Doom and gloom

Democracy means what? Apparently it means police firing rubber bullets and tear gas, and blood pouring down the face of a protester at the miners’ demonstration in Madrid.

More than 70 people were injured in the clashes between riot police and demonstrators, 43 protestors and 33 police. Eight people were taken to hospital, and eight people were also arrested.

Accounts differ as to how the violence started out. Some say the police started firing rubber bullets, others say it was a response to objects thrown at the police by demonstrators.

I say demonstrators, not miners, because the miners were joined in their march and protest by other Spaniards incensed at the endless tax hikes and cuts to public spending, so who knows who threw what?

Political activism huh? Is it ever peaceful? I don’t think the 67-year-old retired miner expected to get shot by a rubber bullet when he set off on the march from his home town in the north of Spain.

Here are a couple of links rt.com and aljazeera with some good (short) videos on both and some good photos on the rt site.

But demonstrators and riot police clashing is nothing spectacular is it? Happened in Northern Ireland too on 12 July (yesterday) for the annual Orange parades although not quite as dramatically.

So what has Revolting Europe got to say about all this? Not about the protest, but some analysis of the issue:

Aid to mining companies in this year’s budget was cut to 111 million euros from 301 million euros in 2011.
These subsidies are direct aid to the sector, but they are also designed to revive the mining areas by reducing or eliminating mining activities and creating new ones.
To be sure, the cuts made by prime minister Rajoy are not about the Spanish state, nor the EU, being short of money.
The State has injected 4,500 million euros into private Spanish bank Bankia, and is pledged to shell out 19,000 million euros more. Europe has rescued Spanish banks with 100,000 million euros. The mining sector is asking for a mere 200 million euros to prevent its demise. In Spain, let alone Europe, there is money. And plenty of it to rescue the banking and financial system. But there is no money to save the coalfields.
The cuts made the right-wing government of Mariano Rajoy seriously undermines the ability of the mining areas to develop the necessary infrastructure and provide incentives to encourage firms to set up new activities in mining areas. These cuts eliminate any possibility of reviving the mining regions.
Yet there could be a socio-economic alternative for the mining communities, compatible with sustainable development. The government could make a clear commitment to economically diversify the mining areas by allowing them a role in the development of an alternative energy sector, integrated into a wider national energy planning.
To date, the tax money Spain has provided to the sector is not well used. Grants are chucked at private ‘entrepreneurs’ who are using the miners for their own purposes and are exploiting resources that belong to everyone to further swell their profits. The fact that over 80% of production comes from opencast mines that are profitable or at least break even means subsidies more than compensate for any losses.

[The full article is a summary of the views of Enrique Javier Diez Gutierrez, Professor at the University of León just in case you are wondering if it is written by your average ignorant journalist.]

Interesting. And so is this:

Goldman Sachs is working up a tidy little plan to profit from the misery of Spain’s miners.
In the Asturian port of El Musel rest hundreds of thousands of tonnes of Colombian coal. The owner – the US-based multinational bank – paid for the black stuff in cash and intends to sell it in the futures market in a speculative venture it hopes will make astronomical gains.
Coal in Europe currently costs $89.40 per tonne (as of 9 July), while futures on the mineral range from $90 per tonne for one month to $97 per tonne for a year.
The markets expect an upward trend, so the New York company is ensured of a handsome return with its stockpile in the Asturian port city of Gijón.
Arriving in the Spanish port from Puerto Bolivar, Colombia, already 156,300 tonnes have been brought ashore. Another similar-sized cargo is expected. In total 600,000 tonnes of the imported material is due to be stored in Gijón.
If all goes well, with Spain’s local coal industry facing accelerated closure, there’ll be a large ready market on the doorstep.
The only cloud on Goldman Sachs’ sunny horizon is a change in the political guard in the area, from the right wing Popular Party to the socialists following elections last March. As a result, the management of the port has changed . ‘I cannot support a speculative operation like this when my countrymen are walking 400 kilometres to fight for a sector upon which my land depends,’ a locally born port socialist counsellor told El Publico newspaper.

Why does this sort of news not make mainstream media? Are we all really so incapable of reading more widely, asking questions, considering different issues, that we can only handle tiny soundbites?

Having said that, I read a BBC analysis of the Spanish economic situation and it might as well have said what I did a couple of posts back, banks lent too much money to fund a property boom that couldn’t continue and now the money needs to be paid back.

Simple sums for simple people. What isn’t being said in any reports about the protests is that this mining subsidy isn’t to keep unprofitable pits going. Most are not making a loss according to Professor Diaz Gutierrez.

The fact that over 80% of production comes from opencast mines that are profitable or at least break even means subsidies more than compensate for any losses.

And, the subsidies are meant to help revitalise mining areas by creating new industry and employment opportunities jobs.

What is this all really about? I don’t have the answer but it smacks to me awfully like the UK coal mining disputes of the 80s when the pits were closed to import cheaper coal from Rumania, Poland, wherever. It seems Spain is not only importing it from Colombia, but also from South Africa, Russia and Indonesia.

While it may be unfashionable, I still think it would be far better if people (yes that means you out there) invested in their own countries and so did governments. I would have thought it was obvious that if you close an industry in your own country and import from elsewhere at a cheaper cost (that apparently benefits speculators) that it will cost in the longer term. But no, my thinking is obviously incorrect. Globalisation is king. (It’s mainly ruled by men so therefore it is a king).

Meanwhile the miners have been on strike for five weeks and a good percentage of them are going to end up permanently out of work, because let’s take that as a given. I don’t know if any of them did their research on the 1936 British Jarrow March that I mentioned on the last mining post.

When the marchers completed their feat, very little was done for them. The ship industries remained closed and all that they were given was £1 each to get the train back from London.

(Great price huh for a rail trip from London to Jarrow….)

For my non-British readers:

Jarrow was a small industrial town on the south side of the River Tyne, near Newcastle.In the nineteenth and early twentieth century its main industries were iron and steel manufacture and shipbuilding. Jarrow prospered at the start of the 20th century with Palmer’s Yard which had been established in Jarrow in the mid-19th century providing employment.
Nonetheless,similar to other shipyards during the inter war years, competition from Americian and Japanese shipbuilding companies led to its closure in 1935. By September 1935, Jarrow had lost all of its heavy industry and unemployment stood at 72.9%.
The march was to find jobs to support Jarrow men and their families. It was also a bid for respect and recognition, not only for the people of Jarrow, but for others in a similar situation all over the country.
The marchers had no resources other than their own determination, and some good boots supplied by the public. During the march, wherever the marchers stopped for the night, the local people gave them shelter and food.

The marchers arrived in London on 31 October, almost a month after leaving. The total number of signatures on the petition was 11,000, and was handed into Parliament by Ellen Wilkinson, Jarrow MP.
Prime Minister Stanley Baldwin refused to see any of the marchers’ representatives, claiming it would set a dangerous precedent. The marchers generally received sympathy, though no proposal was made to help Jarrow, despite the petition being accepted in the House of Commons – with a single simple sentence of announcement, after which the House of Commons went back to their previous business.

[slightly adapted from wiki]

I think the Spanish miners would have been better off marching to La Coruña, where lives Amancio Ortega Gaona, Spain’s richest man, sometime Europe’s richest man, and fifth richest man in the world. [wiki again] Seems to compete with Bernard Arnault of France (LMVH) for the richest billionaire title in Europe – what’s a few billions between rich men when miners – and everyone else – need jobs? Current worth of Ortega $37.5 billion. He’s the guy who founded the fashion chain Zara, in case you don’t know.

Despite the poverty and essential austerity measures, Spain has a few other billionaires too. One of whom is Emilio Botin, in charge of the Santander Banking Group (the one that took over the British Abbey National), but he only has a measly $1.5 billion. And, behind the UK and Switzerland, Spain sits third in the league table of top bankers’ pay in Europe. Even ahead of Germany! [Source Revolting Europe, which used Forbes and FT Alphaville figures]

Today’s pic is of the destruction wreaked by the bush fire that we saw on a recent trip. As the miners’ march has been called the black march, coal is for burning, and they are facing the destruction of their industry, it seems appropriate.

Back to black – scene of bush fire in the Sotogrande area of Cadiz province, Andalucía.

If you’ve got this far you deserve a smile at least. I was looking up to see if Arson in the Royal dockyard was still a capital punishment crime in the UK (it isn’t) and found this on Yahoo answers…..

I think some councils are planning to introduce it for those evil people who threaten society by putting slightly too much rubbish in their wheelie bins and leaving the lid a couple of inches ajar

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34 comments on “Doom and gloom

  1. Some interesting thoughts here!
    Should any industry be subsidised if it cannot be profitable? In my view probably yes but that isn’t predominant main stream radical right wing European political thinking at the moment. Sadly our fascist governments see that it is necessary to shore up the corrupt blood-sucking banks and their overpaid executives because they support the whole rotten economic European infrastructure but traditional industries such as coal mining are expendable. Once the world ran on coal and ship building but not any more. Thatcher and her cronies did exactly the same thirty years ago.
    I read an interesting article earlier about the new wave of austerity measures in Spain – the future looks bleak. Anyway, the sun is shining at last, I am currently packing for my holiday, the £ is strong against the Euro so unless Greece goes bust in the next few days I am going to try and not worry about it too much this week.

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    • From one non-economist to another, I don’t think state subsidies of industry are simple. Should an unprofitable/borderline/profitable state industry receive aid? I used to think not, if it doesn’t make a profit, tough. But then you look at all the knock-on effects, unemployment, payment of benefits, shortage of money in the local economy because people have less to spend, importing – in this case – the same product from abroad. You could look at subsidising an industry, or nationalising it, as just another public service. And why not?
      Bit forthright for you !!
      But anyway, I think it is incongruous that there are not just millionaires, but billionaires sitting on their fat assets when other people can’t find jobs or are facing the loss of their job. Unbelievable.
      Are you on blog hiatus when you jet off to the sunny costa del Corfu?

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  2. Um – I feel like a hypocrite ‘liking’ this post. But you know what I mean. Black marches are nothing to ‘like’. This makes me sad… Sad for our world, our people, our future. I’m glad that you are bringing these issues to our attention.

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    • I know what you mean. You like the content of the post inasmuch as what is written is interesting but not the points that are being made. I think what is happening in Spain is sad, but it is all to easy to judge people for over-extending (which is all too easy to do) and not look at some of the other issues.

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      • You are right – this is much more than wanting a new couch. I just mean that disposable income is only disposable as long as the one disposing of it is able to pay the rest of the bills! And our entire marketing system is geared toward encouraging the glut of spending. Spending drives the economy – but is putting it through the wringer just now, too. Throw a few unscrupulous banking institutions in with politicians with an agenda, and you have a Black March…

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        • The problem, at a domestic level, as you say, is spending what you don’t have/can’t afford/putting it on credit. For me, it’s always been bills and food first, then – and this is really old-fashioned – I’ll save up for something I want. Easy, but oh so eccentric. To quote back at you, spending may drive the economy, over-spending depresses it. Unscrupulous and banking strikes me as tautological these days :(

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    • Yes, interesting that the two names that have come up so far in terms of Spain’s problems are big hitters, Deutsche Bank and Goldman Sachs. I wouldn’t be at all surprised if Barclays and Credit Suisse aren’t lurking in there somewhere. Spain doesn’t have one of these HUGE international investment banking companies.

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  3. Greed, greed and oh yes….greed. Keeping non-profitable industry going, keeping slightly less profitable industry going, stockpiling, supporting homegrown – like with everything from economics to environment and climate change it is looking more and more like we are getting to the point where we are going to be left with no choice but to completely re-think how we do things.(Should have happened awhile ago me thinks.) Wouldn’t that be nice? But what are the chances and what is it going to take?! Many rubber bullets and more.

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    • Greed is definitely the relevant word. Globalisation is my huge gripe though – eg the coal shipped from Colombia to Asturias while they are trying to close pits in that region. Outsourcing everything and everyone from telesales to coal, it doesn’t matter where so long as it is cheap, without any thought for the knock-on effect in the home country. The bottom line, shareholders profits, and the CEOs salary matter far more than the average person in the street.

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      • Taking us back to greed. Does my head in. How much stuff / power does one need? I guess the two can’t be separated. I get just as frustrated at how globalisation which if reworked a bit as a model, could be so useful to manage what is left of our limited resources effectively, is abused in the hands of the rich at the cost of the poor / the environment (rhino horn trade for example). Don’t have any answers though.

        We are involved in a dispute here where we questioned abuse of our natural environment by a developer and got hammered with threat of legal action if we didn’t shut up. Little, local issue on a global scale – but for us scary none the less and a pertinent reminder of how the world works. Global ecomonics is not my thing but am starting to engage a bit from reading your posts. Lots to learn.

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        • You are right, globalisation as a humanitarian concept could work extremely well – if it can work for capitalism, it should work for people and the environment. But that doesn’t make money for the ones in power. And by power, I don’t just mean governments.
          Rhino horn – I read at least a post a day about poaching and killing endangered animals in Africa. Too depressing for words in such a beautiful country with so much wildlife.

          Your local example is a sad one, but as you say, too too accurate about how everything works. Part of the sadness is the community spirit being disregarded, people getting together, working on something for the good of everyone and – pffff – who cares about you?

          I make no claim to being an economist at all (historian, archaelogist, journalist, yes) and my posts are basically local ones about Spain or Gib. But if it is a serious issue like this one, then I think a wider look at the context is merited.

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  4. And some people think countries should be lead by businessmen. One country certainly comes to mind but what do USers know? The black countryside photo looks a bit like many of our landscapes in Utah, Arizona, Colorado and California, to name a few locales. And on to the rubbish wars. Our rubbish collecting company does not like the extra rubbish or open lids either. They will not empty the bin if the lid too far ajar. As if an extra kilo or two will break their budget. But hundreds of kilos can make a difference. It’s all about rules and the bottom line.

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    • Well, all businessmen think countries should be led by them. But who would one get to ideally run the country? The list of ‘who nots’ is pretty long. Banks and corporate business being at the top. I’ve read there’s been some bad fires over your side of the pond this year, but you seem to get them every year as does Spain. I’ve just not seen one before and it was pretty scary.
      The Spanish bin system is probably the best. Large contenadors in the street for everyone to use and they are emptied daily, apart from when the staff go on strike in summer of course ;)

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  5. Interesting post which I’ve had a few reads of to grasp it all, and I come back each time to the bin… which I’m sure you intended… the world needs to get back to basics, looking after itself properly & not worrying about stupid unimportant issues which only serve to distract, and justify people who only look after their own interests.

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    • As I’d mentioned the miners’ march earlier, I though it worth doing a follow-up to see what had happened, and then I found out about this stock-piling of coal from Colombia which muddies the waters (so to speak). And although I’d mentioned the British Jarrow March before, I realised many readers wouldn’t know about it – and the fact that it achieved nothing apart from publicity until everyone forgot about it. I see the Spanish miners’ march going the same way.
      My bin comment wasn’t that clever – if only! I did like the idea of the biggest dangers to society being people who put slightly too much rubbish in their bin (maybe they should cut down on the packaging they buy…) and bringing back capital punishment for it, when there are far more dangerous, powerful and legitimate threats out there. I liked the irony. I hadn’t consciously linked it at the time I wrote it though.

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      • I thought your post brought it all together perfectly… if we are all preoccupied with garbage so-to-speak we conveniently for the money lords don’t focus on the what they would prefer to go unnoticed, uncommented, undisputed.

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        • Thanks. It’s always easier to sort the little things in life. I do that myself.

          Oh! You have just reminded me of something I mean to write on a post on here. Will get on with it right now :)

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  6.      
    “Dictatorship naturally arises out of democracy, and the most aggravated form of tyranny and slavery out of the most extreme liberty.” ~ Plato

    Sadly, this is only the beginning of things to come to the entire “civilized” world.

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