Lessons learnt?

Again, I will talk politics...

What have we learnt out of this crisis? What have we done about it?

Well... yes, there have been massive cuts on pubilc expense, some indiscriminate, some late... but the main reasons why we are in crisis have not been addressed. First of all... our economy is extremely ineffcient. Not from now, but from centuries. We are not productive. And that is one of the reasons why we have the record in unemployment rates.

I honestly believe that there are some factors that have never been properly addressed:

1) Capital. In Spain it´s in too few hands and investments are done mainly with high security for the big capital. There is little risk in their profits... but the control of the markets that they have (partly due to the support of the laws and governments) prevent its further and competitive development. Some examples: energy, construction, services... but also industry.


2) Financing tools. Not only the capital is in few risk-averse hands, but also, the small capital does not have enough tools to reach the few entrepreneurs and innovators in every industry. The banks have been, traditionally, the only tools for financing... and this is a big mistake. First, because they have too strong power (and no doubt they belong to the pool of point 1), and secondly, because they are not efficient in certain flows (especially to industry and new ventures). Maybe they should not handle all the money available.

3) Credibility. In all statements... there is fewer credibility than some years ago. The first one, is the speed at which the economy went down once the real estate bubble. Also, the stupidity and stubborness of our politics. And also... the inability to stick to certain commitments. The E Plan was a good example of what should not have happened... spend the money in unproductive investments.

4) Monopoly and oligopoly breakdowns. Since we entered the EU, much have been said that certain sectors should be de-regulated so that they gained competitivity. It happened partially in some of them (airlines), but not enough (like energy, services, banking). The situation of the "cajas", which have been virtually eliminated, make the banks stronger... without further lessons learnt. Is it really good that there are no more "cajas"? Well... I can only talk as a customer... and I remember that the cajas were normally a good alternative source of financing for many small businesses. The way of the banks is not so close, nor understanding with certain investments. I get this impression from the useful projects that I have seen where banks and cajas were involved. I saw the big banks in the big businesses... but rarely in the more local projects, and sometimes riskier projects... where I did see the "cajas"... even if they were not always successful investments. It´s ok to get rid of the political control of the "cajas", but no so sure about their elimination.

5) Education. Not only of the workers... but also of the entrepreneurs and investors. Enough of this autocratic systems and organisations. Enough of this under-utilisation of the talent and capacity of the people. Enough of the stupid training programs who do not fix real issues... but provide useless certificates with very little exigence and self-crtique about the suitability of the contents. There are not enough enterprises who can use the excellent sets of skills in our prime students... and there are too few students of certain level for our current industries.

6) Public Finances. For too long the worse and most ineffective user of the capital has been the public sector. From excellent but empty public buildings to useless infrastrucures such at airports or high speed trains. But also excess of civil servants. And also, the country should have a more coherent approach to certain sectors that are key for the future. They do so in all developed economies... prioritising certain industries over others with special investments or tax conditions. But this has to be through a flexible, quick and monitored organisation(s). I am still shocked that the public expense is not published with standardized format and tools that make it possible to monitor them, the same as the shareholders can monitor the companies they own.

There is a number of reforms that should be made so that we don´t find ourselves in the same situation as today in some 10-15 or 20 years... No more investment in brick (at least, no more than in developed countries), no more investment without control, and also... no more spreading stupidity (through these means that we have in this contradictory country).