The Real Madrid vs Barcelona rivalry is about to heat up…
One of the most ambitious, and successful, efforts of the academic Left has been a war on common sense. True economics is a science governed by very intuitive rules. Extremely complicated monetary theories have arisen to confuse the subject and contradict common sense conclusions any high school graduate can come to with minimal effort. The confusion puts up a veil behind which leftist social engineers can operate with reduced risk that someone empowered with simple intuition can identify that the King, in fact, has no clothes…
On of the most intuitive rules is the following: The more you punish success and take the fruit of people’s labor, the less productive they will be. Spain has ignored this rule for many decades. Years of anemic growth and re-distribution of capital from productive hands to the lazy regions of the country have created a fragile economy unable to weather the global downturn. More importantly (here comes one of those intuitive laws economics/human nature), the productive parts of the country are starting to resent supporting the dead weight. The Catalan region of eastern Spain has long been the industrious part of the country. As per a recent article in Reuters, a significant part of the economic output of the region (8% or $21 billion) is redistributed from Catalonia to the remainder of the country every year…
Which brings us to our second super-simple economic lesson: People grow entitled to charity quickly. Give someone a dollar one day and they say “thank you”. Give that same person a dollar for seven days and then try to walk by on the eighth day. He will angrily ask where ”his” dollar is. Appreciation turns quickly to entitlement. When I lived in Spain eighteen years ago, I don’t recall a “Catalonia appreciation day” for supporting the rest of the country. I am guessing that it hasn’t started since.
Liberals will argue that there has always been a separatist movement in Catalonia, and they would be right. However, it didn’t gain any political power until the economy tanked and the country raised taxes to meet the bills. Since tax burdens weigh disproportionately on the most productive parts of society, Catalonia was hit especially hard. Rather than continue to support an entitled country incapable of balancing the checkbook, the people of Catalonia are looking to shrug off the oppressive weight. Just recently, the local government gained a majority capable and willing to vote for separation. Who can blame them?
How much worse does it have to get before we see the same thing in the US? Secession petitions have been submitted by people in more than 30 sates in the US, but there is no real political will behind them. However, what happens when the people of Texas and Florida see their taxes going to bail out the entitlement groups of California and Illinois. Like in Spain, England, and France the increased taxes in those states will not bring in nearly as much revenue as their predictions and certainly not enough to meet their debt obligations. Eventually, like with Greece and Spain, the other states will have to come to their rescue, but the constituencies of the bailed out states will not allow any fiscal restraint. We will see riots and paralyzed liberal politicians who, like a child whose gambling debt comes due, will be backed into a very uncomfortable corner. At some point Texas and other productive states will not want to pick up the tab for California. Secession risk will become real.
The road we are on and where it leads has never been so clear. You don’t need a crystal ball to figure it out, just pick up the paper. Only a nation that has lost its ability to exercise common sense will be caught by surprise.