“We need worthy and decent unemployments”… and a Universal Basic Income could be useful for that.

Sir, Tobias Buck quotes Marcel Jansen, a professor of economy at Madrid’s Autónoma university with “More than a quarter of unemployed workers in Spain have been out of a job for more than four years. Their chances of getting back into the labour market are very dire” “Spain’s first quarter job losses less severe than usual” April 29.

It relates directly to an Op-Ed I wrote in Venezuela (before I was censored there) titled “We need worthy and decent unemployments”. I quote the following from it:

“What politician does not speak up for the need to create decent and well paid jobs for young people? But, if that's not possible, and the economy is not able to deliver that on its own ... What on earth do we do?

Society must of course do its utmost seeking to solve the problem of youth unemployment ... including taking leisure to levels never thought of… six months vacations! But it also needs to prepare itself to handle a growing number of unemployed, not cyclical but structural, that is, those who never ever in their life will have a chance to get an economically productive job.

The power of a nation, and the productivity of its economy, which so far has depended primarily on the quality of its employees may, in the future, also depend on the quality of its unemployed, at least in the sense of these not interrupting those working.”

And recently I have reflected on that a Universal Basic Income, as that is not-having-a-job-or-not related social contribution, could be a significant part of the efforts needed.

@PerKurowski ©

Urgently fire those damn bank regulators who abandoned the young and ignored their needs for jobs and a future

Sir, I refer to the true tragical horrors described by Tobias Buck in “The fear and despair of Spain’s young jobseekers” March 2.

And I tell you again, though you will most probably ignore me again, that nothing as serious as that would have happened had not some few powerful and arrogant bank regulators, while trying to level the field for banks to compete, unleveled the real economies’ access to bank credit.

Read the chapters of “Capital adequacy and the Basel Accord of 1988” and “The BCBS and the social sciences” in Charles Goodhart’s “The Basel Committee on Banking Supervision: A History of the early years 1974-1997” 2012, Cambridge Press and you will understand. There is not one single reference to that how banks allocate credit to the real economy was of any concern whatsoever to regulators. And most probably it still is not.

Had they given that banks’ social purpose the slightest thought, they would have understood, unless too dumb, that their credit risk weighted capital requirements for banks impeded banks to adequately serve the economy.

Allowing banks to leverage equity differently based on “risk”, allows banks to earn higher risk adjusted return on equity on what is perceived or deemed to be“safe”, than on what is perceived as “risky”

So now “The safe” get too much credit on too lenient terms, while “The Risky” have no access to bank credit, that is unless they pay much higher risk adjusted premiums than they would ordinarily have to pay in an undistorted market.

Houses are safe so lend to that, but SMEs and entreprenuers the job creators are risky so cut them off!

Sovereigns are safe so lend to these, but the private sector is risky so, except for the AAArisktocracy, cut it off!

And so now our banks do not finance the “riskier” future they just refinance the “safer” past.

These regulators must be stopped! They are financial terrorists who threaten the future of our kids. And you FT must stop covering up for them.

“A ship in harbor is safe, but that is not what ships are for” John Augustus Shedd, 1850-1926

But not even ships are safe in a safe harbor if that harbor gets to be dangerously overpopulated.

@PerKurowski ©

Here a call in Spanish to the young to demand the risk taking they need

Here a letter in Spanish to the King asking for him to help the youth of Spain

Pablo Iglesia’s offer of a 35-hour workweek and a retirement age of 60 in Spain, sounds more like a “No se podrá”

Sir, I have surprised read Tobias Buck reporting that Pablo Iglesias, of Podemos (we can), suggests “a 35-hour work week and lowering the retirement age to 60”, “Spanish upstart party challenges status quo”, November 22.

Sincerely, in a so job starved Spain, that sounds to me much more like a giving up, like lets share the leftovers, like a defeatist “No-Podemos”.

If that is what Spain wants, then Spain is truly in big trouble.

I hope Spain understands that speaking engagingly, emotionally and with great empathy of the problems of a nation, has absolutely nothing to do with the capacity of solving those problems, on the contrary, these are often worsened by experts in verbal populism. (See: Venezuela)

If I was a Spaniard, and a bit similar to Churchill’s “Blood, sweat and tears”, I would now be arguing: “We can (nosotros podemos) and must get out of this sorry mess, and make Spain great again, even if that takes a 60 hours working week and forces us to work until we’re 100”.

PS. When an Executive Director of the World Bank, 2002-2004, it was a great honor for me to be sitting in the chair which represented, among others, Spain and Venezuela.

La oferta de Pablo Iglesias de 35 horas de semana laboral y 60 años para la jubilación, me suena más a un ¡No Podemos¡ 

Señor Editor, sorprendido leí a Tobias Buck informando que Pablo Iglesias, de Podemos, sugiere "una semana laboral de 35 horas y la reducción de la edad de jubilación a los 60", "partido advenedizo español desafía status quo", 22 de noviembre. 

Sinceramente, en una España tan  hambrienta de empleos, eso me suena mucho más como un abandono, como a un vayamos a compartir las migajas sobrantes, como a un derrotista "¡No-Podemos!". 

Si eso es lo que España quiere, entonces España esta realmente en serios problemas. 

Espero que España entiende que el poder cautivar hablando con gran empatía de los problemas de una nación, no tiene absolutamente nada que ver con la capacidad de resolver tales problemas, por el contrario, éstos son a menudo agravados por los expertos en populismo verbal. (Ver: Venezuela) 

Si yo fuese español, y algo similar a lo de "sangre, sudor y lágrimas" de Churchill, yo estaría ahora argumentando: "Nosotros sí podemos y tenemos que salir de nuestra triste situación, y hacer de España de nuevo grande y fuerte, incluso si esto nos obliga trabajar 60 horas por semana hasta los 100 años". 

PD. Cuando fui un Director Ejecutivo del Banco Mundial, 2002-2004, fue un gran honor para mi estar sentado en la silla que representaba, entre otros, a España y a Venezuela. 

http://bombaaaa.blogspot.ca

IMF, forget it! Spain, for the time being, is incapable of ‘turning a corner’… for the better

Sir, I refer to Tobias Buck’s “Export-shaped cloud looms over Spain’s bright outlook” July 22.

In it he refers to that “The IMF this month declared that Spain had ‘turned the corner’”

Forget it! No country that insists on capital requirements for banks which discriminate against the fair access to bank credit for the “risky”, medium and small businesses, entrepreneurs and start ups, can turn a corner… at least not for the better.

About this, on the web, I placed a message in a bottle to King Felipe VI, on his first working day

http://bombaaaa.blogspot.com/2014/06/carta-publica-al-rey-felipe-vi-de.html

Sir, don’t you recognize insanity when you see it?

Tobias Buck reports on how “banks from countries such as Spain and Italy borrow money cheaply from the European Central Bank to buy high-yielding sovereign debt from their own governments”, “Spain’s lenders reap profit on Madrid bonds”, January 30. And that the banks can do, because they need to hold no capital against these “infallible sovereigns”.

Frankly, Sir, don’t you recognize insanity when you see it? This is what the banks are doing in countries where the unemployment rates, especially those of the youth, want to make you cry. How on earth are the banks to help these countries to get out of what seems to be a death spiral?

And all because bank regulators do not care an iota about asking themselves what is the purpose of banks before regulating these… and therefore allow themselves to come up with loony risk-weighted capital requirements based on perceived risk of expected losses and which directly discriminates against the access to bank credit of the “risky” medium and small businesses, entrepreneurs and start-ups.

How could Europe have allowed itself to fall in the hands of regulators who do not care about the real economy? And how can FT keep quite on this?

Spain, if you bail out banks, how can you be so stupid not allowing these to help bail out your real economy?

Sir, Tobias Buck quotes activist Ada Colau during a hearing of the Spanish parliament on Spain's mortgage crisis with respect to the many heavily indebted homebuyers. She stated the following: “It cannot be that the most vulnerable people are made to live with the consequences of their actions until their death, while the big companies take no responsibility and are bailed out with public money”, “Spain´s voice of indignation grows into influential political force”, March 9.

And of course she is absolutely right, and anyone unwilling to comprehend that deserves being ashamed by the whole society.

But, even though all Spaniards with a home mortgage would be allowed to stay in their house with a mortgage reduced to leave him at least 1 Euro in equity, or allowed to walk away from the mortgage, the problem of where to work and what to eat, and in the latter cases where to stay, will persist.

And here is what I really have the biggest problem with, and not only with Spain. If banks are bailed out, how can regulators be allowed to be so stupid as not to allow banks to help out?

Because that is precisely what regulators stop these from doing when they award the banks irresistible incentives to lend to what is perceived as "absolutely safe" and to stay away from what is perceived as “risky”. And because that is precisely what happens when you allow banks to leverage immensely more when lending to what is perceived as “absolutely safe” than when lending to what is perceived as “risky”, like to small businesses and entrepreneurs

Spanish youth please do not build a government coalition around the many justified grievances you might have, and do yourselves a big favor, build it around daring hopes for the future instead.... God make us daring!

Jóvenes desempleados