done to sort out the mess. reforms to the banking system have no happened.
edit: sorry for the tl;dr basically: banks being able to think they have no worry adn will be bailed out whatever, is unhelpful to solving the problems.
I understand why they are angry, but they did vote for Zapatero and the PSOE twice. Were there protests against all the expensive projects undertaken under that administration? I don't keep frequent tabs on European news outside of Italy, so I'm not certain, but I would doubt that there were. It just seems like -- and this is the sense I get from reading about the Greek and Italian problems too -- is that it is plainly evident that this lifestyle, these labor and pension laws, etc are completely unsustainable and cannot withstand any severe downturn that depresses tax revenue, but no one wants to admit it. I mean in Italy you have rioting because a company might actually be able to fire someone without getting sued or having to still pay them anyway, or that people will no longer be able to retire at age 42 with a full pension. Some reforms will be painful (I happen to agree with most of the pension reform and labor laws I've seen proposed in Spain, though), but not accepting that the relatively generous system has been exhausted and that severe changes need to be made is simply setting up for more failure and pain. Maybe there are people do accept it, but many of the proposals I've seen that I consider for the most part reasonable when looking at the rest of Europe are overwhelmingly unpopular. I could be way off in my reading of the situation, who knows. It's all pretty messed up.
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 is worse than a collapsed banking system - even though a collapsed banking system is a terrible thing for a country's economy. there are worse things for Spain.
Now, things get complicated though. The Spanish government has a huge deficit it needs to cover. So it needs to borrow money. Who on earth will lend Spain money right now? Only Spanish banks... that is... the ones being bailed out. When the bailout money was coming from ESM that meant Spain could get a direct line of credit really. But giving the banks money that they want to then get back from the banks with interest to pay on that money they borrow... is. fairly. ludicrous.
the whole this is pretty messed up, i agree there. but all the talk of "banks cannot collapse or the economy is doomed" isn't helpful, because it allows such absolute bullshit to go on as it going on now in the name of sanity? when it is anything but sane, certainly not sensible and definitely not reasonable. and then asking the workers to pay for it all while all this bullshit is still going on and nothing has actually been done to sort out the mess. reforms to the banking system have no happened.
edit: sorry for the tl;dr
basically: banks being able to think they have no worry adn will be bailed out whatever, is unhelpful to solving the problems.
Reply
Leave a comment