Wednesday, April 25, 2012

I STOPPED reading this Robert Teitelman piece on the Spanish financial crisis at the HuffPo when I bumped into this:
 Spain is interesting for many reasons: its size; its massive, U.S.-style real estate bubble and collapse; its almost New Deal-like willingness to try just about anything to wriggle out of its mess, which a number of folks agreed could be either very good or very bad. But Spain does not conform to the conventional wisdom of Greek-style fiscal profligacy that hangs over the crisis. Spain, like Ireland, ran a fiscal surplus.
Surplus? What surplus? Since 2008, in a futile attempt to avoid the financial crisis, the Zapatero government ran an accumulated deficit of 465 billion dollars, and incurred in 550 billion in public debt. Throwing good money after bad, and not only leaving the problem unresolved, but making it much worse.

People wonder why the financial crisis has hit Spain harder than other countries. Yes, the real estate bubble was particularly bad. But the fact that the government refused to admit until 2008 there was any crisis whatsoever, and then went into panic mode after that and started burning money like there was no tomorrow has left the country in the mess it's in right now.

(On a side note, I tried to write this as a comment to the piece on HuffPo itself; I had never posted one and had no account. I signed in, wrote the comment, and when I hit on Publish I got a message on the screen saying that I've been banned from commenting... Oh well.)