FU, ZP

With great horror I began Jim Hoagland’s article in the Washington Post where he initially compares Barack Obama to Spanish President Jose Luis Rodriguez Zapatero (aka, “ZP”).

Other than both politicians’ opposition to the Iraq War, the similarity stops there. Hoagland writes, “Zapatero can be brash and provocative, while Obama works at being cautious and reassuring.” The reality is that ZP is a featherweight buffoon whose all too often populist rhetoric has been counter-productive to Spain’s global interests.

ZP has publicly opposed French President Sarkozy and German Chancellor Merkel, blamed all of Spain’s economic woes on American capitalism, and boasted about the superiority of Spanish banking regulations over its European counterparts. It is no wonder that neither Bush nor any of ZP’s neighbors pushed for his presence at the G8 meetings in Washington earlier this month, regardless of the fact that Spanish banks are major players in the global economy. Only after begging was he finally invited to the party.

His claim that American capitalism is killing the Spanish economy is pure scapegoatism. Spain’s over dependence on construction and its real estate bubble had been predicted to burst for ages. Sounding like John McCain’s “the fundamentals of the economy are sound”, ZP and his finance minister, Pedro Solbes, have flatly denied the severity of the numbers for over a year. Last Christmas when the first obvious signs of economic decline were on the radar, Solbes went so far as to blame consumers for causing inflation by over tipping on coffee and even recommended switching to rabbit (a cheaper alternative to seafood) for Christmas dinner.

Hoagland brings up ZP’s banking regulation talking points,

Spain — the world’s eighth-largest economy — is gripped by serious unemployment and by an oversupply of housing. But Zapatero proudly noted the strength of the country’s banking system, “which did not fall for deregulation and for the ideological model” of free enterprise. “Such ideology does not accept facts and does not understand that history is contingent.”

But in conversations with Santiago, my friend and economic advisor, I have learned these four important facts that contradict ZP’s bragging about Spanish banking regulations:

1. The rescue package that the Spanish government has approved for it banks is roughly equivalent (in proportion to GDP) to that of other countries whose banks are failing. If Spain’s banking sector is so much healthier than its American and European brethren, then why the extreme measures?
2. In Spain, more than half of the financial system (i.e., the cajas de ahorro) is not transparent and no one knows what is really going on inside those entities (other than the Banco de España who is not willing to make those disclosures).
3. Spanish legislation has heavily favored Spanish banks at the cost of the tax payer: (i) For years, banks have been permitted to keep over-the-top early retirement for employees off of the balance sheets. All of this at a time when banks were raking in major profits. (ii) The banks were given government subsidies to acquire institutions abroad; while the government permitted them to diversify their risk in the Spanish real estate market through a tax break that allowed them to amortize “good will” – at the cost of the tax payer.
4. Perhaps most egregious, the government – with the support of the banks (as stated by Alfredo Sáez) – is asking that the names of the financial institutions who receive the government aid not be made public. In other words, it’s better for citizens to be kept in the dark on who they are bailing out.

Hoagland also gives ZP’s insights into the effects of Obama’s election on the world.

Obama’s election “means that in countries where the U.S. flag was being burned before, it is being waved now,” Zapatero said. “This is a historic opportunity for the United States to be better understood” abroad.

Maybe Hoagland wasn’t aware of this, but ZP is one of those abroad with a history of not understanding the U.S. Back when he was running for president in 2003, ZP made a deliberate gesture of disrespect towards the U.S. As described in Wikipedia,

On 12 October 2003, during the Hispanic Day military parade held in Madrid, then opposition leader and presidential candidate Zapatero remained seated when a U.S. Marine Corps honour guard carrying the American flag walked past Zapatero and other VIPs. Everybody else stood as with the rest of the foreign guest armies [sic] representations. He declared afterwards that his action was a protest against the war and certainly not intended as an insult to the American people.

While ZP may have been correct to oppose the Iraq War, he completely failed to distinguish between a diplomatic show of good will towards the American people and his immediate domestic political aspirations. With actions like these and his history of ridiculous boasting, you wonder how on earth ZP would be even remotely qualified to advise Obama on conducting foreign or domestic policy. If anything, Obama’s win should be a sign to the Spanish electorate about the importance of primary elections, transparent party politics, and open democracy. The way things stand, you’re left with more Rajoy who perpetuates more Zapatero (dumber and dumb).

I wonder whether ZP’s “historic opportunity” quote was really just about his own ignorance. Did the election change the American reality or how the world perceives that reality? If ZP meant to say that he has learned something that he had previously misunderstood about the U.S. and democracy, then his comments add some value to the table. Otherwise, they are just a continuation of his demagoguery, and he can respectfully keep his thoughts to himself and mind his own business. Thank you very much.

Finally, it’s fascinating to see how easy it is for an American to misread a European: Hoagland actually describes Zapatero, who resembles Mr. Bean, as elegant. I don’t think that even ZP’s supporters would call him elegant.