Up, Down, Side-ways?

Today Wednesday 1st of June, the ABS released its "Australian National Accounts: National Income, Expenditure and Product, Mar 2011" report (cat. Number 5206.0), from where the following chart was extracted:

GDP, Percentage changes - Volume measures

"In seasonally adjusted terms, GDP decreased 1.2% in the March quarter, through the year GDP growth was 1.0%.
"On the expenditure side, the decline this quarter (in seasonally adjusted volume terms) was driven by Net exports (detracting 2.4 percentage points) and Changes in inventories (detracting 0.5 percentage points). Partially offsetting these falls were Private gross fixed capital formation (adding 0.7 percentage points), Household final consumption expenditure (adding 0.3 percentage points) and Government final consumption expenditure (adding 0.2 percentage points)."

The results were better than Goldman Sachs had expected yesterday:

"Investment bank Goldman Sachs predicted Australia's economy will have shrunk by as much as 2 per cent in the first quarter of the year, a big turnaround from the 0.7 per cent expansion in the final quarter of last year." (See here)

Other comments by observers:

"After today's negative GDP figure for the March quarter, and the recent spate of bad news and economic statistics pouring out, it isn't a big leap for Australia's so-called miracle economy to be staring down the barrel of a technical recession in the June quarter." (See here)

My comment: possible, but perhaps too pessimistic.

"Australia's economy has suffered its biggest quarterly contraction since the recession of the early 1990s." (See here)

My comment: see the chart above, for seasonally adjusted (light gray broken line).

And then, we find this:

"The domestic economy grew very strongly in Q1
"Well, for all the whinging and whining! (...) Today's GDP numbers show precisely why the RBA should have hiked in May, or if not May, in June. The more likely outcome is July. Here is Paul Bloxham's (HSBC) summary:
" 'If it weren't for the headline GDP number being severely hit by a sharp fall in coal exports, today's numbers would be universally judged as strong.'" (See here)

My comment: You be the judge.

Protests in Barcelona Turn Violent

"Lo mío ha sido como estar en una pastelería y no poder comer ni un trocico de pastel. Tanto hijoputa y ni una colleja he podido dar". Ferran T. F.  (in Facebook, Guardia Urbana agent) (See here, Spanish)

"It's like being in a patisserie and being unable to eat a slice of cake. So many sons of bitches[*] and I couldn't hit anyone". [my translation]

Last Friday 27th of May, the peaceful protests in Plaza de Cataluña, Barcelona, turned violent when police charged against the protesters.

According to some versions, acting by order of the PM José Luis Rodríguez Zapatero, or by the authority of Felip Puig, Catalonian autonomic Interior secretary, the provincial Mossos d'Esquadra deliberately started to harass and strike at random protesters, as seen in the videos below

Ferran T.F. (apparently himself not a Mosso, but an agent of the Guardia Urbana, municipal police force) witnessed the incident, describing it as lasting up to six hours, and regretting not being able to take part in it. (See here, Spanish)

As a result, 121 were injured; according to Mr. Puig, 37 police agents included.

Faced with harsh criticism, from Spain and abroad, including the European Council (see here, Spanish), the Catalonian autonomic government decided to launch investigations.  So, who gets chosen for the dubious honor of perpetrating this aggression against a mob of teenagers?

And the winner is...

The thuggish imbecile who publicly boasted about other thugs beating kids, but did not beat anyone himself: Ferran T.F.

Not those in charge, or even the thugs themselves. As the saying goes: el diablo paga mal a quien bien le sirve.

Note:

[*] Hijoputa or more properly hijo de puta is a curse phrase that does not strictly translate as son of a bitch, but as son of a whore. But as such expression does not exist in English, I chose the closest available.

Precariously Proletarian

Protester in Madrid. Wikimedia

Last week's Spanish provincial and municipal elections ended with the ruling PSOE (Partido Socialista Obrero Español, Spanish Socialist Worker Party, nominally social democrat) soundly defeated by the rightist PP (Partido Popular: Popular Party or, more accurately, if ironically, People's Party).

(All links to Spanish sites, except where explicitly stated)

According to El País (see here), PSOE lost about 1.5 million votes, in comparison to the results of the 2007 elections. PP gained some 0.6 million and IU (Izquierda Unida, United Left), gained 0.2.

At the provincial level, out of 13 provinces, PSOE gained in one, leaving PP with 11 and Bildu (a basque local party), with another.

Although under opposition pressure to call for early elections, PM José Luis Rodríguez Zapatero doesn't need to form a new national government: the national elections are scheduled for 2012.

Why did PSOE (that ruled Spain for 21 of the 36 years of post-Francoist period) lose these elections so badly?

Whatever their personal ideological stances, the consensus among pundits is that the catastrophic economic situation faced by Spain (21.19% general unemployment and 44.6% unemployment among under-25s) explains this defeat:

"Voters are also taking out their anger on those politicians inflicting euro-zone policies. The ruling Socialists in Spain, who have actually done a pretty good job pushing through tough - but unpopular - reforms, got smacked in local elections this month." (See here, in English)

Some two weeks before the election, the so-called 15-M movement (a spontaneous, broad-base social protest movement) threatened to make the elections difficult.

However, the elections did not seem particularly affected by the movement: in Spain, where voting is not compulsory, abstention (the number of voters that did not vote) actually diminished from 36.73% in 2007 to 33.77%. Blank votes (also interpreted as possible protest votes) did increase, but modestly, from 1.94% to 2.54%. (See here and here).

What are the short term consequences of this defeat? The Rodríguez Zapatero Government, for all their understandable concern with the upcoming national elections, seems intent on maintaining the current policies, while offering to consider only a few of the 15-M's demands (like the Tobin Tax), should they remain in power. (See here)

Under these circumstances, one may be forgiven to speculate that the next elections could see a repeat of the PSOE's defeat, now at the national level, at the hands of the PP. And, given the financial constrains imposed on the Spanish economy by its euro zone membership, it's unlikely an eventual Rajoy Government would be able to undertake adequate social policies, even if their ideological stance allowed for that.

What about the 15-M (a.k.a. Los Indignados - The Outraged Ones)?

According to the respected Spanish journalist and commentator Rafael Díaz-Salazar (see here) that movement represents a subsector of the Spanish working class, quickly mobilized through the new social media, ironically referred to as the "precariado" ("precariat"), in a pun for "proletariado precario" (precarious proletariat): the "unemployed, low-wage workers, young without access to housing, low income pensioners, exploited migrants, unemployed or low income graduates, couples [financially] incapable of forming families, near pension-age workers, poor working and rural area inhabitants" [my translation].

Always according to Díaz-Salazar, the Spanish society has divided itself between a satisfied and integrated group, represented by the mainstream parties, and the precariado.

Again, one may also be forgiven to speculate they're there to stay.

Further reading:

2011 Spanish protests. Wikipedia. (English).
The Pain in Spain. (English),
La chispa del Movimiento 15-M. El País.

Photo credit: Wikimedia

Update:
Speaking of the precariat, last night SBS's Dateline contained a report on a section of this subsection of the working class: the salad slaves.

Disclaimer: Any similarity with foreign student, working-holiday visa and 457 and 456 visa holders in Australia is merely coincidental... Yeah, right.

Wisconsin: Walker BRB overturned

From Journal Sentinel (Madison, 26-05-2011): "A Dane County judge Thursday struck down legislation repealing most collective bargaining for public employees, but the measure could still gain new life from the state Supreme Court or a fresh vote by lawmakers." (See here)

Since I last reported here, several events have taken place in Wisconsin: the (contested) re-election of Justice David Prosser to another 10-year term in the Wisconsin Supreme, Court after a strange counting error (see here); and the passing and signing of a voter ID bill requiring voters photo ID as a requisite for voting (see here) seem to be the most important ones (see here).

NSW News
In NSW this week, Premier O'Farrell has given steps towards what promises to be a conflict between unions (particularly state employee unions) and the State Government (see here).

Although all state unions are affected, police, nurses and teachers unions in NSW are affected twice: (1) because the State Government decided to strip the NSW unions of their powers to initiate prosecution of employers on breaches of safety legislation; and (2) the New South Wales Industrial Relations Commission will be stripped of its powers to decide on wage levels for State employees (see here).

However, in a surprising development, the legislation, steamed rolled by the Coalition in the Lower House of the NSW Parliament, was stopped at the Upper House, thanks to the votes of the Shooters and Fishers Party (see here).

I will do my best to keep readers posted on these subjects.