SEP019.- Entrevista a Santiago Niño Becerra

Name: SEP019.- Entrevista a Santiago Niño Becerra
Uploaded: 2019-09-08T15:34:42.000Z
Duration: 1 h 38 min 10 s

Crisis Analysis: Understanding the 2008 Economic Collapse

Contextualizing the 2008 Crisis

The professor discusses upcoming crises, emphasizing that the 2008 financial crash remains unresolved and will not be fully addressed until at least 2023.

He explains that the economic model established post-World War II collapsed due to exhaustion, similar to past economic downturns in 1929 and 1875.

Phases of Recovery Post-Crisis

The collapse manifested significantly through financial issues, with Lehman Brothers' bankruptcy marking the official start of the crisis.

Following a model collapse, there is typically a cycle of decline followed by recovery; this pattern was evident in both historical and recent crises.

Phase 0: Initial Response (2007 - 2010)

Governments initiated massive Keynesian public spending as a response to stimulate recovery during this phase, which included many unnecessary projects.

By May 2010, it became clear that countries were accumulating public debt without significant economic activity resuming.

Phase 1: Austerity Measures (2010 - 2012)

In this phase, austerity measures were implemented leading to cuts in public spending and increased scrutiny over expenditures.

Mario Draghi's famous statement in July 2012 marked a shift towards aggressive monetary policy aimed at stabilizing the Eurozone economy.

Phase 2: Monetary Injection Strategies

The U.S. adopted Alan Greenspan's "helicopter money" theory, injecting large amounts of money into the economy to spur growth.

By mid-2012, despite political claims that the crisis had ended, underlying issues such as excess supply remained unaddressed.

Public Perception vs. Reality

Citizens accepted political narratives about recovery despite ongoing economic challenges; banks began issuing credit again but not at pre-crisis levels.

Consequences of Monetary Policies

Reports from institutions like the IMF indicated a fragile recovery with persistent shadows over true economic health.

Excessive monetary stimulus led to unsustainable private debt levels; companies often used cheap credit for stock buybacks rather than productive investments.

Long-term Implications

As of mid-2018, signs emerged indicating that these policies were no longer sustainable; rising student loan debts exemplified broader systemic issues within the economy.

Economic Crisis and Recovery: A New Perspective

The Onset of a New Recession

Discussion begins on the potential for a new recession, highlighting concerns about economic stability and rigidity in the market.

The speaker compares the current situation to 1937 when Roosevelt halted public spending, leading to an economic downturn despite signs of recovery.

Emphasis on the need for cleaning up bank balances, indicating that many banks are struggling with inflated asset values.

Banking Sector Challenges

Mention of necessary bank mergers due to excess banks in the market; shareholders will face losses during this consolidation process.

Increased productivity and business investment are essential; some companies are surviving artificially, which could lead to rising unemployment and underemployment.

Structural Changes Required

Urges restructuring of public finances, suggesting that actions needed since 2009 have yet to be taken.

Historical dynamics indicate systemic crises must be addressed; failure to act may lead to a prolonged transition period similar to past economic collapses.

Transitioning Economic Models

The necessity for implementing changes is highlighted; while capitalism remains, models within it must evolve.

Productivity increases are crucial; those who fail to adapt risk obsolescence in a rapidly changing technological landscape.

Global Economic Context

Current discussions around global recession reflect ongoing issues from previous crises rather than new developments.

The end of stimulus measures (referred to as "anfetaminas") signals a slowdown in activity, mischaracterized as recession but seen as part of an ongoing crisis since 2007.

Trade Wars and Internal Issues

U.S.-China trade tensions contribute significantly to macroeconomic instability; these conflicts extend beyond tariffs into currency and technology battles.

Historical context provided regarding post-WWII agreements that allowed U.S. dominance at the expense of other economies' growth.

Domestic Challenges in the U.S.

Acknowledgment of severe internal issues such as poverty and structural imbalances within American society and economy.

Concerns raised about stagnant productivity levels in the U.S., with real wages remaining unchanged since the 1970s, indicating deep-rooted economic problems.

Economic Competitiveness and Global Dynamics

The Role of the United States and China in Global Trade

The U.S. has seen a loss of competitiveness due to its reliance on cheap imports from countries like China and Southeast Asia, which affects its economic standing.

China's significant investment in technology surpasses that of the U.S., positioning it as a technological giant in the global market.

The U.S. dollar's status as a global reserve currency leads to an overvaluation, unlike China's ability to influence its exchange rates, giving it a competitive edge.

European Union Challenges

The EU was founded with good intentions but struggles with diverse economies among member states, leading to conflicts of interest.

There is a stark contrast between the economies of member countries like Holland and Romania, creating tensions within the union.

Brexit is viewed as England's attempt to regain independence from the EU, highlighting underlying issues within the union.

Historical Context of UK-EU Relations

The UK joined the EEC in the 1970s through a referendum but had previously been part of a free trade association that limited its integration into Europe.

The UK's primary interest in joining was for trade benefits rather than full political integration or freedom of movement for people.

Current Political Landscape in the UK

Northern Ireland's economic interests are often overlooked by England, raising questions about its future within or outside the UK.

Scotland’s potential independence could lead to further fragmentation within the UK, affecting economic dynamics significantly.

Future Prospects for England and Europe

If Northern Ireland were to unite with Ireland post-Brexit, England might focus on strengthening ties with the U.S. for better trade agreements.

A practical approach from both sides suggests that despite challenges, there will be efforts towards reaching mutually beneficial agreements post-Brexit.

Emerging Paradigms in Europe

The Shift in Political Correctness and Regional Dynamics

Discussion on the resurgence of ideas from the 1980s that were previously deemed politically incorrect, indicating a potential shift in societal norms.

Introduction of a new model that will bring technological advancements but also lead to a dilution of traditional state concepts as understood historically.

Regional Disparities in Italy and Beyond

Analysis of Italy's division along a line from the Adriatic Sea to the Tyrrhenian Sea, highlighting two distinct Italys: one prosperous and one struggling.

Predictions about further divisions within countries like Italy, Spain, Belgium, France, and the UK due to regional disparities becoming more pronounced.

Economic Challenges in Germany

Examination of economic struggles within Germany where certain regions face unemployment rates as high as 20%, contrasting with wealthier areas.

Identification of industrial concentration in western Germany while eastern regions remain economically stagnant, leading to political shifts.

The Future Concept of Europe

Assertion that while the concept of Europe will not disappear, its administrative structure will undergo significant changes due to evolving economic landscapes.

Emphasis on how technology—particularly AI and robotics—will reshape economies and labor markets across Europe.

Employment Trends and Basic Income Discussions

Concerns about rising unemployment due to technological advancements; historical parallels drawn with solutions during the Great Depression.

Prediction that only 5% of the population may be needed for future global GDP generation, leading to surplus labor issues.

The Necessity for Basic Income

Introduction of basic income as an essential solution for addressing employment challenges stemming from automation and job precarity.

Historical context provided by mentioning Milton Friedman’s role in conceptualizing basic income during economic upheavals.

Societal Stability Through New Measures

Discussion on how basic income could complement short-term jobs to ensure sufficient living standards amidst changing work dynamics.

Speculation on societal reactions to these changes; belief that revolutions are unlikely due to cultural shifts towards leisure activities like legalized marijuana use.

What Will Happen to Basic Services and Social Welfare?

The Future of Social Protection Models

The current model of social protection is at risk of disappearing, as it is based on outdated assumptions that no longer hold true.

Four foundational assumptions were made when the social protection model was established in the early 1950s: full employment, rising wages indexed to inflation, increasing demand for labor, and a life expectancy post-retirement of about ten years.

None of these assumptions are currently being met; with declining wages and contributions from the population, the sustainability of social protection is in jeopardy.

Implications for Healthcare and Education

A basic level of healthcare will remain, but significant changes are expected due to increased productivity leading to lower costs for medical procedures and technologies.

As productivity rises, prices for medical services such as scans or surgeries will decrease significantly. This includes advancements like 3D printing which could revolutionize organ production.

Life Expectancy Trends

Contrary to popular belief about increasing life expectancy (up to 150 years), there is an expectation that average lifespans may actually decline in the near future.

The period between 1950 and 1975 was considered a golden age; however, subsequent decades have seen economic challenges that threaten this stability.

Economic Outlook Post-Crisis

While a crisis may end around 2023–2024, it does not guarantee a return to previous stability; rather, it suggests a new equilibrium without significant growth.

Large global corporations are expected to take over many functions traditionally held by states, particularly in social sectors.

The Role of Corporations vs. State Functions

Major tech companies like Microsoft and Google are predicted not to contribute positively to society despite their economic power; they may continue avoiding taxes.

There’s speculation that large corporations might begin assuming responsibilities typically managed by governments—especially in social welfare areas—leading to reduced state involvement.

Evolution of State Functions

The state is anticipated to shrink significantly as corporate entities take on more roles previously held by government institutions.

This shift isn't ideological but rather an evolution reflecting changing global dynamics where capital flows freely across borders.

Current Economic Situation in Spain

Spain's economy is described as deteriorating; there’s widespread acknowledgment that economic deceleration is affecting the country adversely.

Understanding Spain's Economic Challenges

The Dependence on External Resources

Politicians in Spain are not providing the full truth about the country's economic situation, particularly its heavy reliance on external resources, such as 96% of its oil consumption.

Germany is highlighted as a leader in solar energy investment, contrasting with Spain's underutilization of its abundant sunlight due to insufficient investment.

Key Economic Sectors and Employment Issues

The primary sectors contributing to Spain's economy—tourism, construction, and commerce—are characterized by low added value, which poses significant challenges for productivity.

A study reveals an inverse relationship between GDP growth and productivity; when GDP rises, productivity tends to fall, indicating structural issues within the economy.

Productivity and Employment Dynamics

There is a disconnect between employment levels and productivity in Spain; while employment may rise during economic booms, it does not correlate with increased productivity.

Low wages and precarious employment conditions contribute to this issue, limiting necessary investments that could enhance productivity.

Export Challenges and Domestic Consumption

For exports to thrive, foreign demand must be stable; however, if external purchases decline for any reason, domestic consumption suffers significantly.

The automotive sector exemplifies declining sales due to changing consumer preferences among younger generations who prefer alternatives like public transport or car rentals over ownership.

Societal Influences on Economic Behavior

Changing social dynamics affect purchasing behaviors; many young people opt out of car ownership entirely due to practicality and cost considerations.

This shift reflects broader societal trends impacting economic structures in Spain.

Political Awareness vs. Public Communication

There is skepticism regarding whether politicians fully understand these economic challenges; they may avoid discussing them openly due to potential backlash from voters.

Predictions made by the government regarding future growth rates are viewed skeptically; there are concerns that these forecasts will not materialize.

Future Economic Outlook

Anticipated governmental pressures from Brussels post-elections suggest impending tax increases and spending cuts that could further strain the Spanish economy.

Historical data indicates unsustainable private debt levels in Spain since 1996 have led to warnings about potential economic disasters if trends continue unchecked.

Long-term Projections for Capitalism

Discussions around the future of capitalism raise questions about sustainability beyond 2060 based on OECD studies predicting stagnation followed by decline across member countries' economies.

The Future of Capitalism and Collaboration

Economic Predictions and Historical Context

The speaker discusses the economic projections for member countries of the OECD, predicting that by 2060, their GDP will be lower than in 2005, indicating a potential collapse of the capitalist system.

The argument is made that just as historical systems like feudalism collapsed, capitalism is also reaching its limits, suggesting a cyclical nature to economic models.

Individualism vs. Collaboration

A critique of individualism within capitalism is presented; the notion that "the winner takes all" reflects a belief in survival of the fittest which may no longer hold true as society evolves.

The speaker predicts a shift towards a collaborative system where cooperation among individuals becomes more effective and powerful than competition.

Societal Changes and Quality of Life

There’s an acknowledgment that future generations may experience diminished quality of life compared to those who lived during more prosperous times, highlighting concerns about societal decline.

The discussion touches on how freedom may be sacrificed for security in future societies, with implications for personal privacy and autonomy being significant issues moving forward.

Conclusion on Future Perspectives

The conversation concludes with reflections on how these changes will be marketed to society, emphasizing the tension between increased security measures and reduced individual freedoms.