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Record Unemployment Stuns Spain, France

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There are now six million unemployed in Spain, the highest level of unemployment since the country first started keeping records. The FT reports that France also posted record joblessness numbers, with unemployment rates breaking the previous 1997 high. What will the long-term effects of these staggering totals be?

The fear voiced by many analysts is that it will be difficult, if not impossible, to get most of Spain’s low-skilled youngsters back into work. They point out that unemployed workers have less chance of finding a new job with every month that passes. After two years, which happens to be when Spanish unemployment benefits run out, they are 50 per cent less likely to find work than at the start of their term. […]

Madrid-based foreign diplomats have noted with admiration—and a degree of surprise—that the economic crisis has not yet spilled over into significant social unrest. There has been no surge in political extremism as seen in Greece, and no violence or overt expressions of antipathy towards Spain’s large immigrant community. But many worry that the peace cannot last forever.

There was nothing necessary about this crisis; the troubles in Spain and France are entirely driven by bad policy decisions. At the European level, the euro is one of the great mistakes of modern history and a bad monetary system was then foolishly administered. Nationally, successive French and Spanish governments failed to understand that without massive reform they were heading for disaster.

It’s likely that the Great Unraveling still has farther to go. The cost in money and in blighted human lives continues to rise.

[Image of Spanish Flag Courtesy of Shutterstock]

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  • andy

    Value maximization for capital is achieved by stacking layers of transaction diversity (work/localizing/value production). The income and investment dependence of monolithic capital aggregators upon efficiency ratios, on the other hand, contravenes instrument value attainment by directly proportioning risk to investment with income payouts.

  • Corlyss Drinkard

    Public policy is very hard to change based on facts that the policy isn’t working or should be changed. I fear generations of western politicians of both stripes have cocooned their populations in swaddling policies with such intellectual credentials that the public likewise cannot see and name the failures for what they are. The purveyors of the Santa Claus policies did their propagandizing far too effectively.

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