La crisis económica en España, responsabilidad e interdependencia mutua

Abstract

The primordial causes of this current crisis are the following: 1) A shock that came from abroad. 2). Wrong investment decisions were made in Spain as too much investment was concentrated in one sector, housing, which has been ruined; and 3) All of this in conjunction with a very rigid system of prices, that cannot adapt easily to changes. In addition, the Spanish economy has some structural weaknesses that exacerbates the crisis and makes the recuperation more difficult: 1) The low productivity of our productive goods. 2) The difficult demographic circumstances. 3) The size of our public administrations, with their overlapping responsibilities and inefficiencies and 4) The problem of maintaining the current welfare state. All of these variables and structural deficiencies act in weakening the chances of recuperation of demand and, consequently, sales; by undermining our competitiveness in costs and domestic prices; and alternatively, the lack of credit. What is urgently needed is to accept that all of these assets that the banks have in their portfolios are overvalued. Who or What prevents the prices from falling? What is required is a drop in values of the overpriced assets so that the economy is able to provide investment opportunities. It may be that some banks will fail. Additionally, there needs to be a drop in wages so that there can again be incentives for hiring. We (the agents) are tremendously interdependent and promptly we need to preserve, to take care of and increase, without malice, the level of mutual confidence. The level of mistrust, with its worst aspect, the more than five million unemployed, shows the urgency of well done structural reforms. Here I am highlighting the relationship between unemployment and the level of distrust. The fundamental problem is the increasing desperation of people in a situation of massive and persistent unemployment. If we cannot overcome the rigidities of prices and wages than we will be trapped. This obstinacy in preserving this rigidity blocks the solution. At the heart of the matter is the concept of values (of common, recognition of mutual interdependence versus a permanent class struggle approach). In the background is a matter of values (of communion, of recognition of mutual interdependence versus a permanent approaches struggle). Public intervention and the "invisible hand" must work on a scheme of rational and fair values. On this basis, freedom is capable of creating wealth and well-being. Therefore we must clean up the banks, private enterprises, public administration, employers and trade unions all the while, preserving and rewarding moral values, so that there is "almarse".