Blumneconomics VIII: Let's copy the economy of Spain

From the title of this week's piece from Robyn "Blumñata" Blumner, I thought I might get the week off by ignoring another human interest editorial.

Old World of Spain can teach us how to live

She's tricky. Her column morphs from a travel log into a woe-is-the-American-economy screed in short order.

My new Spanish relatives-in-law regaled me with stories of their health care system, where no one has to worry about bankrupting themselves to receive top-flight treatment.

The new relatives probably heard through the grapevine that Blumñata would eat up stories like that.

The majority of the Spanish population thinks the health system needs to be changed. The problems cited relate mostly to long wait times to get health-care. Nevertheless, over the last 15 years, the proportion of people who have very negative views about the health system has decreased by half.

("Public trust in the Spanish health-care system")

The Spanish system has public and private health side-by-side, by the way. It is not a national single-payer plan, but the public system has the traditional problems of third-party payment.

More good stuff:

Yet even with such attractive national and cultural priorities for its workers and citizens — ones that undoubtedly have the side effect of tamping down worker productivity and wealth accumulation — Spain's currency, the euro, is trouncing our dollar.

In November 2000, the euro was worth about 84 cents. Now, it takes around $1.58 to buy a euro. For me that meant getting punched in the wallet at every meal and hotel.

You want a small plate of pasta for lunch? That will be a reasonable 12 euros — that is if you get paid in euros — or a pricey $19.

It's horrible being an American, isn't it? But hold it for a moment. What's the average salary in glorious Spain?

According to a report published yesterday by the Inland Revenue Office in Spain about the Spanish labor market and pensions, men earn salaries which are on average 30 percent higher than those of women. The average annual salary of men in 2004 was 17,964 euros, compared to 12,464 for women - a difference of 5,500 euros per year.
(euroresidentes.com)

Hmmm. Doesn't sound all that impressive. How about a comparison?

(W)e found that the Bureau of Labor Statistics reports the average annual wages in the U.S. as $36,764 for 2002.
(ask.yahoo.com)

Even if the Euro was worth $2 the average Spanish salary would be less than the average salary in the U.S. (the U.S. salary numbers were from 2004). Despite Blumner's whining she would probably have less to spend if she held her job in Spain as opposed to St. Petersburg, FL. So much for the advantage of being paid in Euros.

Blumner spends a paragraph or two wringing her hands about the weakening dollar. Apparently she wants to make more than her Spanish counterpart and have her dollar go further. She cites economists who associate the weakening dollar with the U.S. trade deficit. No doubt that's true to a point, but the weakening dollar is also an inevitable result of the global economy. We get to have a dollar that is worth a zillion Bolivian pesos essentially because things are rotten in Bolivia compared to the United States. As conditions elsewhere improve (which is what ought to happen as a result of the benefits of trade) the dollar will lose its relative value. Yes, that's bad in a way but it's also good in a way.

I do get a kick out of seeing Blumner come out implicitly in favor of American exceptionalism in the midst of extolling Spain, of course. Yes we must always make more than those in other countries! That sounds fair!

There may also be a psychological aspect to our current fix. Note that the dollar's decline has been concomitant with the fall of America's international stature.

Why bet on the growth and stability of a nation that is a spendthrift debtor, hubristic bully and unapologetic torturer if there are reasonable alternatives like the European Union?

More of that patented brain-dead economic analysis. As noted above, the decline of the dollar is pretty much inevitable in a global economy that isn't rigged to keep Americans as the top dogs. And while that certainly doesn't mean that we need to speed the process artificially, it at least leads to Blumner's latter point(s).

Spendthrift debtor? Not in relative terms, yet, but give the Democratic Congress time to expand on already crippling entitlement spending and then maybe we can talk.

Hubristic bully? Yeah, you do bet on the hubristic bully if you expect a good return on your investment. If the hubris is not reasonably in proportion to ability, then you hedge your bets. And you don't bet on ability in the lack of self-confidence, either. When the more athletic fighter is a soft coward then think about betting on the other guy. Wasn't Blumner one of those who was sure the hubristic bully would inevitably lose in Iraq? Did you lose your shirt on that bet, Blumner?

"(U)napologetic torturer." Apparently eyes are closed to the global war on terrorism as well as to the aggressive surveillance methods the Europeans have sometimes used in recent times. If the European Union does not aggressively stand up to Islamo-nazi terrorism then bet on the terrorists.

Note to Blumner: Facts are stubborn things.

And one more thing about the grand Spanish economy. Try an unemployment rate of about 10 percent.

clipped from bp2.blogger.com

If Bush had led the United States to a 10 percent unemployment rate we might expect Blumner to call for a revolution. That isn't the only weakness to the economic picture in Spain, by the way.