From independence, freedom and truth

Economy

The socialists of all parties and public spending

Fernando del Pino Calvo Sotelo

May 29, 2014

In Spain public spending is out of control to such degree that not even the government knows for sure how many public employees there are. A Staff Central Registry “counts” every six months all the employees paid for by any of the three levels of the Administration (State, regional and local), including state-owned corporations and public universities (by the way, none of which are rated among the top 200 in the world despite having 150,000 people on the payroll). However, there are elected officers, regional government-owned corporations and other local entities that appear to escape from any sort of accounting, to the extent that only through statistical inference can their approximate number be estimated thanks to the responses given to the government-sponsored Labor Force Survey. Can you imagine a private business which would not know its payroll accurately? Can you imagine its Chairman, when asked by any shareholder about it, responding “we don’t know for sure, but according to a survey, 0.04% of respondents say they work for us?” Obviously, only the public sector can afford such licentiousness.

Well, whether measured by the Staff Central Registry or roughly estimated by the Labor Force Survey, the number of public employees in Spain it today very much the same as it was back in 2007, that is to say, in the happy old days of carpe diem, credit orgy and squandering fame. In fact, measured in euros, the central and the regional governments today spend 16% and 20% more, respectively, than they did back then. It is true that since 2012 the current government has carried out one of its infamous mini-reforms shyly reducing the payroll by 2.5% at the state level and 5% and 8% at the regional and local level, respectively (the Labor Force Survey shows slightly higher figures in its latest findings). But as from 2007 to 2011 the number of public employees significantly grew under the sharp leadership of the ever smiling former president Zapatero, the latest timid reduction does not compensate for the former increase.

With these numbers to hand and apparently exhausted by the staggering effort of shrinking the central government payroll by 2.5%, the Minister of Finance has unashamedly stated that payroll reduction has “hit rock bottom” and that, from now on, it will increase “because we cannot confuse the needed austerity with the undercapitalization of the civil service”. With a 6.5% deficit, a 100% debt over GDP, let’s go hire? Great. In addition to making it obvious that it lives in a watertight compartment totally alien to the real world, the government may be confusing the apparent stabilization of the economy and the financial assets’ bubble with an economic miracle (performed by them, of course) and has decided all by itself that we are back to normal malgré tout. Maybe they have misread the artificiality and extreme fragility of the current situation, sustained by clueless central banks, with the highest ever debt ratios and an absence of true structural reforms. Maybe they even think we do need more rules, more controls, more licenses to do anything, more abuses of power, more inefficiencies and more squandering in a sick administration that forgets that it is there to serve the citizen and not to despotically tyrannize him. Or maybe, it is simply that we have just entered a long period of electioneering and the government has directly decided to quit governing at half term.

Long gone are the days when the current president, then opposition leader, stated that is was “ridiculous to freeze public pensions when in Spain there are 3,800 stated owned corporations”. Or when he criticized his predecessor for increasing public debt “in the amount of 267,000 million euros in four years”, saying “that a country cannot go on like that for too long”, right before increasing public debt by the same amount in half the time as soon as he took office. Ridicule must be contagious: where’s the difference?

In politics, the priority list is short: priority number one, election; priority number two, reelection. There’s no number three. What is relevant for a politician-in-power is not that the country should go well, but that it should improve a little bit just before elections, even it is gets worse afterwards. Power-seekers, that is, politicians in the opposition, celebrate every single negative piece of information because it brings the seed of an earlier-than-expected victory. Above all, what matters is to get to power, and when achieved, to exercise it. After pathetic election campaigns that are an insult to the intelligence, one day every four years the politician must face up to the citizenry, previously conveniently softened by propaganda. Once elected, the politician will exercise such level of power, with such arbitrariness and with such impunity that they would make the absolute monarchs of the past green with envy. One day of suffering and 1,500 days of absolute power. This is the world of the politician, unconnected to the reality around him.

In Spain there is no alternative to the socialist, interventionist and power -hoarding ideology that is ruining the country. What this government is showing is that it will never reduce the size of the State, neither will it cut the plague of absurd regulations, or return to civil society its stolen degrees of liberty, or fight corruption or rearrange the regional governments’ madhouse. And without that this sort of regeneration there will be no sustainable recovery. Unfortunately, this government has showed that it is just the blue team, which amicably takes turns with the red team so that both have the chance to satiate their thirst for power. Nothing else.

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