Reflections from Spain

The author returns from a few weeks travelling around Spain and gives his opinions on Spain through his economist’s eyes.

I must admit that I’ve commonly regarded Spain as a bit of a basket case. It suffered a similar fate to Ireland in the GFC with a big housing bust, though, unlike Ireland, it didn’t have a large tech sector and dodgy international finance dealings to keep things ticking over. I always had the impression in my youth that it was on the verge of collapse, though this opinion was never based on extensive research! 😄

Not so says Mr. Caplan - while things are not all rosy, he reckons there is massive untapped potential, particularly if immigration is encouraged from the half a billion Spanish speakers worldwide.

After I visit a new country, Tyler Cowen always asks me, “Are you long or short?” In terms of potential, I’m very long on Spain. The trinity of “deregulate immigration, employment, and housing” is vital in almost every country, but this formula would do more for Spain than nearly any other country. Wise policy would make Spain the biggest economy in Europe in twenty years flat.

Merkel Fading Away

Long article from Der Speigel on the tail end of Angela Merkel’s Chancellorship and her pessimism at the current direction of global politics.

Like every long-serving chancellor, Merkel tries to escape the petty melancholia of domestic politics. In that sense, she’s no different from Konrad Adenauer and Kohl. What does distinguish her from her predecessors, though, is a deep pessimism, the fear that the world is sliding into the abyss. During her term in office, Turkey transformed from a hopeful democracy into an autocratic regime. The Saudi crown prince turned out to be a cruel despot rather than the young reformer many initially hoped he might be. Putin sought to make his delusions of grandeur reality. And then there’s Trump, whose most recent project is to attempt regime change in Iran, an experiment that already failed terribly one time before. In Merkel’s view, the fuse has already been lit.

There’s also a lament at her unwillingness to address the concerns she has now that she’s freed from re-election concerns.

If Merkel were to take her own speech that she gave in Munich seriously, she would have to explain to voters that Germany – together with the Europeans – must feel a sense of responsibility for its periphery, North Africa and the Middle East. She would have to get Germans used to the idea that the German military needs more money and that in the future, German soldiers will be deployed more often on more dangerous missions. After the refugee crisis, who could honestly argue that civil wars in places like Syria or Libya doesn’t have a direct impact on Germany?

Merkel knows all this. She speaks theoretically about Germany needing to do more. But when it comes to suggesting a concrete strategy, she hardly says a word.