It's Not Only the Politicians: This country is completely fucked up

    6 minutes read | 1231 words by Ruben Berenguel

Beware, in what follows I rant. All figures come from Wikipedia or similar and are expressed with many zeroes and also in written form to make clear what a billion may be.

If you are a regular reader of mostlymaths.net, you’ll be aware that I don’t write a lot about current subjects. In fact, I actively try not to write about what’s going on at the moment, one notable exception may be a post I wrote about Mesut Özil’s stellar debut in the 2010 World Cup. As a curious example, last week we (Laia and me) had a wonderful dinner with Michael and her girlfriend. He’s been a week on holiday here in Barcelona and we found time for a tasty Indonesian dinner. He talked me about a mining strike in Asturias (in the Northern area in Spain,) and I was completely unaware of it. My usual news sources are Reddit, HackerNews and my tweeps. And almost none are Spanish.

But now, I just feel compelled to write about the state of Spain and Catalonia as a byproduct. I am pretty sure out there I could find a decent politician… Given an infinite set of politicians and the axiom of choice. But I don’t like doing NP-hard problems by hand anyway, and I’ve thought for a long, long while that someday politician will be an insult. And banker could (as well) be another, at least referring to the heads of the bank.

What made me break my standard silence? This article. It’s in Spanish, but I can give you a rough summary (or read it via Google Translate)

A municipality in Cáceres (center-west of Spain) formed by 3 towns had 15,000€ prepared for summer festivities… Money destined to bull fighting. The major of the district had a better idea: use these 15.000€ to hire (temporarily) some workers, alleviating the area unemployment. The result?

  • Town A: 242-181 for unemployment (40% of citizens voted)

  • Town B:  47-126 for bull fighting (27% of citizens voted)

  • Town C: 19-76 for bull fighting (27.6% of citizens voted)

The paper interviewed some people. The opinion of a citizen of town A is that “festivities are two days and invoices are due all year long”. The opinion of 3 17-year old girls (town unnamed) is that “they are too young to work and they enjoy a lot the acts”.

As the title says, it’s not only this country’s politicians. There’s a very deep problem here, it’s not only that a lot of people don’t care about what happens to others. In some sense, I’m also guilty of this. It’s more like people don’t realise what is going on. “Fiesta!” They think money grows on trees (or on printers,) in fact, a former minister (from the supposedly left-winged party, now in opposition) said

We administer public money, and public money is nobody’s money.

Yes, this is the idea coming from someone “we” elected. This is the stupid idea running amok in my country’s society: public money comes from nowhere. Somehow I feel it all started 30 years ago with the beginning of our democracy, when to soften Catalonia’s and Basque Country’s special consideration  someone invented the “café para todos” (coffee for all.) What this meant is doing the same in all regions. Barcelona has an airport? Why can’t Castelló have an airport, too (and all other regional capitals, even if they have less than 150,000 inhabitants)? High speed train from Madrid to Barcelona? Let’s get it going to Cuenca, again.

When the plan started it wasn’t as stupid as it is now. Maybe because politicians knew where money was coming from? Who knows. But now the only thing we have is majors and regional presidents building unnecessary infrastructures, after all, who pays the bills? Someone else. Who? Not the Doctor.

And this is the state of affairs. Regions have no money, some less than others. Valencia is completely bankrupt, but they don’t care at all. In Catalonia, we are too, and still the central government asks for more cuts. Public employees (who are mostly tenured in all Spain) got a 10% cut (average over all incomes) in Catalonia, but not everywhere else: a general strike of public employees could stop the country. Instead, health and education budgets got a huge cut, while all savings from them go to saving bankrupt banks. The last case, Bankia… 

The Bankia case deserves a special post, and there are plenty. For the uninitiated, it was the merge of 7 smaller banks, all of them bankrupt. It should be clear to any lay person that a lot of companies with a lot of debt, joined, result in a big company with a very big debt. Go figure. It was created with money from other banks and government money, trying to clean the worse assets in these 7 magnificent. And who was in charge of Bankia? Rodrigo Rato, former economy minister with the same right-winged party that is now in charge of things in Spain. This same RR stepped down on May 7th, after getting a salary cut from several millions to “only” 600,000 €/year. It’s clear I choose (and probably, you too) a bad career: when I do a lousy job, I don’t get money. Clearly the guy did a bad job: he refused a merger with “La Caixa” (the largest Catalan bank) to keep Bankia (mainly a Madrid-controlled bank) from becoming mostly Catalan. This is my “country.” Oh, forgot to add this: Bankia had 309,000,000€ of profit in 2011. Turns out, once this was revised, before taxes they had already lost 4,300,000,000 (that’s 4.3 thousand million) euro. I’m guilty of messing with my calculations and forecasts. But before doing anything with a result, I double (or triple) check. And from my calculations don’t depend the money of a lot of people.

Now the state has to give Bankia around 25,000,000,000 (that’s 25 thousand million) euro to keep it from bailing out. For a lay person, this amount of money is just staggering. Here in Europe we are used to big transfer fees in sports, but they are “just” of the order of 100,000,000 euro (hundred million). So, let’s see what 25 thousand million are for Spain

  • The GDP (nominal) of Spain is 1,400,000,000,000 (that’s 1.4 million millions) euro. So Bankia’s bailout is equivalent to 1/56th of the total GDP. 
  • Spanish government revenue is 515,000,000,000 (that’s 515 thousand millions) euro. Bankia’s bailout is ~ 1/20th of the total revenue. BUT
  • Spanish government expenses (as of 2010) were already 616,000,000,000 (yes, 616 thousand millions.)
  • NASA’s budget is 14,250,000,000 (14.25 thousand millions) euro. Almost half of it. 

Okay, in short, it is a f**cking lot of money. Money that our country does not have, that Europe can’t lend. 

What happens when the whole Spanish government bails out? Who knows? Most likely the Euro as a whole breaks… Unless Germany let’s the ECB start printing euro bills like crazy.

This is the rant. Not only politicians are stupid, our own countrypeople are stupid. And there’s nothing rational people can do about it.

Damn, how I’d love to be able to live in Iceland. At least the ratio of shouting-reforming people there is higher.

Further reading (via Google Translate):