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Spanish Monarchy Shoots Self in Foot

Machiavelli should have added a chapter to his book on advice to princes about vacations: Don’t go on safari during a national economic breakdown. If you do, don’t break your hip so you have to be medivaced, from southern Africa back to Europe, in a private jet.

Such is the situation for the King of Spain. A few weeks after declaring that the plight of unemployed young people in his country kept him up at night, he was rushed back to Spain after breaking his hip on the way to the bathroom during an elephant hunting trip in Botswana.

While the king was out hunting pachyderms (Via Meadia has no word on how many he killed), Spain’s economic outlook continued to darken. The Economist reports:

The 2011 budget deficit was 8.5% of GDP, not the goal of 6%, in large part because of overspending by Spain’s autonomous regions. The economy is in recession—industry shrank by 5.1% in the year to February according to figures released on April 11th. Attempts to cut the deficit by 3.2% of GDP in a year will make things worse. Reforms to the jobs market, making it cheaper to fire workers and easier to set pay locally, will benefit Spain’s economy in time but not now.

Anxiety about Spain’s banks worsens the outlook further. A messy end to Spain’s long construction and mortgage boom means a lot of bank loans have already turned sour. More are likely to. . . . Investors fear that the state will be called on to recapitalise Spain’s banks.

In trying to achieve its deficit-reduction targets, Spain might have sabotaged itself in a worse way. Wolfgang Munchau writes in the FT:

Fixing the Spanish crisis will have to start with the banks – and this is a task the private sector is not willing, and the government not able, to perform. The only halfway benign solution I can see would involve a European rescue programme for Spain that focuses specifically on the recapitalisation and downsizing of the financial sector. Spain would also need to undershoot the eurozone’s average inflation rate over many years to redress some of the lost price competitiveness. At the same time, the country needs to go easy on austerity…

I can see only two outcomes for Spain. The crisis will end either in a catastrophic Spanish withdrawal from the eurozone, or in a variant of a fiscal union that includes a joint eurozone backstop to the financial sector. If the Spanish government pursues the strategy it has announced to the bitter end, the first outcome will become vastly more probable.

Many investors fear the six percent mark for Spain’s ten-year bond yields. Today, those yields hit 6.15 percent, the highest point so far this year. Spain is back in crisis mode, and not a few Spaniards are probably thinking that a good way to cut the budget deficit might involve sending the royal family back into private life.

Presidents are often cheaper than kings.

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  • Bruno Behrend

    I know that this doesn’t sound very conservative, but the idea of pointing a gun at an animal as majestic as an elephant, and killing it, really frosts me.

    Why not just come to Illinois’ suburbs and shoot some Deer?

  • WigWag

    Ridiculing Juan Carlos after be broke his hip is a cheap shot by Mead and his snarky cadre of young interns. While Mead’s team of youngsters are too young to remember it, certainly Professor Mead knows that it was Juan Carlos who led Spain out of the misery of the Franco years and helped rebuild Spanish democracy.

    When Franco designated Juan Carlos as his successor surely the last thing he expected was that the King would voluntarily relinquish his power to rule by fiat and instead promote parliamentary democracy. Moreover Spain’s King has done more to make amends for Spain’s historical treatment of the Jews than any Spainard.

    I am sure that most people in Spain wish their King a speedy recovery and that few spend much time thinking how to depose him.

  • Jamie

    “Presidents are often cheaper than kings”
    Not in our case, I’m afraid.

  • Andrew Allison

    Oh, my. Here I am agreeing with WigWag again.
    This post is unworthy of Via Media!

  • Daniel M. Ryan

    Hey, hey… Not that I’m much for cheap shots, but I’d like to point out that George III was considered a tyrant for the U.K.’s Parliament imposing a tax burden on the American colonists that was far lower than what the American Republic presently imposes on its own citizens.

    Like it or not, Republics are expensive too.

    [Disclosure: I’m Canadian, and a loyal subject of HM Queen Elizabeth II. So there…]

  • RadicalRoyalist

    Right or wrong – my King!

    Viva el Rey!

  • Hammered at Tosca

    Wig Wag and Andrew– Speaking of the Spanish monarchy and shooting things, how about the time Juan Carlos blew his brother’s head off with a shotgun in Portugal?

    If memory serves, Franco was negotiating with both brothers to have one come back and lend some royal respectability to the fascists. Prince Juanito presumably saw the need for a bit more bargaining power…

    How dare anyone make fun of ‘Sure Shot’ Juan?

  • Otis McWrong

    @ WRM: “Presidents are often cheaper than kings.”

    I know this was an off-hand comment but it is not even close to being true. No monarch (private government) could get away with absorbing 25% or more of his state’s GDP as democratic (public government) routinely does. Nor, given that the ownership of government was private (i.e. to likely be passed to his heirs) would he want to loot, err, govern as modern democracies do.

    Hans Herman Hoppe in “Democracy: The God That Failed” shows convincingly that the explosions of public debt, employment, and spending levels we see across the “democracic” world have largely occurred since the end of WW1 (when the world began to shift significantly to Representational govt and away from monarchy. The reason is simple incentives: a democratic politician not only has no incentive to govern wisely and for the long-term they have every incentive NOT TO. LBJ left office a wealthy man after putting into place his countless idiotic and destructive policies. The names of the wise congressman and senators that resisted him are lost to time (or to a motivated historian).

  • Otis McWrong

    Sorry about the typos and other errors in the above everyone. I need an editor or at least to compose my posts in Word or something first.

  • WigWag

    In the truth is stranger than fiction department; King Juan Carlos’ 13 year old grandson literally shot himself in the foot while taking target practice on his family’s estate yesterday.

    The details can be found here,

    As Hammered at Tosca says (April 18, 2012: 8:15 am) the incident is eerily reminiscent of the accident where the teenaged Juan Carlos accidentally shot and killed his brother.

    I am happy to stipulate that this is a family that shouldn’t be allowed anywhere near a loaded weapon but I still think it was in poor taste to ridicule the Spanish King shortly after he sustained a serious injury.

    The Spanish Monarch is 74 years old and at his age a broken hip can be a lethal injury although thankfully elderly hip fracture victims are much more likely to survive today than they were in the past.

    Juan Carlos has done great things for his country; making fun of him on the heels of his injury doesn’t seem particularly classy to me.

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