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Bill Black: Note to Italy – Please Send Us More Saracenos

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By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives

I began writing this article while returning from presenting at a conference on Modern Monetary Theory (MMT) in Reggio di Calabria, Italy arranged by Francesco Toscano and supported by the Regione Calabria and the Provincia di Reggio Calabria. MMT has sparked considerable interest in Italy because it puts the lie to the constant claim that there is no alternative (TINA) to austerity and deepening recessions in the Eurozone.

At the conference, a Calabrian professor, Francesco Aiello, urged the position that macroeconomic policies designed to take Italy out of recession should not be adopted unless they could be demonstrated to increase worker productivity. His position was that austerity – in the form of substantial cuts to public spending – should be the default position in Italy. He argued that Italian government spending generally harmed productivity.

I responded that forcing Italy back into a gratuitous recession and causing millions of Italians to be unemployed was a self-destructive policy that caused immense waste and great suffering – and would greatly harm productivity. MMT policies, particularly the jobs guarantee programs my colleagues have developed would add greatly to Italian productivity in multiple areas. In this article I emphasize one of those areas, an area that illustrates how insane Italy’s austerity policies have become.

Austerity has driven unemployment among young Italian adults to over 35%. The result is that Italian university graduates are emigrating. This loss of Italy’s greatest source of future productivity gains is particularly crippling because Italy has far fewer university graduates than most developed nations.

How bad is Italy’s loss of productivity? Consider the loss to Italian productivity of losing one Calabrian couple. Vincenzo and Santa (née Freno) Saraceno were illiterate peasants who emigrated from Reggio di Calabria to the State of New York in 1896. Santa had somewhere between 12 and 16 pregnancies once she and her husband came to the U.S. Their children were traditional Italian-Americans. The girls married Italian-Americans, often at age 16, withdrew from school, and began to have children. The Saraceno girls were literate, but a high school degree was never an option. They raised their young families during the Great Depression.

One of the Saraceno girls married a man with the family name Marino and had a boy they named Raphaële (Ralph in English). Ralph was the first university graduate in the extended family and was admitted to Harvard Law School. Ralph went on to become the Majority Leader of the New York Senate. He was a Republican who worked cooperatively with the Democratic Governor – Mario Cuomo.

Another Saraceno daughter married an Italian American named Johnny. Johnny was not a well-educated man. He was awarded the bronze star as a tank commander in World War II. His Sherman tank took out over 15 German pillboxes to help breach the German border fortifications. The Sherman had a large silhouette, poorly sloped and inadequate armor, and a gasoline engine that led to catastrophic fires when the armor was penetrated. The Germans had the best anti-tank guns and the best man portable anti-armor weapons in the world and they were adept at placing their pillboxes to secure overlapping fields of fire that would shred attacking infantry and aid attacks on the particularly thin armor on the Sherman’s flanks.

The Saraceno’s youngest daughter had her name changed by Irish nuns (who insisted that she have a more “American” name) to Jane. She married a carpenter named Joseph Carbone (whose family came from Abruzzo) several years after he came back from being a navigator on a bomber in the European theater. He helped guide bombing raids in which as much as 20% of the attacking force of bombers was destroyed. (Like Johnny, Joseph rarely talked about his service.) The Carbones had two children. June was the first of the Carbones to get a university degree. She was one of the first classes of women to be admitted to Princeton and then received her law degree from Yale. She holds the Smith Chair at UMKC and is invited all over the world as the featured speaker at far more prestigious law schools. We married over 33 years ago.

Other descendants of Vincenzo and Santa Saraceno have graduated from Harvard Law School, are dentists, nurses, bankers, biomedical engineers, and dozens of other trades. Divorces are rare among the descendants. The old joke about the three critical matters for Italians – family, family, and family – remains true.

One illiterate peasant couple left Italy and created a massive gain in productivity and an extraordinary extended family here in America. Calabria’s seemingly trivial loss in 1896 has produced exceptional gains to America.

Pasquale Catanoso, another professor from Calabria, responded critically to my recounting of the Saraceno’s story by stating that anyone can give an example of a single family and that Italy had no equivalent to Princeton and Yale. Both of those statements actually constitute agreement with the points I was making. Everyone in America can give dozens of examples of families like the Saracenos. The story of my wife’s extended family is simultaneously a story of an exceptional growth in the productivity and opportunities of a family and an utterly conventional example of what made America great. From an American perspective, the Saracenos are simply a typical family. We are a nation of immigrant families whose descendants made extraordinary progress even when the family arrived in America as illiterate peasants.

Italy is no longer causing illiterate peasants to emigrate. The massive unemployment of young adults caused by austerity is increasingly driving Italy’s best hopes to flee their home nation. Austerity constitutes a vicious assault on Italy’s children, young adults, and productivity. Austerity is an insane policy, but defending austerity on the basis of purported concerns about government spending harming Italian productivity exceeds insanity. When Italians simultaneously defend the austerity program that is causing hundreds of thousands of young Italians to flee their homeland and claim that they are devoted to protecting their children we know that we have transcended insanity and achieved despicable hypocrisy.

I’ll assume for the purpose of discussion that Professor Catanoso is correct that Italy does not have equivalents to Princeton and Yale. Italian scholars often make extremely harsh criticisms of Italian universities and their faculties. The central criticism is that decisions are made on the basis of connections rather than merit. If this is true, the question is why Italy does not create its own world-class universities, particularly in the South. Italy can create a superb group of universities. It can found new universities run on the basis of merit by professors from the Italian diaspora. The universities would not have the endowments of Princeton and Yale, but they would (if the Italian critics of their universities are correct) quickly be Italy’s leading universities and would encourage Italy’s best and brightest not to leave. The real answer, of course, is to end involuntary unemployment in Italy through applying MMT’s recommended policies while creating these new, superb universities so that graduates will be able to find productive work in Italy.

Italians have to choose. They can continue to waste the talents of millions of Italians, particularly their young, through Great Depression levels of unemployment. Italians can continue to make a mockery of their claim to being obsessed with the welfare of their children by driving their children from Italy through austerity. America’s message to Italy is simple – make our day – send us your Saracenos. Alternatively, Italy could decide to end its recession, employ its people, and create a group of world class universities. Not all choices are tough.

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62 comments

  1. ginnie nyc

    Professor Black:

    Thank you for entering the lion’s den to discuss MMT in Italy.

    Your account of the Saraceno family is so common as to be a cliche, and is therefor the rule, not the exception as Catanaso claimed.

    I’m sure you know the complaints that Italy lacks the equivalent of Princeton or Yale is bogus, to put it mildly. The University of Bologna is the oldest university extant on earth; La Sapienza in Rome, etc.

    Perhaps the pro-Austerity Italian university critics regard their institutions as ‘inferior’, because most of them are not spook centers like Yale and Princeton, or temples of Milton Friedman like the University of Chicago.

    1. Susan the other

      Prof. Black is saying that Italy would do better to turn its back on austerity and return to the lira. With Italian sovereignty, all things are possible. If Italy were to fund new universities for a new century, they could lead the way environmentally. They could compete with us on all levels. Geneticists. Pharmacy (easy). Sustainable energy. A new definition of productivity – productivity that produces something we want and need. Etc. Italians are too smart to abandon their own country. Maybe it is time to quit the euro – just when the Brits are embracing it!

      1. Jim

        There are a lot more problems in Italy than can be solved by abandoning austerity and returning to the Lira. It’s hard to see what would improve the situation.
        On the positive side many Italians do avoid tax, so they do have savings. That money is hidden away, if that money could be moved out of the bedrooms and into the economy then things might change, but it will never happen. Italians know that their state is totally corrupt, so the money is kept as a welfare state for the family.

        The other problem is a lack of children, the demographics are ugly.Young women don’t want to be the wife, they want to be the mistress. Italian women have outsmarted Italian men, I don’t think you can do much about that.

        I don’t know if prof Black is recommending spending more, I can’t see how that helps. Bankrupting the banks, repudiating the debt and hanging the politicians seems the logical way out of this conundrum.

        1. Robert Dudek

          You can bring in immigrant women who want children and want to integrate into Italian society – there are probably several million candidates in Central and Eastern Europe.

          1. Lidia

            This is already happening, as young women from the east are now filling thousands upon thousands of positions in Italy as nannies and (primarily) oldster-caretakers, as well as engaging in more borderline types of employment.

  2. BagHolder

    I think Dr. Black is off base on a number of points. Italy’s government spending is already a high percentage of GDP. Where is the austerity that Dr. Black speaking of? Running a balanced budget is not austerity (Not that Italy is even close to running a balanced budget.) When government spending is at a high level of GDP, it is a drag on the economy, which of course results more unemployment and youth unemployment over the long run. Please see Alberto Alesina’s article on VoxEU, “Cut deficits by cutting spending.”

    As with Greece, Italy’s problem is largely fraud and corruption. Look at the Corruption Perceptions Index, and you will see that countries where corruption is prevalent often have high youth unemployment.

    1. Kurt Sperry

      “When government spending is at a high level of GDP, it is a drag on the economy”

      This strikes me as counterintuitive. If, for instance, American health care were made public there would be at the same time both massive increases in economic efficiency and government spending. Do countries with the lowest government spending against GDP have the best economies?

      1. Systemic Disorder

        I agree with Kurt, and health care spending is a prime example. If U.S. health care were made public, we would indeed see more efficiency and lower costs.

        I recently did some quick calculations based on OECD figures for national health spending. When I compared U.S. health care spending with a composite average of Canada, France, Germany and the U.K., I found that annual spending in the U.S. was $1.15 trillion higher during the decade of 2001 to 2010:

        http://systemicdisorder.wordpress.com/2012/07/11/the-high-cost-of-private-profit-in-health-care/

        The first time I did this calculation, I thought I made a mistake because it was so high, but that really is the figure. And the U.S. gets worse health results than the comparison countries, not to mention the more than 40 million who aren’t covered as opposed to the zero not covered in the other countries.

        Why the disparity? Because the U.S. health care system is designed to maximize private profit, not provide health care. An excellent summary of government vs. private health care spending is in the Journal of the Canadian Medical Association here:

        http://www.pnhp.org/PDF_files/ForProfitCare.pdf

        The idea that government spending is always bad, and therefore austerity is always good, is nothing but self-interested propaganda.

    2. reslez

      Running a balanced budget is not austerity

      Italy has almost no trade surplus. This means if the private sector wishes to save any part of its income, the government must necessarily run a deficit — otherwise the economy will shrink. The alternative is for the private sector to run up a bunch of debt, which as we have seen is not a sustainable path. This is why a balanced budget is indeed austerity.

      Austerity does nothing but stripmine the economy and create worse deficits than before, as economies shrink and workers are pushed into unemployment. We’ve seen austerity fail over and over for years on end. Yet zombies still push mindlessly for it. Economic pain does not make us stronger, it makes us sicker. A government’s budget is not a household budget, it’s more like a mirror image. And enough economic pain destabilizes democracy.

      Budget deficits are a necessary part of population growth and economic growth. If the monetary base does not expand through government spending we would see (1) a huge run up in private debt, followed by (2) mass deflation. In case I also need to explain why deflation is bad, note that a situation in which savers are better off hoarding assets than putting them to productive use is not good for the economy. Of course, many people privately benefit from chaos, or at least do not suffer personally from it, and so austerity has many supporters.

      1. EconCCX

        A government’s budget is not a household budget, it’s more like a mirror image. And enough economic pain destabilizes democracy. Budget deficits are a necessary part of population growth and economic growth. If the monetary base does not expand through government spending we would see (1) a huge run up in private debt, followed by (2) mass deflation. @reslez

        If you believe monetary base expansion and deficits are the ticket, take a look at the graphic at this link:

        http://econintersect.com/b2evolution/blog1.php/2012/12/04/should-the-fed-keep-paying-interest-to-banks-on-excess-reserves

        It shows Reserve Balances, base money, expanding from about $20B at the outset of the financial crisis in 2008, to over $1.4 Trillion today. A 700-fold increase fueled by annual trillion dollar deficits and FedBank purchase of Treasuries. MMT theories at work; where’s the “mirror image” prosperity?

        And to think, it wasn’t that long ago that MMTers were ascribing depression economics to the Clinton surpluses. I heard Hudson trot that one out just this past September, on the Australian broadcast “Renegade Economists.” Trillions in deficits and QE later, the lesser depression continues.

        MMT is a giveaway to the financial sector. USG spends Treasury sale proceeds once. Then, to the extent FedBank purchases these Treasuries, they become private bank reserves wherewith to capture real-world productive assets.

        That so many NCers have become ensnared by this destructive, wealth-concentrating theory is incomprehensible to me.

        The problem isn’t in the policies; it’s in the present engineering of money itself. Money should originate as contracts for vital services such as bridge crossings and subway rides, rather than as Ponzi contracts to repay compounding, parasitical loan-debt with money that must be borrowed anew.

        1. TK421

          That’s not really MMT principles at work, though, since the people who gifted those banks with new money now demand that it be paid for, probably by cutting Grandma and Grandpa’s Social Security payments. And the depression that continues today isn’t the same one caused by Clinton’s surplus.

        2. Chauncey Gardiner

          @Econ CCX, Thank you for your comment. Sorry about the lateness of my response as I didn’t get to the post until late this evening. I posted a comment some time ago questioning why the FED is continuing QE-Infinity with the reserve account balance at such a high level. You inquired why that is so. I don’t know why, of course, as I don’t work at the FED or for a bank, but suspect it is a combination of some perceived and undisclosed systemic risk as well as a hidden subsidy to the banks (as the FED pays interest on reserve balances).

          In any event, your observations beg the question of what the banks are doing with the estimated $85 billion Cash per month proceeds they are now receiving from selling their MBS to the FED, and why the FED is continuing with this policy? Related is how the prices for the MBS paid by the FED are established, to what extent the banks are using that Cash to purchase bonds and equities, and if they are accounting for those purchased securities at mark-to-market prices – thereby driving up reported capital, possibly funding corporate stock buybacks, and gaining some significant measure of working control over large U.S. corporations and their boards and senior management?

          Lots of questions, both from a public policy perspective and in terms of mechanics.

          I am unfamiliar with exactly how MMT would work; i.e, if the FED and banks would be disintermediated; but I would posit the possibility that it is not MMT that is the giveaway to the financial sector, but the FED’s current QE policy.

    3. Tchir

      Italy actually has a primary budget surplus not counting interest payments and if those are factored in, still gives Italy a budget deficit much less than the EU average.

  3. charles sereno

    I agree entirely with your advice to improve the Italian economy. However, the successful family story of 19th century poor Italian immigrants, while in no way to be compared to the despicable Colombus in the 15th century, still benefits from taken land. Lots of shuffling going on.
    Leonardo was a bastard. Catherine of Siena was the 24th child of her mother, followed by a 25th. We’d be the losers without either of these Italians. However, that should not be intertwined with issues of marriage or fertility as anecdotes.

  4. Kurt Sperry

    How does Italy apply MMT principles as part of the EZ though? They aren’t in command of their monetary policy.

  5. The Dork of Cork.

    The first Mario Structurally adjusted the country before entry into the Euro trap.
    This was a mere wealth transfer to sov holders with no net gain in capacity

    They should have seen this coming………

    We all should have seen this coming.

    Mario was asked about Ireland today (shitload of sov interest & Anglo shit coming this year) and his answer was priceless.

    Nothing to give

    “other then that there is plenty of good will”

  6. alex morfesis

    Italy is no worse than most of the rest of europe in respect to govt expenditures vs gdp ???

    france, denmark, finland, sweden, are they any better ?? Include German State and City debts along with its Federal side and it looks as bad as greece…

    Prof. Black is correct, unless you are someone who intends to retreat the planet into some warped notion of a new dark age or feudalism, push forward and fix later…

    Social security in the USA is a problem only because FDR did not ever imagine the S&P 500 would have half their activities outside the US, bleeding Social Security by the lack of funding with industrial production being imported into the US and providing no additional taxes…read Marc Chandlers(brown brothers)book on the US dollar to get an honest glimpse on what is really going on in respect to the strength or weakenss of the dollar and the trade deficit.

    I hope the good prof Black takes the idea and turns into into an Italian version of a MOOC situation with testing and…oh…just remembered…when pythagoras set up in Croton…did not sit well with the locals…maybe you stay stateside…we need you here…

  7. Moneta

    When in the presence of a population pyramid, I am against austerity but when confronted with a boomer bulge, I think austerity comes into play. No one seems to account for the intergenerational issue.

    We know that 2/3 of boomers don’t have much in savings. This means they will not be able to pay for health care and many other services.

    Therefore, if we keep on offering services that the old can’t pay, this means the young will be working for free.

    So do we just keep on printing money to pay for all the services the boomers want but can’t afford just because we can?

    1. Carla

      “So do we just keep on printing money to pay for all the services the boomers want but can’t afford just because we can?”

      Yep. Exactly. Just because we can.

      For the same reason we wage endless wars and pay hundreds of CEOs multi-million dollar bonuses and subsidize the oil companies and prop up the international banking cartel, time after time after time.

      Just because we can.

      It’s the money thing. Figure it out.

  8. Moneta

    The problem is how capital is allocated. I don’t see how printing more money without fixing the misallocation issue will solve anything.

      1. Moneta

        When Greenspan talked about a conundrum, he was probably a little early….

        We now have the boomers with money who don’t want to pay taxes because they don’t want to pay for their cohort that is sick or without money and the young don’t want to pay taxes because they know they are getting nothing in the end.

        1. tiebie66

          It does not matter how much money the government prints into existence, if there is no-one to do the job, austerity is an inevitable consequence, meaning one has to make do with what resources there are. Money cannot compensate for a lack of natural/human resources. This MMT cannot seem to address. It merely acknowledges that money printing is constrained by inflation, which implies a theory with very limited scope. There is a grounding problem with MMT. What fix does it propose for a 4 pensioners to 1 laborer ratio? A jobs guarantee? Spending stuff into existence? Taxing more?

          The only way to deal with such imbalances is by way of real, painstaking adjustment. This can be accomplished in fair or unfair ways. Austerity, per se, does not have to be unfair.

          1. Moneta

            I couldn’t agree more. MMT seems to assume that there is a group of people that will print and know how to allocate resources efficiently… or does it say to print for any project and let the market decide how it all plays out?

            I don’t believe a group can do the job and if we let the market decide, it will tell the boomers they can’t retire.

          2. Thorstein

            A good question, Moneta? Do you think we should continue to let a small group of bankers and their DC/Brussels puppets decide? Do you believe monarchy is superior to democracy? Certainly you don’t think the “free market” is anything but a fiction. One has to pay to get in; one always has.

            I will declare myself for democracy, but I realize that democracy requires a free marketplace of ideas. One did not always have to pay to get into that market, not when there were public libraries. Do you believe the world should privatize education and put books behind pay gates? What are your principles?

          3. Moneta

            Thorstein,

            Good questions. Honestly, I don’t know what to believe anymore.

            All my life until recently I have believed in the power of fairness and hard work. I have believed that if we work together, the pie can get bigger and wealth can growth globally while protecting our environment. For that pie to get bigger, we must rely less on materialism and more on services.

            But I now realize that my ideals are utopia. With 9 billion people on the planet, there is no way we can export our way of life to the planet and expect our environment to survive.

            Unfortunately, we humans are materialists and we don’t value services nearly enough. To make things worse, our monetary system is mostly based on hard assets. Those in control of the assets control our destiny. And I don’t see this changing anytime soon.

            I believe that the wealth we enjoyed in the West over the last few decades will get redistributed globally. I believe our economies will destroy the environment.

            I believe Malthus will finally be right. All populations peak and decline.

            Some groups will do well and others will suffer. Humans are made to live in small goups. I am starting to believe that countries with over 100 million people are destined to fail.

            I believe there are a lot of ideologues out there, many with a lot of clout. They will bulldozer their ideas into place and force the masses to follow them but in the end we will get uneven growth and our planet will get destroyed in the process.

            I think the system is too complex for a simple solution.

            I used to have strong ideas, now I just analyse what is happening.

          4. Moneta

            Good questions. Honestly, I don’t know what to believe anymore.
            ——–
            I mean in terms of economic and monetary solutions.

          5. Moneta

            I also believe that government is here to stay. So we must strive to make it efficient.

            I believe there are services that should be public and others that should be private.

            I believe democracy works in small groups.

            I do not believe that countries can survive if they are run like for profit enterprises…. over-centralisation is killing us.

            I believe that we are being forced into ever larger spheres of activities in every aspect of our lives when we really need need to shrink.

          6. Calgacus

            So modern societies, which are far more productive and wealthier than those of the baby boom era, are less able to provide for the aged than the same societies were able to provide for the same people when they were young 50 years ago? It costs about the same to provide for the young as the old. It is unlikely that the dependency ratio will even rise as high as it was back then. As demographers say (but who listens to them?) – if you can afford a generation as children, you can afford them as oldsters. Intergenerational arguments, the idea that there is some difficulty in providing for Baby Boom retirements are a joke, an insult to your intelligence, a Big Lie. Increase Social Security payouts. Result – booming economy, problem solved.

          7. Moneta

            I have looked at demographics and you are right about the dependency ratio staying more or less flat.

            The thing is that it costs much more to support the young and the old than it used to a few decades ago.

            The other issue is that we have not maintained our infrastructures over the same time frame. A lot of the money that was being spent on consumer goods and servies over the last few decades will be going to fix or prop up the huge infrastructure we have failed to maintain. So to me, it is not obvious that there will be as much money to support the young and the old as there was in the past.

            We will only be fine if boomers who are healthy keep on working as long as possible.

          8. Moneta

            A lot of the Western wealth over the last few decades has been generated by exploiting other countries thanks to a reserve currency as well as raping the environment on a global scale.

          9. Calgacus

            The thing is that it costs much more to support the young and the old than it used to a few decades ago. No, higher productivity, better technology means it costs less in real terms, which are the only terms that even make sense for a nation as a whole. Our infrastructure has been neglected, but it is not so bad that it imposes a real constraint on retirement by competing for resources. They use pretty different resources, and again we cared for these same people before when we had less to do it with.

            So to me, it is not obvious that there will be as much money to support the young and the old as there was in the past. The government has an effectively infinite supply of money. The government creates it the same way all money has always been created, by printing it. Saying there won’t be money is like a theater owner saying that he has to close down because he ran out of tickets – even if he has a printing press for them. Money is debt is a relationship between economic agents. Saying that we can run out of money is saying “we can run out of relationships”. Does that sound remotely sane?

            We will only be fine if boomers who are healthy keep on working as long as possible. Absolutely wrong. The only constraints are real constraints. If you bring up an ecological catastrophe, OK, that might be a constraint. That could make boomer retirement “not fine”. But the problem is the ecological catastrophe, not an utterly imaginary financial crisis which is literally inconceivable if you understand money.

            Applying the advanced economic social technology of say 1960, and rejecting the retreat to the paleolithic technology of 2012, we could lower retirement ages and raise payouts very, very easily. Just do it, and the giant machine we call “the economy” will take care of everything.

          10. Moneta

            When I say money I mean resources and labor. I don’t care about the fact we can print because no matter how much we print I still only have 24 hours in a day.

            I believe we could probably afford to pay for the boomers’ retirement but that will require a huge sacrifice from the 35-50 year olds which are the current Gen-X and Gen-Y.

            In the 50-60s, a lot of schools were built to accomodate the boomers. In the last 10 years, we built houses and produced more car manufacturing capacity instead of preparing for the tsunami of retirees.

            Maybe we’ll see huge productivity growth but I doubt it. My intuition tells me most boomers will work for a long time.

          11. Calgacus

            When I say money I mean resources and labor. They’re very different things, so you shouldn’t use the same word. The US economy had the resources and labor back then. So a richer economy has the resources and labor now. That’s it. You don’t need to know anything else to refute the Big Lies of the Big Liars.
            Since economies are nearly always constrained by lack of demand, not supply issues, the baby boom helped the US economy, just as the boomer retirement would help, not hurt the US economy – if we only used sane economics. If you reasoned only monetarily, you would see through the Big Lies. If you reasoned only in real terms, you would see throught the Big Lies. But the Big Liars confuse people by confusing monetary and real terms, and get them to believe 2 + 2 = -9 .

            I don’t care about the fact we can print because no matter how much we print I still only have 24 hours in a day. So? Do you see a world where everyone has a job, where people are so hyper-employed they don’t have time to take on another job, because they only have 24 hours in a day?

            I believe we could probably afford to pay for the boomers’ retirement but that will require a huge sacrifice from the 35-50 year olds which are the current Gen-X and Gen-Y. No sacrifice is necessary. The way economies have been run, it would be a “negative sacrifice”, a huge benefit to amply “pay for” boomer retirement.

            Maybe we’ll see huge productivity growth but I doubt it. We’ve already seen it! People who are getting you worried about boomer retirement are telling you a Big Lie. Absolutely in old Adolf’s sense. You just aren’t used to such enormous lies, you don’t think that anyone can say such untrue things, that the media would say such preposterous things. So the Big Liars make you believe something which is on the face of it, utterly fantastic.

            My intuition tells me most boomers will work for a long time. Sadly could be true, if we economic policies continue to be insane, relative to the Keynesian era. Or worse, if we use economic policies as bad as Europe. But if we just ran our economy as sensibly as China does, or as we did in the 40s, 50s and 60s -even the 70s – no problemo. Negative problemo!

        2. LeonovaBalletRusse

          Calgacus Wins the Internet! Raise SocSec payout: economy blooms, especially fresh food markets and books, and to spoil the Grandkids! “Just do it.”

          1. LeonovaBalletRusse

            President Obama, “Just do it!” Where’s you inner LBJ? Don’t YOU want to be remembered as the Black Man who stood up the the Weak White Boss in Congress and behind the scenes? DARE to cop a UNIQUELY high rating in History, President Obama. Dare to be Uniquely Great! Or what are Second Terms for?

  9. steelhead23

    Dr. Black. Nice essay. However, you attribute to stupidity that which I attribute to malevolence. You must be aware that many capitalists view MMT and the right to work as “insane” and hold a fairly rigid view of human psychology – we are intrinsically lazy. If not for the fear of destitution and privation, none of us would ever lift a finger in labor. We must be cajoled into work – we must be pressed to be productive. Suffering furthers our desires to be productive and if productivity is to be increased, so must be our suffering.

    While I do not share this view of humanity, I perceive that it permeates western culture and that it contributes to several social pathologies: 1) the perception that the wealthy have earned both their wealth and their indolence, 2) the wealthy should lead us as they are clearly more virtuous than we proles, 3) the poor are poor by choice, victims of their own laziness and stupidity, 4) whenever possible (preferably by obtaining great wealth), labor is to be avoided.

    Imagine instead a culture that places great importance on labor and opportunity; a culture that values all as equals, with the value of our work to society as the only definer of our individual importance. I perceive that among the aspects of our lives that best define us is our work. As evidence I offer Antonio Stradivari, who constructed musical instruments of some renown. Is he known for his great wealth? No. He is known, and will likely remain well known – for his work.

    Francesco Aiello may not be insane, but I believe he is a disciple of the current distorted view of human nature. It is not just the prevailing economic paradigm you are fighting, you are battling a cultural norm that holds that Sr. Aiello is right. Good luck.

    1. JTFaraday

      “a culture that values all as equals, with the value of our work to society as the only definer of our individual importance.”

      Surely you can see that these two ideas are in contradiction with each other. That it is out of the first idea, that we are all equal until we apply ourselves, the second idea, that all of the other ills you cite arise.

      There may be no way around this conundrum, but we should recognize that the producerist ideology you yourself advance– particularly as a means of determining the value of human beings, which is the use you make of it– is a key part of the problem.

    2. LeonovaBalletRusse

      Do NCers remember the UNIQUELY FINE Italian products we used to be able to buy in America? That’s before NeoCap Shock Doctrine made way for Chinese Triad profits in Naples and thereabouts. See “Gomorrah” by Roberto Saviano.

      Friends, the TPP is designed to turn the U.S. into this “Gomorrah.” Read the book, and comprehend what the Global “Capitalist” Racketeers have in place for us.

      Prof. Black, what do you and your colleagues have to say about the really ugly truth of “Gomorrah” by any name, in any place, esp. in the Abruzzi?

      1. Lidia

        LBR, the whole “Made in Italy” premise has completely shit the bed. The interesting shops around Piazza Vittorio in Rome visibly changed over the 10-15 years I have been passingly familiar with it, from a mix of random local shops to dozens of Indians and Chinese standing in identical storefronts full of crapulent stone-bead necklaces and shitty polyester shirts (I believe these are money-laundering enterprises because not only is the “merchandise” of horrendous quality, there are never, ever, any customers while the rents are not cheap!).

        In Tuscany, the clothing and shoe concerns are chock-full of Chinese immigrants, many of them in the country illegally. Hence, you can find shitty plastic flip-flops for $12 at TJMaxx marked “Made in Italy”: they’ve just transferred their bottom-of-the-barrel crap plastic production onto Italian soil. The Italians don’t have the wherewithal to combat this.

  10. Hugh

    The danger there as here is that both austerity and anti-austerity in a kleptocratic environment can be equally looted.

  11. Moneta

    The 1% cares about increasing its wealth. Just like everybody else. But 5% on a billion is a lot of money. As it moves up the wealth curve it sucks up resources and makes them unproductive.

    Over the last 3 decades, the bottom 2/3 has been drained and unless the rules are changed it will attack the top 1/3. The ones with pensions are next.

    However, the top third still thinks it stands a chance and is doing nothing to change the rules. Since most in this group are over 50, they are hoping the can gets kicked out far enough that they do not to change their ways and in the mean time, they cling to the greater fool strategy, thinking that will save them.

      1. Moneta

        So are you implying that the others don’t care about increasing their wealth or are you implying that the others don’t get to do it the same way?

  12. Tom Verso

    Italian Diaspora mythology

    It is sad to see that a professional American should lecture Italy in a professional conference based on such a very totally non-representative education anecdote – the Saracenos family.

    In fact, the education and vocation attainment of Italian Americans is hardly cause for bragging or lecturing others. According to the Census Department American Community Survey of 17 million Americans who identified themselves as being of at least some Italian ancestry:

    Less than Bachelor degree 67.8%
    Bachelor Degree 20.4 %
    Graduate Degree 11.8 %
    Total non-profession Workers 60.8 %

    Black perpetuates “American Dream” whose mythological character is being demonstrated with every new economic report.

    For more expanded discussion see:
    http://www.i-italy.org/bloggers/33878/southern-italian-americans-and-99-vs-1-american-class-dichotomy

    Tom Verso

    1. Systemic Disorder

      Those figures you cite, if true, aren’t much different from the overall figures for U.S. citizens. Growing up in a state with a significant Italian-American population, I didn’t see ethnic Italians as being different than any other European immigrant group.

    2. ginnie nyc

      It is true that Italian-Americans have not done as well, economically, as those of Italian descent in say, South America. By economically, I mean average income and standard of living.

      However, that has little to do with educational levels per se. Rather, it is the unique racial stratification in each region. For instance, in North America, Italian immigrants were regarded as ‘colored’, often in law, up until after WWII. This impeded their access to education and the professions until the GI Bill. In South America, Italian immigrants were/are considered to be Europeans from the first, and hence, ‘white’. Thus the upper echelons of government, finance and the arts have many persons of Italian descent there.

      This dichotomy exists in my own family on both American continents.

      1. ginnie nyc

        To clarify: In South America, Italians entered the upper ranks of society within the first generation, not the third or fourth generation as in the U.S.

    1. ginnie nyc

      Stu: Good question. Italian universities already have superior departments of chemistry, engineering, design and medical research.

      But there are only so many academic/research positions funded. There are no jobs in business, so these are the graduates that are emigrating.

  13. Hiram Bilgewater

    I was not aware that American universities were run on merit rather than connections. This is new news to me.
    –Scott

  14. kevinearick

    for the empire, there is no alternative to austerity, but to voluntarily relinquish power. All economic growth goes through labor, and nothing has changed in the lock-out/strike. They always procrastinate and they always lose.

  15. JR

    I’m not *quite* sure how MMT connects to the emigration of Italians, but I can heartily vouch for both. The former from indirect observation, the latter from direct observation. I know of at least eight younger Italians who did advanced research work in the Boston area — all went there with the intention of getting ahead and returning to family and fortune in Italy. None have done so. None seem any longer to even hope for returning to Italy. They are now based in America and Northern Europe, from whence they can easily visit, but never with the intention to stay. It’s sad, since Italy has so much going for it. However, the universities and government are not part of it.

  16. Cattani

    Instead of “Gomorrah” watch “Jonny Stecchino”. It’s a lot more “divertente” (fun) put makes the point about Italy’s “piaga” (as mentioned by the cocaine-addled lawyer in the film) in a light-hearted way characteristic of director/actor Roberto Benigni.

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