The Economist

Tuesday, August 14, 2012

The July 28th cover of “The Economist” on which the “S” has fallen from “Spain”, leaving “pain” warrants careful consideration.

The inside article observes that “The prognosis for Spain is bleak. The economy is in recession, the public sector is cutting spending and the private sector is reluctant to invest… To escape this situation Spain requires outside aid… that might come from the ECB, together with other rescue sources… The Euro zone must unite around a plan that is economically sufficient and politically feasible… It is necessary and urgent to implement federalism and pro-growth policiesThe important lesson to be learned from Spain is that delay is worsening the odds of the euro surviving…”.

And later in the article, “When he speaks of integration with solidarity President Hollande should explain what type of integration he is referring to… Europe is not only suffering from a euro crisis, but also from a growth crisis, due to its chronic incapacity to stimulate business… Small enterprises are necessary, capable of rapid development (and without the temptation to delocalize production)…

The article also analyzes the particularly serious situation (including the corruption) in Valencia. And in Murcia. And the lack of liquidity in Catalonia…

And it concludes, “Europe must understand –and hopefully it’s not too late- the necessity of obtaining loans directly from the ECB”.

A few national references:
·    There are still no fees charged on financial transactions.
·    A “judicial and parliamentary investigation” (in the words of Josep Ramoneda in “El País”, 24 June 12) has still yet to be conducted to ascertain what occurred in the last few years in the financial sector… Mechanisms for political participation so that citizens may make their voices heard have still not been updated…
·    We continue to ignore the great challenges underscored at Rio+20 and the extreme poverty in which hundreds of millions of the world’s inhabitants live (and die)…
·    “Capital flight increased in May due to Bankia’s situation, reaching historical levels”, according to an article published in “Ideal” in Granada on 01 Aug 12. In the first five months of the year over 163,000 million euros were withdrawn from Spain… to be invested in third countries… or stashed in tax havens.
·   So that the present won’t lead to an uncertain future, the budget cuts made in healthcare and education, which according to information provided in the media will represent “9,627 euros in 2014”, are particularly unfortunate. They are making a mistake. All other capital, all of our “financial and labor health” ultimately depends on health, education and science. Make closely calculated budget cuts… but don’t include the fundamental pillars of social welfare, and emulate the United States by issuing euros or “Eurobonds” or “hispanobonds” for growth. With budget cuts alone, we will sink deeper and deeper. “Job creation in the United States stimulates Wall Street”, underscored the US press on August 4. This is a good symptom and is the result of issuing over 300,000 million dollars in incentives a few months ago.
·   And what has happened in TVE? Where are the news broadcasts that formerly provided a substantially unbiased view of events? I would like to render homage to some excellent journalists (Pepa Bueno, Ana Pastor, Xabier Fortes…) and deplore the fact that the Government is returning to its old ways from the beginning of the century. We’ll have to watch other channels. What a shame!
·   In 1967 I went to the Director General of Health (at that time there was not Ministry of Health) to implement the National Plan for the Prevention of Disabled Children… I had specialized in perinatal biochemistry and neonatal molecular pathology. I subsequently participated in the transition and contributed to reach appropriate approaches to very sensitive and delicate issues. The book “Gen-Ética” (2003), coordinated with Carlos Alonso Bedate, reflects very interesting and applicable criteria and experiences. Why were we not consulted before proposing changes in the grounds for interrupting pregnancy that are absolutely inadmissible from a scientific perspective?
·     “….pain ” Yes, there will be pain if in addition to politics and
S      the economy, we also have to “Do God’s Bidding” in education and especially in secondary schools. That was the hair-raising title of an article by President Esperanza Aguirre on the editorial page of the July 7 “ABC”. Reading her reflections in this article about Bismarck’s Germany and a European culture based “on the thought of Greece and Rome, and the morals and values of Judeo-Christian religious tradition” caused me much perplexity. And, alas, after rendering tribute and expressing her admiration for German education, she concluded by manifesting that “as is often the case, the solution is freedom”. With that I’m in almost complete agreement: the solution is always freedom.
·   “The freeze on public employment has been extended”. Indiscriminately. This is a mistake. One thing is to recommend and monitor austerity measures… and another is for those who pledged to reduce unemployment to limit the efficiency of services and raise unemployment figures.
·    They who are cutting subsidies for dependent persons are also making a huge mistake. In contrast to the colossal amounts being spent to stabilize the financial situation, to save a mere pittance many of the most vulnerable citizens will now be neglected and many “basic jobs” will be lost.
·     And amidst this economic turmoil, last Friday on the sly, the Government approved a change in the content of the Education for Citizenship curricula for primary and secondary schools, renaming it “Civic and Constitutional Education”. This is another error that separates us conceptually from Europe, where it’s so hard for us to fit in. As I have written repeatedly, in 1993 in Montreal a Conference of professors and educators from all over the world approved a “World Plan of Action for Education in Human Rights and Democracy”… Almost twenty years later Spanish government leaders now prefer to follow anachronistic and discarded guidelines. This is a mistake. And this time there may also be numerous “conscientious objectors”, which they (along with the ecclesiastical authorities) so enthusiastically applauded when “Education for Citizenship” was first approved.
·     The Government doesn’t miss an opportunity to allude to the “legacy” it received… although most of its problems have originated in the Autonomous Communities and related institutions in which it holds a majority, such as Valencia, Murcia… CajaMadrid, Caixanova… and in the awful throes of the “real estate bubble” at the end of the past century, which the socialist government was unable to contain and redirect.

And in the European Union?
·    When proposing a “pact for growth”, Hollande initially considered issuing 120,000 million euros in incentives for businesses and to promote employment, as Obama did in the US. That’s the right way. Budget cuts and increased unemployment may lead to social rebellion, even revolution. No, that’s not what should be done. That’s not “doing God’s bidding”. That’s doing the bidding of the great (military, energy, financial and media) domain.
·  “Germany Pressures the ECB against the Rescue Plan for Spain and Italy” read the front-page headlines of the August 2 “El País”. And inside: “The debt ceiling imposed by Rajoy forces Andalusia to make additional budget cuts… The Andalusian government says that Rajoy intends to “privatize, dismiss and close down…” And, very important, “the Federal Reserve is monitoring the decisions taken in Europe”.
On August 3: “The ECB forces Spain to make an additional cut”… “Public (but not private) schools are losing teachers for the first time in 23 years”… And the risk premium is rising, while the IBEX drops… and the “markets” buy today to sell tomorrow… !
·    Faced with this complex scenario, it is essential to adopt an interdisciplinary approach and to give philosophy and ethics prominent roles in order to make accurate diagnoses for timely treatment and for foresight, since prevention is the supreme aptitude of human beings.
Fernando Vallespín recently quoted Borges when he wrote “We are not united in love, we are united in horror”. Human Rights were proclaimed precisely “to free mankind from fear”. It is time to take action, bold and peaceful action, with innovation and creativity.
·    With the delocalization of production on the one hand and robotization on the other, we will have to start imagining “Another Economy and Another Way of Life”, the title of a recent book on the crisis by Juan Torres López. He asks, “Is the dictatorship of the markets inevitable?” and he concludes that another economy is possible. Yes, another way of life from now on. Another way that is fully democratic, forever eliminating the scandalous inequalities that fomented the absolute power of men and the temptation to replace at the local, regional and global levels a genuinely democratic system with groups of incompetent and greedy plutocrats.
·    Now is the time of “The Peoples,” the people. For the first time in history all human beings can progressively express themselves and have access to a global vision of the world.
·   Now is the time for federalism at the national and European levels, to prevent conflicts and disputes that should never arise and are unacceptable. Backing the autonomous communities into a corner is also a huge mistake. Political, economic and ethical coordination is essential to conquer the immense inertia of a European Community that will never become a Union if it doesn’t emancipate itself in areas such as security and economy. The euro zone can’t continue on bended knee, at the mercy of the large multinationals.
Some time ago I wrote that knees are for lifting us up, not for kneeling or tip-toeing around to follow the orders of colossal consortia or multimillionaires who, with a complete lack of solidarity, evade thousands of millions of euros to deposit them in that tax the havens that unfortunately border Europe.
·    Weaken the State! Deregulate everything that is working properly and leave the bad businesses to the State. RENFE was in State hands until it became attractive for privatization…
·   Let’s send our best professionals abroad (we’ve paid for their education, university studies, doctorates), as well as our capital… Obsessed with stock market fluctuations, it seems our government leaders only have eyes for the IBEX.
·   It’s essential to mobilize the middle classes who aren’t conditioned by factors affecting the less fortunate.
It’s true that immersed in this “entertainment bubble” it is very difficult to get people involved, especially when they are disappointed in the way that these last throes of capitalism are being managed in both Europe and Spain. Sporadic reactions, some of quite relevant numbers, don’t alarm the leaders of the European Union or its Member States in which the markets are so dominant that they have appointed governments in Greece and Italy without elections… But if the government leaders’ disdain increases and if detachment gives way to hostility, then expression may be accompanied by violence, which in principle doesn’t benefit anyone. Listen to each other, get together, explain yourselves, and rectify when warranted. Don’t abuse your at parliamentary majority, because it might become a boomerang. Look ahead to the future!...
·   Globalized neoliberalism, in addition to replacing the democratic principles of social justice and liberty so aptly set forth in the UNESCO Constitution with the laws of the marketplace and the United Nations with groups of oligarchs (G-7, G-8, G-20), also delocalized production and weakened Nation-States by transferring the majority of power, including political power, to the large multinationals… and to the markets!
·   The introduction to an excellent book “Economic and Social Alternatives to the Crisis”, edited by Alfonso Guerra y José Félix Tezanos, states that “crisis contexts such as the one we are experiencing render past success strategies void… and require us to reconsider our modus operandi by applying significant amounts of innovation and creativity…”.
I like to repeat that the future has yet to be written and that there are critical moments in which we must invent the future. Crisis and opportunity: we are now at a historical turning point. We have the “human tension” and the knowledge to do it. There are only two conditions: to promote democratic conduct at all levels (personal, local, national, regional and global) and to dare to do it. Genuine leaders are those who, when the occasion arises, dare to use their powers. Dare to know and know how to dare. If we don’t, we will deserve Albert Camus’ terrible disdain: “I despise them, because they could have done so much, but dared to do so little”.
·   Reality, so adverse, will finally overcome the inertia of the majority of citizens, many of whom are outraged but still remain passive?
Plagued by circumstances so different from those that brought them to power, I sincerely hope they will seek consensus with the same attitude and intelligence with which the Moncloa Pacts were sought and achieved.
If so, the “S” may perhaps be returned to its proper place.
Otherwise, the prognosis that I make from my “tired old eyes” will be quite negative. That’s fair warning!