Of course Spain has massive problems; it has also had massive tax evasion and a completely absurd property boom. But these are falls in retail sales. Consumption is collapsing in the wake of tax rises and austerity cuts which in combination are destroying all prospect of any economic recovery and in the process are eliminating any chance that Spain can address its debt issues.
This is the realtiy of what George Osborne wants for the UK.
This is what neoliberalism and its small minded practitioners prescribe.
And it does not work. It just creates the destruction of value, and not just economic value at that, but the real value of human endeavour.
When can we put this madness behind us?
Leave the Euro maybe?
For that is what is causing the disaster in Spain. It’s not neoliberalism at all: it’s the euro, which is a decidedly non-neoliberal project.
If you have your own currency, your own printing presses, then you can, in a corner like Spain is, deliberately inflate the money supply (from QE to helicopter drops of cash, as Friedman himself pointed out) and thus you don’t have to go through this hard austerity.
I don’t claim that monetary theory will solve everything. But I do claim that it will solve monetary problems. And that’s what Spain has at the moment: a plummeting money supply. It was Friedman himself who pointed out that this is what entirely fucked up the US in 1930. That they’re doing it again in the name of “Europe” doesn’t make it any less tragic: and nor does it make it neoliberalism.
This is, in fact, anti-neoloberalism. And yes, we’ve been shouting for years that this would happen. And since it has started happening we’ve been shouting that the solution is to break up the euro. Or if that can’t be done then the ECB has to be doing that QE and helicopter drops.
I don’t mind being blamed for the things that neoliberalism does do (like, increase in country inequality) but I do object to being blamed for what we warn against.