Edward Hugh has published a
massively verbose 5,731 words on what mostly ends up as an attempt to defend, against all evidence to the contrary, his belief in the lack of international competitiveness of the Spanish economy - and, by corollary, the merit (nay, necessity) of his 'internal devaluation' prescription. Despite its displaying his normal misunderstanding, and consequent misinterpretation, of the economic data which he presents, it does contain some interesting little tidbits.
Pale as it might when compared to his truly incredible 2010
masterpiece of statistical illiteracy and self-delusion, in section number five of his entry he puts up the chart on the left as 'proof' of an ineffectual Spanish export sector. Readers will probably be as surprised as we were, notwithstanding Mr. Hugh's conclusions, that exports from Spain - expressed as a percentage of the same from a booming Germany - appear (judging by the upward slope of the line in the lower right hand corner) to have increased since mid-2010.
Just a detail.
Sublimely fascinating, however, is the graph of the Spanish and German CPI's on the left. Before moving on to the really fine little nugget contained therein, we'll lightly mention Hugh's failure to note that the 2010 surge in the Spanish version was the result of an increase in the country's value-added tax and is categorically not a symptom of uncompetitiveness - especially considering that exports are not charged the IVA.*
But the truly interesting point on the chart is that the inflation rate spiked, not on the July 1, 2010 introduction date, but in what appears to be March or April prior. We think it is more than a coincidence that, in late March, giant retailers Carrefour and Mercadona
announced that they would not be passing the tax increase to their customers. Why bother when you can do it three months earlier, when nobody's looking, and pocket the difference?
*Curiously, Mr. Hugh chooses to bring the matter up a mere five days before the first anniversary of the tax increase - the day on which the effects on the inflation rate will fall off the statistical record and it will return to a eurozone standard in the mid 2's.
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4 Comments:
Catalan pro-independence activists are calling Hugh a "great friend" (http://emma-col-cat.blogspot.com/2010/06/edward-hugh-at-new-york-times.html).
If Hugh is as much a friend of their cause, can this be the reason for his badmouthing the Spanish economy?
Don't worry. It crossed my mind a long time ago. Then you get around to reading the shite he publishes about other countries... and maybe not.
On the other hand they did make him the (non-voting) show guiri on the CatalunyaCaixa board. Gads!!
That's what you get when you caress their soft spots. There are others here who make a living out of it, too. I'm still anonymous, so I'm keeping my options open.
I've taken your point, thank you. Got not much of a clue about economics, though. I'll keep reading your blog.
"the shite he publishes"-I read Edward Hugh:seems to be very well known and referenced.You meanwhile have the manners of a pig
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