The Panamanian economy in 2010 was in good shape, compared to what it usually is. The country's sovereign bond rating went up to investment grade, undemployment was down to single digits however anyone counts it --- unless they count those working in the informal economy as jobless --- and multiple large public works projects kept money circulating through the economy.

However, the upscale end of the real estate market was moribund in the city and very slow in the Interior. The US economy did not much recover as far as it affects the Panama Canal's business. WikiLeaks revealed the former US ambassador's concerns about an American company getting cheated out of the main canal expansion contract by way of a lowball bid and inflated qualifications.

Sacyr Vallehermoso, the Spanish company that "won" the bidding, skates on existential thin ice because it suffered terrible losses in the bursting of Spain's real estate speculation bubble. In the WikiLeaks cables there was discussion about whether, notwithstanding EU rules against such things, the Spanish government or the European Union itself is subsidizing the lowball bid on the canal expansion in order to save one of its major companies. But the other day, as Panamanians took their eyes off of the news for the holidays, the Martinelli cabinet approved the first Panamanian government subsidy for the Sacyr-led consortium (which includes Panama's Construrctora Urbana SA): they exempted the companies of that group from the taxes that all other construction companies have to pay.

We already knew that the canal expansion's economic plan was off track on the revenue side. The prediction that US imports from China would steadily increase at the rate that they did between 2000 and 2005 through 2025 was rather immediately disproven, and of course the Panama Canal Authority has erased virtually all postings from the time of the canal expansion referendum campaign from its website because they are reminders that the Torrijos - Alemán Zubieta Plan was sold on the basis of outrageously deceptive claims, illegally paid for with public funds.

Now, for better or worse, that project is the engine of the Panamanian economy and its merits and flaws will be debated for decades to come.

The lessons that Martinelli, Alemán Zubieta et al take from what we have seen so far of the canal expansion is that you can sell anything and get away with anything. The WikiLeaks cables we have seen so far suggest that this may not be the case.

Now, as questions about the canal expansion that were previously raised and blown off again arise and pose themselves more insistently, the government and private partners are selling us another boondoggle, as if everyone has forgotten about the insane real estate speculation of a few years ago. How many condo flippers will come here for Panatropolis? How many gushy International Living articles will hype it? But the more relevant question is whether a slush fund in the hands of a University of Panama rector with a fake doctorate will yield five more years of breathtaking corruption in Panamanian higher education.

Meanwhile, as the usual suspects dish up ever more that is unreal, down in the trenches of the Panamanian economy there are very real success stories that quietly persist.

There is much weeping, wailing and gnashing of teeth among the "get rich quick" and "hide ill-gotten gains" crowds of the American community here, and among the lawyers who serve these people. Panama and the United States have agreed to share financial information for the purpose of tax investigations.

Me? I'm wondering how many politicians in Washington are closing their Panamanian bank accounts and moving their bribery proceeds to places like the British Virgin Islands or Kiribati. However, the deal has retroactive features, the effectiveness of which we shall see when it is approved and implemented.

Attorney Sandra Sandoval recently became a mother. In her better-known role as the Godmother of Cumbia, she was performing onstage almost until she gave birth. On YouTube there are live videos of this tune, but I choose this version because the sound quality is better: