News & Analysis
Spain: Consequences of a Generalized Depression
Spanish unemployment hits new peak ... One in four Spanish workers are now without a job. Spain's unemployment rate hit a record high of 25% in the third quarter, as the jobless total grew to nearly 5.8 million people. The latest unemployment data reflects the impact of the region's recession, and Spain's government cuts aimed at restoring stability to the country's finances. The national statistics office said unemployment in the July to September period rose 0.4%, compared to the previous quarter; and 3.5% compared to the year prior, as another 85,000 people were left without work. – CNN
Dominant Social Theme: We shall overcome. This is merely another challenge for civilized society.
Free-Market Analysis: Sometimes dominant social themes and sub-dominant social themes are unstated instead of stated.
One out of every four Spanish workers is now without a job. This is a full-fledged depression by any standard. This statistic is topped by another one, that 50 percent of Spanish youth is unemployed.
The larger unstated dominant social theme is that unemployment and subsequent suffering are simply part of life. The sub-dominant theme is that austerity is a necessary part of the solution.
Fear is an essential element. Unemployment is a fact of life and only government programs can alleviate it. Higher taxes, service cuts and generalized enforcement of regulations are necessary to ensure that society ultimately thrives. Here's more from the article:
A sharp fall in the number of public sector workers accounted for a large portion of the unemployment increase. Almost 50,000 fewer workers were employed in the public sector in the third quarter, representing a fall of 7% year-over-year.
Some 1.7 million Spanish households have no adult of working age in employment, a rise of more than 300,000 over the past year. That means around 10% of all Spanish homes are now without a breadwinner.
The unemployment figures underscore the impact of Spain's second recession in the last three years. The eurozone's fourth biggest economy had fewer than 2 million people out of work at the end of 2007, when it was riding a boom before the financial crisis hit.
Analysts believe Spain's unemployment rate could deteriorate further next year as the economy continues to contract, and more austerity measures begin to bite as Madrid struggles to contain its budget deficit.
This is simply a disaster. The CNN article tells us that both Prime Minister Mariano Rajoy's government and the International Monetary Fund have published predictions that Spain will continue to be in "recession" next year.
Also: "Data published by the Spanish central bank earlier this week showed the country's economy shrank by 1.7% in the third quarter, compared to a year earlier." This is only to be expected, we are told, because "austerity" has reduced the public sector head count.
We get the canned explanations, as well ... "Spain's economic decline has been driven by a real estate bubble burst that destroyed the capital base of its banks." The amount needed by Spanish banks now amounts to some 60 billion euro." This presumably is the amount of value that Spanish building has lost.
The solution to such losses is assistance from the European Stability Mechanism, which will provide funding but demand further austerity. Standard & Poor's just cut Spain's credit rating to BBB-, "citing rising social discontent."
Western-style regulatory democracy is showing once again it doesn't work. The downturn, as we have written many times, seems to be an engineered one, designed to create greater political unity throughout Europe. Various European leaders have predicted that a European "nation" would only be formed in the crucible of economic depression and it was well known that the creation of the euro would cause such an event to take place.
That "leaders" could inflict this kind of pain on those voting for them is perhaps surprising but certainly predictable. The combination of regulatory democracy and central banking is a lethal one, giving those in power the ability to reshape society as they choose.
In this case, the powers-that-be want to create a more powerful European Union as a steppingstone to world government, apparently. The pain and suffering this entails is seen as a necessary part of the process.
Of course, if there were no euro, countries could simply inflate at will, spreading out the pain. The social and economic crisis would diminish more rapidly, as it has in the past. But in this case, the power elite wants to see a cultural change. Government is to become far more formidable and tax collection is to become invasive and authoritarian. This is a calculated gamble, designed to reset the 2,000-year-old culture of Southern PIGS.
We want to point out, as we do often, that it may not work in this era of the Internet Reformation. Too many people are aware of their own manipulation and the causes of it. The secessionist movement sweeping across Europe is a proximate result of this growing knowledge.
The kind of economic collapse that Spain is suffering is intolerable. It will lead either to secession of certain regions – Catalonia and the Basque country come to mind – or state fascism or both. It is hard to see these results as supporting globalism but these are the results that current elite strategies must almost inevitably generate.
Conclusion: The power elite didn't anticipate the Internet. Their globalist goals may not be nearly so easy to realize as they once expected.
Posted by clark on 10/31/12 11:20 AM
DB wrote, "Government is to become far more formidable and tax collection is to become invasive and authoritarian."
A bigger better monster. The little monsterettes will love it!
Mexico Joins the US and Others in Implementing Capital Controls
"... For now it is safe to say Mexico has joined the effort of many other first world countries to track all significant financial transactions within its borders, to capture every taxable peso and to gain access to the wealth of those banking or transacting business here." ...
Click to view link
New Credit Card Rule in Japan Bad For Small Businesses
"... the Japan Credit Card Association has passed a new rule that says all internet companies using credit card must register with the association and get a individual "credit card approval stamp" for their site and every sale must run through their approval process first before each and every purchase is made!
The big companies like Amazon and Rakuten have rejected this new rule but the association, according to my friend, is insisting upon new and small businesses to toe the line by early next year... " ...
Click to view link
It *is* getting to be a bit like reading a script.
Reply from The Daily Bell
Correct. It likely is a script written long ago.
Posted by Bosco Hurn on 10/31/12 01:48 PM
What?! You mean the whole solar/green jobs thing didn't work in Spain?
Reply from The Daily Bell
Doesn't work anywhere.
Posted by DarbyJie on 10/31/12 02:45 PM
"DB: In this case, the powers-that-be want to create a more powerful European Union as a steppingstone to world government, apparently. The pain and suffering this entails is seen as a necessary part of the process."
Actually the *pain and suffering* is probably the most edifying part of the process to them--they LOVE pain and suffering. That is why if ever we escape their yoke, NO pity should ever be shown to them..
Posted by zliker on 10/31/12 09:46 PM
The powers-that-be want to create a more powerful European Union as a steppingstone to world government... Bueorocrats are just sick cowards and nothing more. They can not rule their own lives and how do you think they will rule the world via world goverment? DB you re doing great job but i have some feeling, that sometimes you are taking this clowns too serious. Cowards dont rule, they just pretend to rule. Greetings
Reply from The Daily Bell
We cover elite memes, that's what we do, so, yes, we take it seriously. Governments apparently killed 150 million people in the 21st century.
Posted by wulirider on 11/01/12 11:04 AM
Spain's unemployment only mimics the rates in the US of A today. May be this is a classic example of the biggen entity, the USA, able to hold up a bit longer, for the inevitable effects of this dislocation, this level of disquiet in America will implode and explode into a revolution against the prevailing model and, after a most painful transition, find value and substance in means and ways of economic and social order, and a political approach that eschews the DC, federal government in your face model now dominating, and, sadly, more a reflection of the world or globalist model that has caused more death and destructin in the last hundred years than any comparible model. Now that is a run on sentence!!!