It is striking how well-equipped humans are to find self-defense mechanisms to any perceived aggression. And the current economic crisis is no different.
There are multiple causes that created the current state of things: regulators, poor management – especially in financial institutions, miscalculation of individual wealth, poor financial criteria, greed and so on.
Despite the apparently large set of reasons that caused the crisis, in some countries, citizens are now devoting a great deal of time to blame governments for their responsibility on, first, creating the current situation and second, their inability to put the economy back on track.
Apart from the questionable positive effect of this effort on promoting recovery, which would not be the objective of this column, the criticism seems to be highly ironic.
We would like to call it the “I Passed, She Flunked Me” syndrome in honor of the insightful analysis of pass and fail carried out by students after an exam. For those lucky people that have never flunked at school and may need an explanation, it consists on priding oneself for all the good grades and blaming the teacher for all the Ds.
This practice seems to be common throughout all European countries – after all, we learned it very early in school and it is a well-developed self-defense mechanism against academic failure. But in some countries, fundamentally those in which there is still lot of work to do in promoting respect – please do not read praise – for public institutions, the symptoms of this syndrome are more acute.
Spain is arguably a good poster child to analyze this malaise. At this stage of the crisis no one doubts about the government’s share of responsibility in the crisis (the size of this share is another matter). Among other things, they tried to minimize its consequences, sidelined those who saw things differently, took highly visible populist measures with small or negligible impact and did not do all in their hands to seek a broad pact with the opposition in order to implement the required measures for recovery. With regards to this last point, it is fair to say in favor of the government that it has not been the only responsible for the lack of agreement with the opposition.
Whatever the damage done, it is striking the fierce attacks directed to the current government, in particular from the most conservative side of the public opinion. It is striking because in the debate it is completely absent what supposedly is the main idea underpinning the political Right: individual freedom.
The very own sector of society that with no shortage of arguments promotes individual freedom is now leading a campaign that puts the responsibility of the crisis on a third party, disposing of key elements of the analysis such as the responsibility of each individual for their own decisions.
On the economic front, there is no question about the relevant role that governments and other public institutions – judges, regulatory authorities and others – have in economic development. We believe, for example, that government has a big role to play in protecting the disadvantaged players through regulation and education. And this is something that citizens can assess and try to change in each election.
However, it might be useful to reiterate that business decisions are only facilitated by governments but not taken. It is the responsibility of market actors to take their own choices under a defined political and economic environment.
If we look at investment, job creation and GDP growth figures, it seems like Spain was an attractive country for companies and individuals to be present. Driven by an economic boom created by low interest rates, economic stability and low taxes – in particular for housing, individuals and companies thrived. Some economic decisions were taking under the belief that we were richer than what we actually were, promoting overspending and little saving. Overall, during the good times, individual decisions seemed to be right in a surprisingly high percentage of times.
With the downturn, the situation is radically different. Demand, prices and asset values have come down, and many companies have closed while individuals have lost money with their investments. It may be easier to blame the government for this. But, rather than holding the government responsible, it may be that some of these freely taken decisions were not as good as they seemed when they were taken (i.e. during the good times).
It is easier to blame others than to look inward. But we may do better if we stop complaining about the government and start, as individuals, to learn from this crisis and make sure we are better equipped for the next recession. Both those who have weathered the crisis well and those who have lost money or close shall be accountable for their acts and their successes and failures during the crisis.
Government can and must do much, in particular with regards to education and unemployment (especially young). But we cannot really think that they are responsible – and therefore cannot solve – all of our problems, as I am sure we do not think they are responsible for all of our accomplishments and wealth gain.
Or, Could we be through a strong episode of the “I Passed, She Flunked Me” syndrome?
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