Credibility and dogma

Zapatero paid dearly (but only later) for denying that the crisis existed - just a "brief deviation," he said while identifying the Spanish financial system as one of the world's most solid. When the property bubble had already burst, he went on denying the obvious with such conviction that, to judge by the 2008 electoral results, many of the voters believed him. How can this be?

We cannot really explain it in terms of unscrupulous cynicism on the part of politicians and the public's abject stupidity. It seems more reasonable to suppose that the political class, and the public in general, share the prevailing opinion: to allow the economic, and in particular the financial agents, to do as they wish without restrictions is the road to prosperity for everyone.

That the capitalist economy is the only rational and operative one, is now a dogma beyond question. Thus we must take seriously what is said by the economists, a new caste of priests who know the workings of the economic cosmos. Anyone who departs from the mainstream, and dares to propose alternative policies, excludes himself from the political class. There was no lack of warnings about what was coming - but the warnings came from people without access to the regions of power, so they went unnoticed.

Since the days of Thatcher and Reagan, the idea has prevailed that, if the markets are allowed to act without state controls, the economy booms. An economist, Alan Greenspan, at the head of the Federal Reserve for 18 years, set the trend in financial policy, eliminating controls and setting low interest rates. The financial sector made huge profits while the middle classes, though indebted, consumed more and more.

Though in theory everyone knows that a speculative bubble has to burst sometime, no one wants to be the one to prick it. Think of the money that the property boom was generating as late as 2008. Can you believe that in those circumstances any government, whether of PP or PSOE stripes, would dare to question the doctrine of deregulation and comply with its legal obligation to control a process that is generating so much money? How not to follow the advice of economists who, actively and passively, hammered in the doctrine that the true source of abundance is an uncontrolled market?

On June 10 Prime Minister Rajoy, with the desolate look of someone announcing the death of a loved one, communicated to the Spanish public his signal personal success in avoiding a bailout of the economy by having obtained a 100-billion-euro "line of credit" for the Spanish banks. He insistently repeated that the support was for the banks, private entities that would pay the resulting interest, with no effect on the sovereign debt, and at no cost to the taxpayer.

A change has taken place in the social perception of prime-ministerial statements. Zapatero won the 2008 election, and kept denying the crisis for some time, because (the reader will forgive my naivety) he still believed what the economists and bankers were telling him.

But now that the crisis really has us in its grip, belief in Rajoy's statement did not endure for more than a few hours. There was no "personal initiative." Under heavy pressure from Brussels, Spain was obliged to request an aid package - which, instead of dispelling the risk of bailout, has considerably intensified it, as the markets' immediate reaction showed.

In fair weather people tend to believe in the ideas that legitimize the established order. But when the weather turns foul, people begin to question them. It is not by chance that certain institutions, which have gone on behaving as they did in times of boom, are now met with widespread repudiation: the monarchy, the judiciary and parliament. We are in for months, perhaps years, of this polarized situation.