Mafia becomes "Italy's largest bank" in aftermath of financial crisis | Hacker News Reader

Mafia becomes "Italy's largest bank" in aftermath of financial crisis

reuters.com

150 pointscs70255 comments

This is one of the greatest hypocrisies the European Union is committing. The EU (Germany and France) are putting the Italian government under a lot of pressure to stabilize the economy but no one ever (including the new Italian PM) mentions the plague of criminal organizations running the show in Italy.

Even if Italy manages to get out of the current economical turmoil, there will always be half of the country (some say the whole country) literally in the hands of criminal organizations with huge power and virtually unlimited funds.

How can the new PM (Monti) dare to talk about "development" where the moment you open a shop or a business you will be forced to pay a "premium" to some thug. Banks in Italy have been historically very cautious about lending money to businesses and the result is that business-owners have to use the "other bank" to survive a bit longer. And again, nothing has been done to facilitate access to line of credits for businesses. The only thing that has increased is taxation (a business in Italy now pays over 50% in taxes).

If the cancer of Mafia is not eradicated once for all, Italy will never become a modern country.

Literally? They must have impossibly large hands.

Come on... Camorra, 'Ndrangheta and Mafia are not the same thing. Neither every one that borrows money at too high interest comes from Mafia. There is not such thing as a huge, bank, single, Mafia organization in Italy.

And in this article there are not even comparison of this crime (extortionate lending) in Italy with other countries.

In the article, they probably meant "organized crime" as a whole. To a foreigner, Camorra and 'Ndrangheta don't say much.

They are not a huge single organized crime organization as the article says. There is no such thing. I bet legal lobbies in US deal with much more power and money than the single most powerful crime org in Italy.

"And in this article there are not even comparison of this crime (extortionate lending) in Italy with other countries."

I'm not sure what you mean by this, but if you're insinuating that it happens across Europe, then that's not true. The "extortionate lending market' so to say (of the extra-legal kind) is very, very small (to the point of non-existent) in Western European countries, whereas (according to this article and some others I've read) it's a sizable portion of Italy's GDP. That's an unacceptable situation.

You are probably right. But until somebody shows me a table comparing OCSE countries, I keep thinking the writer of the article has watched too many movies of the Godfather.

> "And in this article there are not even comparison of this crime (extortionate lending) in Italy with other countries."

> I'm not sure what you mean by this, but if you're insinuating that it happens across Europe, then that's not true.

Italian-based organized crime does its business everywhere in Europe with success.

The only difference is that in Italy this dirty business is not hidden at all because criminals also run "consumer branches", while in the rest of EU they hide themselves behind commercial banks or companies.

Take for example waste management and disposal. Most of EU and international waste goes through the hand of organised crime [1] that offer lower prices and more efficient services to municipalities and states. This always happens through proxy companies with crystal-clear records.

Germany thought it was free of organised crime. Then the Duisburg killing happened [2] and they opened their eyes.

[1] http://books.google.co.uk/books?id=83BVyffqnJEC&pg=PA117... [2] http://de.wikipedia.org/wiki/Mafiamorde_von_Duisburg

You're right.

Some people don't understand the importance of Mafia in all the world - maybe 100 years ago it was limited to Italy, then it moved to USA, to East-Europe and so on, but mass-media still say it's limited to Italy. Ok, keep on living in the wonderland, I can't say any more..

They're "using" what they've earned in decades of selling drugs, prostitution and so on. Now they're honest employers recycling money. That's it.

I suggest you to read some books from Salvatore Lupo (Giovanni Falcone's "Cose di Cosa Nostra" too is a good introduction, ...), an Italian historian, whose activity is centered to study mafia and its origins.

Isn't their "higher efficiency" of waste disposal due to the fact they just dump it into the ocean rather than doing it properly?

http://en.wikipedia.org/wiki/Radioactive_waste_dumping_by_th...

The link also mentions the possibility that this is what pissed off Somalis and spurred the takeoff of piracy. (Not trying to justify it, please flame me for the right reason.)

> Isn't their "higher efficiency" of waste disposal due to the fact they just dump it into the ocean rather than doing it properly?

That is the "lower prices" part. The higher efficiency is due to the fact that the other legally-run companies are often hindered in their daily tasks by these organisations. In the last few years Italy has seen: fake strikes organised by bribed union leaders, waste treatment plants accidentally burned, key managers being forced to resign over "personal matters"…

You do not need to be that more efficient if you can make the others much less efficient.

That wikipedia page has an apostrophe in its URL:

https://en.wikipedia.org/wiki/Radioactive_waste_dumping_by_t...

Come on... Camorra, 'Ndrangheta and Mafia are not the same thing.

Does it really matter? Isn't it more like you can see them as different branches of The Mafia, merely distinguishable from one another by their operation area (inside Italy)? The fact that Italian economy (and government, or society as a whole? But this would be another discussion!) is highly infiltrated by The Mafia (either active, by protection money or via loan-sharking, i.e.) and that an economic crises is a gift from heaven for them (there's a lot of black money to be laundered, in one way or the other), there's no need to distinguish between the different groups, IMHO.

I don't say that these groups and implications are an Italian singularity, but in Italy the implications for the Economy are maybe the worst (at least in the Western world). Or maybe I'm just naive?

Where are you from? If you are from US, what you say is like taking all the criminal bands and small org across US and say: look what the US mob is doing...

I think, in this case and discussion, it's just about the scale of the influence and power. So yes, if you want to measure the influence and the power of the american mob to the US economy: sum it up and don't distinguish between different groups.

I agree on the scale, but then you really need to put a table comparing with other countries. What happens if I say Italians eat 100 M tonnes of ice scream per year? Is it a lot? A lot compared to what?

I don't agree on the influence and power and that's exactly the point. If you sum up all the US criminals, you get a raw index of criminality in the country, not how much power few criminals have over US people. If all US criminals where part of the same organization, the infamous US mob, that would be a huge problem then. But US mob does not exist, the same as Mafia does not rule all criminality in Italy.

It only matters because it makes you sound like you don't know what you're talking about. There is really no such thing as the "Mafia". It's a lot like calling every extremist Islamist group a branch of "Al Qaeda" – i.e., lumping a lot of categorically different groups into an imaginary hierarchy created by law enforcement and the media as a convenient scapegoat.

Thank you. Pretty much any time you see the term "Mafia", you know you're dealing with amateur pseudo-journalism.

I came here to point out that Sicilian organized crime is probably not the "bank" here. Sicilian crime syndicates are generally not as powerful as the Campania/Napoli groups these days.

The Sicilian tradition of protection rackets is actually based on an (arguably) noble history of maintaining the integrity of blood family against a constant stream of outside conquerors. I'm not defending organized crime in any way shape or form, but lumping the protection rackets together with drug traffickers and other gangs is just kind of wrong on some level.

Your Sicily example and the article remind me of other "syndicates" operating in the wake of disaster and conflict. I'd read somewhere that the Yakuza have been tolerated for so long in Japan because of the social services and "protection" / "law enforcement" they provided in the aftermath of World War II. In Beirut, Hezbollah provides social services and protection that the State can't (or won't) particularly to the marginalized Palestinian refugee population.

Likewise, I'm not defending the tactics, but there's an interesting thread here.

It's definitely a common theme around the world.

I think it's not a coincidence that these places are islands or geographic crossroads where outside invasions are frequent during their history.

Speaking of Japan, here's another interesting variation on the theme: http://en.wikipedia.org/wiki/Zaibatsu

Note that the names of the Zaibatsu families are some of today's biggest names in industry and finance.

FWIW, the Mafia in the US became a more institutional, more professional organization with the formation of "The Commission" in 1931 -- i.e., during the Great Depression:

http://en.wikipedia.org/wiki/The_Commission_%28mafia%29

The New York Times calls 1931 the "birth of the American Mafia:" http://www.nytimes.com/2011/01/23/opinion/23raab.html

I wonder if prolonged economic downturns are somehow correlated with, or maybe even lead to, the rise of more powerful, more professional crime organizations...?

Well, somebody has to compensate for the lack of professionalism in legitimate business.

The US Italian mafia has been effectively been neutered since Gotti. Most of the modern powerful people got busted by RICO. In the US today, the most powerful are the Italians, Russians and the Mexican 'mafias'. The most influential may be from Mexico because the wars have spilled over across the border and they are the largest supplier of marijuana.

The truth is, at least with the Italian mafia, that the greatest success of the Italian mafia occurred during WWII. The CIA depended on them to provide them with information regarding Italy because Mussolini worked against mafia interests and Allies. It wasn't until the Kennedys took office that they heavily went after the mafia.

During wars it is known, at least in the US at that time and probably today, that it creates a healthy economy.

The reason why you see the economic downturns of today is because most Congressmen pass laws with loopholes. There was a time when a CEO didn't live in a lavish mansion over his employees. They managed their selfishness better back then. Today, most live in secluded areas so they don't have to deal with that harsh reality.

From the article, the only thing I noted from it was that the mafia was late to the game. These predatory lending practices is what led to the financial crisis and that companies, corporations and governments were more efficient at being gangsters.

This is such an important point: there is no difference between "too big to fail" and "an offer you can't refuse". It's protection racketeering in a five thousand dollar suit.

"Nice economy you have here. It would be a shame if anything happened to it."

Mafia uses violence. That's different.

So do governments ...

Sure. Governments like North Korea or China's is similar to the mafia.

But 1st world developed democracies are not.

This is the sort of sensationalistic stuff that happens when HN veers "off-topic".

If you want to look at the Mafia as one big organization, then in the same light, Italy's largest, and legitimate, lender is of course "The Family".

Another example of the remarkable prescience of Neal Stephenson's Snow Crash.

If you are unfamiliar with the Camorra I recommend this film: http://www.imdb.com/title/tt0929425/

Or, read Roberto Saviano's book.

I guess it's time to invest in Mafia?

Credit crunch is going to make an already terrible situation worse. The biggest problem is that every kind of "external" help (like, for example, EU lending money to italian banks at a low interest rate) is only going to help Mafia because they're deelpy entangled inside the italian government and banking system. The only viable strategy would be for EU to lend money directly to small businesses... but that's not going to happen.

Despite the fact that I will end up auto-dead for saying so, there is no difference between a government and an "organized crime" ring.

Plenty, a government is granted a monopoly on violence in order to block other players from getting into (or at least flexing their muscles in) the violence game.

Assuming a government is democratic , not corrupt (or a close approximation of) and government by law a government has limits to where it can apply violence and must follow some due process that is deemed to be fair by a majority of democratically elected members. For that process to be changed said members must vote on changes and these must be published. This means that in theory rules should be made that are reasonable to the majority of the population, they might not be able to vote on all laws but if a representative votes for too many laws that are unfavorable he will be unelected.

The mafia works on the basis of fear since they will play by their own rule book that is likely decided upon in secret and not applied consistently. All rules will be made in favour of the rule makers themselves.

Imagine for a moment that we let private corporations hire goons with sticks and imagine that when you miss a payment instead of a polite but firm letter you came face to face with one of these goons at your doorstep and they have paid off the police to take no notice of what they do.

It depends on the government. In the end, the fundamental proposition is that you pay into an institution that offers physical protection.

I find it fascinating that:

1) That model of government traces its roots straight to Ancient Rome.

2) Organized crime has a long history of stepping in to fill the vacuum of legitimate government - sometimes to profoundly negative effect, sometimes in a benevolent way.

Ohhh really?

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