In case you are interested, this hour long documentary from the BBC gives a very workmanlike breakdown of how it all  happened.

Spain is the canary in the coal mine for the world’s top economies, because of its large size and its fragility. The story carries lessons for everyone, everywhere. What happens in Spain first can happen later in more robust economies.

Well made and clearly explained, in one hour with this video, you’ll be up to speed.

Cross posted from: http://seaton-newslinks.blogspot.com

See SpongeBob SquarePants duke it out with Hello Kitty in Madrid’s Puerta del Sol… (where the “Indignados” camped out last year).

The Economy - Eleonore Weil

Suddenly, Spain and Greece are being racked by strikes and huge demonstrations. The public in these countries is, in effect, saying that it has reached its limit: With unemployment at Great Depression levels and with erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far.  Paul Krugman – New York Times

What began as an economic storm has blown into a full-scale political crisis. Amid popular discontent and separatist protests, Spain has stumbled towards a crossroads: without decisive action by the government, the post-Franco democratic settlement is at risk. Financial Times

It is said that every historical phase carries within it the embryo of the next phase to be born in the future. If this is so, then someday we may come to consider the mountain of debt that threatens to crush our present system as an explanatory, broken condom.

One of the paradoxes here is that the enormous robustness of the United States, its size, population, its natural resources, military power and perhaps most of all, its ability to create money out of thin air to pay its debts, probably means that it would not see the total systemic crisis arriving until it was too late to really do anything about it.

If Americans wonder where the world economic crisis is taking them, a look at what Spain is going through right now might give them some serviceable hints.

Read the rest of this entry →

This remobilisation of Spanish society, lulled into comfort and complacency during the boom years, in some senses recalls the fevered political and street activity of the transition to democracy after the death of the dictator Francisco Franco in 1975. Yet it is more amorphous and experimental, bypassing politics and Spain’s increasingly tarnished institutions.(…) A salient feature of the present crisis – beyond the immediate drama of Spain’s cost of borrowing and the broader eurozone crisis – is the extent to which Spain’s institutions, the linchpins of the vibrant democracy Spaniards painstakingly built after Franco, have been battered. Financial Times

Street Protest in Madrid (Photo: Popicinio / Flickr)

I don’t usually like to blog here about Spain, where I live, because I would have to spend too much time explaining the context of a very complex reality to the majority of my readers, who probably come to that reality burdened with a multitude of cliches about Spain, cliches that I find too boring to clear away. I write about politics, I’m not a travel writer.

I’ll make a bit of an exception now in order to explore the advantages that come wrapped in Spain’s weakness and the disadvantages for the American people inherent in America’s enormous natural strength.

Spain, unlike the USA, is by nature poor, with few natural resources, with practically no rivers of any commercial use, a dry, rocky, challenging terrain that has always made communication between its regions difficult. It is also an extraordinarily beautiful land, but as any farmer of Iowa’s flat, boring landscape will tell you, “pretty land is bad land to farm”.

It is a landscape that breeds hardy, fibrous and energetic men and women. This ungenerous, hardscrabble, land is what drove the conquistadors to discover and conquer the Americas, take its gold and create what was then the world’s largest empire.

When that empire fell apart Spain languished until Europe’s post war prosperity lifted all the boats and finally provided Spain with the capital necessary to modernize its infrastructure and give opportunity for the Spanish people, called “the Prussians of the south”,  to express again their native energy by building Europe’s fourth largest economy.

Today Spain is trying to dig itself out of the debris of an enormous real estate bubble created out of the euphoria of finally finding low interest money in their pockets after centuries of privation.

Read the rest of this entry →

Not really the image that America would like to project at this moment