Top Ten Things Mitt Romney’s Insults to Spain tell us About Him

Mitt Romney has caused a tiff with Spain by saying that its economic crisis was caused by government over-spending and saying he doesn’t want the US to end up like Spain. The Spanish are bewildered, since Romney’s charge (like most of the things he said in last week’s debate) is simply untrue. So here are the top ten lessons we can draw from Romney’s ongoing War on Europe:

1. Mitt Romney is the least diplomatic politician in America, having by now managed to imply that the British might not be up to hosting the Olympics, that Russia is our Enemy No. 1, that the Palestinians do not exist, and that Spain’s economic woes come from budget deficits.

2. Romney doesn’t know anything about Europe’s economic crisis, since in fact Spain’s government ran lower deficits than most European countries in the run-up to the 2008 crisis.

3. Romney consistently tries to shift blame for any problem away from the private sector onto the government, even when this approach involves out-and-out falsehoods.

4. Romney doesn’t know that Spain’s crisis mainly derives from the private sector and has to do with the bursting of a real estate bubble.

5. Romney doesn’t seem to know that last year Spain elected a conservative government headed by Prime Minister Mariano Rajoy, which is dedicated to exactly the kind of fiscal discipline and austerity that Romney favors.

6. Romney doesn’t know that Rajoy’s determination to stop running budget deficits have repeatedly provoked tens thousands of people to take to the streets in Spain, including students objecting to cuts to education.

7. Romney doesn’t know that Rajoy’s austerity policies have demonstrably worsened Spain’s crisis and increased its unemployment. Romney thinks Obama’s 7.8 percent unemployment rate is an illusion, but it was achieved by government spending to kickstart an economy from which entrepreneurs like Romney had withdrawn– i.e. Obama did the opposite of what Rajoy is doing, and Obama’s way is working.

8. Romney doesn’t know that sacrificing all just for the sake of a balanced budget has turned Spain into a nation of hobos and has deeply damaged the education system. (He wants to do the same thing to us.)

9. Romney only seems to trust ‘Anglo-Saxons.’

10. Romney seems to think that the entire nation of Spain is in the 47%, along, perhaps, with everyone of Spanish heritage.

Posted in US politics | 39 Responses | Print |

39 Responses

  1. Hello Professor Cole,

    I would suggest instead of “does not know”….maybe you should also underscore the fact that “he does not want to know”….

    • I was going to replace that with “does not care that”. The Republican philosophy, never let its proven falsehood interfere with a focus-tested talking point.

  2. Concerning #1, you forgot when he declared Russia the US’s number one enemy, thereby giving Putin a talking point in his opposition to the missile defense shield.

      • “Putin himself said a missile deal would be more likely under Obama because of Romney’s attitude towards Russia.”

        Not to mention that Obama himself gave Putin plenty of reason to think so, when at a security conference in Seoul, Korea, he had the following exchange with then-President Medvedev (not realizing the mic was hot) on March 26, 2012:

        Obama: “This is my last election … After my election I have more flexibility.”

        Medvedev: “I will transmit this information to Vladimir.”

        Here we have an American president obseqiously suggesting to the Russians that he will be in a better position to cut a missile deal after the election; when the Russians have given him no assistance whatsoever, in areas ranging from Syria to Iran, not to mention they recently kicked out all Agency for International Development (AID) personnel from Russia. The Russians, of course, are a sovereign nation and can do as they wish, but why does the U.S. president pander to a Russian leadership that has shown him nothing but contempt in its lack of support for U.S. initiatives? Unfortunately, it demonstrates a lack of resolve and leadership on his part.

        • In the most relevant area, that of bilateral arms negotiations, Obama’s record of working successfully with the Russians is rather impressive.

          Was it “pandering to Russian leadership” to negotiate the New START agreement?

          I wonder if you consider New START, like its predecessors under Reagan and Gorbachev, to demonstrats “a lack of resolve and leadership on his part.” I certainly don’t – I think it takes a great deal of leadership and resolve to restart nuclear arms reduction talks with the Russians after Dubya so dramatically trashed them (and the Nobel Committee agrees).

        • Or, it demonstrates that Obama actually recognizes the necessity of nuclear disarmament and the relative triviality of these other issues compared to thermonuclear holocaust. Which would come as a big surprise to all the peaceniks who continually complain about Obama being pro-war.

          Did you have a problem with the US negotiating the SALT treaties with a USSR that was far and away our biggest enemy?

        • To double down on something I linked below, this little snippet seems so apropos of your situation. Must be horrible when the reality (another failed imperium, a planet that may spit us humans out like a mouthful of dirt, inability to think or act our way out of a cul-de-sac) really clearly and pretty much inarguably stops corresponding with the force-fit mythic model, on which one is then compelled to triple down on, quadruple even…

          The question is whether we, as a species, will continue to live within this crumbling fiction or whether we can construct a different mythological system founded on principles that are a closer fit to our really existing circumstances.

          Almost every moral pillar of our contemporary societies – from the discipline of economics, to ideas that dominate about what constitutes good statesmanship – militates against the formation of such a new mythology. And, as psychopathology teaches us well, people are quite stubborn in their giving up of their mythologies, despite their possibly high degree of dysfunction.

          link to

          Let’s stick with what we know. We ain’t gonna live much longer anyway. And do you know there are older people who run their Oldsmobiles and Escalades into crowds on the street, killing and maiming, and claim they just hit the gas instead of the brake “by accident?” And in their hearts are actually just doing something they have always wanted to do but were afraid to simply on account of the uncomfortable consequences (which they now escape, by prosecutorial discretion in favor of the very old or because they die, out on bail awaiting trial on reduced charges): Kill another human being, or many of them if they’re lucky.

          And what do you think is in the hearts of the folks who run the drone program, and the rendition program, and the Phoenix Program, and all the rest of those “programs?”

  3. Dear Professor Cole

    I have finally got to the point of sayingt clearly and unequivaocably that this man is not fit to be President of the US when he makes fundamental errors like this

    link to

    New York Times reported last week that Obama is encourgaing the Saudis and Qataris to cut back on weapons flows to the rebels, because they are creating a Frankenstein that will come and devour them. The Saudis and Qatari officials agree.

    Now this nincompoop makes it an election issue, so rational decision making can fly out the window.

    General Dempsey and some Turkish, Jordanian, and British Generals need to surround the clown and explain the consequences of arming a loose cannon like the FSA and the Jihadis.

    Mr Romney has just provoked the formation of a coalition of the unwilling, against his foreign policy if, tragically, he is elected.

  4. Your use of the term ‘nation of hobos’ hints to a lack of insight to the true reality here in Spain. I’ve lived here for the past two years and whilst there is a small increase in the amount of beggars on the street (I saw four whilst walking through the city of Pamplona a day ago) it most certainly isnt a ‘nation of hobos.’
    Things are tough and yes people are battling but the reality of what I see and photograph everyday is not that of the NY Times’ story… American sensationalism or deflective reporting?

    • Hobos are not beggars. Hobos are unemployed people who are forced to become nomadic in search of work.

    • The comment about the “nation of hobos” was in reference to something that Romney said. It did NOT imply that Spaniards were now all beggars. Romney had equated receiving government aid such as unemployment insurance or social security with being a nation of hobos. The implication was that if you weren’t paying income tax, then you were living off government handouts.

      Spaniards should feel as insulted as large women would if they heard the expression, “when the fat lady sings.” It isn’t a reference to them.

  5. Juan should help Obama prep for the next “debate.”

    Of course, the Democrats may want to bring Romney back into the race. Republican voter turnout may suffer with such a dismal choice at the head of the ticket and those down-ticket Republicans may loose giving the Dems control of the government – and then the Dems would have no excuse for implementing a progressive agenda.

    Recall that the Dems in 2008 saying they needed 60 votes in the senate to get anything done while the Republicans in 2000 said all they needed was a 50/50 senate as the VP would cast the tie breaker.

    • “Recall that the Dems in 2008 saying they needed 60 votes in the senate to get anything done while the Republicans in 2000 said all they needed was a 50/50 senate as the VP would cast the tie breaker.”

      The reason for that is that the Republicans tend to circle the wagons and lock-step, to mix some metaphors, while the Dems have members that go their own way and actually have to be persuaded, coerced or bribed into giving their vote to a particular bill. The ‘Pubs are well known historically for not even being willing to criticize their own. Hell, it took a year and a half of nonstop public shaming just for Tea Party leaders to state that they were intolerant of the extremely vocal and well-documented racists in their midst… and that was as far as they’d go.

  6. Dito the above.

    Salt Lake City is a good distance from Spain, and though conservative Spaniards can give one the creeps (try visiting Salamanca during Holy Week) at least you won’t have any trouble finding a drink in any Spanish town or city. And as a rule there is a great deal of life on the streets.

    The Romneyacs also blame the poor and the public sector for our own meltdown. Fannie Mae and Freddie Mac. Any gloss will do to cover up their boundless game playing greed….

  7. I´m a Spanish young clerk at a little-medium size company… and I have to say that I totally agree with you. Spending cuts in Spain are most likely to keep worsen our situation. Nowadays Rajoy´s government seems to be only focused on paying the Debt (and its interests) we have accrued all these years. If I´m not wrong, WE the common People by means of taxes and social cuts are taking charge of “paying” the Spanish banks´debts. Debts credited by German banks. It´s kind of an imposed demand. We could be paying this Debt but not at such a enormous cost. There are no real stimulus neither pro employment nor pro growth. Few isolated measures. Cuts on Investment and innovation are sacrificing our future. Tens of thousands of high-qualified young people are either redundant or looking for any opportunity abroad (I myself am thinking of getting any sort of job that could allow me to earn more than the 880€ check I monthly get from my company) This way we are going to become a second or third tier country. And something OUTRAGEOUS: they are now even thinking of promulgating a law to restrict people from demonstrating on the streets. UNBELIEVABLE. We are goona ending up thanking the Police for not shooting us dead when we regularly get out to the streets to protest.

    • “they are now even thinking of promulgating a law to restrict people from demonstrating on the streets. UNBELIEVABLE. We are gonna ending up thanking the Police for not shooting us dead when we regularly get out to the streets to protest.”

      What you are referring to is the de facto case here in the US. While there is no single law forbidding demonstrations, the results of a bunch of small regulations is to, in fact, forbid demonstrations except when they are for government approved functions. And the various demonstrations of OWS and others have shown that the police have no compunctions about seriously wounding if not killing people. The other day a cop in MD punched out some woman half his size because someone else, somewhat larger, had squirted water in the air and the cop had gotten wet. Nothing will happen to the cop.

      • Spaniards were only kind of used to Police brutality in the Franco era. And that period ended up like 35 years ago. In recent years we have been a little bit shocked by some Police interventions. Certainly there are radical people who incite others to violence and provoke serious incidents… But having our country suffered for decades from a type of radical separatist terrorism whose target was mainly personnel from Police forces, I think the situation here was quite different from that in the US. Police forces are (or have been) largely well considered and highly respected here, though this view is somewhat changing in recent times. I see things are pretty different in America. I´m aware of some cases of brutality over there in the States. Anyway I now realize Police abuse of power/authority has been a constant in every country throughout History. What I can´t conceive nowadays is Politicians restraining our right to publicly demonstrate on the streets. Yeah maybe in the past but not now. Western countries should have taken a leap forward not backwards on right issues. I guess American people somehow have their hands and voices a bit tied up. Am I right? Bush era showed us a scrap of what “democracy” really means (since the vote re-counting in FL. 2000)

  8. I find Romney’s ignorance of the European economic situation absolutely astounding. One would think that a candidate for president at a moment when economic questions are front and center would make a point of being informed about the details, which emphatically did not involve deficit spending on the part of the Spanish government, but instead involved a lot of German money pouring into huge development projects that now stand empty. While I’m a Krugmanite about the solution here, I recognize there’s disagreement at that level — but the historical facts are not in dispute and I don’t want anybody being president who hasn’t made a point of learning them. Of course knowing those facts would be “professsssorial” … because bad.

    • I’m beginning to think the cocoon Romney sprang out of only dedicated him on how to win at a place like Bain…..

    • Well, Romney does come from the industry that caused the global financial crash and got bailed out. How could he sleep at night if not for being in denial?

  9. A nation of hobos? Mitt Romney isn’t the only clueless, patronising American…

  10. Saying that Spain is “a nation of hobos” is like saying that the US is “a nation of convicts” (The US has 5% of the world population and almost 25% of all its convicts)…

  11. 9. Romney only seems to trust ‘Anglo-Saxons.’

    Considering Romney’s comments about Britain running the Olympics, he doesn’t seem to trust Anglo-Saxons either.

  12. So much for the idea that Mitt is very wise and informed about international finance. Anyone who reads the Financial Times regularly knows that Spain’s problems did not come from the public finances but rather from a property bubble financed by banks…

    So one wonders what precisely Mitt does bring to the table? His strong suit is weak..

  13. No serious economist would disagree with the notion that austerity can be very painful but pushing off austerity and kicking the can down the road only makes the ultimate problem that much larger and even more painful. This is common sense and frankly George Bush cutting taxes at the same time as starting two wars showed me that he is not a serious politician when it came to deficit fighting. Obama clearly is even worse when it comes to the deficit fighting since the US is still running trillion dollar deficits and its no longer 2009 so the excuse of an imminent collapse is no longer valid.

    Romney and Obama are both reasonably aware of all of the economic problems but its not in a President’s or especially Congress’s self interest to do what is necessary to start to fully solve it. When George HW Bush raised taxes and cut spending, he lost the 92 election.

    Governments not managing their budgets wisely in times of great economic activity/bubbles such as the Spain or US housing booms or US dotcom bubble to generate massive revenue surpluses/rainy day funds, eventually lead to hardship or massive pain down the road when the bubbles burst.

    Ron Paul is the only politician with a foreign — little involvement overseas and zero involvement where we are not wanted — policy and economic policy where the math actually adds up.

    Cheney “deficits don’t matter” and Obama clearly do not believe in controlling the debt. This deficit spending is only OK until its starts to negatively affect growth and it already has in the US as well as Japan. There are negative consequences of the economic games the US is playing and we are already starting to see some of the negative consequences such as the true unemployment rate which is clearly over 10%.

    I’m all for helping the *truly disabled* which is probably only 40% of the people receiving full disability payments right now from the government. I’ve met more then a few people on full disability for neck or back pain who routinely go golfing. If we are honest with ourselves every American reading this probably knows of 2 or 3 Americans at least abusing the system.

    As for the meltdown. It was a combination of private sector greed from wall street to main street and government incompetence(both Democrat and Republican and Greenspan) and government greed that led to the massive housing bubble.

    George Bush did many things wrong but he was right about the risks the GSEs Fannie Mae and Freddie Mac were taking with 100-1 leverage. Barnie Frank was some other Democrats were wrong to defend these entities.

    Both the Republican led Congress and President Clinton and Clinton’s economic advisors deserve blame for repealing Glass Steagall and that repeal help lead to the crisis as well.

    • Dan, not only would a serious economist disagree with your naive idea of how economics work, in fact many have. It goes against not only most economists’ understanding of the mechanisms, but also the empirical evidence.

      “Common sense” is often quite wrong.

    • Isn’t Ron Paul against Glass-Steagall and all forms of regulation of financial markets, as well as the very idea that bubbles have always been a problem in capitalist systems?

      • Actually Ron Paul was one of the people that voted _against_ the repeal of Glass Steagall so he is favor of the Glass Steagall regulation and breaking up the big financial institutions. He certainly believes in some very strict financial regulations that setup how the game is played such as Glass Steagall. Paul believes bubbles have been exacerbated by government and federal reserve policies. It’s frankly hard to argue with him in many areas since he has been proven right. Without the GSE’s we would have still had a housing bubble but it would not have been as large.

        I don’t agree with Ron Paul 100% of the time on his priorities but I am impressed he is one of the only politicians in either party — perhaps the only one — where his budgetary math actually adds up.

        And frankly I probably agree with Rand Paul even less but in actual interviews such as the DailyShow with Jon Stewart he comes across as a thoughtful man at least that is willing to be a lone wolf.

        He held up a pipeline safety bill from an immediate vote after the PG&E disaster since he realized that bill had next to _nothing_ in it that would have prevented the disaster or similar disasters on aging pipelines that were initially grandfathered out of the bill that every other member of Congress wanted to support. It was too much feel good regulation considering the actual problem was not being solved..

        After Paul and Congress looked into it more, Congress _added_ regulation to it that actually was directly related to the root cause of the disaster of I believe actually inspecting aging pipelines and a couple of other pipeline disasters.

        Even Rand Paul isn’t against all federal regulations. He just believes their benefit most outweigh their costs and they must not be unconstitutional.

        My elderly parents — both Democrats — had a garage put on their house and they literally couldn’t believe the amount of crazy regulation that they had to go through that held up the project 3+ months. Every little phase of the project needed to be signed off. It truly was insane and comical and completely different from their experience of putting on a different similarly sized addition 20 years ago whereby they only needed 1 or 2 approvals by the town. Granted this wasn’t federal regulation but it did show them that regulation can often go way too far.

        • Re regulation going too far: got any Paulian exemplars of how de- or non-regulation has worked out wonderfully for anyone except those who are de- or non-regulated? Your example is a seductive fraud, as I am sure you know. The permitting process for construction is the way it is in part because interested parties, usually as a result of some bad outcome (the Beverly Hills Supper Club fire and many bridge collapses and falling buildings in minor earthquakes and Ford Pintos with pinchpenny explosive “engineering” of their fuel fillers come to mind), use the “rule of law” to set some standards. Which then may or may not be enforced. And once regulatory apparatuses are in place, “running government like a business” by lobbying regs that favor YOU at the expense of your competition is just peachy. And it’s BS to claim, given our nature and all the historical evidence, to expect that it will ever be much different.

          Your elderly parents in many places could have just spread a little grease around and slid right past the “crazy” regulation you toss out as a red herring exemplar. And of course you provide no details of what kinds of approvals were required, what jurisdiction you are yakking about, (not “federal,” nice conjurer’s trick there), what “features” of that garage might have been “odd,” and other stuff that might allow rational analysis as opposed to emotional tear-jerking.

          Love the casual toss-off of loaded terms, that sound so “fair” and “rational:” regulations must satisfy some “cost-benefit” test (and gee, who will administer that, again?), and be “constitutional?” What’s that high-pitched squealing I can barely hear? A dog whistle?

          The Pauls are sneaks and frauds in their own right, and the amount of misrepresentation offered on their behalf and that of their acolytes is just astounding, comparable to other cults…

    • I guess Paul Krugman is not, by your judgment, a “serious economist.” Thanks for sharing the “conservative” talking points, with some of the sharper barbs sanded down a bit. It’s becoming increasingly clear that “economists,” particularly the ones denominated “serious” by the Narrativatizers, are paid shills for the kleptocracy. And that “economics” as a “discipline” starts from false premises and postulates, and goes downhill, fast, from there.

      Ever trouble yourself with the likes of Yves Smith (or the actual Adam Smith, for that matter, not the ChicagoAustrian Cliff Notes (per)version) or Matt Taibbi (who does not pretend to be an “economist” but has done a heck of a job showing how the vampire-capitalist state actually works)?

      A couple of recent selections from Naked Capitalism:

      This is the legacy that Smith [Adam, that is}] has left us today. Not just in the field of economics, but also as a sort of moral or mythic code by which we arrange our social intercourse in mass society. When we step into a shop and purchase a good or a service we are acting as Smithian individuals. We see ourselves as unbounded to those around us and free to make whatever decisions we please. And we believe that once the transaction is complete we can wash our hands of it.

      The problem is that this is not true and it probably never has been. Today, instead, we see all too clearly the importance of debt. Debt is what ties us together. We may be in the position of creditor or in the position of debtor – or we may even be in the position of neither – but debt affects all of us. Even those of us that balance our books perfectly and do not engage in any form of lending nevertheless rely on banking systems and systems of government founded on the simple and timeless principles of debt. And it is these principles that bind us together.

      We are not, in any way, “men who owe no obligation to one another”. Our entire social system is founded on obligation and interconnectedness. This was likely true even in Smith’s time, but his genius was to have hidden it from view and in doing so to construct the founding myth of liberal individualism as it exists in modern times.

      <strong?Yet today the debt issue explodes once more. And because Smith’s mythology cannot contain it we see all around us anxiety together with its attendant primitive emotions such as envy, anger, spite and malice and, in countries such as Greece, a general collapse of the entire social economy. We see politicians obsessed over government debt sending their countries into ruin simply because they adhere to a redundant mythology. In short, we see the chaos that terrified Smith of a society in which, in his words, injustice prevails.

      What Smith gave to humanity in his founding of economics was a great lie with which to structure our newly forming nation-states and mass societies. But it was a lie that was in many ways quite fragile. And it is this lie that we see cracking up all around us today. The question is whether we, as a species, will continue to live within this crumbling fiction or whether we can construct a different mythological system founded on principles that are a closer fit to our really existing circumstances.

      Almost every moral pillar of our contemporary societies – from the discipline of economics, to ideas that dominate about what constitutes good statesmanship – militates against the formation of such a new mythology. And, as psychopathology teaches us well, people are quite stubborn in their giving up of their mythologies, despite their possibly high degree of dysfunction. But given that the stakes are rather high and humans are a fairly adaptive species, we may surprise ourselves yet.

      Read more at link to

      And then there’s this, but you’ll have to read or watch it for yourself: link to

      Gee, think of all those places that are having “austerity” shoved up their ______, who are discovering that all it means is that “bondholders,” a tiny7 fraction of the alrecy hugely wealthy, are now freed from the downside risk that they, as “sophisticated investors,” knew or should have known supposedly was priced into the bonds they bought at various discounts.

      Spare us your fake empathy, claiming to be “all for helping the truly disabled.” That’s a line our FL governator, Rick Scott, uses when cutting Medicaid and kicking disabled kids out of their homes into “privatized” institutions owned by his buddies. All disabled people are not true Scotsmen. As a nurse who works with them every day, I call you a liar or at least misinformed on how many cheaters there are (and how many fully able rich sh_ts have “disabled” license plates and hang tags for their Lexus or Mercedes? Any “economist” studied that statistic?)

      Don’t you dare lay half the “greed” label on “Main Street, bunkie — it was the Very Few who created and operated The Economy for their benefit, creating huge debt on the part of people who created all that REAL wealth, people with ZERO chance to “make it big,” and enormous invisible profit, all on the way, like their feudal and Gilded Age forbears, to “owning all the land.” Ask Henry Potter how the model works — he almost ended up with the Brass Ring of owning all of Bedford Falls. link to

      Afraid of DEBT, Dan? Maybe that’s one of the myths that the first link discusses, hey? Think about it. “Austerity” is killing people and their relationships, in favor of more upward migration and concentration of wealth. There’s only one possible end to that process. Economically speaking. Global environmental collapse or nuclear war and several other possibilities are in the running.

    • This is common sense

      Repeat 100 times – “a government is not like an individual or a business”.

      Government “debt” is the flip-side of private financial asset creation – money issued by the government is necessary for the private sector to build up net financial assets or to finance trade deficits. Balance the government books in a country running a trade deficit, and net private financial assets will decrease – the private sector will go further into debt (to pay for the money going overseas).

      And your real economy requires people to spend, which they will only do when they have built up their financial assets and paid down their own debt. Balance the government books – austerity – and your real economy will continue to suffer.

  14. Watch the Real News network’s recent videos on Spain and the effects of “austerity”. The Mutt is outstandingly ignorant- probably never went to a public school.

  15. He apparently doesn’t realize that a whole lot of Brits living in the eastern side of England/Scotland from the Firth of Forth down to the Wash likely don’t care to be called Anglo-Saxon. Our ancestors were mostly Vikings. That’s how most of our old streets are called “Gates” and our place-names so often end in “thorpe”–Norse for “village.”

  16. My pack-rat memory recognizes your name, Juan Cole. You clearly have impressed people who write things that I read. Indeed, I’m only at this website due to someone’s linkage. It is thus with some dismay that I repeatedly read above the phrase “…doesn’t know…” Can you be that innocent? Or are you merely another villager, desperately flinging wallpaper at the exponentially-expanding cracks in the edifice of, of… whatever you call today’s establishment.

    To suggest that Romney is ignorant of the real-world outcomes of austerity is a joke, a malaprop, a dis-service to ordinary people around the planet.

    To suggest, for example, that mere ignorance leads Romney to blame governments for the results of casino capitalism unleashed is to suggest that the 99% are at fault for not explaining to him the corrosive, corrupt effects of Wall Street in general and Bain Capital in particular. If only the good people of the world would wait patiently a bit longer, then perhaps Romney would see the error of his ways, have a Saul-to-Paul conversion, and all would be well in The Village once more.

    You will not miss my forgetting of your name in the future.

  17. link to

    But Obama leans austerity as well. Here is a better plan than either O or the Spanish elite is offering.

    Unluckily, it is hard to do “socialist nationalism” in a splintering multicultural country.

  18. Not only does Spains problems stem from a property bubble, but also from pressure from ECB and Germany not to let their banks go bust, so that Germanys banks (that has borrowed to the Spanish) will not reap the rewards of their follies. This has long been concluded by observers and was just the other day confirmed by a Merkel advisor.

    Merkel Advisor: We Are Rescuing Spain in Order to Rescue German Banks | Forex Crunch

    Jürgen Donges, a member of Germany’s 5 strong Council of Economic experts, said clearly that when Germany is rescuing Greece or Spain, it is thinking of rescuing German banks with exposure to in these countries.

  19. The debt/austerity issue a very tough one to solve. Many intelligent economists line up on both sides of this issue. A reading of this article tells me that because the Spanish have taken to the street in protest of austerity measures, the austerity measures are mistaken. That’s nothing but mob rule and is not a way to establish public policy. I’ll admit that I can see positives and negatives on both sides. Is QE3 excessive, running up the debt and perpetuating inefficient investment or is it required by what may be the worst depression since 1929-1937? Is high government debt spurring demand, is it caused by a lag in tax receipts, or is it spurring empty investment? Are austerity measures eliminating inefficient investment or are they unecessary pain? Economic geniuses on both sides argue over these things – I’m continuing to try to read as much as I can to get my own answer and it’s awfully time-consuming. I get irritated when people are labeled as stupid for believing things that are argued ferociously by very smart people.

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