venerdì 27 dicembre 2013

Lessons from the crisis

(the video and the text, with the most relevant slides, of my speech at the conference "Should we die for the euro?", organized by the EFD group at the European Parliament on December 3, 2013).

(qui la versione italiana)

I wish to thank Magdi Cristiano Allam for inviting me to this important meeting.

I will speak in English, and this is somewhat ironic. Why? Because English is the language of a country where the economic science was born, at least the economic science as we know it, and that, perhaps for that reason, did not enter the euro, and is seriously considering to leave the European Union. It is perhaps paradoxical to remark that in order to be understood by the largest share of European citizens, I have to use the language of this country. This is an important lesson for those who believe in the United States of Europe as a real possibility. And there are two lessons in that. The first is that you are a majority of Italian people, so the most democratic solution would be for me to speak in Italian. But I am giving you a lesson of European politics. I belong to an elite, and I am proud of it, and I decide for you: I will speak in English, and that is the first lesson. The second lesson is that I am not against Europe. I can travel across Europe, and speak in their languages with most of the people I meet. It was funny, the first time I went to Portugal, my son said to my wife: “Mom, that’s the first country where dad cannot speak the language of the people we meet!”. That is true, because unfortunately I cannot speak Portuguese and I cannot understand it. But with English you can travel all around the world.

So, now, that was the premise. Let us go ahead with the content of my presentation. I will try to put things in perspective, and the first thing I will show you is that financial imbalances, debt crises, very often come out of income distribution imbalances. This is something that should not be underrated, because it gives us a positive message about what should we do once we leave the euro. The second point is that the alliance between a single currency and economic reforms is very uneasy. We were told that the single currency would have forced us to make the reforms that we badly needed, but you should know now that the economic literature gives us many arguments to put forward the opposite argument, namely that fixed exchange rate, or a single currency, are very useful to delay economic reforms.
Then I will move on and give two lessons that we have received from the crisis. The first lesson is that we should start from a reform of the labor market at the European level, and of course that we should remove the euro. These are two necessary conditions, for the reasons that I will briefly show you and that were partly explained by Antonio and Claudio.

Just another premise. The Eurozone crisis finds its root in private finance. The financial imbalances in the private sector were fostered by competitiveness problems and unregulated financial markets. It is a completely fake argument to present the Eurozone crisis as a public debt crisis, and it is not Claudio Borghi Aquilini who made this statement, but Vitor Constancio. Who is Vitor Constancio? He is the Vice-president of the ECB. So, let us hear the word of the Lord, with a capital “L”. Point 1: “imbalances originated mostly from rising private sector expenditure...”; point 2: “financed by the banking sector of the lending and borrowing countries”; point 3: “European financial markets did not perform according to the theory” (let me add a cautionary remark: according to his theory, because many economists had foreseen what is happening now); point 4 “exposure to stressed countries more than quintupled” (and this is what Claudio showed; by the way, he also showed that Italy was the country least involved in this massive explosion of foreign debt); finally: “this led to loss of competitiveness”.

My summary is that peripheral economies were doped by external debt, i.e., they were doped by credit from “core” countries. Vitor Constancio said that in Athens, on May 23rd 2013.

You do not need to applaud me: it is very trivial. Anything I will say today is very trivial. Any economist knows that, believe me. Not Mario Draghi: believe me.

Let us go ahead.

Primary public expenditure in the Eurozone. Italy is very often blamed by people coming from Northern countries, from mosquitoes exporters, for being the country with the most profligate public sector. This is simply not true.

Have a look at those data: Italy has a public expenditure-to-GDP ratio which is very close and under the Eurozone average, if you consider primary public expenditure. If you consider total expenditure the situation worsens but not that much. And now have a look at another detail: France, Finland, Austria, Belgium, Germany, the Netherlands, the so-called virtuous countries, did expend much more, as a ratio of their GDPs, than Italy, and more than the supposed Pigs (Portugal, Ireland, Greece, Spain). I suppose that you did not know those data. Many people do not know those data. But they are important, because they are showing you that a whole political class, a whole media system, is lying to you. And we are in democracy. Let us go ahead.

A mantra. We live in a mantra economy. The mantra is that we must become more competitive, therefore we must compress labor costs (why? Because raw material costs are in most cases exogenous, so we must insist on labor costs), and we must become more productive.

So, let us have a look at the historical experience of an advanced country, which is very often quoted as an example for us. Why? Because we think that our problems can be solved by becoming the United States of Europe. Let us have a look at what happened in the United States of America.

(Source: Wolff, R., 2010. "In capitalist crisis, rediscovering Marx", Socialism and Democracy, 24:3, 104-146; see also this post for different time series of the same variables). 

That is an interesting graph in my opinion. In blue you have labor productivity, and in red you have real wages. They are indexes going from 1890 to 2007, namely to the beginning of the crisis, and what you see is that there were period in which productivity grew faster than real wages, especially at the end of the sample. If you believe in the mantra, that should have been periods of prosperity. Why? Because a country were productivity grows, while real wages stagnate, becomes more competitive. Now, have a look at this table. I took the average growth rates. I know we are in a political institutions, where numbers are perhaps not very welcome, but it pays to have a little look at those data.

I stressed in red the two periods in which labor productivity grew faster than real wages. The first period was from 1919 to 1932, namely in the eve of Wall Street crash. The second period was from 1971 to 2011, namely in the eve of Lehmann crash. And we had real wages growing faster than productivity in the New Deal period, and we had real wages growing at the same rate than productivity after World War II, in the period in which the United States liquidated the massive amount of war debts that were accumulated in order to free Europe from you know what.

So, the question is: why do things go wrong when we behave well? Why we do have a crisis at the end of periods in which we are so competitive? And there is a simple answer: because capitalism works if there is enough aggregate demand. You do not produce in order to produce, you produce in order to sell. The problem is that if you repress wages, demand has to be financed through indebtedness. And there are many kind of indebtedness that you can use for that purpose. If you are Keynesian, you may perhaps want to use public debt, and this happened in the United States. Well, it may seem ironic, but it actually happened under the Republican rule of Ronald Reagan, and the same happened in Italy. If you are so to speak a “liberist”, a liberal, well, a right-wing economist, you may appreciate private debt, and say “Yes, free up capital movement, let finance work”. If you are German, you will use someone else’s debt, and adopt a mercantilist policy. Lend money to the other people, and have the other people buy your goods (and repress wages at home). This is what Germany did, and it is very clever, I do not contest that, but it leads to an unstable system, and we are now paying the price for that instability.

The fall of the wage share in the period of the third globalization was a general phenomenon, all around the world. You have it in the USA, in Germany, France, Italy. The most important fall from 1991 to 2007 was in Germany, -8 percentage points, and in Italy, -5 percentage points, but everywhere we had that. The problem is that wage repression is sometimes a beggar-thy-neighbour policy, because you make wage dumping in order to become more competitive and to sell more abroad, but it is always a beggar-thyself policy, because wage repression destroys the domestic market. And destroying the domestic market goes against the logic of  the European Union. Why? Because as Alberto Alesina, who teaches at Harvard, not at the Gabriele D’Annunzio University, put it very clearly in 1997, when he was against the euro, the main benefit of an economic union is to enjoy a large domestic market, which can act as a buffer against external shocks (here, in his comment to Obstfeld's paper). I mean, there is recession somewhere in the world, but you will continue to grow because you have enough demand at home, if you are a big market. Now, this did not happen in the Eurozone, why? Because it was managed as a zero-sum game, where what Germany won was lost by the Southern countries, as Claudio has so clearly explained.

And now we are going from a zero-sum game to a negative-sum game. I mean, the euro is a walking dead, and you see that from that graph, that was published in the Washington Post:

You see that after the Lehman shock the United States, the euro area and Japan fell together. Then they resumed growth. Then there was Fukushima in Japan, Mario Monti in Italy, and the troika in the Eurozone. The tsunami lasted for one day, and afterwards Japan resumed growth. The troika is still in power in Europe, and what is really frightening is that this walking dead is walking in the wrong direction: it should go up, and it is going down. Mind that graph!

What is really sad from an academic economist point of view is that this outcome was foreseen by economic theory, and we know very well that politicians decided to take a decision that was against economic logic, because by hindering or altering the functioning of markets, the single currency has perverse effects on both the public and the private sector of both the weak and the strong member countries. You should never forget that, because all these effects are and were well known, they are less evident for strong countries, but they are still there, and it is for that reason, for its perverse effects on strong countries, that I believe that the euro will quite soon come to an end.

What are the perverse effects on weak countries? It is quite the contrary of what was told us, namely that a strong currency would have a discipline effect on the public sector. The economic literature tells us that things go exactly the other way round. Why? Because if you adopt a fixed exchange rate, and your government makes too expansionary a fiscal policy, you do not have any effect on the Forex market, because the exchange rate is fixed. If instead the exchange rate is flexible, once the country engages itself an a too expansionary monetary or fiscal policy, it will get indebted with the rest of the world, and the exchange rate will devaluate. In that case the depreciation of the exchange rate gives to the markets an immediate signal that something is going wrong. Why on Earth did people continue to lend money to Greece at a huge pace, some 10% of Greece GDP for years and years? Because Greece was credible. Why? Because it had the euro, it had a fixed exchange rate, and there was no signal that could come from the currency market that things were going wrong. This is the problem, and this is what Tornell and Velasco explained in the Journal of Monetary Economics (it is not the Pravda or the journal of any little Italian province: is a leading journal in the field of monetary economics, published by Elsevier). There is another problem, that was stressed by Martin Feldstein in the Journal of Policy Modeling, and it is that if you adopt a single currency, you will have more or less a single interest rate, and that interest rate will be too low for weak countries. We are now blamed by Germany for having enjoyed too easy credit conditions, and that is true, but that is the very argument against the logic of the euro, because different countries must have different interest rates, in order to manage their economies well. And also the private sector in weak countries has an incentive to take too much debt, and this is basically what Vitor Constancio told (at the beginning of my presentation), and this is an argument that was put forward very clearly by Roberto Frenkel and Martin Rapetti in the Cambridge Journal of Economics four years ago.

But there are also perverse effects on strong countries. This is important, because if you remove the exchange rate risk and the exchange rate signals, the private financial institutions of strong countries will lend too much abroad. German banks lent too much abroad. I mean: you cannot take too much debt, if someone is not lending too much. Have you ever tried to get some money from your bank? Ok, you know that!

But there is another bad incentive that comes from the single currency, because the single currency is too weak for Northern countries, has Claudio has explained very clearly, and this means that it allows countries like Germany to make huge profits out of an undervalued currency, and for that reason those countries do not have incentives to invest anymore, and the private non-financial sector of strong countries will invest too little at home. It is Hans-Werner Sinn, a German economist, who made this argument, it is not an “envious” American economist or a “lazy” Italian economist. It is a strong, very professional and very clever, I really admire him (well, not always), German economist.

Have a look at the data: Germany is the country with the lowest investment-to-Gdp ratio in Europe, in the period from 1999 to 2007. Forget the fairy tale of Germany being competitive because it invests a lot, please do forget that.

What did Germany do?

Germany did a very standard “beggar-thy-neighbour” income policy. You know, we are blamed because we did not do structural reforms. What are structural reforms? They are paying the workers a little less. Germany did that starting in 2002. Here you have the graphs of the wage shares (in Italian: quote salari), Germany is in black, and you see what its wage share did from 2002 to 2007after the so-called structural reforms put forward by Hartz, who seems to have had habits very similar to those of Berlusconi, but this is another question, I will not enter into gossip. Have a look: it is impressive! By lowering wages they became competitive. Why? Because the exchange rate was fixed. We will come on that later.

But “beggar-thy-neighbour” income policies have hidden social costs. Look at that.


This is the graph of income inequality in Germany. Have a look at how fast it rises after the adoption of the so-called structural reforms. There is a growing inequality in Germany, it is the country where inequality grew much in the euro period, there is a growing poverty, there is a growing divide between West and East, and between workers with typical and atypical contracts.

There are two necessary conditions to overcome the crisis.

The first one is to harmonize the member countries labor markets by bringing real wages again in line with labor productivity, everywhere in the Eurozone, because if a country plays the dirty game of Germany by compressing real wage dynamics under productivity dynamics, things will suddenly come to an end. We will have to re-regulate the European financial markets, and we have to dismantle the euro now, for both short-run reasons, and long-run reasons. Let us take these points in some depth.

 (Source: Reinhart, C., Sbrancia, B., 2011, "The liquidation of government debt", BIS Working Papers, N. 363).

Have a look at the red line here: it is one century of sovereign debt in advanced countries. We have two peaks. Look at this period (red box): this is the period where advanced countries liquidated the huge debt that had been accumulated because of World War II. It is a period that lasts from 1946 to 1971. Now, this is the current period (green box): you see that we have a sudden rise of public debt. Why? Because the need to rescue private finance imposed to the governments a huge effort, that translated into a massive and sudden accumulation of public debt. We are now, as far as public debt is concerned, in a situation which is very similar to that we had experienced at the end of World War II. What happened the first time we reached such a high peak in sovereign debt? What did the government do? Two things. The first one is what we have seen before. This is the period in which real wages grew in line with productivity, so we had a fair distribution of income, and the second thing is that they regulated financial markets. Let us take this point. The liquidation of the huge post-WWII debt was made possible by two things: the first one is what economists call financial repression, I would rather call it financial regulation. Carmen Reinhart and Belen Sbrancia made this point in their 2011 paper. The second point is that in that period we had a fair distribution of revenues: we had capitalism working as capitalism pretends or claims to work, namely, by paying the factors of production according to their productivity. This made possible growth, and this made possible the liquidation of debt, because any problem of debt is always a problem of the growth of income.

What does financial repression mean? We should re-introduce, for instance, some kind of Glass-Steagall regulation, by separating commercial banks from investment banks. The German model of universal bank did not work. We should rethink central banking: central bank independence has been finger pointed by some economists, like Josef Stiglitz, or Axel Leijonhufvud, who is less known to the general public, but it is a very important Keynesian economist, as a threat to democracy.

What does it mean a fair distribution of income? Well, there are many proposals for that, I will take one from a German economist, Eckhard Hein, just to show you that German people are not my enemies, they are my friends, because we are all living in the same world, and for a very short life, and there is no point to make this short life a bad life, when we have technical means to live much better. Fair distribution means that nominal wages should rise at the rate of growth of productivity plus an inflation target, if we decide to keep the same inflation target.

This is what fair distribution of revenues mean.

The euro is a walking dead. If you noticed the declarations by Jens Weidmann, the governor of the Bundesbank, when he told that the next stress test on the banking sector will be performed by allowing for different risk coefficients for sovereign bonds, this means that the “whatever it takes” statement by Mario Draghi was a bluff, because if Mario Draghi was right, government bonds would be riskless. That means that in Germany some people are getting sick of that situation, and want to dismantle the euro, and the declarations by Hans-Werner Sinn, that Berlusconi was sacked because he was preparing a euro exit for Italy, are also very telling in this respect. Sinn has always said that Southern countries should go out of the euro, and he is a German economist. If he makes such a statement it is a very important political signal.

There are short-run reasons for dismantling the euro, because exchange rates allow for a symmetric rebalancing of the huge imbalances that have been accumulated during the euro period. But there are also long-run reasons. In order to integrate their economies, the European countries cannot give up two features of the flexible exchange rate: the signaling feature, namely the fact that the flexible exchange rate gives a quick and clear signal to the markets if something is going wrong in a country; and the enforcement feature.

What do we mean by “enforcement”: well, James Meade told that very clearly in 1957, before winning the Nobel prize in 1977. He is an important economist, that was forgotten, but in my book I end my political proposal by using a paper which was written in the same year in which Rome Treaties were signed. What does Meade say? He says that if some European national government is going to use monetary or budgetary policy for purposes of domestic stabilization, if for example, look at that sentence: “in their present situation of balance-of-payments surplus the German authorities are nevertheless going to use their monetary policy to prevent a domestic inflation, and if it is desired to avoid the use of quantitative import restrictions on trade... a greater use of the weapon of exchange rate variation will have to be made”. Exchange rate variation is a defensive weapon against the non-cooperative behavior of the other member States of an economic union, and it is the most effective, because in front of such a huge wage dumping policy, as the one practiced by Germany with the Hartz reforms, its nominal exchange rate would have appreciated. Well, you are the good guys, you did the reforms, that’s good, your goods are more affordable, fine, we will buy them, wonderful, you are a surplus country, bravo, clap the hands, but if in order to buy German goods we had to buy German currency, the German currency would appreciate, and that would re-establish an equilibrium. And it is a market! We are living in a Soviet system, where we have planned the most important price for an economy, the price of its currency.

What should you do as European MPs? Since by defending the euro at any cost this Commission is destroying any prospect of survival of the European Union, you should exercise your power of censure and force the European Commission to resign, because it is destroying Europe, and this is not what the European Commission is supposed to do. You may lack the numbers to do so now, but after the next elections, things could change, as I had foreseen two years ago, and if you do not signal your dissent for this situation, you will take a political risk and you will probably have to pay a political cost.

Mind the gap, and good luck!

27 commenti:

  1. We are LIVING in a soviet system... Grazie di tutto e tanti auguri alla sua famiglia, magari corregga e cestini pure il mio commento-saluto

    1. Giuro che è un lapsus freudiano! Hai fatto bene a segnalarlo, grazie.

  2. Un po' meglio, ma ho ancora bisogno della versione per diversamente rivoluzionari. meglio decisamente il francese, lingua della eclaration universelle des droits de l' homme. O magari lo spagnolo, lingua nella quale, il "vecchio conio" potrebbe assumere significati goliardici. Ci resta dover parlare, nella lingua di chi all'unione monetaria non vuole aderira. sarà.... Grazie comunque a Magdi Allam.

  3. si riesce a trovare in italiano? purtroppo non conosco la lingua del nemico troppo giuro che presto mi attrezzerò meglio...

    1. Dieci minuti di pazienza ve li posso chiedere? Sto anche traducendo il Vangelo dal greco col Palla. Se permettete, do la precedenza a Gesù Cristo. Poi traduco me stesso.

    2. Il prof. ci vuole far imparare le lingue, ma è talmente chiaro nelle sue esposizioni che lo capisce persino il traduttore di google. Con un abbondante lavoro di copia e incolla sono riuscito a scavalcare i miei limiti linguistici.
      Chiedo perdono a me stesso per la scorciatoia.
      Prof.: vada avanti col greco e ci trascuri un pò. Non troppo però. Grazie.

    3. nun me cazzià a professò...dartronde se so diventato bulimico de sta robba e corpa/merito tuo :-)

  4. L’Italia ha perso la guerra?

    Quelle che abbiamo attorno sono le macerie di una guerra. Lo afferma senza giri di parole il centro studi di Confindustria descrivendo questa crisi, ovvero la più drammatica recessione della nostra storia, dopo il secondo conflitto mondiale. A partire dal propagarsi nel mondo degli effetti reali della crisi iniziata con i “sub-prime”, lo sfacelo dell’economia è paragonabile a una guerra per i danni e le macerie che ha lasciato dietro di sé. In pochi anni sono svaniti quasi due milioni di posti di lavoro. E la drammatica morsa creditizia, operata dal sistema bancario, continuerà ancora a lungo, almeno fino al 2015 nello scenario più negativo. «Otto anni di vacche magre, anzi, scheletriche», annota Eugenio Orso.

    La catastrofica recessione neocapitalistica sta dando segni di luce in fondo al tunnel? Attenti: se la “guerra” è finita, «il dopoguerra potrà essere altrettanto negativo e socialmente drammatico». Parlano le cifre: oltre 7 milioni di senza lavoro e quasi 5 milioni di poveri.

    Il tutto è condito da un crollo dei consumi delle famiglie che possiamo definire epocale: è la fine della tanto deprecata società dei consumi? Siamo appesi a un filo: le ostilità potrebbero riprendere improvvisamente, «a causa di un ennesimo shock orchestrato dalla grande finanza internazionalizzata». In quel caso, «la situazione potrà precipitare ulteriormente».

    Del resto, la debolezza strutturale del sistema-Italia, dal punto di vista sociale e occupazionale, si manterrà anche il prossimo anno. E il Pil, «se crescerà, crescerà di un’inezia, meno dell’uno per cento», per la precisione lo 0,7% secondo la Confindustria, che rivede a ribasso precedenti proiezioni. «La peggiore ipotesi, nel dopoguerra e a partire dall’anno nuovo, è che il rispetto degli “impegni” presi in sede europea implichi la rinuncia forzata a un punto di Pil, con conseguenze negative sul temutissimo spread e ricadute ancor più negative sulla società».

    Se anche la “guerra” fosse veramente finita, aggiunge Orso, se ne deduce che – in ogni caso – l’Italia è un paese sconfitto: «Abbiamo perso la guerra e soltanto ora ce ne siamo accorti». Potenza manifatturiera in Europa e nel mondo, l’Italia «è forse il grande sconfitto in Europa», anche se «non certo l’unico, perché l’area europeo-mediterranea esce complessivamente sconvolta dal conflitto, che pare continui in Grecia».

    Lo spettacolo è desolante: «Le macerie visibili, le distruzioni del tessuto produttivo, i segni dei continui “bombardamenti” neocapitalistici ed europoidi ci sono tutti», continua Orso. «Lungo le direttrici del Veneto e nei distretti industriali del nord», si moltiplicano «gli edifici industriali e i capannoni chiusi intorno ai quali già cresce un po’ di vegetazione, abbandonati all’incuria perché nessuno può riattivarli». Analoga disperazione nelle strade e nelle case: «Il proliferare continuo del numero dei poveri veri, dei mendicanti, di coloro che dormono nelle stazioni, sempre più sporche e prive di manutenzione, ugualmente lo dimostra. Case senza riscaldamento (e senza luce) sempre più numerose, perché la cosiddetta “economia della bolletta” ammazza le famiglie monoreddito». E attorno, «edifici pubblici e privati senza manutenzione, che fra qualche anno cadranno in pezzi». (continua)


    Caro Professore su Repubblica un articolo di Federico Fubini (Noto Eurista), afferma che le seguenti monete hanno svalutato sull'Euro di:

    - Il Dollaro americano del 4,2%,
    - Il Dollaro canadese del 11%,
    - Lo Yuan cinese del 2%,
    - Lo Yen giapponese del 22%,
    - Il Real brasiliano del 19,7%,
    - Il Dollaro australiano del 20%,
    - Il Rublo russo 13%,
    - La Lira turca del 24%.
    - Il Franco svizzero del 1,5%,
    - La Corona norvegese del 15%,
    - La Rupia indiana del 14,5%.

    Poi “IL CARO FEDERICO FUBINI” aggiunge che nella guerra valutaria, “IL CARO EURO SI’ MOSTRA PERDENTE” ??? (Ma come se tutte le politiche economiche degli stati europei sono orientante a mantenere alto il valore del Euro, come si fa poi a pretendere che l’Euro si svaluti verso le altre monete del mondo ? Decidetevi o l’uovo o la gallina).

    Premesso che nel articolo non vi è nessun riferimento se queste cifre sono state ricavate a partire dall'inizio della crisi nel 2007/2008, confrontandole con il valore odierno dell'Euro o altro poiché il valore delle monete cambia continuamente, che “IL CARO FEDERICO FUBINI” si è dimenticato casualmente di inserivi la Sterlina Inglese e Złoty Polacco.

    Però se questi numeri fossero confermati da studi scientifici seri, il teorema “SVALUTAZIONE uguale ad INFLAZIONE GALOPPANTE, SAREBBE DEFINITIVAMENTE SMENTITO DAI FATTI”, giacché ad oggi per quanto né sò non si hanno notizie di fenomeni inflativi disastrosi dove si usano queste monete.

    “E LE CARRIOLE DI SOLDI PER ANDARE A COMPRARE IL PANE, DOVE SONO FINITE ? ” Chi le avesse trovate è pregato di restituircele, né sentiamo vivamente la mancanza.

  6. Bruxelles produce odio - I forconi e la deflagrazione dell’Europa

    Ciò che sta accadendo in Italia va letto nel contesto della deflagrazione dell’Unione europea, provocata dall’aggressione finanzista guidata dalla Banca centrale europea e dal governo tedesco. Da Maastricht in poi, il ceto finanzista globale ha deciso di cancellare in Europa le tracce della forza operaia del passato, la democrazia, la garanzia salariale, la spesa sociale.

    In nome del fanatismo liberista ha finito per sradicare le radici del consenso su sui si fondava l’Unione europea. L’effetto, però, non è solo il dimezzamento del monte salari dei lavoratori europei, la distruzione della scuola e della sanità pubblica, l’abolizione del limite dell’orario di lavoro, la precarizzazione generalizzata. E’ anche la guerra.

    Era prevedibile, era previsto, ora comincia ad accadere. La disgregazione finale dell’Unione europea possiamo leggerla sulla carta geografica. Cominciamo da est. L’insurrezione ucraina è prova di come sia mutata la natura d’Europa. Nata come progetto di pace tra tedeschi e francesi, e quindi di pace in tutto il continente, l’Unione è oggi divenuta l’esatto contrario.

    Gli europeisti ucraini usano l’europeismo come arma puntata contro l’imperialismo russo, e risvegliano fantasmi del nazismo. L’ingresso in Europa è visto come una promessa di guerra, e la precipitazione del conflitto in Ucraina non potrà che avere conseguenze spaventose per l’Europa intera. Bruxelles reagirà aprendo un confronto con la Russia di Putin, oppure lascerà che la Russia di Putin soffochi una rivolta che è nata nel nome dell’Europa?

    Spostiamoci a ovest. Il Parlamento catalano ha indetto il referendum indipendentista per l’autunno del 2014. I franchisti del governo madrileno hanno risposto che il referendum non si farà mai. Nel frattempo, in Francia i sondaggi prevedono che il Front National diverrà partito di maggioranza alle prossime elezioni. A quel punto il patto franco-tedesco su cui si fonda l’Unione sarà cancellato nella coscienza della maggioranza dei francesi, e la balcanizzazione del continente precipiterà. Questa dinamica mi pare il contesto in cui leggere le convulsioni agoniche della penisola italiana.

    Il governo Letta Alfano Napolitano, filiale del partito distruttori d’Europa, è in camera di rianimazione. Può durare o crollare poco importa: non è in grado di mantenere nessuna promessa, neppure quelle fatte ai suoi padroni di Francoforte. Il movimento dei forconi è tracimare del nervosismo sociale. Nel 2011 il movimento anticapitalista tentò di fermare l’aggressione finanzista, ma non ebbe la forza per mettere in moto una sollevazione solidale. La precarizzazione ha sgretolato la solidarietà tra lavoratori, e il movimento si risolse in una protesta che il ceto politico-finanziario, per criminale interesse e per imbecillità conformista, rifiutò perfino di ascoltare.

    Ma la sollevazione non si ferma, perché ha i caratteri tellurici di una disgregazione della base stessa del consenso sociale. E’ una sollevazione priva di interna coerenza, priva di strategia progressiva. Ci sono dentro elementi di nazionalismo, di razzismo, di egoismo piccolo-proprietario, ma anche elementi di ribellione operaia, di democrazia diretta e rabbia libertaria. Non è importante la sua confusa coscienza, le contrastanti ideologie e i contrastanti interessi che la mobilitano. Conta il fatto che il suo collante obbiettivo è l’odio contro l’Europa. Questo odio non può che essere portatore di disgrazie.
    Franco Bifo Berardi

    1. Questi criminali (perché questo sono) ci consegneranno (e consegneranno la nostra Repubblica) ad un' alba dorata italiana. Tutti a scherzare sui vessilli di questi strani buzzurri greci, a gennaio 2015 saremo nella stessa situazione. Il lupo è già in casa. L'italiano medio spaventato ed incazzato farà quello che ha sempre fatto in questi periodi tristi. Un mio conoscente che lavora nella polizia stradale l'altro giorno a pranzo parlava apertamente di quando ci vorrebbe un "governo tecnico" e quando bene farebbe al paese un' "amministrazione speciale" '"solo 6 mesi e si fa pulizia!" "un uomo serio, deciso, possibilmente un generale". E poi fanno i sondaggi nelle forze armate per capire quanto "siano fedeli" alla repubblica... belli stronzi ora avete un po' il nervoso! spaventati eh? a questi sfuggirà di mano il mostro nero che loro stessi hanno contribuito a creare.

  7. Splendido intervento e ne sono felice: le cose si possono conoscere, ma non è detto che si riescano ad esprimere con tale lucidità e capacità di argomentazione. Purtroppo, pur riconoscendo la sua capacità previsiva, temo che la Germania non uscirà dall'euro e nulla farà per promuovere l'uscita di qualcun altro...le élite economiche di mezza Europa sono sostanzialmente d'accordo nello schiavizzare i propri popoli ( alla faccia dei mercati interni) in vista delle possibili esportazioni verso i paesi "in via di sviluppo" e questo senso, ci credono davvero alla Ciiinaaa e credono che inevitabilmente diverrà un gigantesco mercato di sbocco per merci occidentali per l'aumento del tenore di vita dei suoi abitanti, costretto dalle circostanze (ovviamente non solo la Cina, ma anche l'est europeo,, Putin permettendo). Magari alla fine, ma molto alla fine, tutto sarà un colossale disastro, ma per il momento la vedo così, al di la di considerazioni razionali...del resto, non è che sia proprio la razionalità che guida i comportamenti, o no?


  9. @ Andrea Susto
    C'è il video con tradizione simultanea su youtube. Puoi trovarlo anche nel gruppo " volenterosi scordinati" su fb, se ci stai su fb, puoi sempre chiedere di essere ammesso;)

    tutto il tempo che vuole naturalmente
    PS: il piddino confonde anche i frattali con le frattaglie. Io preferisco le seconde :)

  10. Splendido intervento di una chiarezza cristallina.
    Ora anche il prossimo Parlamento europeo non ha più scuse: o blocca la Commissione e ne chiede le dimissioni degli attuali membri o si renderà responsabile di quello che accadrà nei vari Paesi per l'acuirsi delle tensioni sociali, figlie della disuguaglianza economica e della distruzione di quello che è stato sempre la camera di compensazione delle spinte sociali: il ceto medio.
    I pezzi grazie a voi sono stati piazzati sulla scacchiera ed è stato anche illustrato come si muovono per chi non conosceva le regole, ora la mossa spetta a loro.

    1. Questo volevamo e dovevamo fare. Chi ci chiedeva il gesto eclatante, invece, non ha fatto nulla, tranne farsi prendere in giro dai rispettivi referenti politici. Bucce di uomini che la democrazia ha sputato.

  11. This article is completely wrong.

    Here, just read the first chapter of this paper (1.1 The Achilles Heel of Real Output and Wage Measures on page 29): [URL=‎]Do Real-Output and Real-Wage Measures Capture Reality?[/URL]

    When you read it, you will surely understand why the basic thesis that Alberto Bagnai offers is completely ridiculous. Comparing real output and real wages is virtually impossible as the accuracy of such comparison revolves around using the right indexing method for incomparable products and services.

    The gap is the difference made by the increasing quality and diversity of products and services and the crisis is the result of low productivity of public sector where there aren't enough mechanisms of positive selection which is particularly a problem where people are generally less hardworking and proactive. Such people usually prefer government as their employer because they can easily avoid pressures on their productivity. Also, when the high expenses of their overpaid work begins to overly burden the economy, then they start cherrypicking economic evidence in a futile attempt to prove budget cuts as evil and wrong.

    1. Hello! It is still you? I preferred the first version of your comment:

      "That article is completely wrong.

      Here, just read the first chapter of this paper (1.1 The Achilles Heel of Real Output and Wage Measures on page 29): [URL=]Do Real-Output and Real-Wage Measures Capture Reality?[/URL]

      When you read it, you will surely understand why the basic thesis that Alberto Bagnai offers is completely ridiculous. Comparing real output and real wages is virtually impossible as the accuracy of such comparison revolves around using the right indexing method for incomparable products and services.

      The gap is the difference made by the increasing quality and diversity of products and services and the crisis is the result of low productivity of public sector where there aren't enough mechanisms of positive selection which is particularly a problem where people are lazy and passive."

      Being lazy and passive, I had not enough time to publish this bullshit yesterday, sorry, my friend.

      It is plainly obvious that you are only a racist, with limited knowledge of economics. These are venial sins. The true problem is that you lack of basic logical skins. The two variables you mention are the components of ULC. Now, I might agree with you that the way ULC's are measured throughout the world is questionable. But here comes the political point. You are, for ideological reasons, against government, and so are the troika and the European establishment at large. Now, the argument the European establishment uses to promote "structural reforms" (i.e., to punish lazy people and their State) is that they are not competitive in terms of ULC. It is completely ridiculous to come here and criticize ULC measures, because in so doing, you are saying that the troika policies (the ones you so plainly like) are devoid of any analytical foundation!

      Please, write to the troika and reach an agreement with it. Once you have a common strategy, come back here and we will discuss. Will you?

      (By the way: the data in the first graph refers to manufacturing in the US. What has manufacturing in the US to do with the public sector of lazy countries? You seem to lack something more than basic knowledge in economics, my dear... I am really worried about you. Take care!)

    2. Dear professor Bagnai,
      I must say that I am very disappointed with your reply. I did not expect that my disclosure of weak foundation of your theses will lead you to assuming your ex cathedra position and using ad hominem arguments against me. Yes, I am not a professional macroeconomist like yourself. I am a merely a financial controller in the private sector. When new kids come on my block, I have to work much harder to keep my position. Using ad hominem attacks would only show very soon that I am not fit for battle with them any more. I am afraid of what happens to your students when they question your opinion based on a different mindset than your own.
      Anyway, I hope that we can keep ourselves civilised and focused on the meritum of your paper and not engage in ad hominem insults any more. Before I enter into a macroeconomic discussion I always remind myself of 2 lightbulb jokes about economists. How many economists does it take to change a lightbulb? There is 2 answers I know: A. two, one to change a lightbulb and one to assume the ladder and B. 101, one to change a lightbulb and a 100 to keep all other things constant. :)
      I tell myself these jokes to remind myself that economy is a social science despite my inclination to analyse it in numbers. It is a very sensitive plant and psychology plays a bigger role in it than mathematics. Also, its complexity is mindboggling and making models of it is often a futile task. That is why I am not surprised that even distinguished and experienced economists like yourself make mistakes. I expect it to happen.
      In my opinion, you are overly simplifying the problem and are looking for conspiracies where there are none. Most conspiracy theories are just rationalisations of some "shit happens" type of events. Unfortunately, there are much more stupid people than skillful conspirators. I agree that monetary union without political union is as stupid as it gets in our European history. But this is a lose-lose situation for all involved. There is no evil mastermind behind it that is making extra profits because of it. We all just have instability and nobody likes it. And the best solution now is establishment of this sine qua non political union. We simply need a common fiscal and monetary policy along with an intelligent supervision of financial system.
      Why is your thesis an oversimplification? Maybe this paper helps to explain some more: So again, you cannot compare ULC with real output across time and between countries which are on different levels of technological development. The products and services simply become unindexable, so to speak. We would need a more accurate imagination than accurate facts to be able to do that. So, let go of the wage share conspiracy and too slow real wage growth compared to real output growth theory. It is just wishfull thinking. With all due respect, these graphs simply do not show what you want them to show.
      I don't have a better theory than yourself nor do I think that the troika knows exactly what they are doing. I just noticed that your theory is built on a cloud of smoke. No hard feelings and take care.

    3. I really love you! I have been running this blog for three years, don’t you think I am able to recognize a troll when I meet one? Just a remark: you charge me of ad hominem arguments (well: homo is a bit overstated), but you charge whole populations of being lazy! A population is mostly made of homines, you know? And the fun side of your argument is that the fairy tale of a virtuous North that suffers for a lazy South is based on exactly the same statistics whose statistical foundations you are confuting. In my opinion, this is trollogic, not logic. Absit iniuria verbis, of course.

      A technical detail. No matter how wrong these statistics may be (this is something I would really like to discuss with you, but it is you, not me, that declared to be not competent), no matter how wrong they may be, they have always been wrong (or right). As a consequence, you need to provide a serious explanations of what determines their sudden divergence. I give one explanation. You do not.

      Just a little explanation: I dislike trolls, and I do not like racists. Perhaps I am wrong, but right or wrong, this is my blog.

  12. Mr. Bagnai, so you don't want to get into a discussion with me about the wage share? I am very disappointed. You said that you would like. I have a very interesting discussion with one of your pupils on this page:
    Some very interesting points are being raised. Your paper "All unhappy families are unlike" is very well written. Too bad it is based on completely wrong premises. I would still give it a Nobel but only for literature. ;)

    1. Dear Sasha, please do forgive me. I am working on a very tough deadline and you demand an high quality feedback. Quality requests time. The premises of my "Unhappy families" paper are a paper published by the Cambridge Journal of Economics by an economist who became my friend, Roberto Frenkel. CJE is an impacted journal, and the only "heterodox" journal to be considered as a "first rank" scientific journal by the Italian Ministry of Education (and in many more ranks around the world).

      Apparently you do not belong to its editors nor to its referees.

      Do not esitate to write again if I forget this thread, but please give me a little week. I will read the Levy Institute WP, but I have exams in Pescara on Monday and Tuesday, I am alone with my kids this we, and so on.

      There is much more in life beyond economics. Try to enjoy it, or at least to suffer it.

      I would be much more happy with a Nobel for literature than with one for economics, by the way. Just give me some time.

    2. Dear professor Bagnai, thank you for your kind answer. I completely understand you and I apologize for pushing for your answer. Take care of yourself and your family. I am looking forward to your answer if and when you are able to find time for it.


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