Friday, October 28, 2016

Prospects for the Spanish Left [feedly]

Prospects for the Spanish Left
// TripleCrisis

William Saas, Jorge Amar, David Glotzer, and Scott Ferguson

This is the first part of a three-part series on Spain’s economic crisis, the program of the new leftist political party Podemos, and both the limitations and potential of the Spanish left today. The authors point to the importance of employment policy (and especially a job guarantee) for pulling Spain out of the crisis, the necessity of a “left exit” (lexit) from the euro, and the relevance of Modern Monetary Theory (MMT) in transcending conventional balanced-budget thinking.

William O. Saas is an assistant professor of rhetoric at Louisiana State University. His work has appeared in symplokē and Rhetoric & Public Affairs.

Jorge Amar is a Spanish economist, president of Asociación por el Pleno Empleo y la Estabilidad de Precios, or Full Employment and Price Stability Association), and a doctoral candidate in applied economics at the Universidad Valencia. Recently, Amar served as economic advisor for Spain’s Unidad Popular party.

David Glotzer is a valuation analyst at Solidifi, and freelance writer whose background is in Economics and Mathematics. His writings have appeared in CounterPunch, Investig’Action, Strategic Culture Foundation, and Young Progressive Voices.

Scott Ferguson is an assistant professor of humanities and dultural studies at the University of South Florida. He is also a Research Scholar at the Binzagr Institute for Sustainable Prosperity. His essays have appeared in CounterPunch, Naked Capitalism, and Flassbeck Economics International.

They are beautiful sights, the public squares of Madrid—open spaces, lush gardens, and sparkling fountains, all surrounded by striking architecture dating from the city’s days as seat of a colonial empire. These ornate public spaces now serve as makeshift residences for a growing number of Spanish dispossessed. After nearly a decade of austerity, depression, chronic unemployment, and perpetual political submission to the dictates of the Troika (the International Monetary Fund, European Central Bank, and European Commission), thousands displaced from work and home are left with little choice but to seek refuge in the few parcels of public infrastructure that remain available to them.

Improvisation is the name of the game for members of the new Spanish precariat. At Madrid’s main square, the Plaza Mayor, newly homeless citizens (some highly educated) rise early for work busking or selling scrap metal. Throughout the country, members of the growing reserve army of ninis—or “neither nors,” the quarter of the young Spanish who are neither in school, nor employed, nor in training programs—forage for food to take home to their squatted apartments. Los irrecuperables (“unrecoverables”), the more than half of long-term unemployed Spanish over age 50, are meanwhile forced to figure out how to subsist on severely reduced pensions and the charity of their fellows.

The homeless, ninis, and irrecuperables are not alone in their plight. Indeed, stability and security elude even the employed afortunados in austerian Spain. Recent labor law reforms, first passed by the center-left (and resolutely neoliberal) Spanish Socialist Workers’ Party (PSOE) and then expanded by the conservative People’s Party (PP), have eroded workers’ rights and enabled employers to seize an even larger share of national income. Wages and benefits are taking a beating, too. Total worker compensation fell from about €523 million in 2007 to less than €510 million in 2015. Even as unemployment has risen, total spending on unemployment benefits has fallen more than 25%. Temporary work is replacing traditional employment, with the average length of contract falling from 77 days in 2008 to 57 by 2014. (Formal contracts between employer and employee are legally required in Spain.) Part-time work constitutes one third of all labor contracts. Finally, the percentage of unpaid overtime rose from less than 40% in 2008  to over 55% in 2015—a sum equal to the lost income of approximately 87,000 full-time jobs.

Nearly 30% of the Spanish population is currently classified by the Unión General de Trabajadores (General Union of Workers, or UGT) as “at risk” of poverty. Any may consider joining the estimated 700,000 Spaniards who have fled the country to find marginal employment elsewhere. Most will opt to stay, however, knowing full well that that they are not welcome in other EU countries, and that their prospects would not improve by much in any of those countries, anyway.

What relief does the Spanish left have to offer a population so imperiled? The simple answer is: not much. On the one hand, the PSOE has consistently—if not exclusively—made things worse for Spain over the last decade. That the PSOE is presently in the throes of a slow and torturous death spiral is no consolation for the years of impoverishment and despair that resulted from the party’s servile deference to the Troika’s commands. On the other hand, the slick façade of the only-slightly-further-left Podemos makes poor cover for the purple party’s own orthodox underbelly. In the face of all evidence to the contrary, Podemos leadership appears convinced that “balanced budgets” are the best remedy for Spain’s economic ills. As recent elections have demonstrated, Spanish voters were less than inspired by Podemos’ master plan to squeeze more euros out of domestic businesses and middle-class families in order to facilitate increases in public spending. A similar plan—to transcend austerity through more efficient tax collection—has clearly not worked out well for Syriza and the Greeks. Spaniards simply want—and deserve—better.

The far left coalition, the United Left (UL), would give it to them, were it in a position to do so. While Podemos’ top economist Nacho Álvarez advocates for better tax enforcement as the key to achieving a more symmetrical balance sheet, Eduardo Garzón, economic advisor to UL and researcher at the Fundación por la Europa de los Ciudadanos, argues that a municipal jobs guarantee program is the only viable path to renewed Spanish prosperity. For Álvarez, the vital first steps to recovery are to “reduce the deficit more slowly” and to “broaden the tax base.” For Garzón, deficits and taxes are secondary to the need for “construction of a new alternative economic model that puts the current economy at the service of the people.” The disparity of ambition between the proposals of Álvarez and Garzón—an archaic and conservative accounting target for the former, a progressive full-employment agenda for the latter—is stark. Of the two, only one bears any real chance of achieving meaningful relief for the Spanish working class. Unfortunately, the force of Garzón’s rejoinder to Álvarez’s plan for functional-in-name-only finance is presently attenuated by UL’s minority position in the Podemos-led Unidos Podemos (“United We Can”) coalition, where the spirit of “sound finance” otherwise prevails unabated. Moreover, the very public conflict between Podemos’ top officials—“number one” Pablo Iglesias and “number two” Íñigo Errejón—makes for splashier headlines than does news of disagreement within the coalition regarding how best to escape from austerity.

The Jobs Guarantee

A “jobs guarantee” program is the best political tool for breathing new life into the Spanish economy. A proposal of this kind was presented to the Spanish parliament in 2014. Designed by Eduardo Garzón and presented to parliament by his brother, Alberto Garzón, the jobs guarantee program would have put a large portion of the ninis, irrecuperables, and the homeless back to work. As opposed to the current system, under which the last to be fired is the first to be hired, the Spanish jobs guarantee program sought to put most idle labor to work immediately, involving Spain’s dispossessed in socially meaningful and adequately compensated communal projects. In accordance with MMT, meanwhile, financing for Spain’s full employment economy would not be contingent upon tax revenues or government borrowing. Unlike the short-term and revenue constrained New Deal programs deployed in the United States during the 1930s, the Spanish jobs guarantee program should be financed through direct government authorization and appear as a fixed charge on the federal balance sheet.

Garzón’s proposal suffered a resounding defeat in 2014. Deluded by the poor logic of the neoliberal consensus and a punishing phantom gold standard, opponents of the program ignored Garzón’s arguments and voted against the bill without comment (here the Spanish saying, “no hay mayor desprecio que no hacer aprecio” or, there is no bigger contempt than not listening at all, is apt). It is also worth noting that, had the jobs guarantee been implemented under the aegis of the EU’s budget rules, the policy’s overall impact would have been severely limited by the fiscal straitjacket of Maastricht.

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