Tropical Jungle

A couple of years, only specialists had heard of mortgages subprime, they knew a such Bernard Madoff, promoter of the electronic market of shares in United States, or knew that Lehman Brothers was not a set of soul music. Companies continued with their individual careers to reach the Olympus of corporate earnings, investors were more concerned about buying cars and houses, while both asked for credits to make consumption pull and not miss opportunities that were presented as unique and unrepeatable. Rivers of ink ran to find explanation to the current situation. So he resorted to economic history, with the idea of trying to connect the dimension of the current crisis with the which occurred in 1929. They broke out speculative bubbles that affect real estate and financial sectors then and now, in the words of Galbraith exposing the gaps that claimed its foundations. The insatiable greed and politics take more firewood to the fire, or that the same is rubbing the liquidity trap with interest by soil types, today as yesterday, it supports these behaviors. Hence the need for a regulation put coto opaque operations including those in Luxembourg that rampant camped for more than one decade in the roaring twenties and the happy 2000.

Interesting thing about economic history is to learn from the mistakes and, indeed, although there is a certain similarity between the current crisis and that of the 29, there is no comparison in the dimensions, view the gravity of the yesteryear. Dusting off the archives are seen strategies followed in the resolution of the critical situation. In 1929, the developed countries sought the exit from the crisis by the competition. The policies of devaluation of the exchange rate to gain competitiveness applied by United States were replicated by the European countries through the so-called policies of beggar-thy-neighbor, with disastrous in the majority of cases. Against the competition is structured as current formula cooperation. Against the lack of coordination, the coordination.

Resuscitating Keynes to resolve the crisis nearly a century later leads us to understand that the imaginative formulas are few among economists and that, when it comes to the truth, again the battles between classical and Keynesian, as if it were an economic derbi. And the European Union as a playing field. The European Union and its contradictions: between the agricultural policy and the free market, between a Bologna’s excellence and the budgetary constraint, between innovation and environment, between stability and Growth Pact and resource to the deficit to overcome the crisis, between Luxembourg and the Cayman Islands. And in the midst of these contradictions, those of the countries themselves. Between the economies of Central and Eastern Europe, countries convinced that quickly that the growth of the European Union model was good, and that even we would give them our currency. Thus grew above the EU average for more than ten years until it touches the finger his equality with the incomes of Western countries. How reminds me your situation the Spanish. But with the crisis they were investors, appropriations, growth, employment and left uncovered structural deficiencies covered with structured benefits. Europe must resolve these contradictions if it wants to move forward with successful and reinforced in the current situation. As he said Rockefeller, great fortunes are always kneaded in times of crisis. Fernando Alonso Profesor of applied economics from the Universidad Complutense de Madrid (UCM) original author and source of the article.

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