Spain FORBIDS Real Estate Downturn

According to news accounts yesterday, which we cannot verify, a senior Spanish official has ruled out the possibility of a real estate downturn in that country. The head of the prime minister's economic research unit, in an interview at the presidential palace on September 17, reportedly said that a real estate recession in Spain is "unthinkable." Said official reportedly stated that a meltdown in prices was "ridiculous."

Whew! We can now breathe a sigh of relief. For a moment there, with residential real estate prices having merely TRIPLED in 10 years, we were worried that the a bear market might occur. It is reassuring to learn that the laws of financial gravity DO NOT APPLY TO SPAIN.

With all due respect to the contemporary Spanish economic miracle, we would note that Spain was the country which destroyed its own economy with the ruinous and infamous alcabala -- a tax levied on every level of production and economic activity by the Hapsburg kings. (But then, as the historian has written of the most important family in European history, "the Hapsburgs were slow learners." For anyone who doubts this, just refer to the careers of the Emperor Charles V and his son, Philip II). Spain, if we recall correctly, also established its very own Inquisition, which succeeded in driving Spain's most industrious and productive folk into exile, thereby insuring Spain's decline from European hegemon to third rate player.

The pronouncement that Spain is not subject to the laws of economics remind us of an equally amusing historical incident. This occurred when Xerxes, the most powerful ruler on earth, the Great King of Persia, was angered because the turbulent waters of the Bosphorus would not allow his ships to set sail for Greece, where they aimed to do a bit of plundering and conquest. In his rage, the Great King ordered that the Bosphorus receive 20 lashes with heavy chains. This was duly accomplished, but, funny thing, the Bosphorus did not reduce its turbulence!

From this we infer: the quality of human intellect has advance precious little over the intervening 25-odd centuries.