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Posts Tagged ‘Spain’

Austerity – Alt-med of Economics

Posted by Don McLenaghen on June 4, 2012

The very social fabric of society is currently under assault by the forces of economic minimalism. What it means to be a member of a society is radically changing in the direction of extreme libertarian types that believe a society is only a collection of individuals, the government that governs least is best and that personal responsibility means others should feel NO expectation to help their fellow human.

The latest salvo in this assault is “austerity measures” that MUST be passed to avert economic disaster…the Shock Doctrine manifest. Okay, pretty stirring stuff, can I defend this claim….what light can the skeptic tool box shed on this issue. First, we need to define our terms, then seek empiric evidence to support/defuse these claims and lately is there any “test cases” that can be used as data points for analysis.

What is austerity?

Simply put, austerity is the reduction of government spending…well, not really. It is an irony that many governments’ budgets are increasing but this is not due to “social spending” or stimulus spending ; it is due to debt maintenance and financial bailout. Most of this money is leaving the countries in question exacerbating the local economic recessions.

There are three poster children for austerity – Ireland, Spain and the UK. Most people think of Greece or the USA for austerity but these are rather new to the game (Greece) or incomplete (US military spending).

So, let’s check the budgets for Ireland specifically, this was the first to stumble economically and the harshest to follow (with little internal dissent) the “austerity cure”:

Ireland 2008 2009 2010 2011 2012
Total Expenditures 57.722 60.127 54.753 59.160 61.471
Total Capital Investment 11.089 14.609 7.406 10.169 10.249
Debt Servicing 1.939 2.664 4,807 4,904 7.,488
Net Spending 44.694 42.854 42,540 44,087 43.734
Adjust $ (2008) 44.,694 41.,996 40,855 41,494 40.338
The Austerity
0 -2.698 -3.839
All values in billions of Euros. Sourced from the Government of Ireland Department of Finance

2011 also included €7 billion recapitalization of the banking sector…i.e. bank bailouts…after an emergency bailout of over €4 billion in 2009 and another €7 billion in 2010. The bailout money is important because when we talk about austerity, we mean specifically cuts in government spending on society…the bailouts (although arguably necessary) largely went to foreign debt holders or to maintain the liquidity of the institutions. Although the expenses of the state increased these were offset by equal or greater losses in the economy in general.

Austerity in Ireland meant €6 billion in cuts in 2011, including a quadrupling of student fees, reduction in child benefit, EI, welfare, 4% cut in student grants, reductions in public employee benefits and pay, and an increase in the VAT.

The UK spending followed the same trend: £697 billion (2010), £710 billion (2011), and £683 billion (2012).

Okay so first myth, that governments have not ‘tried’ austerity because some budgets are still growing; dismissed. So, what about the second myth that ‘austerity’ is needed to recover the economy; that painful cuts in government spending will stimulate the private sector and revive their economies?

Well there are two metrics we can use to judge this: GDP and unemployment

IMF GDP (Billion US$) GDP % (Constant Prices) Unemployment
2010 2011 2012 2010 2011 2012 2010 2011 2012








































1: In 2010 the Conservatives took power and moved towards austerity measures2: Canada is added as a non-austerity comparison

On the one hand, GDP seems to have recovered but what is GDP? And what does it say about the measure if it does not reflect itself in the employment rate?

This points to a major disconnect in our economy and why austerity, however some economists may insist it is necessary, is ultimately bad for our global economy now. NOW is important and often missed in many discussions about deficit. Why deficits? Well, those who promote austerity do so because they blame rising debt and government deficits for the financial crisis. There is plenty of academic work that shows the cause of the current ‘financial crisis’ has nothing (or at least little) to do with debt and everything to do with under regulated global juggernaut financial institutional gambling (sources below).

That said, debt is not an issue to be ignored indefinably. When in economic boom times we should run fiscal surpluses and pay off the debt…IN TIMES OF BOOM, not Ka-BOOM! In the past we had been promised in good times tax reductions (predominantly for the corporate class) while still maintaining necessary and desired social services. That was society’s failure (or as some more realists believe the result of lobbying and media propaganda by one class for its own benefit). When good times return, the debt should be paid down or eliminated. If debt is such the bane some claim, how has Japan managed to have a robust society and functioning economy for the past twenty years with a debt-to-GDP ratio of over 220%? Greece is barely over 140% and that is supposed to mean automatic economic apocalypse.

But we are not in good times. EVERYONE is cutting back. Tax reductions now (almost exclusively for the corporate class) have not stimulated spending but saving instead. The public is too unsure about the future (largely thanks to political fear mongering about debt and austerity) and put off large purchases for fear of job loss, pension loss or just reduction in pay/hours. The corporations are not spending because there is no demand. If people do not spend, they corporations have no one to sell to. Even in those industries were growth is possible, the corporations are just as nervous of the future as the masses and are saving “war chest” in case of future losses and moments of opportunity to acquire less prudent companies.

For a capitalist economy to function we must have both supply and DEMAND. If the people are not demanding; if the corporations are not demanding; it falls upon governments to stimulate the economy out of recession/depression. This means increasing debt. If government put money into the economy, be it directly through spending or indirectly via hiring, there will be more demand in the economy. This will, if capitalistic logic is valid, cause corporations to supply this new demand resulting in more growth. This leads to inevitable recovery provided enough stimulus is spent. The aborted recovery in the USA shows what too little cannot do. Once the economy is running of all pistons then comes the “adult” moment where we forgo immediate pleasures of tax cuts but instead take the tax win falls and removing the accumulated debt.

So, claim this is simply spending today and leaving the bill to future generations. Well, that is true in one sense; in the future we will have the capacity to pay the debt. It is also true that we are investing today so that future generations will have greater prosperity. That what is spent now will give them the extra needed to pay later. Lacking stimulus now, what we give our children is not a financial debt but a societal one…an economy in ruins; a social contract in tatters; a people in poverty who wished they had the money to pay for today.

As a skeptic we can look to the past. In every economy that experienced depression/recession; the only cure was stimulus. In most cases governments were the source of this spending and only in rare cases has this failed and those times under conditions not likely to be repeated (Weimar Germany). The empirical evidence shows that austerity in the past has failed (Hoover in the 1930s) and it is doing little better today (Ireland). So, that leads to the question why are so many politicians are moving forward with austerity?

“By the way, I think you’ve just given me confirmation of something that people like me tend to say [about those who promote austerity], which is, actually none of this is at all about fiscal responsibility. It’s all about exploiting the current situation to pursue an ideological goal of a smaller state. We could argue whether the British State is too large but Sweden which is weathering this very well with a much larger state presence than [the UK]…that’s suggesting you’re not actually sincere. That it’s not really the budget deficits that concern you but you looking for a way to exploit this definite situation to pursue an agenda” Paul Krugman on Newsnight, 30 May 2012


Austerity falls out of fashion


The Austerity Agenda

Austerity is Not About Policy, But Ideology

Austerity Plans Are Based on the Wrong Diagnosis of the Wrong Problem

The Macroeconomic and Distributional Effects of Fiscal Austerity

Britain’s austerity drive as ‘deeply destructive’

Austerity Defenses

Amid EU Austerity Backlash

Greek “Bailout” is a Bank Bailout

Expansionary Austerity

Austerity isn’t working: There is an alternative

Anti-austerity movements gaining momentum across Europe

The “Austerity Myth”

Irish Budget 2011 – Key Points

EU austerity drive country by country

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The Catholic Church/Fascists Steal Spain’s Babies

Posted by Ethan Clow on November 4, 2011

In the category of news to enrage you,  very recently the news story broke that the Catholic Church has been stealing babies from families in Spain, often telling them that their baby has died, and then giving or selling the baby to a catholic or conservative family.

This shocking news, which sounds almost cartoonish evil, was a practice that began in Spain under the fascist dictator Francisco Franco, as a way of controlling his political enemies, their children would be taken at birth and raised by fascists.

This was generally well known, apparently even publicized by the Spanish government, children were taken from political enemies, re-educated i.e told their biological parents were “murderers” and horrible people, the children were allowed to change their names and were inducted into the fascist ideology of the time.

How was the Catholic Church involved? Franco, like several other fascist leaders, made alliances with the Catholic Church, his conservative values synced with the Church’s own oppressive leanings. Franco would often put the church in charge of various institutions like schools and hospitals.

At first this action was considered ideological, a way for Franco to solidify his political power, but soon after that changed. The baby stealing seemed to take on a more sinister tone. Families that were deemed morally – or economically – deficient.

Nuns and priests compiled waiting lists of would-be adoptive parents, while doctors were said to have lied to mothers about the fate of their children.

The BBC recently produced a shocking documentary where the trafficking of babies is described. At times the scale of the baby stealing seems to grand and farfetched to believe. Yet DNA evidence is proving the case, babies were taken from their biological parents, often told they had died, sometimes doctors would give the mother a cold dead baby that the hospital had been keeping in a fridge, but other times the mother wasn’t even allowed to see the body of her baby.

(See part 2, part 3, and part 4 of the BBC documentary Spain’s Stolen Babies)

Many of the victims have death certificates that have clearly been falsified or cemetery documents that contradict what parents were told at the supposed time of death. (Or in some cases, empty coffins.)

One doctor,  Eduardo Vela is accused of telling women their babies had died when they had not and handing over those newborn children to other couples for cash.

A BBC reported who had recently given birth booked an appointment with him (since he wasn’t doing media requests) when he found out she was a reported he picked up a cross off the wall and shoved it in her face saying “Do you know what this is,” and “I have always acted in his name. Always for the good of the children and to protect the mothers.”

The scale of the baby trafficking was unknown until this year, when two men – Antonio Barroso and Juan Luis Moreno – discovered that they had been bought from a nun. Their parents weren’t their real parents, and their life had been built on a lie.

As if the stealing of babies for political or economic reasons wasn’t bad enough, many have been particularly offended by the idea that babies were stolen on ideological grounds, that the mother wasn’t Catholic enough so her baby was given to a proper family. Many of the victims were unmarried mothers and this was a rather big social taboo until recently.

Now estimations are that over 300,000 babies may have been stolen. This baby theft didn’t stop until the 1990’s. The scale of this crime is staggering. Reports of doctors and nuns keeping a stash of frozen, long-dead babies in the morgue to be wheeled out to convince parents that their child, who had been in good health only a few hours earlier had died, leaves one feeling sick at the corruption. And all over Spain there are countless children’s graves in which coffins containing nothing more than a few stones lie buried.

Why has nothing been done about this?  It’s been kept mostly secret by the government and church. I gather that there have been rumours and such for years but this is the first time there’s been proof and admission from the government. Other factors have played a role in this secrecy, after Franco’s death in 1975, the major political parties agreed an amnesty to help smooth the transition to democracy. Attempts to investigate Spain’s baby trafficking as a national crime against humanity have been rejected by the country’s judiciary and resisted by its politicians.

As this story is really just starting to get out, we will likely be returning to it as more information comes out.


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Protests in Spain over Pope’s visit and Abortion Forgiveness Week

Posted by Ethan Clow on August 18, 2011

The Pope just can’t get a break. You’d think that when visiting a predominantly Catholic country like Spain (the Catholic population of Spain is 94%), he would be greeted with cheers and adulation. Not protests and snarky atheists.

But protesting is what a large group of Spaniards are doing.

The Pope is in Madrid to celebrate World Youth Day (WYD), which is a Catholic festival for youth, which is August 16th to the 21st. Organizers of the event expect up to a million people will join in the celebration which will culminate in an open air mass by the Pope on Sunday.

However, large numbers of people in Spain aren’t too happy about this. A large percent of the dissatisfaction comes from the huge cost of the event. The 15-M Group in Spain, an anti-austerity spending group which takes issue with spending cuts so social welfare and anti-democratic actions.

“We are not angry about the Pope’s visit, which some will agree with and others won’t, but rather over the financing of it with public money, especially at a time when many services are being cut because it’s necessary to curb government spending,” 15-M said in a statement. – source

Event organizers are stating that most of the money for the event is being funded by the pilgrims themselves, nevertheless, in a Spain that is facing serious economic hurdles, a visit by the Pope is not what people consider prudent economic planning. Apparently people have been carrying banners that read “The pope travels, the pope pays”. Critics of the visit have put the cost of the whole event around 100m euros ($144m) but that hasn’t been confirmed by the government.

In addition, there are a number of the other groups protesting the Pope’s visit, including large groups of Gay Rights activists who oppose Catholic ideology.

According to this BBC article reports how protesters have been clashing with the pilgrims in Madrid’s Sol Square, there were also reports of protesters clashing with police, although I haven’t heard too much in terms of violence.

Protesters fill much of Madrid's landmark Puerta del Sol square/Susana Vera

The Police in Spain did arrest a young man from Mexico who was allegedly planning to gas the anti-Pope protesters.  The man was a chemist student and had made several threatening remarks online and was found in possession of “two notebooks with chemical equations not related to his studies and a computer “allegedly used to recruit on the internet”, police said.” –source

Whether the threat was real or not remains to be seen. However, it does point to the extreme tension the Pope’s visit is provoking.

Along those lines, there is another issue I’m sure many are upset with. The Pope has offered a six-day abortion forgiveness option. In the divine wisdom that only the Vatican could come up with, over 200 confessional booths are being set up in Madrid for women who have had abortions. Of course, one must thank the Catholic Church for this, after all, abortion is a sin worthy of excommunication and you know what that means. Hell. Forever.

You really have to hand it to the Catholics. For a religion that’s leadership is exclusively male, they sure know how to respond to a situation that they lack the necessary organs to even experience.

In an article on Slate Magazine by Amanda Marcotte, a very good point is made. This is a very expensive abortion get-out-of-hell-card. For Catholics in America, Canada or elsewhere, to get your forgiveness you need a last minute ticket to Madrid, find accommodations, food, and not to mention, forget about whatever was going on in your life right now, because you have to go to Madrid to be forgiven! Of course an less expensive option would be to stop being Catholic. That doesn’t cost anything.

I shouldn’t need to point out the huge hypocrisy of the Catholic Church holding women to some higher standard about what they do with their bodies when they can’t even control the pedophilia within their own organization. Maybe that’s why the Catholic Church hasn’t been able to stop these sexual predators, a few moments in a confessional booth appears to be the perfect cure for anything bad. “Are you sorry that you raped that child?” “yes” “Are you going to do it again?” “No” “Good, I’ll send you to another parish.”

I wonder if the Catholic Church has a special dispensation for women who were raped by clergy or those within the church? Surely they don’t have to be forgiven for having an abortion? Surely these poor women wouldn’t have to fly all the way to Madrid to be “forgiven” for removing the off spring of a rapist?

I’m sure any moment now the Catholic Church will make such an announcement.

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