Economics for Dummies: Rodríguez Zapatero’s new socialism

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“We’re socializing the crisis so the IMF can capitalize its gains!”

This, no doubt, to stave off in Spain what happened to Greece yesterday. Defy the IMF, get downgraded to junk-bond status. National pride? Sovereignty? Shit, what are those next to the almighty fickle finger of Moody’s? Never cross the IMF mafia, little countries, lest you too find a horse’s head on YOUR pillow.

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1 Response to Economics for Dummies: Rodríguez Zapatero’s new socialism

  1. Mike Watkins says:

    To be fair, what has put Spain in an uncomfortable position is very high unemployment (> 20 percent in some regions) and a huge overhead of unsold homes. There were plenty of good construction jobs but overbuilding to the point where it’ll take years to burn off that supply isn’t going to help them in the near term. The Spanish government should have taken steps years ago to rein in what had become rampant speculation, but they didn’t (sounds familiar, no?) and thus everyone there will have to pay up in the end.
    On the bright side, Spain probably isn’t in as bad shape as Greece.
    Credit rating downgrades are par for the course. It’s just a way of saying “I don’t trust you as much as I used to”. That happens all the time, in relationships, between people and countries.
    Put another way, would you put some savings into Greece? How about Spain> Probably not, or at least not without asking for a big risk premium to pay for the uncertainty of it all.
    Probably Canada gets touched by this before all is said and done, but maybe not before China does.

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