by Don Quijones

from WolfStreet Website




Through crude use of statistics,

the Spanish government

makes a mockery out of tragedy.



"¡Que se jodan!"

With these words (which roughly translate as "F**k them"), the Spanish Member of Parliament Andrea Fabra greeted her party leader Mariano Rajoy's parliamentary announcement, in July 2012, of new cuts in unemployment benefits.


Unbeknownst to Fabra, all three of her words were caught on camera. In predictable fashion, the video went viral, sparking a wave of indignation as well as an online petition for her resignation.


But Fabra, the proud daughter of a jailed former big shot of the governing People's Party, refused to yield. She offered no public apology, instead dispatching a handwritten letter to the head of the chamber in which she lamented her "inappropriate" choice of words.


Now, two years on, Fabra's inappropriate choice of words have taken on a chillingly prophetic edge. Granted, there can be no telling whether the target of her wrath was really the unemployed; or whether it was, as she claims, the main opposition party, the PSOE.


Either way, she got what she wanted: the PSOE is, to her use her term, f**ked, as voters flee its sinking ship; and so, too, are Spain's unemployed - all 4.4 million of them, 40% of whom now have no "official" source of income.





Bullshit Jobs and Eternal Internships


Also f**ked are growing ranks of Spanish workers, in particular the youngest.


Ultimately, it is they who have borne the brunt of the economic fallout from Spain's real estate crash and the Troika-imposed internal devaluation that followed in its wake. In newly reformed Spain, it is they who must eke out a precarious existence on the margins and the meager scraps provided by bullshit temporary jobs and eternal internships.


And it is they who will have to pay off the government's debt (ha!) as well as support their parents and grandparents through their retirements (ha!).


Exactly how they are supposed to do this is anyone's guess, especially given their current financial malaise. If lucky, they might one day earn the minimum wage; many will earn less.


As for job security, there is none: nine out of ten new job contracts are temporary and in most professional sectors the proportion of temporary contracts is already double the EU average.


What's more, over 40% of young Spanish workers are over qualified for the jobs they hold, while eight out of ten millenials (that is, those aged between 16 and 30) continue to live with their parents. As for the lucky, brave few who strike out on their own, most of them must cough up more than half of their income on rent, even for shared accommodation.


This is just a little taste of the grim reality facing Spain's lost and betrayed generation.


But it's not the only reality vying for attention; there is also the government's version of events.





Lies, Damned Lies and Government Statistics


In the government's alternate reality, things could not be rosier.

"We are on solid ground," Rajoy recently said. "The recovery is here for good."

What he failed to mention was the main reason for this supposed improvement:

namely that more and more Spaniards are falling into bad old habits.

Egged on by the government and media, they are once again buying lots of foreign-manufactured goods they probably don't need with money they don't have.


That's right: thanks to a relentless feel-good campaign, internal consumer demand is once again soaring in Spain, just as the country's exports tumble. In four short words: not a good sign.


But don't worry about that, the government tells the public reassuringly. It'll sort itself out. [I'm liberally paraphrasing here.] Instead, dear voters, come and feast your eyes on the latest unemployment data and graphs (that some friends, ahem, just produced for us). Notice how they go up and down in all the right places.


All of which is true. In fact, as economics graphs go, they look pretty good.


However, as former senior business executive (of ENAGAS and CAMPSA) Roberto Senteno notes in El Confidencial, something doesn't quite add up.


For starters, according to the statistical methodology employed, if a solid 40-hour-a-week job is destroyed and two 10-hour-a-week jobs are created, as is happening more and more, Spain is all of a sudden one job better off, and its economic situation has improved:


A total of 402,400 jobs have been created (in the last year) using this crude trick alone.


The figure actually drops to 61,000 if you seasonally adjust the data and untangle all the lies and flawed assumptions about the active population. But that's not all: the total number of hours worked has dropped by 3.86 million in the last year.





Making a Mockery Out of Tragedy


If nothing else, the latest release from Spain's Ministry of Information serves as a reminder of the grave risks of taking "raw" government data at face value.


With the possible exception of the big banks, no one has more skin in this rigged game than our respective governments.


Indeed, since the Great Recession began, the one area in which government has truly excelled (with the obvious help of certain media outlets and central banks) is in the "presentation" of "raw" economic data.


Through its crude use of statistics, the Spanish government has made a mockery out of tragedy.


Its reality of figures, graphs and equations could not diverge more from the on-the-ground reality in Spain, where conditions are set to get a whole lot worse as the IMF and big business lobbies pressure struggling peripheral EU Member States such as Spain to further reduce the minimum salary (currently languishing at €635 a month) as well as enhance "labor mobility" (i.e. make it even easier for companies to dismiss workers).


The result will be increased job insecurity and an even greater preponderance of non-living wages.


Meanwhile, the exodus of Spain's best and brightest will continue unabated. Not that the government will care - indeed, if more and more young people leave the country, the base population on which its unemployment stats are calculated will decrease. And with a little fiddling here and touching up there, its pretty graphs should look even prettier.


And that, ultimately, is all that matters in this new age of statistical madness.



Additional Information:


A new law in Spain hounds the new media, from blogs to Google, to protect the 'loyal' mainstream press from insolvency and irrelevance. Other governments are ogling similar laws.


Read… 'To Protect the Press,' Spain Tries to Muffle the Internet.














To 'Protect the Press'

...Spain Tries to Muffle the Internet

by Don Quijones

from WolfStreet Website



I would like to begin this article by warning that it features no links to any other website, for the simple reason that the Spanish government is in the process of passing a new law that would make linking to other Spanish websites "taxable."


The law, commonly and rather misleadingly referred to as the "Google Tax," forms part of a draft reform of Spain's Intellectual Property Law that was hastily approved by the Spanish cabinet last Friday.


According to Spain's Minister of Education, Culture and Sport, José Ignacio Wert, the reform will permit the reproduction of "non-significant fragments" (i.e. quoted and hyper-linked texts from other websites) without prior authorization, but it will also require the payment of "equitable compensation" for doing so.


In other words, whenever a website aimed at "informing," "educating," or "entertaining" users links to another website, it will have to pay a fee to do so.


According to advocates of the law, its main targets are news aggregators, such as Google News (hence the law's nickname) and the purely user-driven Meneame, which provide brief introductions and links to the latest news from across the Internet.


However, due to the highly ambiguous wording of the law, there are fears that just about every kind of news-sharing website, including blogs and even social media such as Facebook and Twitter, could end up getting caught in the law's trawl net.





Whose Benefits?


The exclusive beneficiaries of the "Google Tax" are the members of Spain's powerful newspaper publishers' lobby, the AEDE.


The association's most influential members include,

  • Vocento (the holding group of El Mundo)

  • Unidad Editorial

  • Prisa (the holding group of El País)

  • Zeta

  • Prensa Ibérica

  • Godó

  • Audiovisual Española 2000

  • El Economista

  • La Voz de Galicia

To understand the main purpose of the law, one need only read what AED Chairman Luis Enrique had to say after its passage:

This is the most important step taken by the Spanish government for the protection of the press.

And there you have it, the perfect summation: "Protection of the Press."


What the new legislation effectively seeks to achieve is enshrine into law a dual government shakedown and protection racket. If passed (and it almost certainly will), the government will have new powers to shakedown just about everybody in Spain who links to a news or entertainment-focused website, while at the same time protecting the traditional (and extremely loyal) gate-keepers of public information, the mainstream press, from the consequences of declining sales and shrinking relevance.


The "Google Law" is expected to raise roughly €80 million, all of which will go into the coffers of AEDE members.


And boy, do they need the money!

  • Unidad Editorial, the publisher of El Mundo, doubled its losses to €20.6 million in the first quarter of this year.

  • As for Prisa, the owner of Spain's biggest-selling newspaper El País, it lost €47.5 million in the first quarter - almost four times what it lost during the same period last year.

  • In the last 10 years, Prisa has somehow managed to rack up total debts of over €3.2 billion.

As I reported here (oops, no link: in theory, if the law is passed, I would still have to pay the shakedown tax even for linking to an article on my own site):

The end result is that the majority of PRISA's shares no longer belong to the founding Polanco family, but instead to banking institutions such as Santander, Caixabank and HSBC, not to mention the Spanish telecommunications behemoth Telefoníca and multibillionaire hedge fund owners such as Nicholas Berggruen.

Having sold out to the financial sector, one can't help but wonder just how effectively El País will be able to discharge its reporting duties now that it is owned virtually lock, stock and barrel by the same banks and financiers on which it is supposed to report.





Changing Behavior, Changing Market


There are four main reasons why Spain's daily newspapers - just like many newspapers around the globe - are on the verge of insolvency.

  1. First, fewer and fewer people are buying their print editions. For example, Unidad Editorial's total circulation is down 18% just in the last year.


  2. Second, advertising revenues continue to plummet.


  3. Third, competition is on the rise as enterprising journalists take advantage of dramatically reduced cost barriers to launch their own Internet news sites. El Diario, Publico, infoLibre, El Confidencial, Diagonal Periodico, Voz Populí are just some examples. All of them (none of whom are members of AEDE) are chipping away at the readership of Spain's traditional newspapers.


  4. Fourth and perhaps most importantly, the behavior of news consumers (I know, horrible term) is radically changing. Put simply, the demographic trend is no longer the newspaper's friend. Unlike their parents or their grandparents, the digitally-native generation feels no allegiance whatsoever to any one newspaper publication. They search out the news that most interests them, by clicking on links on news aggregators, social media, blogs, and alternative media.

It's for that reason that the new law is so pernicious.


Not only does it seek to transfer funds from the pockets of just about every information-sharing Internet user to the empty pockets of semi-solvent newspapers, it also seeks to destroy competition.


As Guru Huky writes on his blog (if you're a Spanish speaker, search for it on Google; it's well worth a read), killing the link is equivalent to raising an enormous entrance barrier. The link is what allows you to discover new things, new pages, new media.


By silencing the Internet, some people think that they can kill the competitive threat posed by new media.





Battleground Internet


At the turn of this fledgling century, the list of countries using repressive measures to restrict Internet freedom read like a who's who of unsavory regimes:

  • China

  • Bahrain

  • Saudi Arabia

  • Cuba,

… you get the gist!


Now everybody's at it, including a growing number of ostensibly democratic nations.


Through measures such as the U.S.'s recent attack on Net Neutrality, the UK's sweeping Internet surveillance laws, and now Spain's "Google Tax" (with similar legislation being introduced in Germany and France), the establishment seeks to radically reconfigure the very essence of the Internet, by slowing users down, erecting barriers, and monitoring our every movement.


It is - as it always was - about three main things: money, power, and control. Warts and all, the Internet is a very powerful public utility. It has offered individuals and groups the ability for their voices to be heard and for dangerous ideas to be shared - just as the printing press did in its day.


As documentary film maker and economics blogger David Malone said in an interview with Renegade Economist (Google it), bloggers and alternative news sites are the pamphleteers of this new age. And just as the Church did during the Reformation, our governments seek to shut them up.


Here in Spain, the Internet community is already fighting back.


The news aggregator Meneame has announced its intention to relocate far beyond Spanish borders, as well as its decision to no longer host any links to AEDE member sites - no idle threat, considering the site provides roughly 2,000,000 clicks a month to AEDE members.


As for Google, it has threatened to close down its news service in Spain and now offers an extension on Chrome called AEDE Blocker that users can use to stop themselves from being able to access any news sites affiliated to AEDE.


Bloggers are also publishing the links of unaffiliated news. If the movement continues to snowball, the Google Tax may actually achieve the exact opposite of its stated goal.


Rather than protecting the mainstream press from the threat of competition, it may end up accelerating its decline.