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But the shoddy economic model based on low wages and mediocre technology was never abandoned, as the real-estate bubble shows. The Spanish political economy is unable to conceive of other activities than bricklaying.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Sat Feb 18th, 2012 at 05:05:59 AM EST
[ Parent ]
Oh, and this is what adjustment looks like: (year-on-year change in wages and company profits

Purple: company profits
Orange: wages of salaried workers

That's not going to improve "competitiveness" but it's definitely not the fault of the wages as the aggregate wage bill has dropped maybe 2% per annum over the past 3 years.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker

by Migeru (migeru at eurotrib dot com) on Sat Feb 18th, 2012 at 05:30:58 AM EST
[ Parent ]

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