A primer in English on what I think and write about.

El País · August 26, 2026 · read the original →

Unfreezing housing.

The right to stay cannot curtail the opportunity to arrive.

One idea has captured the left's housing policy: everything must be kept frozen.

It isn't worth making it easier to build, or revisiting the regulations, procedures and requirements that put any other priority ahead of a new home: apparently, it matters more to have zero-emission buildings, to respect a maximum height, to settle another round of objections, to apply twice for the same permit. Besides — the argument from the left goes — whatever gets built in the open market will end up in the wrong hands, not in the hands of those who need it. So why make it easy?

That would leave the existing stock to solve the enormous, acute problem of those who need decent housing and still haven't been able to get it. But there, this left goes even further: its priority is to stop any movement at all. Rent caps and chained contract extensions, in the hope that nobody has to leave where they are. But then fewer people will get in: turnover will fall, and fewer owners will be willing to subject their property to a life sentence of uncertainty. Freezing evictions for certain groups, thereby stigmatizing those very profiles in the eyes of anyone considering renting them a flat. Bans on buying are even being considered for anyone who isn't going to live in the home they purchase — reserving it, de facto, for whoever can put down a deposit of 40,000, 60,000, 100,000 euros. The city as a still photograph: let nothing move. Let no one who is already here lose out — but let no one new arrive either.

There are honorable exceptions, and they pay an unfair, steep toll when they dare to talk about "building" or "densifying," or when they warn that perhaps we need to look after the existing supply if we don't want it to disappear altogether: then their partners-cum-rivals, inside or outside their parties, raise their voices and their vetoes to condition every decision.

The contradiction becomes extreme when the same left defends an ambitious migration policy in its eagerness to welcome. Every year, thousands of people arrive in our cities to work, to study, to care, to sustain a good part of the growth, employment and well-being we (rightly) like to boast about. But where are these new families, these new households, going to land, in minimally decent conditions, if everything is frozen?

Who sustains these policies? The bluntest explanations accuse the boomers of protecting their privileges, the value of their homes and their neighborhoods, but that doesn't explain why so many millennials and Gen Zers favor the freeze. So perhaps the mechanism runs more through class and surroundings: broad middle- and upper-middle-class sectors in urban centers are unwilling to accept an ounce of dynamism, or the slightest loss in the perceived value of their neighborhood. That's where the blocking kicks in, and the left, which depends on these voters, responds. New housing doesn't go here. Before that comes this or that specific need of the neighborhood. Or it's more important to respect this or that requirement. Or: I don't want my neighbors to change, I like the neighborhood as it is, and rent control and contract extensions serve me well for that. Or: don't spend your municipal budget developing new areas — pedestrianize my street first. David Mejía described it precisely: "We want gentrification to stop at exactly our purchasing power." An urban civil society oriented toward no. Conservationism in progressive disguise.

If we understand progress as "more; for as many as possible; and first for those who need it most," the goal should be clear: as much housing available as possible, meant for those who are going to live in it, and first for those who suffer most from not having it.

The first thing is momentum. The accumulated deficit is such that we need the market and the State contributing at the same time (we've spent half a decade completing fewer than 100,000 homes a year for almost 250,000 new households), but the interesting thing is that the kind of housing that ought to jump ahead of those regulatory and bureaucratic priorities — the kind that wouldn't be exposed to capture by a few, or by people who aren't going to live in it — isn't getting built either. Not even where that last argument would carry the most weight. Between 2021 and 2025, in provinces highly exposed to foreign appetite such as Alicante, Málaga and the Balearic Islands, some 160,000 households were created. At the same time, non-residents bought almost 170,000 homes. Over that period, these provinces reported just over 2,000 final certifications of protected housing — Spain's price-capped, subsidized category — to the Ministry of Housing and Urban Agenda. Even if the figure is under-reported, it remains far below accumulated demand, especially in a context where it competes with an enormous volume of purchases by non-residents. As for open-market housing, by the way, barely 66,000 units were completed. Any developer, public or private, for-profit or not, who has tried to get projects going from scratch has hit the same wall: turning land into a neighborhood can take more than a decade even when the land is publicly owned, because every step and every report can halt a project, and any other priority seems to weigh more than new housing. Revisiting that tangle is not a concession to the market: it's the condition for moving from frustrated promises to keys handed over — in protected housing too.

We can also push existing housing toward that long-term residential use, above all in rentals — something that will help during the dreaded meanwhile (which, by the way, should only ever be an incentive, never an excuse, to start building as soon as possible). We can start with a French-style public rental insurance, far more ambitious and decisive than the timid attempts under way: one that mutualizes the risk of non-payment instead of loading it onto one particular landlord, and that protects without singling anyone out. And continue by removing the obstacles to long-term renting (controls, extensions, eviction bans) so that it pays off for the owner compared with seasonal or tourist lets.

But if momentum helps us with "more, and for as many as possible," channeling the market will help ensure it goes to those who need it most. That is: to long-term residential use. This is where taxes come in. Unlike bans, they allow the penalty to be adjusted to the estimated size of the harmful effect, turned into revenue, and applied without bringing our cities to a complete standstill. First, let's discourage more decisively the sporadic use of homes in areas of high residential demand, as Vancouver and Paris do and as New York has just begun doing with its luxury second homes. To that end, let's experiment with ways of detecting sporadic use, such as low or intermittent electricity consumption. Then, let's tax the uses that compete with long-term residential use: tourist rentals in neighborhoods where a certain threshold has been exceeded, for example. And also, in certain provinces, let's consider taxes on purchases by non-residents. Measures that fence off a market — without demolishing it.

The makings of some of these measures (public insurance, a tax on tourist flats, removing veto points from new projects) are already present in the actions or intentions of progressive governments. But they are systematically overshadowed, watered down or outright blocked by a way of understanding housing policy tailored to the middle and upper-middle classes. One that looks toward Barcelona's Eixample and inside Madrid's M-30 ring road. Mortgaged to a voter base that doesn't really represent the groups that lose the most from this policy. One that defends a right for everything to stay as it is.

But the right to stay cannot curtail the opportunity to arrive.

Substack · Rango abierto · December 28, 2025 · read the original →

No merit, no solidarity, no fairness—they gave you a master's degree and kept the apartments for themselves.

They promised you that effort and solidarity would be rewarded—but there's none to be found. And the dominant ideologies manage scarcity, unlocking opportunities.

[Let me be a little more blunt. Just this once, okay? Here we go.]

"Here, take this tool: do something with it. Make the most of it—and make sure that whatever you get out of it benefits me, since I'm the one funding this tool, okay?"

That's what the previous generation tells you, more or less. The tool is… I don't know… a college degree. A master's degree. Knowing English. A specialized course. A contact. A low-paying internship.

You grab your tools and head out into the world. But every door is closed. And the few that open demand what you don't have, offer barely enough (like a salary so low it doesn't cover rent or even the cost of getting to work), or both. They haven't given you what you need to open them.

[I left in 2011. With a scholarship. A European one, not a Spanish one. In 2013, when there was no country to return to. So I didn't go back.]

A year or two or three or five or ten later, they approach you: "Hey, but…

You haven't done anything with that tool I gave you. Where are your apartments? Where are your kids? It's the best tool we have. I didn't have tools like yours, you know. What more could I have wanted? Seriously, can't you do anything better with it?"

[This has happened to me at casual gatherings and dinners, seriously. From people I adore. It's happened to you. It's happened to all of you. It took me a decade to be able to answer that this was what I'd achieved. The time between having to leave to make a life for myself and being able to return with it on track.]

How do you explain to them that having a tool doesn't mean you have the opportunity to use it?

You try anyway. You don't know where to start or how to proceed. They gave you a promotion and kept the apartments.

And what do you get in return? Silence? No, something worse: reproach.

Merit and solidarity in exchange for nothing—a pact

The reproach comes in two versions.

There's the version that demands merit. You aren't putting in enough effort. You haven't pursued enough advanced complementary studies, enough jobs, enough housing in enough cities. You haven't put enough of yourselves out there. You aren't flexible enough. Too much. You aspire to too much. To a very specific sector. To ending up in a very specific neighborhood. To a position that's too comfortable. If you put in enough effort, if you don't stop insisting, in the end the effort will be rewarded.

The problem is that it takes so long that you start to have doubts. And you see so many people your age or a little younger who have been at it for years with the same patience, the same dedication, the same determination—and who haven't received any reward either. And if the reward doesn't come, the logic of merit breaks down. It doesn't matter what they promise anymore. Since it isn't credible, it starts to seem pointless. And the virtuous cycle breaks down. Instead, it becomes a vicious one: less effort because the expected reward is none—those who argue that you aren't trying hard enough already have their proof.

[The favorite choice of many people in my class, after 30-something years of fragmented emigration, temporary contracts, and accumulated master's degrees: passing a civil service exam.]

At this point, the logic of merit no longer holds water. So it's time to ask for what's due, right? Hey, there are people here who've made it (many of whom are older than you, too). Where's your share? Do they have it and you can't get any? Why does the wealth concentrate on them while here the newcomers contribute without expecting to receive the same?

And in response to this, you're told to show solidarity. That they worked hard enough in life, starting from nothing, to at least have something (a home or two and a pension slightly above the national minimum wage). Now it's your turn to work so they can live comfortably, and you should be grateful, because you inherited a country with services, more rights, and better infrastructure. What you have comes from those who came before you. And if you don't keep paying for it, it will disappear.

But here's the problem: how can you show solidarity with a system that gives you no reason to believe you'll get anything in return? If the system already gives you the impression that it's gone.

Both demands—merit and solidarity—assume the same thing: that there's something waiting on the other side. That effort leads somewhere. That the contribution is returned in one way or another, whether by the market or through a pact, so to speak. But that's exactly what's missing.

Let's remember: between 2008 and 2024, the only age group whose income has actually increased over the last two decades is those over 65.

Pensions rise with the CPI, and the minimum pensions rise just as much as the maximum ones. Here's a simulation for the major revaluation of 2023.

The wealth of two generations has plummeted compared to previous levels.

Essentially because of the inability to afford housing.

Public spending has shifted toward those who already have, while investment in areas that could unlock opportunities—housing, transportation, research—is falling or stagnating.

What those who criticize don't seem to understand is that I believe people between the ages of 18 and 40 want to believe in hard work. That dedication pays off. And I also believe they want to be supportive. They want to contribute to a system that takes care of those who need it, including those who came before. People haven't stopped believing in hard work. They haven't stopped wanting to contribute. They've stopped seeing a reason to do so. And what they need is for that contribution to offer the possibility of giving more and receiving more: for there to be opportunity.

Without opportunity, merit seems like a scam. They tell you that if you work hard enough, you'll get there, but there's nowhere to get to. Effort dissolves into a market that has no place for you.

Without opportunity, solidarity feels like exploitation. They tell you to contribute to the well-being of others who benefit more from it, promising that you'll get your share later, but there's no reason to believe that promise will be kept. Solidarity without simultaneous and credible reciprocity… isn't solidarity.

There is no longer a pact.

The Ideologies of Scarcity

The scarcity of opportunities is not just the starting point: it is a policy we have created and continue to create.

It's the neighbor who owns property and prioritizes profits over housing. When he protested against the new building in the neighborhood, he wasn't thinking about his son's apartment. But his vote counts just the same. The pensioner votes for the maximum increase tied to the CPI while wages stagnate. His pension goes up every year; his daughter's salary, it doesn't. Who do you think pays the difference? The traditional parties that prefer to hand out vouchers or discounts rather than actually free up land, because the former makes for appealing headlines while the latter leads to conflict with neighbors. A rental voucher with no housing supply lowers prices, but they fear that freeing up land for housing might cost them votes at the local level. So they choose the subsidy. Every time. It is, therefore, an implicit, broad though poorly articulated coalition of people who already have—a pension, stability—and who vote, with varying degrees of awareness of their position, but to preserve what they have. You don't need to be aware to be part of a coalition. It's enough to vote. And politicians who respond to that. Not out of malice. Sometimes out of self-interest. Almost always because what has worked for them—shouldn't it work for those who follow?

But the point is that it isn't working. And with opportunities blocked by a political system incapable of unblocking them, the ideologies of "the pie isn't growing" prevail—every slice someone else takes is one you don't get; someone else's success becomes your failure. In that terrain, only two things grow. They come from opposite sides, but they share the same ground: the certainty that there is no more.

One says: Let's close the borders. Don't let any more in. What's ours is ours. The border protects us. It's the politics of scarcity.

In the campaign for the recent Extremaduran elections, Vox proposed banning rentals to immigrants and establishing "national priority" based on years of family roots. It sounds like liberation, but it doesn't liberate—it just decides who stays out of the distribution, and it does so with xenophobic criteria. The pie remains just as small. In Italy, Meloni has been pushing "Italians first" for years, and the courts are overturning her discriminatory measures one after another—while the country has a housing construction rate comparable to… Spain's.

In the Netherlands, Wilders won the election, among other things, by linking housing and immigration; his government collapsed within months without having actually achieved anything. In short: all this does is change who you point the finger at when there aren't enough homes, or spots in early childhood education, or square meters of living space, available.

The other side says: Let's redistribute. Let's control prices. Let's give out vouchers. Let's regulate who gets first access to the little that's available. It's the politics of scarcity.

It sounds like justice, but it creates nothing: it merely organizes the line; it doesn't make the end any longer. In Berlin, they tried the Mietendeckel: supply fell five times faster than prices. In Stockholm, they've had rent control since World War II; the average waiting list is nine years, and in the city center, twenty. It assumes that scarcity is the starting point… and the destination.

Oh, come on. If the left's response to this comparison is "But they're not equivalent!"—well, okay, of course I understand and share that moral stance. But if that's all they say, if they get stuck in a zero-sum mindset, they're just paving the way for the other side. Every apartment that disappears due to rent control is an easier vote for those who say "there are just too many." Every waiting list that grows longer is another argument for those who promise to close the borders. The left's approach to scarcity not only fails to solve anything: it creates conditions for the right-wing scarcity electorate to flourish.

And, in essence, neither of them breaks the deadlock. Both manage conflict within the existing framework. And note that for now they allow the basic balance to survive: those who already have continue to have, while targeting "the rich" or "outsiders." But what if they become the target?

Here's what those who already have it need to understand: the status quo perpetuates the conflict by keeping things as they are. The pact is broken, and the conflict is here. The only thing we're deciding is whether the conflict will be about how to distribute the misery or about how to get more of it.

[We've been at this for nine years, by the way: those who have "The Invisible Wall."]

Adam Przeworski once said something along the lines of: to reach the peaks of growth, a society must traverse the valley of reform. People are willing to make sacrifices today if they believe there is something waiting for them tomorrow. Those under 40 have been asked to walk through this valley, yet all they've seen is more of the same. So now, even those who already have something will have to walk through the valley too. Not because it's fair (which it is), but because it's the only way out that doesn't end badly for everyone. Without shared prosperity, the fight over the crumbs intensifies. It could be against the government or against vulture funds. Or against the elite. Or… against the boomers.

I know that most of them want their children to do well. I know that their children want to contribute, work hard, and make a difference. No one in their 40s is asking for anything for free, or to keep it all for themselves. They're asking for a chance to try. And they're right. But for that to happen, something has to give.

The 30,000 euros that someone lent their son for a down payment is proof that the system doesn't work. But they kept voting as if it did, as if somehow acceptance is already there, like a seed. The acceptance that for the new generations, there must be a way, a means, and a place—the tools they were given.

What is missing is not will or effort. It is space for opportunity.

We have to build it.

[This draft has, in a way, been with me since I left Spain. Now I'm finishing it from a flat that is finally mine. Unrenovated. From 1969. In a fantastic middle-class Madrid neighborhood outside the M30. Bought at 39 and a half. With a lot of luck, with a partner, without kids or family obligations, and after a decade away. This is the success story. Imagine the others. Or rather: you probably won't need to, because maybe one of them is yours.]

El País · January 14, 2026 · read the original →

Growing — and yet not getting there.

The growth figures that others envy us for are hard to believe for those just starting out here, because they don't experience them in their daily lives or in the early stages of their careers.

Let's try telling a thirty-something who rents an apartment in Madrid or Barcelona that things are going as well for them as they seem to be for the country they live in. Spain ended 2025 with a GDP 2.9% higher than the previous year—twice that of the eurozone. In 2026, we'll outperform the rest of the region again. But for someone who already has a dual degree, a couple of master's degrees, or unpaid internships under their belt—none of which are really "their thing"—and who sees that the apartment they could afford three years ago is now out of reach, it will be hard to believe.

Like the couple who, without a college education, dared to have a child in the Valencia metropolitan area and are now thinking about having a second. Or the mother who arrived in Spain a couple of years ago with her young daughter to build a new life.

The growth figures that others envy us for are hard to believe for those just starting out here, because they don't experience them in their daily lives or at the beginning of their lives. And the thirty-somethings, the couples, the new mothers—they are exactly that: people just starting out. Spain is filling up with them. Many come from abroad: net migration figures indicate that we'll see about two million net inflows between 2022 and 2024; 40% of new enrollment is from foreign workers. Others are moving within the country: in 2024, there were 1.75 million changes of municipality. And, in general, we have a large number of people entering adulthood: those born during the demographic boom of the 2000s will turn between 18 and 26 in the coming year.

For these new beginnings, what counts is the costs you face and the income you can count on. And these new beginnings are failing both sides.

First, the costs. Above all, the cost.

Because most of these adult life cycles begin or restart in the places with the most opportunities: our cities and metropolitan areas. But, according to data from Idealista, the average rent in Madrid rose by 45% between the end of 2019 and the end of 2025. In Barcelona: 48%. Valencia: 76%. Málaga: 50%. And it's not just housing: food prices have risen by a cumulative 30% since the end of 2021. In recent years, given its composition, the cost of the shopping basket has risen more for households with lower purchasing power.

So costs are rising. But are incomes keeping pace? It might seem so: the minimum wage has increased by 54% between 2018 and 2024. But according to the EPA, the median wage has risen much less: by 22%. The proportion of workers earning up to 125% of the minimum wage has risen from 8% in 2018 to 23% in 2023, according to AIReF. We've raised the floor, but haven't lifted the rest along with it. As a result, the at-risk-of-poverty or social exclusion rate has remained around 26%: probably better than without the transfers, but barely seven-tenths of a percentage point lower than a decade ago.

To resolve the paradox of an economy that grows but fails to reach those who are new to contributing to it, we have opted to transfer income. Basic Income Guarantee, rental or energy subsidies; in addition, transportation or child-rearing assistance, and tax cuts. The former suffer from limited reach; the latter, from directing more spending toward those who already have greater purchasing power. And they all share a central feature: they act on demand without addressing supply. If there aren't more apartments, more daycare spots, or more train services, the extra money just goes toward higher prices. But we've focused on demand, and as a result, those just starting out may feel like they're running on a treadmill that keeps getting faster: they pick up the pace, but they're still in the same place.

Of course: if you simply pull the treadmill away, the fall will be hard. Instead, two things are needed: solid ground to stand on and the strength to move forward.

The ground is the supply: housing, services, infrastructure that's there when you need it. Make it flexible so the market can respond, and invest so the government can step in when the market fails. Part of what currently goes to transfers—especially the most dysfunctional ones—would yield better results in any of these areas. It cannot be that a country has created a net one million households between January 2021 and January 2025 (precisely all those people just starting out) and only a third of that number have ended up in new homes. Nor that public investment in infrastructure has fallen from 11% to 8% of GDP in ten years. Or that we have not decided how to allocate the budget surplus per student resulting from the declining birth rate, while maintaining the percentage of spending on education.

The key is productivity: your hour of work is worth more because you are better at producing something, and thus your income rises steadily. Value added per hour worked has barely risen by 3% since 2019. And the sectors that create the most jobs are not the ones that improve their productivity the most. To claim that the minimum wage alone will drive all wages upward is to claim that you can legislate the value of each hour of work—and therefore how much it is paid. For productivity to raise wages, other things are needed: investment in human capital that serves a changing market (making good use of those extra euros per capita in education), or companies with incentives to grow rather than barriers to doing so. And for the transfers that remain, they must build muscle: having a minimum income is a good idea for creating opportunities; but if we don't improve its current design, it will continue to reach only a few and, all too often, discourage employment.

Solid ground so we don't slip. Muscle to move forward. That is what the thirty-something, the couple, and the new mother need. Everything else is running in place. Let growth, at last, mean arriving.

Substack · Rango abierto · July 1, 2025 · read the original →

Spain: Growth Without Abundance (Where to Find It).

If we're growing so much, where's your share, which isn't there.

Imagine a couple. Let's say they're almost 35. They studied one of the typical majors. They moved to Barcelona from their hometown, which is somewhere else in Spain, Europe, or Latin America. They don't exactly work in their field, but it's not like "their field" was exactly in high demand either. They earn more than those who stayed in that city, but that doesn't mean they're better off. They rent, while others have bought homes. Whenever they watch the news, they're told that Spain is growing faster than Germany, France, or the Eurozone in general. It's been like this for two or three years, since the end of the pandemic. They aren't economists, but they don't need to be to see that this doesn't match what they experience in their day-to-day lives. They aren't better off than they were a few years ago. In fact, things clearly aren't going the way they expected when they started their adult lives, ten or twelve years ago.

They aren't economists, let's say. But they do sense that inflation has something to do with it. They've seen it right before their eyes: the rising prices of groceries at the supermarket… not to mention housing.

But is that all there is to it? Isn't there something else? There must be, because after all, those growth figures usually account for inflation, don't they?

What else is there? Where is that growth? Why aren't you seeing it?

We're growing (mostly) because there are more of us

Let's start with a simple chart: how much Spain has grown over the decades. But let's do this by comparing the total growth in our economy's output (GDP: what we produce or spend each year) with the share of that growth per capita (GDP per capita), adjusted for inflation.

Between 1990 and 2024, Spain's real GDP has nearly doubled, but GDP per capita has only increased by about half (+52%). The bulk of aggregate growth stems from an increase in the labor force—primarily due to the net inflow of migrants and the greater participation of women, older adults, and other demographics—rather than from improved output per resident. The social (and ultimately political) implications are that while Spain's economy has grown, household incomes have not kept pace.

Someone might think: well, this must be true for most of our surroundings, right? And it is, but not to the same extent. Spain is the fourth EU country with the largest gap between GDP per capita growth and total GDP growth.

My dear and admired Manuel Hidalgo, one of the best economic analysts in this country, reacted to this chart by sending me a WhatsApp message: "an indirect way of calculating productivity." It's imperfect: because here I'm not considering the result per hour worked or per employed person. But I insist that what interests me is both the macro trend (which isn't so bad: productivity per hour has improved) and the political reading: it's not just about overall growth (even though we're far behind our neighbors), but about the impact on the grassroots level. Because when we keep saying that Spain has been growing well above the European average this decade—and has continued to do so in recent years—we're talking about total GDP. It's no wonder the average working-age citizen keeps asking: "Where's my share?"

With these figures, we have the second part of the answer: this GDP growth is primarily because there are more of us working, not so much because each of us is producing more. In fact, if we look at the trend over the last two years—specifically that latest post-pandemic surge—the overall growth rate is even steeper.

Thus, inflation and population-labor force expansion account for part of the growth. But that's not the end of the story.

The rest of the growth goes to the wealthy

We still have per capita growth, adjusted for inflation. Why does the average person feel like they aren't seeing it? Could it be that incomes have shifted toward the wealthy? Not necessarily. Spain's top 1% of earners are below the European average, and the top 10% are actually below this average, according to estimates from the World Inequality Lab.

However, what happens if we look at average income (now from another source, the Living Conditions Survey) by age group? Well, over the last two decades, only one group has actually seen growth: older adults. It is particularly striking how the gap between them and those under 30 is widening. Those aged 30 to 44—the age group our hypothetical couple falls into—are faring much worse. A series of U-shaped curves that have not managed to recover to the point where the crisis left us.

Consequently, real spending (adjusted for inflation) has fallen across all groups, except for those aged 65 and older. And the difference with those under 30 is striking, to say the least, as Jon González showed in one of my recent favorites.

All of this already resonates with the experience of the hypothetical couple, right? Stagnant or slowly rising incomes. Only now are people earning what those of the same age were earning a decade and a half ago (and that was a good barometer of expectations: because back then, in their adult lives), while spending is on the decline. Let's say the new generations have followed a U-shaped curve. Our couple's expectations were at the start of the curve, on the far left. And they are still completing their arduous climb to the far right.

Although not everyone is in this situation, or not everyone to the same extent. The annual wage growth for workers in the public administration sector has been much more moderate. In fact, comparing 2008 and 2022, it turns out that this group's earnings have risen slightly, while those of the rest have remained flat or fallen since 2008. The gap between the two, which already existed, has widened. In short, if someone has stayed in a small-to-medium-sized city in Spain and is also a civil servant, it's clear that, relatively speaking, they are better off.

Furthermore, public sector workers with a college degree earn more than their private sector counterparts. In other words, this gap is not due to differences in education. To sum up: clearly, pensions and housing income have risen more. These support older groups, who are either retired or own a home. All of this helps explain why the trend is much more pronounced for our couple in their late 30s, leading them to consider whether it might be better to take a civil service exam. Because while they can retire, buying a home to rent out is even less of an option.

The Misguided Progressive Response

For all of the above to happen, the distribution of our spending has had to change. We tend to look at where the money has gone, but let me focus on the areas that have lost the most: public infrastructure.

The money for pensions comes, of course, from increasing pressure on labor.

Yes: this is happening because the population is aging, because we have generations retiring with better careers than their predecessors, and because we've once again tied pensions to the CPI. I understand these factors, but that's not really my point here: my point, as I said at the beginning, is to explain the sense of scarcity and stagnation that any of us might feel, even in a context of growth.

Thus, public spending does not pull the country or its productive classes out of the current slump: it is not increasingly investing in education, R&D, or infrastructure that supports efficiency (such as energy or transportation). Nor is it investing in specific goods in high demand, such as housing. On the contrary, it adds pressure to labor incomes that are already struggling to keep pace.

It is true that, to counteract this inertia and address the sense of scarcity and stagnation, our leaders have relied almost entirely on three types of policies:

1. Increasing income by law. Especially the minimum wage (though we could also include here the intention to reduce labor costs while maintaining wages). I will not delve into the results of these policies, but I will draw attention to the fact that the only way we have managed to improve the meager incomes of the working class is through decree.
2. Subsidizing the demand for basic goods. Discounts on public transit, rental subsidies for young people, tax breaks on basic foodstuffs or fuel. Aside from the many problems these measures have, in the context at hand, they are a bit like playing solitaire with a cheat. "I'll subsidize your prices since I'm not increasing your income" does not seem like a sustainable approach in the long term.
3. Regulating the housing shortage, especially in the most basic housing sector. Determining who can access the limited supply and at what price (let's not forget that this idea of regulating access has been attempted in other areas, such as controlling food prices). At best, this reorganizes the distribution of crumbs, but does not address the problem. And, at worst (unfortunately, more commonly), it exacerbates the problem. See rent control: it undoubtedly benefits those who already have a lease (prices go down), but it systematically harms those seeking to enter the market, reducing available supply and raising barriers to entry.

Let's get back to our couple. Over the past few years, their wages have gone up in nominal terms—they don't earn the minimum wage (not even close)—but their pay is tied to it through a collective bargaining agreement. The truth is, it hasn't helped them much given how much groceries, electricity bills, and gas have gone up. Transportation is much cheaper, OK, but it just so happens that they depend on the Rodalies system (Renfe commuter trains) to get to their respective jobs, and their problem has never been the price, but rather the irregularity of the service. They aren't eligible for the rental subsidy because they earn more than the limit, but the truth is that their fear isn't so much the price of their current apartment as the fact that their lease expires in a year: they've seen how incredibly difficult it is to find an available apartment in the city, even with the subsidy. Since rent control was implemented, it seems there are only monthly options, and even those aren't plentiful. Simply put, there isn't enough supply, and what does come onto the market gets snapped up too quickly. They would receive assistance and decide to have a child (they're thinking about it); but, aside from the fact that this would mean paying for household goods that keep rising in price, what worries them most is having to look for a bigger apartment when there are hardly any available, or finding a spot in early childhood education: for the past three years, public schools have been free in Catalonia, but it turns out that this has increased demand even more and made the competition fiercer.

It feels a bit like being on a treadmill: the speed keeps increasing, but you're always in the same spot. Then you look back and see that there are many others getting on that same treadmill. On either side, others are moving without a treadmill, more slowly, but they're making progress: those who stayed in their hometown, those with civil service jobs, or your own parents, who paid into the system their whole lives and have their rent covered. But you're still on it.

How to Really Make Progress

Honestly, I don't know when we decided that progress meant creating scarcity instead of fighting it. You can spread the problem of scarcity money, but if the supply can't keep up with the demand (prices will actually tend to absorb a good chunk of it), you're still stuck on the treadmill. It seems like you're making progress, but you're not. In the end, there's nothing. Treadmill.

For me, progress is something else: it is more than that, and the more people who benefit from it, the better. Progress is abundance that is shared and accessible. The book arguing this for the U.S. has already been written, and it is the one that has guided this line of reasoning, leading to a concrete proposal: let's redirect public action toward creation. We can and must maintain monetary stimulus policies that have proven to work well (e.g., educational grants and minimum income systems, albeit much better designed). In the medium term, the focus lies elsewhere:

1. Unlock the solution that will help you solve your problems. Didn't Luis Garicano say the other day that any new regulation (or, I might add, the reconsideration of any existing regulation) should follow a certain criterion? Will this help us have more housing? Well, I would apply this criterion to everything where we have bottlenecks. Affordable energy, smooth transportation, computing capacity, competitive research at our universities, basic educational offerings… the regulations that establish the framework for all of this—once a reasonable minimum of security is guaranteed—do they help or hinder?
2. Build what is needed and what the private sector is not willing or able to do. Increase the proportion of public spending allocated to knowledge and human capital (early childhood education centers or research); ensure equitable access that promotes equal opportunities to contribute to and benefit from growth (housing and residences); increase efficiency and productivity (better infrastructure, especially local ones); and protect existing capabilities to ensure the continuity of the system.
3. Above all, shift public resources toward the early stages. Every euro (note: well-spent) invested in early childhood education (ages 0–3), academic support, work-life balance mechanisms, or research yields a multiple return in future productivity and greater equality of opportunity, taking advantage of the fact that we will likely have additional funds available due to lower costs in the education system.

All of this not only unlocks supply and makes it better suited to demand but also serves as a lever to boost economic productivity while expanding equal opportunities. In the energy sector, this may seem more obvious, but it's equally true elsewhere: if people can live where they want because that's where opportunities arise and they can contribute to the economy, the allocation of labor to companies or of human capital to those seeking to acquire it through education becomes more fluid. With productivity, real wages rise—not by decree, but because companies compete for talent that can now live, move, and train more effectively. When the economy turns, income grows faster than rent or electricity bills.

And if you're also concerned about how the government spends the money it collects, that's precisely the conversation we need to have. Every public euro allocated to expanding supply—in housing, energy, knowledge, infrastructure—is a euro that multiplies material possibilities for everyone, not one that simply reorganizes who has access to the little that is available. We can (and must!) frame the ideological debate not as a choice between those who want more or less government, but between those who resign themselves to using it to manage scarcity and those who aspire to foster shared prosperity.

El País · August 29, 2025 · read the original →

What Has Really Happened to Spain's GDP.

Spain has grown mainly by adding people and hours; the average contribution per worker has barely increased in three decades.

GDP is the key indicator for tracking the performance of any economy. Its importance stems from a consensus: counting how many goods and services a country produces in a year and translating that into monetary value. It sums up how we're doing: when purchased, they represent well-being; when produced, they represent income for households and businesses.

But that's where the consensus ends. In recent months, a debate has emerged in Spain in which this indicator has split into several, seemingly serving both hopeful and concerning narratives at the same time. What's striking is that both seem to refer to the same GDP: ours, after all. Or is that not quite the case? To distinguish the signal from the noise, the first step is to understand and break down this indicator.

Let's start by clearing up a lot of specifically: inflation. No measure of income is meaningful without accounting for changes in the value of money; that is why we tend to express GDP in real terms, that is: using the prices of a specific year (for example, 2015 or 2021) for an entire series. But this is not the main cause of the discrepancies. These begin when we consider whether to adjust GDP for population size, converting it to its per capita version (which accounts for population growth). This is, or should be, the standard metric for capturing the well-being of individuals and households one by one. But even so, we shouldn't dismiss total GDP: we care (a great deal) about how it changes from the previous year because it determines how much more (or less) we have produced or consumed.

It may be because we've added more people to the country, but this is equally noteworthy and worth noting. The important thing is to be able to distinguish between how each one has evolved. And, as a complement to total GDP and per capita GDP, we can refine the latter by dividing it only by the number of employed people, to estimate how much each person contributes. With this three-pronged approach—total, per capita, and per employed person—and always in constant prices—let's look at their evolution since 1991.

It is easier to argue that the Spanish economy is doing well based on total GDP than on per capita GDP; and when looking at GDP per employed person, the argument falls apart. The latter is certainly a more restrictive metric: after all, someone can consume without producing. One of the characteristics of the Spanish economy is its aging population, with incomes for older people growing faster than those for younger people. That is why this indicator is useful: it shows that we have grown mainly as a whole, while each worker does not contribute much more than they did thirty years ago.

It is worth clarifying that we are talking about people here, not hours. GDP per employed person measures how much each individual contributes. It is not exactly productivity, because it does not account for hours worked (according to the OECD, GDP per hour fell from 25 to 20 between 1991 and 2024, peaking at 30 in 2006). A country can gain productivity per hour and yet have its workers contribute and receive less overall because they work fewer hours or because employment is fragmented. And in Spain, average hours per job have fluctuated over the years due to part-time positions, temporary contracts, and the influence of seasonal sectors. GDP per employed person is sensitive to these fluctuations because it is based on what each employed individual contributes over the course of a year.

Growth in Phases

While the specific indicator has been part of the fragmented debate, the choice of starting point has introduced another. Limiting ourselves to 1991 as the starting point can distort the picture. So, to compensate for this and better understand the evolution of our economy, we can use the beginning of each growth phase as a reference point, and the moment we entered a recession (or the latest available year: 2024) as the end point.

Three distinct phases can be observed in total GDP: 1993–2007, the run-up to and peak of the bubble; 2013–2019, the post-crisis recovery; and the current rebound. During the 1993–2007 boom, GDP grew by +62% without an improvement per worker (−1.6%): most of the growth came from more jobs and a larger population. The 2008 crisis destroyed those jobs and businesses above all, with consequences still felt today: structural unemployment, precarious retirement, and generations without education or inheritance. In the second phase, net migration turned negative and the population stopped growing; total and per capita GDP converged, but GDP per employed person remained flat: jobs with greater productive or consumption capacity were not being created. Furthermore, the gap widened in purchasing power, to the detriment of younger households.

In the post-pandemic rebound, GDP per employed person is finally picking up—a possible mix of sectoral restructuring, digitalization, and capitalization—but it still lags behind the total and per capita figures. This could be the turnaround we've been waiting for; but we'll need to see the cycle through to confirm it.

In terms of GDP per capita, our performance has clearly been better than in terms of GDP per employed person. In the shared challenge of balancing demographic decline with higher output per worker, we have not fared well.

It's worth taking a closer look. Let's compare with the largest economies in the eurozone (Spain is fourth, following Germany, France and Italy), along with Slovakia—the country that has come closest to us—and two familiar benchmarks from the Americas and Asia: the United States and Japan (which we have theoretically "surpassed"). In terms of GDP per capita, we are only ahead of Italy and not that far behind Japan. This chart illustrates the uneven nature of our development: although we have made progress in recent years, the gap accumulated over the previous three decades is enormous, and we would need to grow even faster to close it.

When looking at GDP per employed person, the picture is even more striking and leads to the same conclusion.

To complete the picture, let's consider another measure of GDP per capita: instead of adjusting for inflation using prices from a specific year as a benchmark, we can use what is known as purchasing power parity (PPP). PPP attempts to answer one question: "What can I actually buy with my income here, compared to what I could buy in another country?" To calculate it, exchange rates and domestic prices in each country are adjusted using a standard basket of goods and services. This allows a euro in Spain and a dollar in the United States to be expressed in terms of equivalent "purchasing power." It is useful for comparing income levels between countries in a given year, but it is not the ideal tool for tracking a country's progress over time: PPP adjustments change with revisions to relative prices and can distort real growth rates. That is why I caution that this last exercise is not the standard for measuring trajectories. I use it because this metric is the basis for the headline "we have surpassed Japan," which has gained notoriety in recent months. It does not appear in any other metric, nor would it be particularly commendable: we are talking about the developed economy which is cited as a prime example of stagnation to be avoided.

Overall, the emerging pattern is one of decades-long improvement based more on population than on per capita output, much less on output per employed person—suggesting that what matters in the coming years is not only to consolidate but to drastically boost the improvement that (fortunately) seems to be evident in most recent years. We need this to make up for the (partially) lost.

Nada es Gratis · October 20, 2025 · read the original →

Homes Without Roofs: Escaping the Housing Shortage in Spain.

By Jorge Galindo (Esade EcPol), author of Three Million Homes (Debate, 2025).

When you've published a book and are invited to speak or write about it, what you're actually doing is rewriting it. And as anyone who's had to go through the peer-review process for a scientific journal knows, there's nothing as fruitful for rewriting an argument as a good critique. My favorite among the many valid critiques I've received has been: Why did you write a book focused on Spain when the problem of affordable housing is something that affects so many global cities?

Successful cities…

And the truth is, I could have started the book there. I could have started it with the urban economist from whom we have learned the most in recent decades: Edward Glaeser. I could have started it by quoting the line from this interview: "The more important an idea is, the more important it is to communicate it face to face." This quote encapsulates his book The Triumph of the City (2011), in which he argues that the concentration of people in dense spaces drives innovation, productivity, and social mobility, because it facilitates the exchange of ideas and mutual learning. And, as Ezra Klein and Derek Thompson argue in Abundance, following Glaeser himself, in economies in today's world, ideas account for an increasingly large share of added value. What makes the difference is not where a computer is manufactured, but who conceived its design and the software that runs on it.

He could then have gone on to apply this to the Spanish context, taking it a step further: how all of this translates into individual gains. De la Roca and Puga tracked nearly two million Spaniards over several years and found something revealing: for every logarithmic unit of urban size, there is an immediate wage premium. Urban economics offers several explanations. The first is agglomeration economies: sharing infrastructure and deep labor markets increases productivity. The second is selection effects: the most skilled workers tend to concentrate in cities. And the third is learning: dense networks and spillovers raise the value of human capital acquired in urban environments. If, in addition to agglomeration (which is the Glaeserian argument), only selection effects were at play, cities would reinforce pre-existing inequalities. But De la Roca and Puga show that the premium grows over the years and persists even after leaving the city.

It is one of the most beautiful findings in urban economics: the imprint cities leave on life trajectories. That is why Puga and de la Roca, along with Glaeser, are cited in the book. But it does not start there; rather, it begins with the flip side of this dynamic. I began with what, for me (and for the Bank of Spain, BBVA Research, CaixaBank Research, José García Montalvo, and José María Raya, among many others), is the heart of the problem in Spain: the relative shortage of housing where people want to live.

…and rising demand…

Having a roof over one's head near where opportunities, added value, and face-to-face ideas are found is the necessary condition for being able to contribute to and benefit from this momentum of people coming together. But in Spain, the challenge we face here is enormous.

Let's start by looking at the long term and then move on to the short term. The INE forecasts the formation of 3.7 million new households. Behind that figure lie two likely factors that help explain why this is expected despite demographic stagnation: increased migration—a net inflow of 642,000 people in 2023, the highest in the EU—and smaller households, with the average size dropping from 2.5 to 2.32 people. And one-third of all households will be single-person households.

Of course, these 3.7 million would not be distributed evenly. Madrid will gain 576,000 households: Valencia (238,000), Alicante (247,000), Málaga (211,000), and Murcia (164,000). At the other end of the spectrum, Zamora has just 1,300, Palencia 2,100, Soria fewer than 5,000, and Teruel 9,600.

Added to this is the fact that cities attract people not only to live there but also to visit. In 2023, Spain broke its pre-pandemic record: more than 85 million international tourists, and the Ministry forecasts 94 million in 2024. The number of tourist accommodations registered by the INE has grown by around 75% between 2016 and 2024. At the same time, another market is on the rise: seasonal rentals. In a study we published led by José María Raya, we saw that in Barcelona, their share rose from 2.1% of listings in 2019 to 14.4% in 2023—a sevenfold increase. In Madrid, it rose from 3.3% to nearly 10%—a threefold increase.

And all of the above also contributes to the appeal of investing. According to the Bank of Spain, the average annual return between 2015 and 2022 was 10.5%, combining rent and appreciation; rent alone contributed 5.5%. This is a far cry from 2011–2014, when returns were negative. Driven by all of this, today, certainly, sales are at record highs: but almost all of them involve existing homes.

In short, what we have is a market of scarcity, in which it seems that supply is not being able to meet the demands.

…with a supply that does not meet

In one of the official presentations accompanying the Bank of Spain's Annual Report in 2023, it was estimated that the cumulative housing deficit in 2022–2023 was around 375,000 units, and that, based on projections for household formation and ongoing construction, more than 225,000 would be added between 2024 and 2025. This concluded the headline that dominated media reports on housing for a year and has become etched in the collective memory: the new housing shortage "could reach around 600,000 units by 2025."

Other sources have recently arrived at similar figures, albeit using different methods and time frames. CaixaBank Research (2025) estimates a cumulative housing shortage between 2021 and 2024 of between 515,000 and 765,000 units. FUNCAS (2025) estimated that the deficit "is approaching 600,000 units."

Meanwhile, in 2024, only 128,000 new homes were started, as measured by building permits. This is well below what is needed to reduce that cumulative deficit. The trend so far in 2025 is barely 11% higher. And this is happening while households continue to form, albeit at a slower pace—likely due to the housing shortage itself. In the end, there were about 111,000 new households, when the forecast had pointed to three times that number. This slowdown aligns with another statistic: the rate at which young people leave their parents' homes continues to fall. In 2015, 58% of people aged 18 to 34 in Spain lived with their parents or depended on their income. By 2024, that figure had risen to 67.2%. If we take the population of that age group as of January 1, 2024—about 6.13 million people, according to the INE—the comparison with the European average (just under 50%) suggests a huge gap: 1.65 million more young people still living with their parents. Given an average household size of about two people, that amounts to roughly 800,000 households that do not yet exist.

There are many reasons for this stagnation. I go over them in the book, but the truth is that this masterful 2024 report from BBVA Research does a much better job: It discusses the meager budget for public housing, the rising cost of materials following the pandemic, the shortage of sufficient labor (no sector has seen unfilled vacancies grow as much) and the aging of the remaining workforce, the lack of credit for development, and low productivity (25.4% below the average for our economy!). But above all, the report delves into regulatory bottlenecks. Both those that, over the last decade and a half, have added checks, requirements, and players with veto power in the arduous process of converting available land into developable land and then into finished homes, as in the most recent regulations, which only introduce legal uncertainty and disincentives.

And when that happens—when supply consistently falls short, when it cannot meet demand—the result is, first and foremost, a price increase, of course: a cumulative rise of 58% in purchase prices between 2015 and 2023, or 47% in rent. Or a 12.8% increase between 2024 and 2025 in the Eurostat index, doubling the EU average during this period.

But there are also measurable losses in GDP and well-being. Let's look at some literature on the subject: in the United States, Chang-Tai Hsieh and Moretti estimated, using a spatial equilibrium model, losses in GDP and well-being of between 3% and 4% annually for the entire country due to metropolitan areas that restrict growth. In contrast, in a city like São Paulo, allowing high-rise construction around transportation corridors increased the city's GDP by 0.75% according to estimates by Anagol, Ferreira, and Rexer. In China, when urban planning regulations became stricter—which Wang et al. measure through a reduction in the floor area ratio—employment growth fell by between 1.1 and 1.6 percentage points for each unit of tightening of those regulations.

Unlocking OTF countries

But what happens when supply does respond? According to recent evidence, prices suffer. What is also interesting about the studies I cite below is that they all provide data to counter the usual fears surrounding new supply (such as that, as a neighborhood improves by attracting more people, this effect will dominate over others; or that the outcome will be purely positive only for higher-income households):

• Asquith, Mast, and Reed observe that the entry of new market-rate buildings reduces rental rates in the surrounding area by between 5% and 7%. They believe the results are driven by the fact that the new buildings "absorb high-income households" and simultaneously "increase moves into these neighborhoods from low-income areas." This suggests that there could be "relocation chains" that likewise take pressure off rental prices and promote upward mobility.
• Andreas Mense uses weather-related delays during construction as a way to identify unexpected increases in completed housing. What he finds is that 1% more new supply reduces rents by 0.19%, particularly for lower-quality housing. And also in the tightest markets. Mense, in fact, makes direct reference to the chain reactions that could be freeing up housing across all market segments.
• In New York, Xiaodi Li shows that a 10% increase in housing within 150 meters leads to about a 1% drop in rental prices, with declines in sales prices as well. Li does identify (via new restaurants) improvements in the attractiveness of the neighborhood, but confirms that the effect of supply on the net reduction is greater.
• And in San Francisco, Pennington notes that "rents drop by 2% on properties located within 100 meters of a new building." He adds, quite significantly: "the risk of tenants being displaced in a low-income neighborhood is reduced by 17%."

The usual caveats

We can—and must—leverage what already exists: the BBVA Research report itself highlights the potential impact of tourism demand on existing housing stock. But the numbers don't add up if we stop there. Take Barcelona, a prime example of the competition for limited space between tourists and residents: Airbnb has about 11,000 active listings in the city, according to data from Inside Airbnb. We can also add those that remain vacant: the City Council identified about 10,000 vacant homes out of more than 100,000 inspected as probable cases (well below the figures from the INE, which in its 2021 Census estimated around 75,000 homes based on electricity consumption—a method that can overestimate in exceptional circumstances such as during the pandemic years). If we put it all together, we would be talking about between 20,000 and 30,000 homes potentially recoverable for the residential market. The INE projects the creation of 480,000 new households in the province of Barcelona by 2039. Although the city accounts for around 30% of the provincial population, even if we assume a growth ratio of three to one between the province and the capital—when in 2023–2024 it was only 1.65 to one—these 20,000 or 30,000 homes would not be enough to absorb the demand that will be concentrated in the city.

And that brings me back to the starting point: honoring the successful trajectory of our cities. Allowing supply to respond more freely to a demand that continues to grow precisely because there are both economic and (albeit somewhat disconcerting) demographic factors.

As a corollary, we cannot overlook the central political-economic dilemma inherent in all of this: doing so would mean reducing the relative value of existing assets. At least compared to the counterfactual scenario, which is the current market of scarcity. In a country where 74% of the population owns property and around 80% of assets are non-financial (mostly housing), the conflict is evident. The "homevoter theorem," formulated by William A. Fischel around 2001, posits that homeowners tend to vote and lobby for local policies—on public spending, taxation, and, above all, land regulation—that protect and reinforce the value of their homes. Although, to be honest, my impression of this reluctance is better captured in a recent study that uses surveys to show that most people simply do not believe that increasing supply reduces prices. The proportion of those who hold this view is much higher in the housing market than in any other market. This goes beyond material incentives to limit supply, encompassing initial positions that make it difficult to imagine a different equilibrium.

Along these lines, perhaps the applied research agenda in Spain could contribute significantly to the problem of housing access by advancing this literature: better understanding the resistance, incentives, and beliefs that hinder the supply response. But, on a more prosaic and immediate level, we also need to fight the battle of ideas, to honor those who want—and need—to live in our cities. One possibility is to change the framework. To shift from talking about "building housing" to talking about what we want our new neighborhoods to be like. Not just how many homes are needed, but what kind of urban spaces we want to create: how they connect, how uses are mixed, how they are sustained over time. Perhaps in the eternal rewriting of the book, instead of titling it Three Million Homes, I would call it The Thousand Neighborhoods Where People Want to Live.

Substack · Rango abierto · May 12, 2025 · read the original →

Build or Decline.

The conversations we are already having about current and future policies involve actively building infrastructure as platforms for opportunity and growth.

It was 2012, and I had emigrated. There weren't just a few of us, but many: the Spanish migration trend reversed due to the bursting of a credit bubble centered on real estate. What stuck in the Spanish collective imagination was that the real estate sector had wiped out the expectations of a generation and a half. Added to this was an economic stimulus package, dubbed Plan E, which focused on infrastructure projects of dubious added value. The poor decisions made immediately following that crisis led to another European debt crisis, in which we played a leading role alongside our neighboring countries.

All of this served as an understandable counterbalance to a decade of growth based on bricks and mortar. In 2012, journalists from across Europe visited us to tour white elephants. When I was in Valencia, the epicenter of the crisis, I took a few of them here:

This is a reinforced concrete observation tower in the middle of a roundabout at the entrance to the city. Considered one of the most expensive roundabouts in Spain [24 million dollars]. [The very idea of "more expensive roundabouts" is striking in itself.] It was inaugurated in 2009 by then-Prime Minister José Luis Zapatero and then-Mayor of Valencia Rita Barberá.

A 45-meter-high concrete tower was erected to serve as a viewpoint overlooking the Valencian countryside and the sea. The structure was accompanied by an underpass [with some puzzling "non-fountains"] and a 7,000-square-meter roundabout that would need nothing more than its presence to fulfill its functions as a roundabout and tunnel—something that would have cost a fraction of the investment.

Within a few weeks, the elevator that took you up to the top floor—a small glass-enclosed area with views that turn into an oven in the summer—broke down. As if that weren't enough, the views aren't exactly spectacular [I can confirm that]. So, three months after it opened, the observation deck closed for good.

It's inevitable that when people think about infrastructure in Spain from the outside, things like this come to mind. That's just how it is. But we're going to have to think beyond that. And, in fact, the lessons learned over the past decade can be useful to us as we enter this new era. I believe that infrastructure—or rather, the physical infrastructure—is going to take on a new central role in decisions that are crucial for our present and future. A recent overview:

• A major blackout in which it appears that both the grid operator's immediate response to the incident and the fact that the grid itself lacks sufficient mechanisms to manage an energy system increasingly reliant on renewables played a role.
• (And, in any case, climate change is not something we can simply ignore—with emergencies and disasters, such as Storm Dana, that require a better-prepared society.)
• A defense budget that already sets 2% as the floor and looks to 3% as the ceiling.
• A slow but inexorable shift in the housing debate toward the need to increase supply.
• The question of what we are going to do with our supply chains and the systems that support them in a more uncertain and fragmented commercial environment.
• (And to that we add the successive disruptions to supplies and other issues dating back to shortly before Russia's invasion of Ukraine.)

If you add it all up, it turns out that, after years of debate marked by largely symbolic or cultural issues (some with strong content and impact on minority rights, others perhaps not so much), the material is demanding space.

To address this, I propose starting with an apparent paradox that does not [hold]. How do we align infrastructure investment with an economy where the source of growth is increasingly the value of ideas, knowledge, and human capital? What I suggest is precisely to use this as a yardstick. As a starting point, we could say that the most worthwhile investments would be those that meet any of the following conditions:

• They enhance knowledge and human capital. E.g., early childhood education centers (ages 0–3); specialized applied research centers; more integrated vocational training systems.
• They facilitate equitable access to education; that is, they promote equal opportunities to contribute to and benefit from it. E.g., affordable housing where people want to come to study or to work.
• They are based precisely on these contributions: they increase productivity or improve public goods through innovation driven by ideas or knowledge. Examples: early warning systems or infrastructure adaptations to withstand climate emergencies; next-generation vaccines; AI for public services.
• They protect us so that we can continue to contribute. E.g.: joint operational capabilities in defense with EU partners—we are clear about NATO's future; protection of connectivity infrastructure.

To sum it up, it would be a perspective of infrastructure as platforms, borrowing the concept from Fernando Caballero, who applied it to cities in his wonderful Madrid DF. And to expand it both in scope and concept. Platforms upon which to do more. One cannot build on a nondescript viewpoint, nor on a housing development built in the middle of nowhere. But one can do a lot by supporting housing built where people want to live (and cannot); in new early childhood education centers; by better equipping those schools and universities that already exist and are subject to growing demands; by creating a more robust energy system that is less dependent on sources that should not deserve our trust; with fast, efficient, and fail-safe transportation networks; and by equipping ourselves with the means to defend our interests.

It is by no means clear, incidentally, that the injection of €80 billion that represents Spain's use of funds to combat the crisis caused by the pandemic is entirely consistent with this approach. It would be interesting and instructive to systematically review it from this perspective: with 95% of the funds already committed, refocusing is more difficult. We can only analyze it in hindsight, but that alone would be helpful.

Circumstantial evidence that the implementation of these NextGen Europe funds is not sufficient to create platforms for growth is the very existence of Mario Draghi's report on competitiveness in Europe. One way to interpret it is as a call to achieve sufficient economic scale to harness the full potential of our continent, our Union. A central part of the entire conversation it has sparked involves "letting things happen"—unleashing the potential for private investment and action. But there is another, equally important aspect that has to do with taking action—whether at the EU, national, or local level—so that others can do more.

Here lies an opportunity for progressive political positions to find their place. It is, essentially, the path that Ezra Klein and Derek Thompson have taken in their book Abundance. It is the one that Matt Yglesias, Smith, and others have been advocating for some time in the U.S. To capitalize on this, progressive discourse must shed five barriers that currently hold it back:

• Avoid "zero-sum" thinking—the idea that the first (and in some cases, seemingly the only) thing that allows progress is the scarcity of what we have. Even worse, though fortunately less common, is "negative-sum" thinking. Degrowth, in other words. It is a politically unpalatable idea to most people once they see its real-world consequences; socially insensitive to those who still do not have enough to live a reasonably comfortable life; and technologically denialist about what the future may hold for us.
• An excessive reliance on regulations as a means to achieve the desired outcome. The paradigmatic example for me, at least in Spain, is the obsession with regulating housing prices in major cities (with likely counterproductive results) rather than considering whether we should be investing in housing at all.
• Present and future debts incurred through areas of the welfare state that have become obsolete yet still absorb resources that could be allocated elsewhere. In a context of budgetary constraints (which is, let's not forget, any realistic context): do I prefer to divert fiscal resources to the pension system or to early childhood education (0-3)? But of course: the votes are more in the former than the latter, as are the financial commitments already made.
• The focus of discourse on issues that are not only detached from material concerns but also fail to yield political gains. Aspects of the "culture wars" that have less to do with protecting rights and advancing equality and more to do with symbolic or superficial matters could benefit from more nuanced positions. And others, more fundamental issues, could be achieved just as effectively without being so prominent: when in power, a party gets things done. It doesn't have to talk about everything with the same intensity.
• We must not ignore that the electorate attributes a certain value to the ideology of security. Ganesh reproached Klein and Thompson in his FT column for claiming that "abundance doesn't win elections," but perhaps the idea of order does. I would simply qualify that as protection. Order is not an end in itself: the end is to feel safe and protected.

And if we don't do it? Decline, I fear. The thing about decline is that it doesn't have to come in the form of a shock. Unlike the bursting of the bubble, which made it crystal clear what we shouldn't do again—and to remember it. But doing nothing produces no result by definition. So it's harder to compare it to the world that could have been. But it's an effort we must make anyway—building a watchtower at a roundabout and sharing the scarcity—there's an alternative path we're taking too long to explore more decisively.

El País · July 10, 2025 · read the original →

Ending poverty: beyond the current Minimum Vital Income.

We could use a productivity "shock" at the lower end of the wage distribution.

In 2021, Spain demonstrated its awareness of the serious problem of poverty by passing the most significant social policy of the past decade. Four years later, the Minimum Living Income (IMV) covers 400,000 households. However, a quarter of the Spanish population lives in households at risk of poverty or social exclusion. This gap reflects the structural limitations of the design of social policy and the Spanish economic model.

To understand this, the first step is to break down the poverty or social exclusion risk indicator. A person is considered to be in this situation if they live in a household that meets at least one of these three conditions: monetary poverty (income below 60% of the median), severe material deprivation (lack of at least 7 out of 13 basic items), or low work intensity (household members of working age were employed for less than 20% of the possible time during the year).

The IMV, on the other hand, is designed as a basic safety net. Its thresholds are lower than those that refer to purely monetary poverty. Thus, when observing the gap between the two, many people argue for a more generous UBI. Two points should be added to this reasonable request. First: AIReF reports that most eligible households do not even apply for it. The persistence of this finding should lead those of us who advocate for cash transfers to consider whether it might be worth rethinking the design of the policy. Second, we do not have one of the highest poverty rates among wealthy countries because our UBI is insufficient. In a market economy, the burden of reducing poverty falls on labor income, and Spain's poverty rate is consistent with its extremely high unemployment.

Reducing unemployment has been a key driver in reducing poverty: between 2014 and 2024, the proportion of people in low-work-intensity households at risk of poverty or social exclusion fell from 13.4% to 6.3%.

Reducing structural unemployment is therefore a key priority. And here, the findings of the latest AIReF report are once again relevant: receiving the IMV reduces the likelihood of working by up to about 5 percentage points for those receiving the most generous benefits. Crucially, this effect persists even after the introduction in 2022 of employment incentives that prevent a euro-for-euro reduction between wages and benefits.

This underscores the need to rethink the policy, and especially this aspect of it. Rethink, not discard, because a unified transfer system remains both necessary and useful. For example, in contexts of high inflation. The data also show that the percentage of people at risk of poverty due to material deprivation has increased in recent years. Here, the use of the IMV has been a missed opportunity: we have preferred specific subsidies (transportation, rent, energy) or tax breaks instead of using the Income as the central channel, which would have been more effective, efficient, and fair.

But perhaps the most concerning trend is the rise in purely monetary poverty to 13%. This suggests that, although households may have moved out of other categories of poverty—especially low-work-intensity poverty—they continue to earn incomes below 60% of the national median. And, as evidence of this, the poverty rate among the employed has remained stagnant at 11% since 2008, while it has improved significantly among retirees (from 20% to 13%). Thus, Spain ranks third in the European Union in terms of in-work poverty.

This is likely influenced by the fact that, despite a significant decline in the number of households with very low labor intensity, problems persist regarding inequality in hours worked and job stability. This is compounded by an average wage level that is actually quite low at the lower end of the distribution.

The persistence of in-work poverty in Spain highlights the need to increase incomes, focusing on the lowest-income deciles up to the median. Attempts to address this issue by raising the minimum wage have revealed limitations that stem precisely from the factors of working hours and labor intensity. The Bank of Spain estimated that the 2019 minimum wage increase raised the probability of job loss by about 3.2 percentage points in the long term and, when accounting for the number of hours worked, led to a drop of approximately 4 percentage points in the proportion of full-time workdays. The ISEAK Foundation obtained less negative results, but with significant indications: in the short term, they find no reduction in employment, but it does gradually emerge in the medium term, and work intensity is reduced by around 0.84 percentage points after one year: small, but it exists.

This leads us to the conclusion that the solution to our high relative poverty goes beyond the scope of demand-side decree-laws. If we repeat the correlation exercise between the risk of poverty and unemployment but using GDP per capita, Spain stands 5 percentage points above the poverty rate that would correspond to it based on its GDP per capita, suggesting distributional inefficiencies in the growth model.

We could use a productivity boost at the lower end of the wage distribution. This means complementing demand-side policies with supply-side measures to narrow the income distribution from the bottom up. We could list the usual suspects here, from company size to production models. But I'm going to focus on one that would also help us tackle structural unemployment: investment in human capital for those at the bottom of the distribution.

To put it bluntly: only 1 out of every 40 euros from the NextGen Funds has gone to vocational training. We have the dual vocational training system, which hasn't really taken off, despite evidence showing that it increases workdays by 25% and cumulative income by 42% during the first two years, according to the study by Samuel Bentolila and co-authors. Vocational training is not typically viewed as a tool for combating the risk of poverty. But few things are better at driving long-term upward mobility for the half of the population with the lowest incomes in this country.

Substack · Rango abierto · October 6, 2024 · read the original →

Progress = Infrastructure (aka "El 47").

Why is a movie about a bus to a suburb of Barcelona the most important reminder of what this is all about (or what it should all be about).

Last night I left the theater feeling moved. Not only because of the extraordinary performances, the sublime screenplay, the perfect cinematography, and the well-crafted music, but also because the film served as a powerful reminder of what kind of public, collective decision-making can have the greatest impact on progress by improving people's lives.

I won't give anything away: I'll just say that "El 47" is about the bus with that name and the battle to extend public transportation all the way to Torre Baró. But what is "up there"? It's something like this (the photo is mine; I took it in Baró, another neighborhood on what was then the outskirts, at the start of summer).

Over there on the left, you can see a plot of land. On the right, another one. They aren't surrounded by walls. There are also some walls (now) without roofs. That area used to be home to a few self-built houses that families—mostly from Extremadura and Andalusia—constructed upon arriving in the 1950s. Further down, there's a much larger neighborhood still standing.

And to situate Torre Baró in relation to the rest of Barcelona, let's take Plaça Catalunya as a reference point.

Almost 10 km. The neighborhood residents, whose jobs were down the hill, did all of this on foot. Or at least a good part of it: the entire descent to the nearest stop. Plus, of course, no services we can imagine reached the area properly. The film talks about all of them, but focuses on transportation.

I won't go into the many complexities the neighborhood went through here (though I encourage you to read about them); rather, I want to use this image to highlight the main lesson learned from "El 47"—or rather, as a reminder: if, out of all the things we can do collectively, we want to choose those that will make the biggest difference in people's lives, let's start with what can improve their material conditions. And to achieve that, the thing we agree on most is to take action.

Taking action is also quite useful from an eco-political perspective because it resolves part of the dilemma between winners and losers: you don't eliminate one bus route to replace it with another, nor do you move a school from one place to another. You add a bus or build a school. Of course, that doesn't solve everything: the budget is limited, and you have to choose what to do. But I think that's the kind of economic and political dilemma we want to face.

I'll illustrate this with another example that couldn't be more relevant. I wish the public debate would focus all its energy on discussing whether rent subsidies are better or worse than providing financial assistance to renters. It's necessary to devote part of the public debate to these measures—which are already in place—and it's essential to assess their effectiveness (I did just that here alongside Ángel Martínez and Natalia Collado). But shouldn't we be investing more collective time and attention in where to create new affordable housing supply, and how to do it? With limited budgetary resources, the focus shifts to renovation or social housing; to whether they do it in this or that location. By the end of the decade, that's what will remain. Not a measure that lasts just a few months or years per household.

Another example: Lucas Gortazar and I said here that the Spanish education system will likely have a more comfortable student-to-teacher ratio in the coming years as demographics empty our classrooms. But other issues are under pressure from unresolved problems: segregation, grade repetition, failure, lack of mathematical and scientific knowledge, school schedules that neither protect nor adequately support students or their parents… Shouldn't we be discussing at length which of all these problems we're going to invest that surplus in?

Let's keep in mind that infrastructure isn't just concrete or equipment like roads or train tracks—no. It's also hiring people, training them, paying them adequately (and hold them accountable accordingly) so they can provide the services we consider most necessary. It includes books, computer equipment, and healthy environments in schools. Infrastructure consists of tangible things that drive progress.

This may be raising two types of doubts (or more, but mainly two) for you right now:

• Doing things comes with costs beyond just the budgetary ones. We understand this much better now than we did 50 years ago, when the cost or the carbon footprint of an "extra" wasn't properly measured. I have two answers: first, let's factor these costs into the price (we're already doing this, though we're a bit behind—this will help us make more informed decisions; we'll have to make it worthwhile). On the other hand, it goes without saying that investing in decarbonization infrastructure is one of the most important things I believe we need to do. As the Draghi report noted, eliminating emissions can make us more efficient. Also in the public sphere. Any concrete examples of investment in this area? From renovating homes with insulation and low-emission heating systems to basic research on clean energy.
• There aren't that many things left to do. Torre Baró achieved its goal, just like the rest of Barcelona's outskirts, and Madrid's. With more accessible healthcare and education systems that brought us closer to universal coverage. And to that I say: well, maybe there isn't much left from your perspective, since you're looking back from a less comfortable position. I'm not at all sure that if you go and ask someone living in one of the millions of homes with thermal insulation problems in Spain, they'll tell you there isn't much left to do. Or someone at a completely overwhelmed health center with unsustainable patient-to-doctor ratios. In this graph by Cobreros and Carlos Sunyer, I see plenty to be done in very specific places: those with lower incomes, higher unemployment rates, and fewer healthcare professionals on hand.

Anyway. If you haven't seen "El 47," I encourage you to watch it, and after exploring all its dimensions (which are far more numerous than the specific one I've mentioned here), I invite you to think about what concrete steps remain to be taken that would make a real difference for many people.

One of the most vivid memories I have from my childhood was the day I rode the tram for the first time. We were inaugurating Line 4 in Valencia. It went as far as Doctor Lluch, a 10-minute walk from my house in Cabanyal, in the spring of 1994, and I was eight years old. It seemed incredible to me—like something out of a civilized city—that something other than a bus would come to my neighborhood. And we were poorly served by buses: lines 1, 2, and 19 went to different parts of the city center, which is less than half the size of Barcelona, with frequencies that weren't excellent, but decent. But the tram connected me to the northern part of the city: there was the pool where I went swimming, my closest friends, the university where I studied, and my first job in the field of what-I-had-studied. Of course, it meant a major change for the neighborhood. And there's no doubt that, as a mode of transportation, it reduced emissions on those routes. So, even though we're not in the half-finished outskirts of 1970s Barcelona, if we look for the physical boundary, we'll find it. It exists.