Grandiose projects across Spain now sit empty and dying. The New York Times focuses in on Ciudad de la Luz, a mega-movie studio built far from cultural centers that is now foundering.
Ciudad de la Luz has become a prominent example of Valencia’s frenzy of modern-day pyramid building, which left a legacy of $25.5 billion in regional debt and bankrupt infrastructure projects as well as the backlash now building against it.
Valencia’s other investments included a harbor for superyachts, an opera house styled like the one in Sydney, Australia, a futuristic science museum, the biggest aquarium in Europe and a sail-shaped bridge, not to mention an airport that never had a single arrival or departure. It also attracted extravagant events like the America’s Cup and Formula One racing.
The Daily Mail takes a look at Spain’s “ghost airport,” a billion Euro project that was meant to serve 5 million passengers a year and is now closed after just three years in operation.
The Socialist regional government spent millions propping up the venue, promoting the project with advertising campaigns and approving a €140 million guarantee to keep it afloat.
But, last October, it saw its final commercial flight, by Vueling. The airport remained open for another six months, the staff still being paid to deal with a handful of private arrivals.
It finally closed in April, but even though it is now closed to air traffic, maintenance tasks still have to be carried out.
The 4,000 metre runway has to be continually painted with yellow crosses, so pilots flying over the airport will know they cannot land there.
Private money appears to have also taken a bath on many of these projects although it’s always difficult to say after government guarantees and kickbacks. The Times quotes one tourist on the meaning:
“I understand now why there’s a financial crisis in Europe,” said Bryce Matuschka of New Zealand. “The bridge is a real work of art, and the aquarium is great, but for some of these buildings you just have to ask, What was all that money spent for?”
I don’t think that’s quite right. My view is that rather than causing a crisis, bad investments are mostly masked by a boom and revealed by a crisis. Still, “infrastructure spending” doesn’t always create jobs; sometimes it’s better to stick with slow rail and sewers.
The purpose of stimulus isn’t to build things of value, it is to build things. That’s why it always works so good.
I sometimes wonder about the actual Pyramids. Were they built as a stimulus project? How were they financed? We don’t seem to have any indications that they caused any kind of a crisis in the Pharonic government, though it’s hard to imagine there wasn’t any debate or competing projects, like the high-speed goat path to Sudan that never got built.
Sort of. A counselor to the Pharaoh named Krug-ra said that people should be hired to dig up ditches and fill them back up again. The Pharaoh said, I have a better idea, have them dig up ditches but instead pile the dirt in a pyramid form. And don’t bother with this hiring stuff. Then, because Krug-Ra was clearly not thinking the way an oligarch needed the Pharaoh buried Krug-ra under the first pyramidal pile of dirt and thought the world had heard the last of him. But the Pharaoh did not realize that Krug-ra was a zombie. Millenia later, a team of British archaeologists named Maynard and Keynes entered the tomb of Krug-ra and Krug-ra escaped. That is how the term “zombie economics” came to be.
Thanks Mark, I appreciated this absurd narrative.
So, just to hypothesize two scenarios:
Spain builds these buildings and incurs a deficit
OR
Spain gives a Bush Tax Cut and incurs the same size deficit and is unwilling to raise taxes.
Those are the options? Either build an airport that nobody uses and can’t be paid for or let people keep more of their own money to spend on sangria, SEATs, and bullfight DVDs? Pretty easy decision.
Chuck,
I was hoping someone would respond this way.
Notice, in the second example, and in your reply, that it didn’t bother you that there was a deficit–except that it was created by a tax cut.
Hope you sober up from your Sangria.
If what you were after was for your correspondents to emote about the deficit, perhaps the choice you gave them should have been between a scenario in which there was a deficit and a scenario in which there wasn’t– instead of between two scenarios in which there were deficits. Between the options actually on offer, Chuck certainly made the right choice.
Paul,
The deficit continues in the next period in case you didn’t figure that out.
Only if spending is temporary and tax cuts are permanent.
Yeah, I know about the continuing deficits– they’re now talking 6.3% of GDP this year, 4.5% next year, and a (wishful) 2.8% target after that. Of course that’s Spain, so blaming “Bush tax cuts” might be a bit touch-and-go.
Government deficits don’t bother me, especially now. They should bother you, I suspect.
Once we have a government as irresponsible as we have, how they choose to screw up doesn’t really matter to me. Borrow half the budget not even to make risky construction ventures, but to create entitlement liabilities and decrease our national security. Knock yourself out. I’ll hopefully be there at the end to say I told you so.
However, if you believe in competent government you should be out of your mind.
“Entitlement liabilities”. Awesome euphemism. One might also call it “reducing senior poverty” or “making sure kids from the ghetto get a healthy breakfast”.
I’m working on a series of questions to identify how conservative in temperament one is (without appealing to the politics of the day). One of the questions is something like “To what extent do people work less hard when given government benefits?” In other words, what is the “elasticity of work ethic” in response to free money from the government. It’s clear that it’s not 0% (if you give people a full salary without requiring them to work, they’ll work just as hard) and it’s not 100% (if you give somebody $100 of benefits, they’ll reduce their economic output by $100). But what value you think it is says a lot about you as a person.
Geoff,
Funny, when I saw the phrase “entitlement liabilities” the first things that came to mind were social security and medicare, which are far better understood as benefits to the middle class than kids in the ghetto. I don’t see any obvious reason to think Andrew’ thought any differently than myself.
Social security, aka “reducing senior poverty”, which is one of the two things I mentioned. Here’s a graph, I’m not sure if this website is reliable but you can find similar info many places:
http://www.nber.org/bah/summer04/w10466.html
“reducing senior poverty” or “making sure kids from the ghetto get a healthy breakfast”.
They aren’t exactly building economically useful infrastructure, but those are exactly the parts I’m NOT talking about.
Whether you think subsidizing the middle class at a government deficit in order to actually reach the miniscule minority who really need it might say something about you.
I’m also not even talking about Social security and Medicare at large. I’m specifically referring to the parts that are going to bankrupt the country (or at least require massive inflation) because we are financing current liabilities with loans from China, et. al.
Deficits in fact don’t matter per se, as long as your return is some degree higher than your interest payments and you can cash flow the debt rollovers. When those things aren’t true then debt REALLY matters.
Using borrowed money to set in motion unsustainable promises and expectations is what I refer to.
Deficit ≠ debt.
deficit = debt accrual
Deficit 1 + Deficit 2 + n…= total accrued debt = debt 1 + debt 2 + n
total accrued debt + net off-balance-sheet liabilities = total effective debt
Or something like that. I don’t really care because none of these accounting models changes the reality. My audience isn’t people looking for rhetorical loopholes.
“making sure kids from the ghetto get a healthy breakfast”.
LMAO. Oh we’re keeping them healthy all right. They are healthy enough to service every nubile female around, and relieve your jaw of half its teeth with a single, well-practiced punch.
Seriously, do you have this vision in your head of government workers ladling out organic oatmeal porridge and antibiotic-free milk to the kids from the ghetto, shuffling in on their little crutches and holding out their little tin cups?
That must be the reason teen pregnancy and crime are skyrocketing.
Re: Anti-Gnostic
School lunches, dude. Food for ten-year-old kids whose parents are not present, or not willing to or capable of feeding their children. Surely, even you think this must be a valid function of a government? (Perhaps not the federal government.)
Look, I don’t doubt that some (much) government welfare goes towards people who don’t “deserve” it. And that to some extent, welfare makes people work less hard. (Earlier I called it the “elasticity of work ethic”.)
The problem is that the quantity really matters here. If government social programs (“entitlements” to use the derisive term) go 10% to people who don’t deserve it, that’s very different than if 75% go that way.
Likewise, if a dollar of social programs make people, on average, reduce their economic output by $0.10, that’s probably okay. (In reality it would be some people working just as hard as before and some smaller number of people just sponging off the welfare. It’s the average that matters.) If the average is $0.90, well, then perhaps the conservatives are right about human nature and the welfare state really can’t work.
I don’t know the real values of these two quantities. I’m not sure anyone does. I do find it interesting to ask what people think the values are, though.
You are an idiot, Bill. Chuck made the rational choice between the options you gave him. He did not say one choice didn’t bother him. Sheesh!!
Yancey, Since there was no tax increase, the deficit continued. You like that choice. So, you accept that choice.
Maybe you would have liked me to substitute “increase military spending by 60% (2001 to 2008) and pass unfunded Part D” and have a candidate propose increasing military spending from 3% of GDP to 4% of GDP” to make it clearer.
You like that.
Sheesh!, as you would say. Apparently, you don’t see how equivalent things are and don’t seem to get upset about it. There is one difference, though: with the tax cut in period 1, someone else will have to pay in period 2, more likely someone on food stamps, and not the person who got the tax cut in period 1.
They aren’t equivalent.
1. The government ain’t us.
2. The people the government taxes are not the same people as those who receive the benefits.
That is the entire problem.
Andrew,
1. Is just a slogan, so won’t respond.
2. The people who will pay for the tax cuts in the future: wanna bet the persons who pay in period two will be persons poorer than those who received the benefits of a tax cut in period 1.
1. No, it’s not just a slogan, it’s a key distinction. For example, “we owe it to ourselves.” No, we never did, and only did in the approximation to the extent that we did “general welfare” public goods projects. And it is especially not true now that we owe it to China to pay for cash transfers from one group to another group.
2. This is what I think you are missing. The reason that tax cuts during deficits are politically palatable is because of #1.
Oh, and the way to fix it isn’t raising taxes on the rich, or unions, or whatever. It is getting back to general welfare.
>>You are an idiot, Bill.
’nuff said.
Which part of “us” is the massive military budget for?
Yancey, I’ve come to the conclusion that you only call people idiots when you can’t respond to their argument.
Simply put: Which is more difficult to turn off: stopping spending for new construction (after having built the Spanish buildings) OR eliminating a tax cut (financed by a deficit), after the expiration of the ten year period.
You wouldn’t expect the Spanish to be building new buildings, but you would expect some Americans to continue going forward with deficit financed tax cuts.
Imagine a different scenario.
Canada builds an airport that isn’t for what it was designed, over budget. In the 1970′s. Mirabel. A miracle of central planning. Budget deficits funding infrastructure projects, some ridiculous like this, quite a few useful and reasonably well done.
End of 70′s, early 80′s. High interest rates, low commodity prices, recessions in export markets, twitchy financial markets due to other sovereign defaults. A series of provincial governments start reforms of their finances, balanced budgets, lower costs. Over a decade and a half, it finally trickles upwards and the Federal gov’t cuts spending and balances the budgets. Governments lose elections due to running deficits. The adjustments take a bit less than a decade, and we end up with a country facing the worst worldwide economic calamity for a long while and is able to manage pretty well, thank you.
Democrats and republicans in Washington are almost indistinguishable except maybe in magnitude and slight difference in preferred spending destinations. Very similar to the Liberal/Progressive Conservative situation in Canada during those years. The change came from the provinces; BC Alberta first, then others followed. Political movements were built on fiscal stinginess. Sounds alot like Walker in Wisconsin, Indiana, New Jersey, and others. What hopefully comes next is someone in Washington that says “bullshit” to all the keynesian cockamamie ideas that are the accepted wisdom. We had that in Ottawa. Then congress, the Senate, and the President, whoever they may be, looking for cover, gives real power to someone respected to handle the purse parsimoniously. Krugman ends up as chief economist at AFL-CIO and only gets gigs on NPR. The world goes on, the US regains economic status in the world, much of it due to the collapse of Europe, the internal contradictions of China coming to a head, etc.
Keynesian thought enters another long hiatus, like cicadas, showing up every few decades then disappearing into well deserved oblivion.
One can dream.
Ah, sweet sweet Canadian revisionism. The fact that the CAD tanked at the same time as the Americans engaged in an orgy of consumption that yanked up Canada *without requiring deep cuts or tax raises* has nothing to do with it. But ya you are right, Alberta pulled itself up by its bootstraps. Just like that other striving place, Saudi Arabia!
I’m sorry to disappoint. Oil prices were below $20 until about 1990 or so.
Alberta and BC both had high costs and faced commodity price collapses. Are you suggesting that there was no fiscal reforms in those years? Are you suggesting that there weren’t real spending cuts at the Federal level?
Yes the CAD collapsed, down to 56 cents to the US dollar. That is what happens when your country is going broke.
And yes, with many barriers to competition removed, leaner government not meddling in the economy, and opportunities for export, plus free trade agreements, definitely helped things along. If you don’t put up a sail you don’t catch the wind.
When did the resource boom really take off in Alberta? Do you know? How many years after the initial Alberta fiscal reform? Educate me.
As a technical matter, it is President Obama who signed the current legislation containing “Bush” tax rates, after it was delivered to President Obama by a Democratic House and Senate in 2009.
I assume you are referring to December 2010, not 2009, when the only way to get anything passed was to get Republican support, and Republicans would not agree to anything but the largest possible increase in the deficit, rejecting Obama’s roughly $100B smaller deficit.
Nope. Lame duck congress. Obama couldn’t get enough Democrat support.
Scenario 1: You congeal your capital flow into an airport no one uses. Its resale value is zero. It generates no economic activity.
Scenario 2: Your capital flow accumulates in assets that can be liquidated for the common currency and paid over to creditors or drawn down to stimulate economic activity.
Not a hard choice.
Mark,
False choice.
Item 2 is not what we did, is it. Instead of not cutting taxes, thereby accumulating the capital you talked about, we cut taxes.
Sorry, but you can always create a false, but not an easy, choice.
Were you in favor of the 10-12 year Bush tax cut?
Never link to Britain’s Daily Mail; it isn’t a real newspaper, more a kind of dishonest outrage and child sexualization machine.
A blatant exaggeration right here:
The 4,000 metre runway has to be continually painted with yellow crosses, so pilots flying over the airport will know they cannot land there.
What are they painting with that it needs repainting “continually” over a 3 month period? Crayons? Water colors?
Tio Andreu’s super-special reflective paint, which unfortunately loses its reflectivity with exposure to the elements. But Tio Andreu is *very* well connected.
Child sexualization machine?
Hey, that’s the name of my new dubstep group!
+ 1, Award for best sub-thread so far, the rest have decayed pretty badly, whereas this one climbed to comic gold
Stuff like this makes my heart ache. We have a limited amount of fossil fuels on the planet (even with recent spectacular amounts of shale gas and tar sands being added to reserves, it’ll still only last the blink of an eye compared to how long humanity has been/will be around) and we should be spending it wisely.
My personal environmental philosophy is something like: Don’t waste energy and materials on frivolities. Build things to last so you only have to build them once. Don’t let good things be wasted.
So yeah, screw you Spain.
edit: Why does MR‘s commenting system say “You are posting comments too quickly. Slow down.” the first time I post a comment?! And then I reload the page, and the comment isn’t there (luckily I’ve learned long ago to compose in Notepad before posting), and half the time when I post it again, it appears twice.
No need to be too sad. I think a lot of large projects spent empty periods before they got successful. I bet this airport will be thriving by 2020.
Perhaps. I think of another airport intended to spur development, in this case from Canada’s more socialist years under Trudeau:
Mirabel Airport
Deja vu all over again.
For a Canadian who remembers those years, what we are seeing now is very familiar. I just hope that in the end it turns out as well for the Spanish (and Americans, Greeks, Latvians, etc.) as it has for us.
This airport won’t be thriving in 2020. Do you know how far Ciudad Real is from Madrid? It’s as if the US had claimed it was building an overflow airport for DC in Harrisburg, Pennsylvania.
One measure of how remote it is is that even Ryanair apparently no longer has the nerve to fly there and claim they’re taking you to Madrid. That’s really saying something.
Incidentally, the airport was originally named after Don Quixote. How did the Daily Mail manage to miss that detail?
Can you reach DC from Harrisburg in 50 minutes? Apparently you can from Ciudad Real to Madrid (with a high speed train, the article says). That’s close to the time it takes me to reach O’Hare from downtown Chicago.
Yes, with a car it is a crazy distance away, I agree.
Don’t reload the page, simply navigate backwards. For my browser, the comment ends up at the bottom of the thread in the writing box, and if I then repost it, it appears on the comment string where I first placed it. Definitely a bug in this system somewhere.
Reminders of the Asian financial crisis, but that was mostly bad private investment spurred on by informal hidden state guarantees.
Hopefully, like the Asian crisis, the invested infrastructure will turn out to be merely delayed in use for a few years rather than written off as malinvestment altogether.
The traditional Keynesian account is that these investments will not be used due to insufficient aggregate demand. The traditional Austrian qualification is that the demand was never going to be there to begin with, which True Price Signals would have uncovered earlier.
Both imply that at some hypothetical level of aggregate intertemporal preference, these investments would have made sense… looking at these projects, it seems unlikely that either the airport or the movie studio would have been viable at any plausible demand/interest rate schedule. An account of hot money flows suddenly sloshing into a financial system lacking the checks and balances for that much money seems simpler, and would explain 1997 too – malinvestment doesn’t occur due to careful (mis)calculation of aggregate time structure, it happens because organizational discipline in large institutional investors breaks down.
so let me get this straight, Spain is becoming… Detroit.
…….without the blacks and the crime? No causality intended.
Many Northern Europeans consider Southern Europeans as blacks…
Many Northern Europeans are full on retarded then.
Never go full retard.
Do you not get it, lads? The Irish are the blacks of Europe. And Dubliners are the blacks of Ireland. And the Northside Dubliners are the blacks of Dublin. So say it once, say it loud: I’m black and I’m proud.
This is also a problem in China where local governments are also making ” bad investments are mostly masked by a boom” and financing these large public works projects by borrowing and land sales.
And to imagine there is a large, respected contingent of people (indeed majorities in academia, government and journalism) who believe more of this kind of spending is the answer to their problems.
Note that markets have reacted negatively to news that Spain’s deficit targets are being relaxed.
Ha ha, what knuckleheads, we Californians are far smarter than our previous Colonial owner, spending $68,000,000,000 on a not-fast train between Bakersfield and Redding.
Some of these projects began while the economy was still booming, or at least before the crisis, but many of them were begun or accelerated as counter-cyclical expenditure programs. All infrastructure projects create employment. But, so what? Obviously, many of these programs have consisted of capital consumption, which makes society worse off.
Has anyone seen any literature on multipliers across infrastructure types? For example, $ spent on maintaining a bridge does not promote growth as much as building an entirely new bridge where there was previously was none.
Also, is it better to build multiple airports to serve a region the way EWR/LGA/JFK serve NYC, or would fewer massive airports be more efficient, holding ground transportation equal?
“I don’t think that’s quite right. My view is that rather than causing a crisis, bad investments are mostly masked by a boom and revealed by a crisis.”
I disagree with this statement. I believe that poor investments are the root cause of the financial crisis in both Europe and the United States. It is the misallocation of resources that did not provide the financial benefit required to repay the loads needed the finance the investments. I understand your point that these investments were not the majority of the poorly invested funds, but I do believe that it is a culture of lower underwriting standards in both government and private investment. As far as entitlement liabilities, in pure economic terms they are luxury purchases for a society. They are poor investments. In the United States, there is a large amount of disability fraud, medicare fraud, unemployment benefits fraud. As a developed society, we should provide for the deserving poor, but there needs to be controls so that people who do not deserve the money are not getting the money.
After world war II, there was a great boom in economic activity after major decreases in government spending. I believe that is economic experiment that has not been tried and should be tried in our current economic malaise.
Rob: You say: “In the United States, there is a large amount of disability fraud, medicare fraud, unemployment benefits fraud. As a developed society, we should provide for the deserving poor, but there needs to be controls so that people who do not deserve the money are not getting the money.”
What percentage of people receiving disability or unemployment do you think are collecting it fraudulently? That is, pretending they’re long-term-disabled when they really could work if they wanted to, or not taking jobs that are available because they’d rather collect unemployment.
I’m not looking for a scientific definition, just a ballpark estimate.
Geoff -
Recent economics literature has found that the “long-term unemployed” quite often end up on disability support, by finding a sympathetic doctor to write up a minor ailment as a debilitating condition. I don’t know what percentage that would be, but I’d guess over 50% of people on long-term disability would find a way to work if they could get a job paying them substantially more than disability offers.
Unemployment – I’d guess that easily 50% of the people collecting it aren’t actually applying for jobs as actively as the rules require, though that percentage drops substantially as people near their benefit cutoffs. When I was on unemployment, I told the temp agencies I’d signed up for to absolutely not give me any work which paid less than $x/hour, because unemployment was effectively $x-1/hour. (I eventually found jobs paying closer to $2x/hour.)
Anthony – Thanks for the reply. 50%, wow, that seems pretty high. Can you point me to one of those studies of the prevalence of disability-support fraud?
That’s interesting what you say about not taking jobs that pay what unemployment does. Do you think this is common behaviour? Like, if unemployment pays as much as minimum wage, many or most people would just stay on unemployment rather than take a minimum-wage job, if it weren’t for the time limitations on unemployment benefits?
So, the story goes that during periods of full employment, and high aggregate demand, we have a large number of people not seeking work—wait, wait –how does that work. During periods of low unemployment, you have, well, low unemployment….what happened to those people that weren’t looking for a job in period 1 (low unemployment), and lo and behold, during periods of high unemployment (period 2) they suddenly appear as not looking for work?? They must change their tastes and preferences quite rapidly for your theory to work.
Hmmm.
Maybe you do something else. Like ask yourself this question: When there are a large number of job openings in the newspaper, or when unemployment is low–what do you see–people running from work or filling positions?
Write your answer below.
I think there is a natural experiment available. One of the cuts the Liberals made in the early 90′s was to the canadian unemployment insurance system. They made it more difficult to get, for a shorter time. At the end of one of their terms, they were about to lose one of their historical strongholds, the Maritime provinces for this reason. They changed the rules for people living there, re-establishing the looser rules allowing people to qualify more easily.
In my area it changed many things. There were quite a few people I know that worked during the summer, got enough hours to qualify, then spent the winter on UI to ski. It was a commonplace expectation for employers and employees to work the required number of weeks and be laid off. Unemployment was high, double digits. We now have 6-7%.
Oddly enough when government money was flowing freely there wasn’t work. When it dried up, after a period of adjustment, there has been work.
derek, The example you give is of seasonal unemployment facilitated by government policy. (You have the same thing in construction and seasonal recreation in most states: what happens is that the employer (and also the employee, by the way) pays into Unemployment insurance at a higher rate, and does so willingly, because it attracts seasonal workers to the seasonal employer).
What we are talking about here is non-seasonal unemployment. You can test that by asking: do you see a high seasonal effect to our unemployment.
A better test of government policy would be to find high aggregate demand and high unemployment–much like you had in England during the 70′s when government policy encouraged being on the dole rather than working during a period of relatively high aggregate demand (at least for a period in England.
I submit we do not have that in the US, as you can see through looking at unemployment being correlated with aggregate demand.
Anything following : ” I don’t know what percentage that would be”, AND, “I’d guess” = 100% noise
I have no idea, and any figure I give would be speculative at best. Unfortunately, I have a full time job that I am desperately trying to hold on to since I would like to buy a house since we are expecting our second child in a month, and I will need to replace my 15 year old car soon. The best I can do is give examples from friends and relatives to the changes in this recession. First, a friend’s wife works for an insurance claims office. She has stated that there are more cases where people are trying to get on and stay on disability till they can retire, which seems to be consistent with the currect economic conditions where older blue collar workers are having trouble finding work. Second, both my sister and cousin are receiving government benefits. My sister has actually provided proof of the cash payments for part time work, which has lowered her benefits. What is the marginal propensity of the aggregate pool for providing proof of cash payments? My cousin has been out of work for over a year and half after getting laid off from a California environmental firm. I find this strange because in our home town she called every firm in the phone book until she found work. Finally, my mother was an inner city school teacher where after her first year she was told not to report so many problems in her class room. I hear a lot of arguments about how there is no evidence of fraud; however, there will only be evidence if the information is recorded accurately.
Now, that I have provided my caveats. My hypthesis is that the 10% of people claiming disability are claming disability fraudulently, which would correspond to the increase from 33% to 43% of people claiming psychological disability.
If we do not run these programs properly, we hurt everyone including the people who really need it.
Off topic, but the way unemployment works in my state is that I get a certain number of weeks of benefits, but if I don’t claim benefits one week(I’m currently unemployed), I essentially “save” a week which I can use later. The benefits get cut off after a calendar date as well, but with that limitation I like taking temporary work when I can because it usually means that I can claim what I would otherwise claim that week when the temporary work runs out.
This is actually not a bad way to run unemployment, since there is every incentive to take stints of temporary work. Without the calendar cutoff, there may be a dis-incentive to take “permanent” work, since its feasible to survive on temporary work bridged by unemployment benefits. But the labor market has been moving in that direction (away from long periods of fixed work) anyway.
Does the clock reset every year? Or…?
There is a reset feature, so you can run out of calendar time even if you haven’t run out of weeks.
I think there is an argument for removing the reset, though I would benefit from it personally if I can’t find more fixed employment soon. If you take a series of temporary jobs throughout the year so your actual weeks of collecting UI are limited, you are gainfully employed for the most part. A calendar reset creates an incentive to decrease the amount of temporary employment so you can use up all your weeks of UI before the clock runs out. And there is considerable evidence that the labor market is shifting more in the direction of temporary, contract, and part time work anyway. Unemployment benefits are still to a surprising extent modeled on the idea that you will be employed, full time with benefits, at just a couple of firms during your career and if you get laid off there is a good chance you will be called back to work later.
This building in Madrid alone could have been clue enough for the impending banking crisis: http://andreasmoser.wordpress.com/2012/06/13/spains-banking-crisis-is-no-surprise/
When there’s corruption in the town, you can expect to see investment in needless infrastructure and no investment in needy infrastructure.
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