The government has announced that Spain is 0.5% over budget this year to the tune of $3.5 billion, the fifth straight year of a basically balanced budget (no deficits above 1%). Congratulations to Prime Minister Aznar and Economics Minister Rodrigo Rato; we've got the healthiest economy in the European Union. Overall economic growth is at 2.9%, the third best in the EU after such big and important countries as Ireland and Greece. The Eurozone growth average is under 2%. Zap, of course, is complaining that the extra cash in the budget should be spent on "social programs". Aznar and Rato are going to use it to pay down the national debt, of course.
No one can deny that the average Spaniard is much better off under Jose Maria Aznar than he was under Felipe Gonzalez. Felipe used to run 6-7% budget deficits year-in and year-out. The killer stat is this one: Spanish per capita income was 78% of the EU average in 1995, the year before Aznar took over. In 2003 per capita income is 85% of the European average. I submit that you've got to give the government big-time credit on this one.
Zap claims that Spanish economic growth is based on the construction sector, which has caused an increase in families' debt and a real estate bubble. The Socialists are really going off on the real estate bubble; the question is whether there is one. Housing prices have increased dramatically, but Spain is still very cheap compared to the rest of Europe. One would figure if our income is 85% of Europe's, our housing prices ought to be about 85% of Europe's. I don't know anything about European housing prices, but I can tell you that the average price in Barcelona is 3000 euros per square meter, meaning that an 80-square-meter flat ought to go for about €240,000. This is pretty cheap compared to most big cities around these parts, I think.
The real housing problem is this. The great majority of Spaniards are homeowners. Renting an apartment is not as common as it is in other big cities. Now, the rent control system put in way back when prevents landlords from jacking up the prices on old rental contracts, so there are an awful lot of people still paying forty euros a month on enormous flats in fine neighborhoods.
Corollary to the Law of Supply and Demand: When the government sets the price of a good at below that good's market value, that good will disappear from the market. That's why you can't rent a cheap place in Spain. All the rental apartments are already taken, because nobody wants to give up his old contract that allows him to live basically free. Rental apartments only come on the market when these folks actually die off. (I'm exaggerating slightly but not much).
The fact that you can't rent a cheap place means that instead of moving out of home at age 21 or 23 or even 25, people stay with their parents until they're past thirty, have established jobs, and plan to get married. There are lots of consequences of this system, to wit:
a) Close family ties. Generally a good thing but sometimes frustrating. b) Immature young adults whose moms take care of them until age 30. c) Lack of independence, conformism among young people. d) Low birth rate--people don't have kids till their thirties and then they have only one. e) A tendency toward laboral overqualification--while kids are sitting at home during their twenties they tend to collect more and more academic credentials of questionable utility. f) Lower consumption of goods--if the kid is living with mom and dad instead of his own place, that's a washing machine less that the economy sells. There are probably a hundred more but those are the ones that come off the top of my head.
Minister of the Treasury Cristobal Montoro, by the way, told Zap openly in the Parliament that he didn't know a damn thing about economics, which he doesn't (an open mike caught one of his advisers explaining to him the difference between progressive and regressive taxation while up on stage recently; Zap had confused them while speaking--and they call Bush dumb). Montoro then rubbed it in by saying, "You'll never get your budget through, because you'll never be Prime Minister, and you won't even be the leader of your party because you're gone after you lose the next elections. You're going from defeat to defeat leading up to the final debacle". Boom, boom, out go the lights.
By the way, we also have the healthiest pension system in Europe; it's running a 0.8% surplus with a €13 billion reserve fund.
Meanwhile, the Frogs and the Toads are both over the 3% budget deficit that the EU agreement permits them to run, and they are going to just flat-out break the EU rules on this. Who can stop them? They run the EU and will break as many agreements as they feel like. That's our friends the French and Germans.
Street gang murder in Barcelona: A bunch of Latin American street punks killed a fellow Latin American teenager outside the San Jose de Calasanz high school near the Sagrada Familia. That's where Remei went to high school, by the way. The killers supposedly come from a gang called the Latin Kings; they dress up like American gangbangers. I do not know whether these guys are affiliated with the American street gang the Latin Kings or whether they're just copycats; I assume the latter. In the past year there has been a wave of gang crime in the schools, with young thugs (often of immigrant origin, it must be said) hanging out near schools and robbing the kids when they enter or leave. Says the city government, "The high school (in question) is not conflictive and violent groups have never appeared, either inside or outside...This is an isolated case." Yeah, right. Everybody else in town hates these punks. And we know they exist because we see them every day. Some of them hang out in the Plaza del Norte, outside the La Salle Gracia high school. In the Vanguardia editorial they say it's just like West Side Story. Uh, no. Manhattan's West Side is a good deal safer, as far as street crime goes, than Barcelona.
Oh, yeah, the Vanguardia's Andy Robinson says that the people who live in the places where the fires are burning in southern California are there because of "white flight" (all Andy knows about LA is that he thinks "City of Quartz" is the gospel truth). They're all multimillionares living in opulent mansions--Andy likes the word "opulent". He thinks the fires are their own fault because they voted against higher taxes. See, if taxes were higher, then there wouldn't be any fires. Or something like that.