This is a well written thread (h/t @RobertaPaliotti ). The only missing part is the observation that #COVID19 , by hitting straight at the productive heartland of Italy, irreparably damaged the social pact.(1/10)
The original system was that south of the Rubicon you depend on transfers from north of the Rubicon, and you leave them North guys be as best as you can. As time passed, and more and more the Kleptocracy was needy, the more producers chafed under the yoke. (2/10)
Now comes the interesting part: it is FALSE that Europe works in a different way, and that's the rub: the #GreenNewDeal, for example, is perfectly understandable to an Italian: under cover of an ethical goal, it appropriates a shitload of money for governments.(3/10)
That money, of course, buys votes elsewhere: happy burghers putting solar cells so far north it's meaningless get paid for it, Wind farms in the North Sea, etc. "You can't stop the economy", coined an italian comic playing an asbestos producer in an asbestos building. (4/10)
To misquote Asimov's Salvor Hardin, "Debt is the last refuge of the incompetent", and right as rain, the whole #RecoveryFund structure is built on that: it's immaterial that it pays out either loans or grants, it will have to be funded via debt offerings. (6/10)
the general idea is to give "moar" money now to governments to bootstrap a recovery , but this is NOT a recovery: it's a restructuring, and are governments, who like market heuristics like Ebola, the best allocators of capital?(7/10)
The relative advantages are only a leveling off of cost of debt for the hapless, paid collectively by an increase in costs for all. but that "all" falls disproportionately on producers and savers. And here there's the second rub: (8/n)
in the New post #Covid environment, company formation is very much scarcer. Activist governments raise the risk premia required since legal/tax stability overwhelms other factors. What if the government decides you are a menace to a protegèe sector?(9/10)
So, as in Italy with " #quota100", as we did not have "three new jobs for every new pensioner", we are not having three new companies for each company liquidation. the pool is shallow and emptying . (END)
@vtchakarova @macrodesiac_ @amlivemon @BaldingsWorld @Trinhnomics
@vtchakarova @macrodesiac_ @amlivemon @BaldingsWorld @Trinhnomics
Uh, I almost forgot.
The whole process is sold as solidarity between states. It is, but not as lay citizen think: the apparatchiks in Italy need other people's money to avoid sharing the plight of the populace.
The whole process is sold as solidarity between states. It is, but not as lay citizen think: the apparatchiks in Italy need other people's money to avoid sharing the plight of the populace.
