Psychological economy

(Minister Scajola)




The introduction of the Euro in Italy was difficult for the population as prices increased dramatically. It is generally accepted that the main reason was the lack of preparatory work done by the then Berlusconi’s government and in particular its Minister of Finance, M. Tremonti. Criticized for his inaction, he started preaching that the reason for the increase in cost of living was due to the fact that there was no 1 € bill, It was a psychological matter: people would be more reluctant in spending a 1€ bill rather than a 1€ coin ! That’s for the economy.

Berlusconi also thinks that the economy is only a psychological matter. Since last year, he claims that there is no real crisis, that it is all psychological due to useless research institutes spreading terror (IMF, OECD, World Bank, European Central Bank, Italian Statistical Office, to name a few….) and the press that quotes them. Last year he recommended to Italians to buy g ood stock such as those of Mediaset (his own company). Imagine an America President who owns Times Warner and recommends to buy its stock. Conflict of interest ? Ethics ? these are only psychological issues quoted by stupid journalists. Now, since September 2008, Mediaset stocks lost up to 40% (March 09) and they are today (11 July 09) 22% lower. Good advice by an excellent businessman, indeed.

Last year in March, Air France was ready to buy Alitalia. The deal was stopped by Berlusconi and friends. Taking over the government on June 2008, one of his main actions was to
“rescue Alitalia”. In the end, Air France got it but for much cheaper and basically closing down all flights from Milano Malpensa. In an article early this week, one could learn that Alitalia bond owners lost about 40% with Berlusconi’s solution as compared with what Air France had initially offered. But Berlusconi still claims that he rescued Alitalia….

Over the past month, Berlusconi and his servants, have been attacking regularly all world most prestigious economic forecast institutes because they continue to say that Italy is in a tough recession. The crisis is over, he claims, and we are “better than before the crisis” (sic!). He even invited the young industrialists, during their annual meeting, to stop placing ads on those newspapers who quote what the IMF or OECD of the EU say….They create undue panic while the crisis is over. The day after he made his last such statement, the IMF published another forecast and the Italian Statistical Ofice published the monthly data. Both were negative. So, Mr. Scajola, another smart boy of Berlusconi’s current government (he is minister of production)came out with the idea to publish Italian statistics on the status of the economy less frequently, once every two months, or even three. This statement shows that Mr. Scajola does not know that the US economy and stock exchange, and the dollar and the world stock exchange places, react at the monthly US economic statistics. Nor does he seem to know that all European countries must, based on the EU treaties, publish monthly statistics prepared following common standards.

Not bad for two ministers and for a Prime Minister. Economy ? it’s only a psychological matter, stupid you.




www.allaguida.it/img/scajola01g_123183.jpg