To go left, Italy first needs to turn right

March 11, 2013

It is political impasse in Italy. In the fourth quarter the economy shrank by 2.8 per cent compared with a year earlier; it has been in recession for the best part of two years and shows no sign of improving.

Pier Luigi Bersani is trying to form a government, but no Italian can say with conviction that the left offers a way out of Italy’s morass. It is a pipedream to think the country can pursue a ‘left-wing’ economic strategy that requires a high level of social trust and professional conduct among the population.

Trust and professionalism barely exist in Italy. This is not Germany, or one of the Scandinavian countries. It is a nation where lawyers and accountants lead the way in cheating their taxes. There is no foundation on which to build a socially advanced economy.

To construct such a foundation, Italy has to turn right if it wants to arrive on the left. The labour market must be deregulated so that older people do not retain jobs at the expense of mass unemployment for the young. The structure of the judiciary must be turned upside down and the professional classes held to account so they begin to provide some basic moral leadership for the country. Stuff like not taking cash payments for legal work or reflexively advising clients how to dodge their taxes.

The era when Italy needed bureaucracy in order to guide its economic take-off is long gone. Now Italy needs meritocracy and responsbility — from its professional classes and from its organised labour. The country is simply too backward to progress by moving left. First it has to go right. Which is why Beppe Grillo was correct on Monday to threaten to leave politics if M5S forms a government with Bersani.

The real problem is that Italy does not have an economic ‘right’. Berlusconi did almost nothing to restructure the economy in four terms of power. He is mainly right-wing in the sense that he is crass, racist and contemptuous of ordinary people. Monti is also not of the economic right. He is patrician, a veteran of the old Italian developmental state and the new, more northern European politics of Brussels.

 

More:

Fitch downgraded Italy again on Friday (FT sub needed).

 

He talked a lot

March 6, 2013

Chavez

Park Chung Hee

Hugo Chavez might have seemed, momentarily, to be a Latin American Park Chung Hee. He was a military officer and a coup leader with communist sympathies who promised to sweep away the post-colonial oligarchy and the vested interests that kept his country poor.

But there any similarity ends. Park was a doer, Chavez a talker. Within weeks of coming to power, Park locked up South Korea’s leading oligarchs, and did not let them out of detention until they agreed to cooperate in building a new Korea. He poured money into improving agricultural infrastructure and support services, so that the poor could feed themselves and generate an agricultural surplus.

Hugo Chavez was a populist who spent oil money to alleviate the immediate suffering of the poor. But he did not give peasants the means to generate their own wealth or create an industrial base that would turn Venezuela into a different kind of country. In China, he found a post-colonial ‘red buddy’ to build him roads and power stations, instead of having Venezuelans learn to do such things themselves.

And he talked. He talked to fellow third-world bullshitters like Fidel Castro and Robert Mugabe. He occasionally brought in smart people from outside to advise on how economic development really works, but if they dared to talk he just talked even louder. He talked remorselessly against the United States and thereby brought upon himself the wrath of the world’s most powerful country. Unnecessarily and unhelpfully. In sum, he talked too much.

Park Chung Hee didn’t talk. As he wrote soon after coming to power in 1961: ‘‘We need wordless deeds and ambitious construction programmes.’ He liked Goethe’s maxim that genius is the crystallisation of perseverance.

More on Chavez and China:

Bloomberg details China’s loans for oil deals with Chavez.

This is a deeper analysis of Chavez’s relationship with his red buddy, but in Spanish.

There is also quite a bit on Chavez and China in this good new book about China’s main development bank.

Footage of Chavez talking:

Rory Carroll has a good short video of Chavez in action.

Goofy is not a fascist, he’s just Goofy

March 5, 2013

Mussolini with fag

Ital election goofy

Ital election grillo red beret

Very good work from Gideon Rachman in the FT (sub needed), who explains why Beppe Grillo is not the same as Benito Mussolini.

It is necessary to do this because Britain’s cretinous Tory thought-leading (ho, ho) rag, The Spectator, has run a long piece saying that Grillo is like Mussolini. Presumably this is what comes from spending your time in Italy by a pool at a villa in Tuscany,

Only against the British can one imagine having to defend an Italian, but here goes:

‘Parties, he [Grillo] is adamant, are the problem, not the solution.’ I don’t think Grillo has ever said or believed this. Indeed he is urging the proper parties to get on and announce policies that will command the support of the electorate.

‘Grillo, a former communist, was banned from national television in the late 1980s as a result of his defamatory performances.’ It is political convention in Italy that public service television stations are controlled by the major political parties. The private stations that everyone watches are controlled by Berlusconi. No one who makes good political jokes gets on television (that’s why there is no comedy on Italian television). This has nothing to do with defamation.

‘Whereas Mussolini spread the word through his own mass daily newspaper Il Popolo d’Italia, and enforced it by means of his blackshirts, Grillo does so through his website, Il Blog di Beppe Grillo, and violent verbal abuse and ostracism of opponents. Whereas Mussolini travelled by train to his rallies, Grillo travels to his by camper van.’ As above, established political parties in Italy have or control their own television stations and newspapers (and banks, and supermarkets). Grillo uses the internet because it is the only affordable entry point for a non-established party or non-billionaire. On travel, I am not clear how Mussolini on a train is the analogue of Grillo in a camper van. What is The Spectator’s approved pro-democratic vehicle? BMW 5-series? Range Rover Evoque?

‘Italian fascism, even though no one is allowed to say so, was a left-wing revolutionary movement which Mussolini founded because the first world war had made him realise that the proletariat is more loyal to its nation than its class.’ It is the nationalism, the racism and the militarism that largely makes fascism fascism and different from socialism. Hence the term national socialism. However the idea that fascism is left-wing and, by implication, right-wing extremism does not exist is so good that it is repeated a couple of pars later: ‘Like fascism, Grillo’s movement is essentially left-wing.’  This is what the 15 nuts who buy The Spectator read it for.

You guessed it:

The author of the Spectator piece interviewed Berlusconi for the rag in 2003 and had the following incisive conclusion: ‘On the whole, I think Berlusconi – a Latino Thatcherite – a very good thing for Italy.’

Back in the real world:

Gideon Rachman also points out that after the monumental Iceland crisis, voters elected a stand-up comedian mayor of Reykjavic. Now they’re on the mend. At least Goofy never recorded a theme song or patted a rock.

Twenty-two years old

March 1, 2013

Bradley Manning was 22 years old when he was arrested. Today he entered his plea in military court after almost three years in US military detention. His long statement was read with composure and, at face value, reflects a person who stands by the logic of what he did.

Manning’s story is well-reported in The Guardian (and this is tangentially important). This 20-minute video is a useful introduction if you are not in a mood to read, but the idea that he was mad rather than rebellious does not stand up for me.

It remains for the USG to prove that Manning endangered national security. In the court of public opinion, I do not think this will be possible.

 

More:

One way to think about what Manning did, and the significance of it, is to watch this documentary about the US dirty war in Iraq. (It builds on a celebrated New York Times magazine cover story from 2005.)

Dog rejects bone, declares duck pâté

February 27, 2013

After only a quick sniff, Goofy has rejected the bone offered to him by Donald Duck. Worse still, Goofy stayed up all night making a digital collage of Donald Duck in a death shroud, declaring (and I have to say I sympathise) that any self-respecting duck who had led his followers to such a disastrous showing in this week’s Disneyland election should have resigned immediately.

Ital election Bersani death shroud Grillo

 

Even worse still, it turns out that Goofy has kept a list of all the nasty things that Donald has said about him since the beginning of Disneyland itself and Goofy has posted the list to his web site:

Con Grillo finiamo come in Grecia
Lenin a Grillo gli fa un baffo
Sei un autocrate da strapazzo
Grillo porta gente fuori dalla democrazia
Grillo porta al disastro
Grillo vuol governare sulle macerie
Grillo prende in giro la gente
Nei 5 Stelle poca democrazia
Grillo fa promesse come Berlusconi
Grillo dice cose sconosciute a tutte le democrazie
Grillo? Può portarci fuori da Europa
Basta con l’uomo solo al comando, guardiamoci ad altezza occhi, la Rete non basta
Se vince Grillo il Paese sarà nei guai
Siamo di gran lunga il primo partito e questo vuol dire che siamo compresi. Perché a differenza di quello lì che urla, noi ci guardiamo in faccia, noi facciamo le primarie, stiamo tra la gente
Indecente, maschilista come Berlusconi
Da Grillo populismo che può diventare pericoloso
Ora questo smacchiatore fallito ha l’arroganza di chiedere il nostro sostegno: “So che fin qui hanno detto ‘tutti a casa’ ora ci sono anche loro, o vanno a casa anche loro o dicono che cosa vogliono fare per questo paese loro e dei loro figli“.

So much for dogs being ‘best friends’!

Ital election goofy angry

Ital election Grillo FO

Goofy’s blog is here.

Martin Wolf can make us feel dumb, but George Osborne makes us all feel clever…

February 27, 2013

Martin Wolf has a nice review of policies of economic austerity employed in different states since the start of the global financial crisis. (You will need an FT sub.) Although he doesn’t articulate it as strongly as I would like, his basic point is simple: the crisis is not a macro-economic problem soluble by austerity. It is a micro-economic problem, or rather two different micro-economic problems.

The first problem, in the ‘Anglo-Saxon’ countries, is the need to re-regulate finance in order to stop bankers taking unreasonable risks with other people’s money. This is sort of being dealt with (including in the UK by the Vickers Commission on which Wolf sat), albeit for me in a somewhat ham-fisted, messy way that will eventually bring us more problems.

The second micro-economic problem is that a bunch of states that developed fast after the Second World War by means of close government control in order to foster industrialisation (Japan, Italy, France are the main ones) need micro-economic deregulation, especially of their labour markets and government and legal institutions, in order to return to growth and pay off the large debts they built up while becoming rich countries.

So the crisis (or two distinct crises), as Wolf writes today, has very little to do with macro-economics and is, in general, made worse by austerity. If it has taken you a while to wake up to this, however, do not fear. For in Britain we have the person who will perhaps be the last in the entire world to understand what is going on around him: George Osborne.

George Osborne fixes cufflink

I haven’t written anything about George since the UK’s loss of its AAA credit rating, because there is nothing to add. Here is what I said about George in January 2011. And here is an update from November 2011. What happened since? Looks to me like four out of the past five quarters showed negative growth. The graph below is from the Office of National Statistics…

UK Quarterly GDP to Q4 2012 inc

 

 

 

 

 

 

 

 

 

 

 

 

 

Ten days later:

Martin Wolf follows up with another attack on Osborne’s policy (FT sub needed), which Brave Dave has come out to endorse without reservation. Meanwhile, latest data suggest the chances of a triple dip recession are now as high as 50:50. All I would add to what Wolf says is that the contrast with the early 80s recession turns on the fact there are no major structural adjustments to the labour market that can be made in this crisis to get the economy moving. Unlike in the early 80s, Britain already has a very flexible labour market. This is why (as in the United States and unlike in continental Europe) unemployment has been lower than the scale of economic contraction would suggest. But it also means that monetary policy alone cannot solve the problem and actually discourages many people from undertaking the deleveraging their finances require. Back in 2010 I thought Osborne would realise this within a couple of years and listen to Vince Cable. Ho, ho, ho…

 

Duck calls press conference

February 26, 2013

Ital election bone handed over

Donald Duck, whose former, disenchanted supporters provided half the support for Goofy in the recent Disneyland election, called a press conference this afternoon and offered to give Goofy a bone if he would enter into a ‘co-production’ with Donald. (Donald also said the bone could eaten by Mickey or Mini Mouse, but analysts noted that mice are not known for eating bones.)

Ital election donald duck

Ital election bersani

Ital election goofy

Ital election grillo red beret

 

 

 

 

 

 

 

As part of a ‘truly yummy’ meal for the dog (or mouse), Donald said he would also serve up a special gravy called ‘Disneyland political and institutional reform’. However Donald failed to specify any of the ingredients.

Donald also said that he will not be resigning as leader of the Disney left since, unlike Italian ship captains, ‘I do not leave my ship [just because I have created a large hole in its side]’.

Goofy is expected to spend some time sniffing the bone.

 

More:

Corriere della Sera coverage of Donald’s press conference is here (in Italian), including video and details of his statement about not leaving ships — ‘non sono uno che abbandona la nave…’.

The dog has it

February 25, 2013

As polls closed in Disneyland today, it looked like the big winner was Goofy. And why not? Given the choice between Mickey Mouse, Mini Mouse and Donald Duck, I might well have voted for Goofy myself.

The result puts Disneyland right back at the centre of global entertainment. All that stuff about a post-global crisis return to normality was so much hot air. It is time to tune in for the next episode of the Disney story — the biggest, most unbelievable, most enduring cartoon of them all.

Ital election goofy

Ital election grillo red beret

Ital election Grillo votes buffon

That is sooo not all folks!

See where Goofy’s votes came from:

This graphic from Corriere della Sera is useful. It shows the fall in the popular vote for, in turn, Berlusconi’s mob, Berlusconi’s pro-fascist Northern League allies, Bersani’s mob, and the rump of the Christian Democrats (UDC).  All the ‘traditional’ parties haemorrhaged votes. In terms of what people who turned away from the traditional parties did, around half of Beppe Grillo’s vote came from the centre left Democratic Party. To me, that says Bersani has to go. But of course he won’t go, because Italian politicians of the left don’t understand principle any more than ones from the right.

Nakries, Bothschilds, torpor

February 22, 2013

Rothschild 1

Bakrie

Inbred Etonian titty Nat Rothschild takes on legendarily dodgy pribumi carpet baggers, the Bakrie brothers (led by Rothschild lookalike Aburizal). I guess the takeaway is that there is little to choose between the British aristocracy and a bunch of Third World wideboys when it comes to moral conduct. The Bakries have been coining in money in Indonesia ever since the Benteng programme of the 1950s was set up by Sukarno to support ‘downtrodden’ indigenous traders. They weren’t downtrodden then, and they aren’t now. The Bakries made a killing out of exclusive trading licences that did nothing to support Indonesian development. Nat ‘Mr Offshore’ Rothschild, meanwhile, showed how naturally at home he is in a south-east Asian, Latin American or Russian business environment by cutting a deal with the Bakries to ‘reverse list’ their coal assets in London. This is a favourite Third World tycoon game whereby you find a failed listed business and have it take over your real business, thereby avoiding the intrusive due diligence and transparency that can go with an Initial Public Offering. Nat then got in a terrible bait that having gone into business with some of the dodgiest characters in Indonesia they turned out to be dodgy. (His own efforts to ‘tool up’ by bringing in the likes of Hashim Djojohadikusumo, a B-grade tycoon and elder brother of former Indonesian special forces commander Prabowo Subianto, were a flop.) Meanwhile, despite the recent global financial crisis, British regulators let the entire sordid affair carry on, presumably on the assumption that British aristocrats who live in Switzerland can be trusted to keep their own moral counsel. What happened afterwards with the London-listed business is precisely the sort of shenanigans and fleecing of minority shareholders that happens in places like Indonesia. Quelle surprise!

The Guardian explains some of the background.

Here is the Bloomberg coverage.

Here is the FT coverage (subscription needed).

Elections in Disneyland

February 18, 2013

Only a week now and the kids are asking: ‘Who’s gonna win, daddy?’ How do I know, when the people running are larger than life itself.

 

Mickey Mouse. The original cartoon character. He’ll make you laugh. He’ll make you cry. And if you are under 20, he may well offer you cash for a quick one. Mickey has posted a late surge in the polls as many Italians conclude that no one will ever be funnier.

Ital election Mickey face

Ital election berlusconi face

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mini Mouse. Billed as a new kind of mouse, Mini turned out to be much like Mickey — all talk, talk, talk — but not nearly as funny. Mini speaks English, but who cares except the foreigners who pay Disneyland’s bills? May have to move to Brussels.

Ital election mini

Ital election monti

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goofy. Definitely funny. Appears daily in the piazza encouraging citizens to shout ‘Fuck Off’ at no one in particular. Indubitably a new kind of political animal. However a lack of facial grooming and tendency to piss on public monuments leaves the average Italian concerned he undermines the national image for form over substance in all things.

Ital election goofy

Ital election grillo red beret

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Donald Duck. What’s the problem with Disneyland? If only everyone listened to Donald, Disneyland would run fine. Donald is a well-meaning, somewhat gruff old time favourite, yet somehow never quite as funny as Mickey.

Ital election donald duck

Ital election bersani

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Projected outcome: Coalition of family favourites. Loads of laughs for everyone except Italians.

Ital election that's all folks