Video: Cutting back in Spain

I mostly liked this video but I ask "Is this an accurate depiction?"  It definitely has a slant – one that I don’t necessarily agree with and that seems political. The subtext at the beginning of the video:

"Spaniards are lazy and living off the government (just like the Greeks). That’s why Spain is in a mess."

While there may be many who are living off the government, Spain’s main problem is a property bubble as it was in Ireland. I caution you that this is not an objective piece of journalism in that regard. I give it high marks for its recognition of economists who argue that austerity can (and probably will) lead to a worsening economic outlook in Spain. The second half of the video is more objective than the first. Take a look. (Runtime about 18 minutes).

Also see:

14 Comments
  1. Kikezurita says

    This WSJ has taken advantage of some true facts: the fact that some (very low qualified blue collar workers mostly) take advantage of government subsidies committing fraud to extrapolate this behavior to the Spanish society as a whole and to “demonstrate” why the country is in the current economic situation. It has depicted a “fiesta & siesta” country, which is part of the country but is not a fair reflection of today´s country reality, (a country that has been transitioned from dictatorship to democracy in thirty years and has experienced and admirable economic development). A country in which there were almost no multinational companies and now you have many leading companies in different sectors (Santander, Telefonica, Inditex, large infrastructure companies, etc…) and with a significant proportion of very well educated individuals (some of whom excell at top European and American Universities).

    Using just scenes picturing a 19th century country, plenty of “Sanfermines” style people and depicting countrymen as “traditional” dancers is by no means what is the country now.

    Highlighting the fact that Spanish Soccer league is one of the best as a way to explain the level of “ignorance” of the people is a curious way to do it in a continent (Europe) in which Italy, England and Germany have very strong soccer leagues in which several Spanish top footballers play.

    Is England, Germany or Italy just a land of Hooligans? It is just not true, as the US is not a land of rednecks eating hamburgers and watching baseball.

    While Spain´s economy needs of many structural reforms to be implemented (introducing more flexibility in the labor market, reducing the dependency on real estate industry, etc…), the current conjuncture has to do more with real estate bubble burst together with austerity plans implemented by the “socialist” goverment in power (with the “short term pain, long term gain” mentioned in the second part of the video).

    Reality is not so black or white, is usually grey. Spain has ranked for several years in the top 10 countries in terms of GDP in the world and fourth economy in the Euro-area (5th in the EU), has seen a significant increase of its GDP per capita (now very close to Italy and France) and has reduced the historic gap with the leading countries in the EU. Nevertheless, there is still a lot of work to do and while entering the euro and the posterior liquidity it provided the Spanish economy has allowed this economic boost, it was introduced a tremendous incentive for speculate on construction & real estate while at the same time putting a halt or slowing down many economic reforms (probably during more than 10 years), with the consequent opportunity cost for the long run economic development. These “flaws” of Spanish economic productive were indirectly hidden during a time in which the economy was as buoyant as ever and in which German and French banks were fueling the Spanish “miracle”.

    Germans know very well Spain, Mallorca is almost “half German”. They knew then who were they giving their money too (a good investment to back the savings of the risk-averse Germans) and who are they asking the money now (a lazy country or a country living the end of a huge real estate bubble).

    WSJ video is maybe good in its second part, but is not an accurate reflection of the country´s reality, for many Spanish MNCs, Entrepreneurs, brilliant professionals, ….etc…depicting today this country as “Siesta, Fiesta…ah, and I forgot Spanish Inquisition”. Those stereotyped comments are mostly used not under a precise analysis but when trying to introduce some “politically” interested and biased point of view.

    1. Edward Harrison says

      I agree that the WSJ video was slanted. Objective journalism is out and slanted pieces are in at the WSJ now that Murdoch is the owner.

      Question: how is the social safety net in Spain vastly more expansive than it is in Sweden or Germany? I don’t think that it is. Why then can’t the same logic be applied to those countries regarding their vaunted welfare states? The answer is because it doesn’t fit the political objectives of the reporting – which is to demonstrate the inferiority of the more ‘socialist’ European form of capitalism. This is clearly the subtext here and the slant in the video. Whether this is true and how is a debate for another time. But, in this context, it’s propaganda, pure in simple – and that’s why despite other positive features of the video, I had to insert this disclaimer. It was over the top in my view.

      Barry Ritholtz has been making a big deal about this supposed post-Murdoch slant.

      http://www.ritholtz.com/blog/2010/01/wsj-jumps-the-shark/

      I haven’t really been on the lookout for it. But here it was front and center.

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