I note the FT Alphaville email this morning says:
Protesters descended on Spain's parliament for a second night on Wednesday and prime minister Mariano Rajoy called on Spaniards to ignore “short-term interests” as he prepared to unveil 2013 budget plans today.
That's all well and good when you have a job, home and food to feed the children. But what if you haven't?
It's another case of an elite just not getting it.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
As Keynes said, if that is your yardstick your not trying hard enough because in the long term we’re all dead.
In Spain the welfare system is not generous; the maximum period to claim “dole” is two years, but the majority only receive six months and then nothing, except the prospect of starvation.
But it is the level of corruption at all levels of Spain’s seventeen, exorbitant regional governments that really chokes economic development. And so far there is little evidence of any commitment by the recently elected right wing Rajoy to tackle a problem that Zapatero’s disastrous socialist government actually enhanced.
Yet further evidence that the world’s political parties are dying and that the world’s economies are in gridlock.
You’re confusing “not getting it” with “not caring about it”
They can’t fail to know, they are just failing to care.
They may “get it” when there are protesters knocking on their doors with baseball bats.
For that, they have police and army.
I have been struck by two comments recently: Shiller saying that most economists’ models best describe normal economic times and so most of them like to think the bad economic times are normal so that their models fit; and Krugman saying that in the good times economists are pretty useless, and only come into their own in the bad times.
Shiller’s co-authored paper (just out) takes a good look at his questionnaire data on US home prices he’s been running since 1988. On page 17 of the report he considers the long-term:
“It is, as was suggested by Keynes in his 1936 General Theory of Employment Interest and Money, the long-term expectations that may be the real driver of the speculative boom, and the long-term expectations are not normally the focal point of economic forecasters. It is the general expectation for the vague and distant future that helps explain why people behaved as if they thought that home price can never fall: perhaps they thought so only about the long run, as our 10-year expectations data seem to confirm.”
As Shiller suggests in his most recent article, the ‘we are Greece’ panic bubble is stopping the short- and long-term fixes, and the two have become inverted. And Krugman cuts through it in his blog posting September 26 2012, ‘Euro Update: The Perils of Pointless Pain’.
This crisis is about getting the short- and the long-term in the proper context.