The man who screwed an entire country
economist.com
economist.com
You're mixing your East European assassination techniques.
Umbrella: http://en.wikipedia.org/wiki/Georgi_Markov Polonium: http://en.wikipedia.org/wiki/Poisoning_of_Alexander_Litvinen...
With such high oil prices Russia could survive for a long time, slowly rotting away just like Italy is described in the article. Although, since Russia has already much lower quality of life, and since bringing the president or even a member of parliament to court is completely unthinkable here, we would rot down much faster.
At the same time, they did set the stage for a dramatic recovery.
This natural experiment shows us that we cannot simplify what is happening in Russia by attributing it to a single person's fault. It must be a systematic phenomenon of complex nature.
When Germany entered a period of stagnation after the Euro-introduction in 2002, the Economist made exactly the same prescriptions. Look what that ideology has done to the US and the UK: countless jobs in manufacturing have been offshored and growth was simulated through financial "innovations".
Personally, I buy lots of organic food products from Italy (e.g. laselva-bio.eu) as well as clothes (e.g. slowear.it), and for a simple reason: They're the best on the market. Therein lies Italy's potential.
You have endorsed the quality of Italian products made by private business enterprises. To keep this discussion on topic for Hacker News (ahem), I wonder what you think about how well the current Italian governmental administration is allowing business owners like that to succeed. The overall economic growth figures for Italy reported in the submitted article suggest that the preferences of consumers like you are not sustaining steady economic growth in Italy. Could that be the result of government mismanagement?
Italy has an immense public debt. It is getting more and more difficult for Eurozone countries to finance sovereign debt. Its population is aging. Pension costs are rising. Productivity, according to Mario Draghi, is stagnant, in part because employment in Italy is structured weirdly, with large numbers of closely-held firms with a two-tiered system of full-time full-benefit workers hired through nepotism and armies of temp workers†. Civil cases in Italy average more than 1,000 days. The country has wild gaps in educational outcomes between different regions.
I don't think you can write all this off as an "Anglo-Saxon conspiracy". These are ideas that can be described with simple numbers, aren't they?
† Articles about Italy have long attributed this to Italy's family culture, in which people cohabitate with their extended families long into adulthood, but it seems just as likely that this is a result of laws making it hard to fire people.
No, it pretty much sounds like racist-tinged, self-hating negative nationalism.
http://orwell.ru/library/essays/nationalism/english/e_nat
"Anglophobia. Within the intelligentsia, a derisive and mildly hostile attitude towards Britain is more or less compulsory, but it is an unfaked emotion in many cases. During the war it was manifested in the defeatism of the intelligentsia, which persisted long after it had become clear that the Axis powers could not win. Many people were undisguisedly pleased when Singapore fell ore when the British were driven out of Greece, and there was a remarkable unwillingness to believe in good news, e.g. el Alamein, or the number of German planes shot down in the Battle of Britain. English left-wing intellectuals did not, of course, actually want the Germans or Japanese to win the war, but many of them could not help getting a certain kick out of seeing their own country humiliated, and wanted to feel that the final victory would be due to Russia, or perhaps America, and not to Britain. In foreign politics many intellectuals follow the principle that any faction backed by Britain must be in the wrong. As a result, ‘enlightened’ opinion is quite largely a mirror-image of Conservative policy. Anglophobia is always liable to reversal, hence that fairly common spectacle, the pacifist of one war who is a bellicist in the next."
Substitute "Britain" for "Britain and America" in the above passage and the mentality of critiquing "generic Anglo-Saxon" economic neoliberalism is plain to see.
A "young" Italian, by living with her parents, doesn't have to worry about rent, food or other basic expenses and can use her modest salary to pay for recreational activities.
But no, let's further deregulate & offshore jobs to countries that have poor humane rights records so our corporate overlords can get ever richer.
So, here we are with these same companies in charge of sovereign credit ratings. The same companies that played a large part in creating a credit crisis are the companies that get to set creditworthiness. Magnificent system we have.
So in order to make these credit rating agencies happy, we must deregulate further, lower taxes further, turn into a service level economy & freeze or depress wages so we can hope for short-term gains in our economy. Which makes corporations happy, banks happy & market makers happy thus our creditworthiness goes higher. It seems rather biased for those who are on top & those who caused the calamity in the first place. Once the economy stabilizes those smart rich people on top can start making imaginary investments with their friends until they create another crisis. Rinse & repeat. Look where prosperity has come from over the last 15 years. Bubbles & scams.
Does this look sustainable? Who really benefits from this?
Do you believe that Italy's debt is that high because Italy overleveraged itself on mortgage-backed securities?
Did you read the other comments on this thread, where Italy's central bank director complained about Italian wage stagnation and its two-tiered employment system, and its poor tax revenues?
Italy didn't get to where it's at entirely because of MBSs but the crisis certainly didn't help any country's financial situation & many countries had to shore up banks & took a credit hit.
There are definitely some issues with how Italy operates. Having a philandering-media-monopoly-owning-billionaire tyrant in charge certainly doesn't help.
While changes probably need to be made, the fact is that changes always need to be made. Radically switching to a pro-corporate/anti-worker strategy because shady rating agencies might downgrade you a point is silly.
Deregulation has happened across every economy -- aside from North Korea and Cuba -- since the 1980s (e.g. with telecom, airlines, utilities, etc). The result of deregulation has spawned record growth in emerging economies, as well as massive growth with the newly liberalized sectors in developed economies (e.g., transportation, energy, communications).
HN has a lot of smart people, but sometimes the lack of any economic wisdom combined with a holier-than-thou attitude among some posters can be a little depressing.
In Energy and Finance deregulation has enabled massive crisies, in the former a crisis that led to shut downs of electricity to the 4th largest and most innovative economy in the world, and in the latter a crisis the size of which hasn't been seen since the Great Depression.
Is it so surprising that less than 10 years after Graham-Leach-Bliley ('99) undid the last regulations put in place after the Great Depression (Glass-Steagal) that we have another GD-level event? We had a historically unprecedented 80-year run without one of those, then some bankers get greedy, captured both political parties, pay them off, and boom, another Great Depression crisis.
In telecom, it's enabling consolidation of the industry into a small cartel that controls the Internet's infrastructure and who are using their massive revenue to lobby against Net Neutrality so they can shape and toll net traffic at will, unleveling the Internet playing field that has laid so many golden eggs.
On a more subjective level, it's also made tons of cheap stuff we don't really need much cheaper, but at the expense of eviscerating the middle class, grossly increasing the wealth (and hence political power) gaps between rich and poor, and making developed economies more dependent and fragile rather than robust and self-sufficient.
Sometimes I think the deregulation/outsourcing mantra is the Emporer's New Clothes, and I wonder when the consensus will change to recognize that economic optimization may not be so good after all, that economic robustness is a better policy for any self-interested nation.
In fact, speaking as someone who helped build an ISP in the '90s, the adoption of the Internet --- as provided by indie IP-as-dialtone ISPs --- was owed entirely to the CLECs and their willingness to route numbers in hundreds of telephone prefixes down a PRI to a single server cage. The CLECs were almost literally the manifestation of telco deregulation; deregulation was practically a synonym for "let there be CLECs".
I call this out this simply as an illustration of the bogosity of the logic of your entire comment.
Do you really think the Baby Bells would have wanted to share their infrastructure with competitors? Judging by how they're trying to get back in bed with each other, my guess would be no.
Deregulation is the removal or simplification of government rules and regulations that constrain the operation of market forces.
The break-up of AT&T & the 1996 Telecommunications Act were nowhere near deregulations.
Also I certainly do not believe that AT&T would have broken itself up or the regional operators would have opened their lines up, had it not been for government regulatory actions.
There are other domains where if left unregulated the expected payoff is asymmetrically negative. Banking appears to be the primary example here. You can make your ~5% yearly return relatively safely, but making significantly more than that can only be done with exposure to a much higher risk of a major collapse.
If you start at the Great Depression and work backwards in time, there's a financial crisis every 20 or 30 years for over a century. It wasn't until we figured out how and gained the political will to regulate the industry that that was mitigated.
Utilities may be another example. I grew up in the Southeast where electric is heavily regulated and boring, but always stable and predictable. It was interesting to witness the California energy debacle with Enron a decade ago, and compare the two.
Stable, predictable, and boring is the ideal state for systems like electricity generation/distribution and the monetary system. Underlie much of the rest of the economy and infrastructure? Check. Expected payoff is negative? Check. Then regulate for stability and robustness. Such states don't tend to naturally emerge from deregulation, except in the form of monopoly or trust, and then you've got innovation-crushing rent-seeking and anti-competitive behavior to deal with.
Now I'm not certain which domain the telcom system falls under, it doesn't seem vulnerable to the kind of major collapse enabled by deregulation in electricy and banking. However, it does have a history of monopoly and rent-seeking behavior that I think behooves us not to discount or ignore.
California's problems do show, however, that people shouldn't uncritically think that any sort of deregulation is good. Its always important to to think carefully about what sorts of incentive are being created in any deregulation.
You can't consume more than you produce without importing more than you export.
Deregulation and opening of markets did not create the US trade deficit. Nobody did anything to focus the US economy on services, other than borrow massively. Which caused wages to go up, workers to move to the US and imports to soar.
All of the long term economic imbalances we're facing are interrelated.
Is this a case of being awful therefore promoted, or was he spectacularly good at stopping Italy from getting worse?
http://italianthro.blogspot.com/2010/09/southern-italys-econ...
I think the article already addresses that. It stresses that "Italy’s economic illness is not the acute sort, but a chronic disease that slowly gnaws away at vitality". Spain, Ireland and Portugal might be in worse shape but they might be coming to understand that they need a tough treatment; Italy doesn't. The PIGS are at shock; Italy is just dazed at stupor.
> Italians are, well, Italians
:^) OK, you won.
Care to elaborate on this? "Blacks are, well, blacks" would sound racist. I'm not sure this highly upvoted comment of yours is much nobler in spirit.
In America we have the sense that these things are mutable, and this is partially true, but it is unreasonable to expect people to change overnight, and it is especially unreasonable to expect that some external force (e.g. purely economic forces) will produce the massive changes that might be perceived as necessary for a society to adapt to modernity as the Economist writers perceive as necessary and laudable.
In any case, I think it is unacceptable to focus only on the negative aspects of a people. "Blacks are, well, blacks" would generally be racist since virtually no one would use that in a positive sense. Italians often self-perceive that their resistance to the way things are done in a capitalist world is based on some inner nobility -- and although I generally disagree, I think there is still a grain of truth there. Besides, Italians are among the most openly racist peoples in Europe -- people from Northern Italy are even comfortable calling Southern Italy part of Africa (not meant in a positive sense!).
Of course, that's only half of the story. Southern Italy, despite it's idyllic landscapes and hedonism, has some serious economic, demographic, and social problems and they don't deny it. I have never felt they wore it as a badge of honor to signify some inner nobility, as you posit. Most Italians I've talked to want to solve these problems and believe they're actively working to do it. They don't feel the fact that they enjoy a good quality of life impedes their ability to develop a strong economy - they think the best of both worlds is possible.
As for "They don't feel the fact that they enjoy a good quality of life impedes their ability to develop a strong economy," they could simply be wrong. Certain aspects of traditional cultures (e.g. long meal times and afternoon nap times) may simply be incompatible with increased productivity. You may want to have both, but this may be impossible.
"Nobility" may not be the best word to use, but certainly there is something laudable about valuing the family highly, etc. I would, however, posit that aspects of what this means in the present world indicate that you can't have all of the aspects of a traditional world (e.g long meal times, living with your grandparents) and expect economic improvement.
I'm perfectly comfortable with criticising a culture.
Repose is unwelcome to their race, and toils and perils afford them a better opportunity of distinguishing themselves; they are unable, without war and violence, to maintain a large train of followers. The companion requires from the liberality of his chief, the warlike steed, the bloody and conquering spear: and in place of pay, he expects to be supplied with a table, homely indeed, but plentiful. The funds for this munificence must be found in war and rapine; nor are they so easily persuaded to cultivate the earth, and await the produce of the seasons, as to challenge the foe, and expose themselves to wounds; nay, they even think it base and spiritless to earn by sweat what they might purchase with blood.
Yet the notion that change is impossible is not just defeatist but also wrong. In the mid-1990s successive Italian governments, desperate not to be left out of the euro, pushed through some impressive reforms. Even Mr Berlusconi has occasionally managed to pass some liberalising measures in between battling the courts: back in 2003 the Biagi labour-market law cut red tape at the bottom, boosting employment, and many economists have praised Italy’s pension reforms. He might have done much more had he used his vast power and popularity to do something other than protect his own interests. Entrepreneurial Italy will pay dearly for his pleasures.
The rule has never been absolute, but a strong preference. The HN Guidelines that appear as a bottom-of-the-page link on most HN pages
http://ycombinator.com/newsguidelines.html
say, "Off-Topic: Most stories about politics, or crime, or sports, unless they're evidence of some interesting new phenomenon."
The welcome message that briefly appears as a top-of-the-page link to newly registered users
http://ycombinator.com/newswelcome.html
(but appears not to be mandatory to read for anyone) says, "Essentially there are two rules here: don't post or upvote crap links, and don't be rude or dumb in comment threads."
By the way, the rest of the welcome message is a good reminder to everyone here about how to make Hacker News a better community.
I thought it was (barely) interesting to discuss why Italy, which is evidently full of smart industrialists, is not thriving better as a national economy. If a politics story doesn't have an angle like that related to the environment for forming new companies for hackers, I usually just ignore it, and I try to silently downvote purely partisan political comments in threads wherever I find them.
The allegation that some are minors is distasteful, but the fact that he sleeps with more women than you feel comfortable with is neither here nor there when talking about how he "ruined a country".
It's depressing to see The Economist's article open by talking about his sex life. It's utterly immaterial.
His grip on the media, his lack of reforms, his policies on this that and the other, his changing the law to avoid prosecution for fraud allegation - those things matter to the story of how he "ruined Italy"; how many people he sleeps with and how righteously outraged Americans are by it? Doesn't matter.
I'm loathe to use "litmus test" type analogies, but I believe this behavior is telling.
What good is karma if you can't use it?
Seriously, in the last decade we have seen more direct, deliberate corruption and out right political douchebaggery than I would have thought possible. And in all of these scandals, not a single politician has paid.
Just like I said when Inside Job came out, if there was any doubt that we are living in a oligarchy, let all doubts now be cast aside.
not that i want to debate the merits of congress.
Always two there are.
Congress approved, via explicit votes, the Iraq war at multiple points.
There has never been a requirement for legislation that says "we declare war".
Are you making the case that the Bush admin doesn't 1,000,000% own the Iraq war? Really?
(FWIW, they were pushing tax cuts simultaneously). Just cause Congress got bullied into approving these things doesn't mean they weren't Bush initiatives.
Huh? The claim was that congress didn't approve the Iraq war. It did, several times. The above has nothing to do with that fact.
> Are you making the case that the Bush admin doesn't 1,000,000% own the Iraq war? Really?
Do you really think that Congress bears no responsibility for the votes that it takes?
> Just cause Congress got bullied into approving these things doesn't mean they weren't Bush initiatives.
Poor little congresscritters, can't stand up to that mean old moron Bush.
Obama hasn't varied from Bush's Iraq timetable at all. Is he also "bullied"? (As candidate Obama pointed out, President Obama could start withdrawing troops from Iraq and Afghanistan with 10 minutes after taking office. PO didn't.)
And, to be fair, they did string up Duke Cunningham. They've got to make an example out of somebody every decade or so.
Lastly, we're not really an oligarchy: we're turning into a Euro-style corporate state, which have seen this kind of corruption and entrenched powers for decades now.