Spanish Triumph?

It’s all a bit annoying. Really. I have just read the Economist’s article about Spain. The article is titled “Back on its feet”.

Such a title might lead you to imagine that the article is about a triumphant return to prosperity. But no.

Instead we are told that unemployment is down to 22.5%. This is down from a peak of 26.3% back in 2013. Growth, we are told, has ‘sparkled’: it rose to an annualized rate of 3.8% in the first quarter and rose again a little further in the second.

Wow.

These are the fruits of severe austerity. They are ‘the vindication of reforms’ the right of center government put in place in 2011.

Double wow.

One of these reforms was to shake up the labor market by making it easier to fire people and to tear down the divide between full time employees and their temporary co-workers. Presumably this reform was designed to instill fear into everyone and to turn them into quasi-part-timers. In any case it worked: just look at that amazing unemployment figure of 22.5%. Only 22.5%!

What a triumph.

Other efforts have slashed corporate taxes from a whopping 30% to a new low (in 2016) of 25%. Further reforms have slashed red tape and made it easier to set up a business. So if you have been unemployed for years you can now start your own business. If, of course, you have any money left to use as start-up capital.

These reforms have seen Spain shoot up the most important table of all: the “ease of doing business table”. Spain now ranks 33rd in the world (out of nearly 190 economies) rather than languishing down in 52nd where it was before all theses amazing reforms.

Go Spain!

At the end of the article we hear something about theses reforms being pretty much irrelevant and that the real problems all had to do with something called a financial crisis and bailing out private sector banks. But we all know that’s not important.

No. What’s important are those structural reforms.

After all they have slashed unemployment! It’s only 22.5% now.

Of course Spain is back on its feet. What economy wouldn’t be buzzing along if its unemployment rate was a mere 22.5%?

Sorry Economist: the story is one of disaster not triumph. It is of lost lives, lost hopes and lost dreams. And those ‘reforms’ are like the leeches of yesteryear: they are the product of economic theories that lack an understanding and empathy for real people.

Let’s all hope that our Spanish friends are tough enough to withstand the damage inflicted by the cure being thrust upon them. And let’s all hope that one day these reckless and violent cures are seen for what they are: inhuman evil.