Firewall, or Farce?
I believe the medication is Bailout going by the name Firewall.
Spain is suffering 50% youth unemployment. If we wait long enough, the "50% of the unemployed youth" will become unemployed grownups. Will the Firewall be large enough to cover Spain's economic problems arising from the lack of revenue?
What I said of Greece can be applied to Spain. No economic development, no growth. No capital investment, no economic development. And Merkelism is still the solution based on the fear that someone, somewhere, is earning a living.
Slimviews (My unfunded, unsupported, non-profit, and--alas--unprofitable web blog has a few "best hit getters.") These are the top three.
Too Greek to Fail.
http://slimviews.blogspot.com/2012/01/too-greek-to-fail.html
Merkel's Last Stand.
http://slimviews.blogspot.com/2011/12/merkels-last-stand.html
China! Economics! Diversification!
http://slimviews.blogspot.com/2012/01/china-economics-diversification.html
Next:
Add firewall to the cliches, slogans, and platitudes of those who've failed to propose a solution that may work.
Big Bazooka; Grown up in the Room; Full faith and credit; Millionaires and billionaires; Granny death panels; lock and load; double bazooka; kick the can down the road; and, now....Firewall.
Have the economists forgotten about the numbers. Oops! Poor example. "Some people use the facts the way a drunkard uses a street lamp. More for support than illumination."
Add to that the fact that everything that has been said by the Public Intellectuals has been descriptive, not prescriptive, it is easy to believe that the only consensus embraces whatever won't work, hasn't worked, doesn't work, and can't work.
"You cannot cut wages, fire people, raise property taxes, and call it a solution." Slim Fairview. And, it certainly is not labour reform.
Now, The Chancellor has to face hostility and opposition at home.
Merkel has become Chancellor Bligh in the crow's nest ordering her crew to bail the boat.
"Chancellor, can we plug the holes in the bottom of the boat, first?"
"No. First you bailout the boat, then you plug the holes."
From the Quotations of Slim Fairview:
"There are no unintended consequences, only unwanted consequences."
Case in point. For the purposes of illustration.
Assume every pastry chef in Greece, Spain, and Italy is fifty-three years old. Assume further, that retirement for pastry chefs is fifty-three years of age. If every pastry chef decided to wait ten years to retire, you will have as many unemployed youth not becoming pastry chefs.
Why point this out? Because one solution proposed to solve the EuroCrisis would be to delay retirement. Well, okay, that would cut back on paying out pensions. However, that would mean paying out unemployment benefits to unemployed youth not being hired as pastry chefs. Do you see the conundrum?
Now, add to that the firing of some pastry chefs and cutting the wages of other pastry chefs. The unwanted consequences? More unemployed pastry chefs, pastry chefs making less money, and less money in the economy. This is not labour reform in anyone's lexicon. (And I did not yet mention raising property taxes.)
To understand how crucial some aspects of economic development are:
The Multiplier Effect
http://www.slideshare.net/slimfairview/the-multiplier-effect-4962273
Economic Stimulus
http://slimviews.blogspot.com/2011/06/economic-stimulus-by-metaphor.html
The above two are crucial in explaining (using metaphors) how economic stimulus works and explaining the multiplier effect.
Now for some analysis:
Have we followed Merkel's lead? Yes.
Have conditions gotten better? No.
Have conditions gotten worse? Yes.
Conclusion? Don't follow Merkel's lead.
Warmest regards,
Slim
slimfairview@yahoo.com
Copyright (c) 2012 Slim Fairview
All rights reserved.
