Today's big word in Spain is "paréntesis". We're not talking about brackets either. Given that things are not going very well economically the head of the Spanish employers association has called for a paréntesis in the operation of the free market. Roughly translated, what he means is that the state should hand bucket loads of cash to the private sector. Then, when things recover again thanks to this communal generosity, we can go back to the normal situation where a tiny group of beneficiaries keep almost all of the profits. To help them on their way, the employers also called for a return to the days of guaranteed easy pickings with more privatisations and contracting of public services. That's what free enterprise is all about isn't it?
Meanwhile the latest construction company to be tottering on the edge seems to be Habitat, a name I always associate with overpriced furniture. They are reported to be in the process of renegotiating their debts with the banks in an attempt to avoid going into liquidation. With all the talk of a credit crunch and lack of liquidity, I was a little bit surprised to get a letter from my bank the other day offering me an easy loan. Not only that, they then phoned me up to check whether I had got the letter and to remind me that they could still lend me lots of cash. I don't know whether to be pleased or worried by this - it could mean my bank is flush with funds, or it could be that they just don't care as we all slide down the precipice that the pre-paréntesis free market has created for us.
Meanwhile the latest construction company to be tottering on the edge seems to be Habitat, a name I always associate with overpriced furniture. They are reported to be in the process of renegotiating their debts with the banks in an attempt to avoid going into liquidation. With all the talk of a credit crunch and lack of liquidity, I was a little bit surprised to get a letter from my bank the other day offering me an easy loan. Not only that, they then phoned me up to check whether I had got the letter and to remind me that they could still lend me lots of cash. I don't know whether to be pleased or worried by this - it could mean my bank is flush with funds, or it could be that they just don't care as we all slide down the precipice that the pre-paréntesis free market has created for us.
2 comments:
No one ever recognizes the good times until they are gone. Not in a free economy, not in a 'socially managed' economy. The good times are 'never enough' and there is always something to complain about. Then, inevitably the system corrects for some imbalance, for some group that has actually been doing 'too' well, and it suffers the 'growing pains' that we see now, even in non open/free markets.
Then it becomes tempting for capitalists, especially the ones doing 'too' well, the ones who have become accustomed to the system statistically bent in their favor, to try to skip the part where the market is TRULY fair, by turning from 'success-end capitalists' into 'failure-end socialists'.
Anyone who votes to support this either hopes they will never go back to being capitalists, or is a hypocrite.
We have to 'take our lumps'
A free market is free to boom and free to bust.
Don't we claim that reducing taxes leaves the most money in the hands of the people who had previously been paying the most taxes, and that it then works its way down into our hands, and the eventually the pockets of the people who make even less?
Well, that's exactly what happens when the market cycles around to bad news, too. The negative effects work their way down the 'ladder' just like the good.
THEN, things start moving back on up again. Rinse, and repeat.
I think the problem is not so much that people don't recognize the good times - it's that they think they will never end. I think it was Javier Ortiz who wrote the other day about the huge quantity of experts who have emerged in the last few weeks with their diagnosis of what has gone wrong. The question being, where were they before the shit hit the fan? The answer, probably, is that many of them would have been amongst the most fervent supporters of the bubble economy that has now burst. When the first internet boom was underway there were people who insisted that the rules of the game had changed and the boom could go on forever. When they were proved wrong they rebadged themselves as experts in why it couldn't have lasted.
As for the negative effects working their way down the ladder, I suspect that those at the top of the companies at the heart of the crisis have simply been allowed to walk away with their multi million dollar bonuses. The top rungs of the ladder always seem to be exempt when it comes to sharing the brunt of the crisis.
Post a Comment