Faces for the campaign

link to italian version Mario Monti, after reaching the target set some weeks ago (the Btp-Bund spread attested a 287, immediately tweeted and got viral), took a new communicative path, like an old good politician used to electoral campaigns. Attacks and hints for the competitors and promises of “good fiscal intentions”, given at alternate days – one day he hints, the other he promises. The most striking thing is the loss of that wonderfully aseptic and sharp communicative style, typical of the 2012 technocratic government. To get disentangled from statements, candidates lists, criticisms, attacks and replies – to separate reality and mystification – to understand which faces are real and which are taped masks…let’s try to point out something about the campaign.




Some measurable and real things, first. The public funding requirement for 2012 amounts to €48.5bn, that is €15.2bn less than the previous year (which amounted to €63.8bn). As underscored by a ministerial note, the result is mainly due to “a more favorable evolution of the fiscal collection”: state taxation revenues show a +4.1% growth trend (+ €15.029bn). Without the contribution to the ESM, the public funding requirement for the year would have been €42.8bn. That is to say: the positive effect on the public accounts, obtained burdening the citizens, is in the figures. With a double benefit: this had created the reliability conditions giving rise to the ECB interventions, hence the narrowing of the Btp-Bund spreads; now, with lower yields, the debt is less expensive for Italy. The savings, compared to the maximum tension period of 13 months ago, are already more than the collection of the IMU.

Political coalitions, being less troubled by the economic emergency, are starting to offer their gobbledygook soups again. The oddest ones: there’s someone promising to keep 75% of the taxation in the Region where it’s paid, and to abolish the IRAP (Regional Income Tax) at the same time. This would mean that the Public Health Service could become economically unsustainable tough – thing which has been merely labeled as “social equity”. Then the spiciest soups: the “Monti-line” ranging from “Everyone promising to modify the IMU is being foolish because after one year it would be necessary to reintroduce it. Doubled.” to “we’re going to reshape the IMU, which has to be given entirely to the Municipalities” after some days – with a sherbet of “we’re going to decrease 1 point of IRPEF (Personal Income Tax) and to freeze the VAT”. And the menu goes on with a dessert of MPs reduction and other amenities which are particularly pleasant for the voters.




“We should form a coalition of everyone in favor of reforms and not of preservation.” said Monti. The message is quite clear: we’re right in the middle of the “taxpayers/football market” – Russia for instance was able to get Mr. Depardieu’s income tax return, after an exciting match with Belgium. Maybe it’s time to create a new profession: the taxpayers’ agent. This is the climate in which some political party says that “The Rich must bugger off”. Being even applauded maybe. Probably, wealth is a fault regardless of anything, no matter how it has been earned. Forgetting an empirical fact: globalization is a huge mechanism of wealth redistribution and inequality reduction, globally speaking – even if we think that the gap is widening (when we look at ourselves only), it is actually narrowing:

This is why globalization is so underrated in the Western world: it harms their rights of “first world” citizens. We’re blabbing about people, main characters – as usual. Monti, Brunetta, Vendola, Ingroia, Grillo, Berlusconi, Maroni, Tremonti, Alfano…why aren’t we talking about the contents? Which is the project we’d like Italy to take on? After the storm (is it gone yet? is it ever going to go?) where does Italy want to go? Which would be the preferred basis for our future? Italians, what would you like for yourselves tomorrow?




And here we go again with the real Italian national sport: passing the buck. Just like we weren’t really on the edge of the cliff…he was the one deciding this tax!…No, it was him! We’ve just promulgated them!…Ok, but I approved deductions and exemptions!…Well, no, they were approved by the former government, we’ve just enacted them. In the end, it’s all about a market-RatingAgencies-GermanBanks conspiracy. Markets are watching – and subjugating – you.

I already miss the technocratic government, where it was possible for the Ministers to speak their mind frankly, no-frills and not consensus-oriented.

I’d really like to hear someone talking about reducing taxation on work, with serious projects. Do you remember the tax wedge which we’ve been talking about for at least ten years? Well, given a little time between the debates about the essential and non-renounceable reform of the Justice System, we’d like to know a little more about taxation relief…

I’d really like to read the details of a reliable plan for debt reduction – not the shoddy, approximate calculations I saw in Mr.Vespa’s programme, with tens of €billions rounded off just like because being precise is necessary, ok, but sooo tiring! Better to promise everything first, and then decide whether it’s possible to justify cuts…where’s the world “coverage” when it’s needed, talking about discounts, reductions, cuts?

I’d really like to listen to a proper plan for a spending review, to proposal of more (or less?) presence and interference of the State into the economy…above all, I’d really like to see someone making politicians be accountable for their previous decisions. I really cannot understand why we’re so eager to forget that some of those asking for our vote were among the creators of SCIP and SCIP2. I can’t understand why we’re not presenting the bill for the total failure of the flat rate tax on rental income – or for the Robin Tax, which was somehow balanced by the Tremonti-Bonds after some time.

Are we aware that, given a certain need for fiscal collection, every missed income (or failed taxation) creates the need of a replacement one (or, of an expense cut)?




And that’s because we’re the champions of complaining, of asking for fresh faces (well, is fresh enough?). And when it comes to vote in the primary elections of the main political party, we vote for old faces. And we go on fighting on faces, not on contents.

It’s harder, more boring, talking about contents – sure – but if we can’t understand how directly and deeply politics influences our daily life, then we really deserve everything.

But if we look abroad we’re super: as soon as the agreement on the fiscal cliff has been achieved, we’ve been quick to understand its affect on the real economy and that the real fight has been postponed to February, on the discussion for the raising of the debt ceiling, unavoidable in order not to default nor to be downgraded, creating a shock both for markets and for the economy.




To have the problem postponed to February, the Treasury has unblocked $200bn through the postponement of the payment of pension contributions for public employees. Within the new deadline, the ceiling must be raised, avoiding a (ridiculous) spiral of default and temporary paralysis for the government. The Republican opposition will ask for cut to expenses – and those would be at least equivalent to any raising. Obama said he’s not going to discuss anything on the matter, and that cuts must be discussed elsewhere (in order to get away from the fiscal cliff it is necessary to proceed with a path of recovery, and Obama does prefer to follow it through new taxes rather than cutting the health expenses which he’s earned with such a difficult path). In 2011, the fight on the debt ceiling between the President and the Congress already ignited a downgrade from AAA by Standard&Poor’s (and the markets suffered consequently), and the same could happen if the political ballyhoo is not replaced by more respect for the citizens and the state.




And as soon as we’re back home…we find it reasonable, even defensible!, for a party to state they’re ready to exploit the flaws of the political law in order to “paralyze the Senate, making the country ungovernable” – supporters are ready to clap and ask for seconds, even thirds.

We’ve been taught to be supporters, lined up…divide et impera. Deployed in fronts. If there’s someone saying “well done” to the enemy, well he’s crooked, an abettor, a fool.

The coalition “Fermare il declino”, which began its path from programmatic elements, has been forced to give itself a face – and Oscar Giannino decided to run for the office (even if he’d said several times he was not going to be a candidate).

He’ll be the “freshman” we all are asking for. And probably he’s not going to go over the blockage threshold for entering the Parliament. We just say we need a change, but it’s because we’re not so far from those who represent us, going on and on and on in their effort for passing the buck to someone else, anyone else. We’ve got our targets – the usual faces – and we’re not going to change them. Too risky: we might have to be accountable for ourselves and our choices then.



Photos in this post are from Wes Naman
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About bimboalieno

Operatore finanziario professionale dal 1998; ha collaborato con diverse banche italiane ed estere. Si può scoprire dell'altro cliccando qui. Oggi é responsabile di un centro di Private Banking. Professional financial trader since 1998; he has worked with several Italian and foreign banks. You can learn more here. Bimboalieno is currently in charge of a Private Banking centre.