Not Hemingway's Spain: Don't talk about the crisis

Not Hemingway's Spain: Don't talk about the crisis

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Zach Frohlich turns his back on the repetitive gloom and doom reporting to celebrate the positive aspects in the Spanish economy.

    "Based on the findings of the report, my conclusion was that this idea [a Doomsday Machine] was not a practical deterrent for reasons which at this moment must be all too obvious."— Dr. Strangelove, in Dr. Strangelove or How I Learned to Stop Worrying and Love the Bomb (1964)

Disclosure: I am trained in a field that studies expertise, or really the history of expertise… How it changes over time, or has different criteria for credibility in different cultures, or how it undergirds or undermines other kinds of authority (wealth and power, i.e. 'might is right', folk wisdom or 'street smarts', and so forth). So recently I've found myself thinking about all the expert opinions floating around in the punditsphere regarding the global economic crisis. It got me thinking about the movie Dr. Strangelove. Back in the 1950s, scientists and especially nuclear physicists were the experts of the hour, turned to for advice by policy-wonks politicians to inform their policies about our geopolitical futures, and in a more direct sense, potential nuclear threats and counterattacks. Now to cut an already long introduction short, Dr. Strangelove, through its brilliant satire of expertise, offered a very simple critique of the atomic age: None of these guys (politicians, experts) know what they're doing, and they're gambling with _our_ futures!

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
Dilemma... Once on Reyes, I was both the rey, for finding a tree figurine, and in debt (for next year's roscón), for finding the haba(This must be how Rajoy feels.) It was because I _had_ to eat that second slice.


Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisisSo what would be our Dr. Strangelove for this economic crisis? Because let's face it, none of these guys know what they're doing, and they're _literally_ gambling with our futures. I spent the first three months of my blog wilfully ignoring the topic of economic crisis in Spain. (Stage 1 of the 'Stages of Grief': Denial. The road ahead: Anger, Bargaining, Depression, Acceptance.) This was no small feat, since I'm a news junky, and all I was hearing on the news was Spain's economy looking grim. Record unemployment. PIGS this or PIIGS that. Macro-economic statistic this, and anecdotal grim story that.

I've long been fed up with all the global economic crisis talk and all the doom and gloom specifically about Spain. Doom in the media (_especially_ the_foreign press). In the politics. Recortes, recortes, recortes. (How many cumbres extraordinarias can the EU hold, and at what point do they become ordinarias?) And perhaps most of all, the endless negativity among economists and financial analysts.

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
I'm wondering if this former Barça coach, Louis van Gaal, ought to be our poster-child for dealing with outside critics on the economy. He made a splash with this statement, "Tú, siempre negativo, nunca positivo,"  back in 1999.


Upside to global economic crisis: I have learned a whole lot of new economy-specific Spanish vocabulary… recortes ([budget] cuts), huelgas generales (general strikes), and so on. For example, how many times will they say 'hoja de ruta' (roadmap) on the news _this_ year? (It's also good hunting ground for Spanish-specific jokes, too. Consider for your entertainment what has my vote for Phrase of the Year: 'prima de riesgo'… Nope, it's not your cousin's risk. Look it up. Punchline: ¿Quién es esta prima, y dónde está 'Riesgo'?) Downside: It's _bor-ing_. What happened to when news meant something new? It's all so predictably negative, self-defeating, and an all-around bummer.

It also has all the trimmings of the housing bubble, but in a negative inverse form. I still remember when, about five years ago, my friends were all telling me, "Buy a house now before they're all gone or too expensive!" Even then I was thinking, "This is just not socially sustainable. This must be some kind of lemming effect." For all of people's gushing about 'crowdsourcing' and the 'wisdom of the crowds', there has also long been a counter-wisdom, with labels such as 'groupthink', 'herd mentality' or more recently 'information cascade', basically when everyone reads the same two or three faulty sources and thus recapitulate those sources' biases and errors. (Another great line in Dr. Strangelove, when the Soviet minister explains to the US President that his source for the erroneous 'fact' that the US was also making a doomsday device was the New York Times.) And just like five years ago when my instincts told me that the housing market was too inflated and surreal to be real, well, now my instincts tell me that all this doom and gloom is too gloomy and doomy to be real.

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
Let us recall what started the economic crisis: It wasn't crop failures. It wasn't world war. It was a bunch of overly cocky rich kids playing monopoly. The movie Margin Call (2011) did a nice job of illustrating the problems of relying on a fixed, mechanical, and opaque market device to determine our financial futures.

 

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis

Are the 'facts' overwhelming in this
crisis, or just all the numbers?


[Warning: I'm gonna get a bit nerdy here.] There are so many tools in the toolkit in my profession which one could use to explain this recent roller-coaster ride of faith it's hard to know where to start. The key one is the 'self-fulfilling prophecy', a prediction that directly or indirectly causes itself to become true. Robert Merton based this on the Thomas theorem: "If men define situations as real, they are real in their consequences." More recent sociological models talk about 'reflexivity' in risk decisions – the fact that risk-taking people, take for example stock market investors, know that they are being watched, and thus predictions or anticipations of their actions can have consequences on how they act. Risk studies gave us the clunky but oh-so-true notion of 'offsetting behavior'. (For the über nerd, check out how sociologist David Stark builds on the concept of performative utterance to explain how finance people follow each other to a fault, rather than following markets or the real world, thereby creating bubbles and crashes.) My personal favourite is the Mathew's effect, often shorthanded as 'the rich get richer and the poor get poorer', which basically explains the positive snowballing effect that awards can have, such that one person can end up accumulating them all… Not necessarily because that award winner (or market leader) is _that_great, but because it is easier and safer for a committee (or lenders) to give the award (or investment) to an already recognised great than take a risk on an unknown. These are all examples of how our self-awareness and future-mindedness shape the present often in spite of the actual present. Each could also be the thesis statement for an entire dissertation on how Spain is getting screwed by the current crisis of confidence and finger-pointing.


Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
Hans Christian Andersen's fable ought to be
required reading on Wall Street

But you don't need to be a sociologist to know all this doom and gloom talk about Spain is bunk. Heck, this is kid's stuff. Hasn't everyone read The Emperor's New Clothes? Isn't it abundantly obvious that the smartest guys in the room in these rating agencies didn't know jack about the real economic health of banks back in 2008, and clearly don't know jack about how to predict the economic health of a given country's citizenry today? Here's a resolution mantra: I will not pay heed to the self-serving zany and after-the-fact unreliable prognostics of Standard & Poor's, Fitch Ratings, or Moody's. (Big tip off: Why _are_ we trusting agencies called "moody" or "standard and poor", anyway?)

So I offer you all a manifesto. How about y'all join me in an experiment. Ignore it. That's right, I'm going to stop listening to the doom-and-gloomers, and start focusing on all those things that are still going _right_ in Spain. This was my realisation sometime last November. I was unemployed and feeling quite discouraged by all this negativity. How does one get the energy to apply for a job, and want it, when everyone is telling him it's a horrible market with poor prospects? When it hit me. It wasn't helping me to believe all this negativity. It was disempowering me while making gloomy economists and pundits rich. I also suspect that it is this negative talk from other countries that is directly pushing Spain into the mud, and undercutting Spaniards' abilities to adapt, innovate, and keep positive.

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
The New York Times's country page for Spain in 2011, and I quote: "In Spain, after two decades of dizzying growth, the party is over." The party's over? Yikes! But I just got here!


Let's all start telling a different story. I've decided I'm going to listen for more success stories of Spanish entrepreneurs and businesses, and then share them on the blog. That's right. There are stories of Spaniards who had a business or non-profit initiative, took a risk and made it. It happens all the time in this country, yet somehow economic pundits in the acronymopolis —the US, EU, and UK— only ever talk about the problem of the PIGS, debt and unemployment, when Spain comes up. (Forget that Spain has demonstrated a unique democratic strength in being the only economically challenged country to let voters determine its fate. Such trivial democratic track-record or virtues apparently don't have a measure at Moody's.)

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
Look at all those logos! This economic powerhouse, Inditex, is Spanish. It can be done!


I already have some candidates: at the top of the list, Zara and its parent company Inditex Group, a Spanish clothes retailing company that has grown at incredible rates despite the crisis. Or, one day on the national radio (thank you RTVE!) I heard an interview with the CEO of Imaginarium. It's a pretty cool sounding Spanish toy company that is expanding globally. A few years back, EmTech Spain gave out its first round of Technology Review 35 (TR35) awards to ten talented scientists and engineers under the age of 35. That's right. Talented, forward-looking Spanish innovators. The New York Times also once wrote about the rise of caviar fish farming in Spain – what a concept! How innovative! Heck, and we shouldn't forget all the local businesses and freelancers sprouting up all over the country with smaller or more modest ventures, such as the Serie Limitada collaboration here in Valencia among others. I'd say that 'after two decades of dizzying growth' it's time we let go of Hemingway paradigm stereotypes about lazy or backward Spaniards or stifling bureaucrats holding the country back. This is a new Spain for a new century.

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
Imaginarium S.A. Building economic success on a sense of enchantment.


So, yeah, it's the economy, stupid. But let's not forget that _we_ are the economy. And we are also much, much more. So don't consider this rant post a prediction, consider it a call to arms!

Not Hemingway's Spain: Self-fulfilling prophecy or, how I learned to stop worrying and love the global economic crisis
Are you one to say the cake is half eaten, or half remaining? I say, have your cake and eat it too. It's good to be king!  

 

 
Reprinted
 with permission of Not Hemingway's Spain.

Zach FrohlichOriginally from Austin, Texas, Zach Frohlich has been traveling between Spain and the US for over a decade, and has been living in Valencia for the last few years. He is a historian by training and is married to a Spaniard. He shares cultural insights on Spain at Not Hemingway's Spain

 

 

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