June 15, 2021

The lyrics of our recovery



One V”? A “U”? The W of the “double dip” that marked our recession? The square root icon? The anagram of a sports multinational is even quoted: a sloping v topped with a long rising line …

The graph that our economy will draw, when emerging from the induced coma into which the pandemic has plunged it, is the subject of multiple speculations. And the good news is that few talk about a downward exit, because the economy, after all, is also a matter of expectations. The output, in short, I would say according to what was observed, will lead to a plateau where there will be hills, yes; but it will not lead us into a recession that will precipitate us into depression.

In any case, to understand and overcome it, it is not enough with the Keynesian state intervention toolbox or the pure monetarism of Friedman with his helicopter throwing money on the crowds.

We have to make an effort to understand a new world that is deglobalizing on the one hand; because multinationals have rediscovered that their production chains are more valuable if they do not cross borders; and, on the other, it becomes universal: we send more and more bits – we are receiving and transmitting content behind the screen all day – and fewer atoms. Twenty years ago we were transporting, for example, cassettes and films; today, they are bits that cross the ether.

That is the essence of big data that defines the third digital age: information was merely a companion to merchandise; today it is the merchandise.

The world is dematerialized; but the material thus redefines, in addition, its strategic value. The manufacturer of 5G equipment is not only strategic; The medical supplies will also be as strategic, from now on, as the Defense.

And this deglobalization of the material and the redefinition of the strategic harms, above all, China: the world’s factory, but now also conceived as a threat. Because the deglobalization of the material reinforces the logic of the three blocks that are more homogeneous than ever: the USA, the U.E. and China.

In this third era of big data, digitization of face-to-face and transhumanism, USA can be the big winner, because, after all, it is the fiscal headquarters of the unique internet platforms.

Hence, in preparation for the departure of this great pandemic break, the US has allowed itself to borrow in figures that multiply the European ones: Trump It has opted to secure incomes – $ 1,200 per citizen plus 500 per child – to prevent a demand shock from following a supply shock when citizens re-fill shops and bars.

The EUOn the other hand, it has preferred to reinforce companies and jobs with credit: a lot, yes; but maybe not enough. American strategy can be criticized, okay. American money has been received just as the poorest of the “homeless” as Rockefeller: Would not it have been more equitable to pay the hospital to those who needed it?

But everything seems to indicate that Washington’s will be the winner, because, with this enormous liquidity, the American funds are preparing to buy – more or less discreetly – the European companies that are cheaper than ever. We are afraid that most, especially those that require attendance such as tourism, airlines or hotels, will be within their reach for a long time and cannot be declared strategic. Hence, we Spaniards are playing it now as never before in Brussels and Frankfurt; because only one determined action It can prevent the pandemic from depriving us of European financial sovereignty.

It would be necessary to remind the Dutch, who with so much effort, and German approval, oppose mutualizing the debt of this shock, which often act as a tax haven that harms us Spaniards and Italians. In short, Washington’s measures allow it to be more flexible to adapt to the new world after the pandemic. Just like in the last recession, Americans are being the most agile in adapting to system changes. Another important reason to believe more in Trump’s “whatever it takes” is that the American president is risking it in the next eight months if he wants to win the elections.

Hence, we join, from the Royal Corporation that I preside, to the chorus of those who urge forceful actions to those who today doubt from selfishness and short-sightedness. And that we join modestly with those who go out to work these days, united against the virus, for Spain and for Europe. Because only with innovation, science and research We will be winners. If we have been able to preserve our human capital and talent we will grow again. And sooner rather than later.

Jaime Gil Aluja is President of the Royal Academy of Economic and Financial Sciences (RACEF)

Jaime Gil AlujaJaime Gil Aluja


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