End credits. The slow agony of the Western economy
Everything we are seeing with our own eyes today is nothing more than the end of a process that began decades ago and that no one has ever really wanted to oppose.
The meritocracy has gradually exhausted itself, giving rise to a veritable caste.
This caste has not only become entrenched, but has completely taken over all sectors, which are now dominated exclusively by real power lobbies.
It is now impossible to get out of it.
With the 2008 financial crisis, an opportunity had arisen to oust the entire ruling class that had wreaked nothing but havoc.
Instead of intervening at the root of the problem (as could and should have been done), the power of the lobbies was allowed to increase.
Instead, it was even allowed to increase it.
Our civilization truly deserves a dark age.
It was too easy to predict even then.
April 7, 2010
End credits. It is a process that, in my view, is now irreversible…
The globalization of multinational corporations is a natural disaster before which governments and corporations are now powerless.
It is a process that, in my view, is now irreversible.
The wealthy industrialized countries have succumbed too early and to an excessive degree to the pressure of large groups.
They have granted them many freedoms.
Whether or not this harms our society and our planet does not matter.
Large groups and so-called elites have abused and abuse globalization for their own interests.
And they further enrich themselves through exploitation, wars, environmental damage and financial speculation.
It is no coincidence that I had referred to globalization as the black swan of the world economy in unsuspected times.
What are the reasons for this crisis that appears to be getting deeper and more pronounced over time ?
I personally espouse the following two theses :
The 2001 WTO agreement has proved absolutely detrimental to the West. Opening markets to China, India and the rest of Asia without any quid pro quo from these countries has caused a monstrous increase in cumulative foreign deficits (particularly in the U.S., Australia, Western Europe and England).
“Offshoring”. Moving factories and service companies to the same countries, especially banks, IT companies and call centers.
These two seemingly brilliant “ideas,” namely cutting production costs and improving corporate balance sheets, actually prove deleterious.
Yet, all the major media compete to repeat that “opening up to the world market is good for us, too”.
But this is simply not true !
Globalization leads to an improvement in the situation of the less wealthy country at the expense of the previously more advanced one.
Moreover, in such an economic cycle, the decline of the globalized countries will, from a certain point, be much faster and more abrupt than that of the countries that are globalizing.
Progressively letting everything we buy at the hypermarket be produced in China or India and slowly moving our factories and services to Asia (or Mexico for the U.S.) is a recipe for self-destruction.
The financial crisis was just a way to hide the reality of the gradual hollowing out of the European and American economies.
Turning to Italy (but the reasoning could be extended to the entire West), one can safely note that unless things change, our economy is destined, in the long run, to irreversible decline :
The tax burden is 50 percent (in theory, as we shall see).
Five million households have home mortgages. Foreclosures are steadily increasing.
Protected checks. A steadily and steadily increasing trend.
Figures indicating zero or negative consumption are multiplying (just take a trip to the hypermarkets). Discounts, particularly on groceries, are increasingly common.
People who are working (taking into account those who are cash-strapped) number about 22 million out of 58 million Italians.
This figure shows that the tax burden on those who actually work is not 50 percent, but much higher, since in the calculation of the tax burden in the denominator the GDP is used, which includes the entire population, from infants to the 90-year-olds, to the unemployed, to those who work off the books.
Fifty percent is merely the average.
Anyone with all or nearly all visible and billable income from work pays taxes on 65-70% of the income they produce.
In fact, all “indirect” taxes hit consumption.
This is absolutely demented.
To get ahead, the mass of workers go into debt.
Consumption stops.
And then the economy.
Meanwhile, the debt of the Italian state continues to rise.
As a result, it has become impossible to stimulate the economy in Italy.
In fact, the state appropriates most of the national income and wastes most of these resources.
The only one that could be stimulated is the private one.
The state one follows laws that are not economic.
When the economy is more than 50 percent state-run, however, it stops and begins to accumulate debt.
The only solution would be to focus on exports.
However, with the € (it is not possible to make “competitive” devaluations periodically) and with Chinese competition becoming increasingly fierce, it has become very difficult for us.
In Europe and the U.S. we have already raised interest rates to near-zero levels to “stimulate” something that should be done with fiscal policy.
Public spending and taxes would have to be cut.
However, which is in fact impossible in our country.
In China the tax burden is less than 25 percent of GDP (the figures are of course completely falsified and the cost of labor is very low).
In Russia, and generally in Eastern European countries, it is very low indeed.
The same is true in Asia, where it is usually less than 30 percent.
This is their real ingredient of economic success.
Whereas in the West, where all the sovereign states have decided on a policy of monetary stimulus and not cutting spending, having arrived at the current point (out-of-control deficits) they will have no choice but to print money to plug the holes that are getting wider and wider until one day they reach a point of no return.
What about welfare ?
How will they be able to guarantee essential services in such a scenario when funds run out ?
Unfortunately, the problem is that there is a lack of organic and well-structured economic-political thinking.
It is ridiculous that the denunciation of the problems of globalization is based on groups of nutcases like the no-global “people of Seattle.”
And their “bible” is some cheap little booklet like Naomi Klein’s “No logo.”
The media, on the other hand, do nothing but misinform.
A new world policy, promoted by Western countries, should be based on two simple goals :
Promote efficient welfare by eliminating the incredible waste that is there.
Take power away from global lobbies in order to achieve a more equitable distribution of resources (without ridiculous and dangerous communist vagueities like those of the last century).
Instead, it is moving inexorably in the opposite direction.
That will guarantee a very sad ending.
End credits. State employees to whom the state and regions still provide free service housing.
It is unbelievable, for example, that there is crazy waste in Italy.
There are people hired in municipalities and regions doing the same jobs as others.
Pure clientelism after elections.
State employees to whom the state and regions still provide free service housing.
Not to mention the ridiculous hours and “corporate” defense toward slackers and incapable emeriti, and the resources squandered on golden salaries for state managers.
But the wastes of the Italian state are many.
And unfortunately there is an absolute lack of political will to intervene.
Not least because then you’re up against the union, the newspapers, the television stations and the fancazzisti of all stripes.
But sooner or later there will be riots between generations and categories.
When the tax burden exceeds 70 percent, the state resembles the old Soviet Union.
All incentive to do business is lost.
How much to take power away from multinational corporations and lobbies.
Here, too, there is only a choice left.
Is it possible to continue to see a very small number of people getting richer and richer at the expense of the rest of the population?
If people would begin to be outraged and protest the fact that multinational corporations such as Nestlé, Procter & Gamble, and Shell have higher turnovers than entire states, that would already be a good start.
Finally, on globalization.
Misinformation reigns supreme here as well.
When an Italian buys a pair of Chinese shoes, for example, it is easy to hear the objection :
“But excuse me, what am I supposed to buy, if I don’t make ends meet ?
Will you give me the money ?”
Yet, those who do not make ends meet do not realize that they do not make ends meet, partly because they buy Chinese shoes.
In doing so, he destroys the work of indigenous shoe factories and gives work to the Chinese, who thank him heartily (and get fat on our ruin).
Then there is a more important point to be made about some countries.
End credits. It basically says yes to a ruthless dictatorship…
When you buy goods from China, you are not just buying goods.
It basically endorses an inhumane system in which people are forced to work up to 12-14 hours a day in slavery-like conditions.
A system in which there is no union protection for workers.
Those who protest are imprisoned and, not infrequently, killed.
Basically, you end up endorsing a ruthless dictatorship.
That is why, for example, one in four consumers in Germany openly boycott Chinese products.
They do it because they understand what happens to our economy when you buy products from those countries.
In Italy no one talks about it because they are hypocrites.
Some say we cannot go back to autarky.
To autarky, no.
But neither can you globalize Chinese exploitation and dictatorial system.
