Beppe Grillo, Italian Populism, the Left, the Right and Who is right?

Nothing has quite fired up populist rage around the world like Italian commedian turned politician Beppe Grillo and his Five Star Movement, also known as Movimento 5 Stelle.   It's the equivalent of the "shot fired around the world" because it's gone media viral and, more importantly, directly threatens the cozy corrupt establishment.  Ordinary folks everywhere are cheering for Grillo. In the recent Italian elections, there was no clear winner although Grillo's Five Star Movement elevated itself to the largest political party in Italy.  The candidates included the former Italian prime minister, Berlesconi of the Bunga Bunga fame, who was forced from office amid sex scandals and allegations of wild orgies.  Berlesconi  represents the center right and Italy's deep culture of corruption.  Barsani, the leftist with links to hardcore Marxists, was the choice of statists and communists.  Monti, the engineer of fiscal austerity, is a technocrat who respresents bankster interests, performed the worst in the election with under 10%.

Italian politics really aren't that much difference than politics everywhere because folks really are spitting venomous fire at those they believe are responsible for job losses and economic misery.

Financial and political pundits are literally glued to Italy and Zerohedge.com is no exception.

Italian Economic Health Worst Since Mussolini

Italian debt jumped in 2012 to 127 percent of gross domestic product from 120.8 percent a year earlier. As Bloomberg notes, that's the most since 1924, when Mussolini won 64 percent of the popular vote in elections that opposition members said were marked by irregularities. While the only irregularities in the current election were the electorates dismissal of the status quo - as Monti’s policy mix prompted 25 percent of voters to back the anti-austerity stance of comedian-turned-politician Beppe Grillo’s Five Star Movement, which was the single most voted party in the country...

All Roads Lead To Rome

This contest will be decided by the mob; thumbs up or thumbs down. Even if you wish to believe in the far flung view that Bersani could form a new government; it will not survive as Grillo can block what he wants and on his own which makes no mention of Berlusconi who is not exactly Bersani’s ally either in spirit or political leaning. Odds on is that a new election will have to be called and that Grillo gathers even more votes as his political positions do not rest upon being a comedian but upon a new order for Italy. You may recall Ronald Regan in our own country, a former cowboy star and the positive affect that he had on America. Grillo may be the Ronald Regan of Italy and it means the worst of scenarios for Europe as the old guard is thrown out, the deceptors by design, and the people, the mob, has the run of the Coliseum once again.

Grillo refers to Berlusconi as “the psycho dwarf.” Grillo’s vision of Bersani is a “dead man walking.” In an interview that Grillo had with the New York Times over the weekend he said he would support neither side and that doing so “would be like Napoleon making a deal with Wellington.” He went on to say that, “We can change everything in the hands of respectable people, but the existing political class must be expelled immediately.”

What precisely is wrong with Italy?  Italy has the same spending/debt disease that is plaguing the rest of Europe as well as America.  But what is especially angering Italians is that austerity is being forcibly imposed on the people while the rich get bailouts and headlines like this only fuels discontent.

Italy To Bail Out Old, Broke and Crooked Bank 

Heard of too big to fail? How about too old, broke and crooked to fail?

Banca Monte dei Paschi di Siena SpA, a 540-year-old financial institution commonly called Europe's oldest bank, was the newest Continental house of finance to receive a government bailout, after the Italian Treasury granted the bank a €3.9 billion ($4.87 billion) credit lifeline Tuesday.

The Treasury loaned the money to Monte dei Paschi even though it is seen as basically insolvent by the markets -- the nominal amount of the rescue package exceeds the market capitalization of the bank -- and even though the institution's chairman, Alessandro Profumo, is under criminal indictment, accused of helping devise a tax evasion scheme....

Headlines like the above fire up resentment and anger.  As the people are forced to endure austerity, there is zero austerity for the wealthy and politically connected who clearly exert their political clout to avoid the austerity that is being forced on the working class.  It's a recipe for revolution and class warfare.

Because the dollar is still the world's reserve currency, America kind of gets a temporary stay of execution but the executioner's ax is destined to eventually fall on us.   There is no escape from political corruption, crony capitalism, unsustainable spending and mountains of debt with a limit of infinity.  It's just that some nations will fall faster than other nations.

There are two defining attributes of "Spend and Debt Gone Wild".  1.  Ratcheting up the debt to fund social services and entitlements and 2. Ratcheting up the debt and economic misery to fund the bailouts of banksters, bond holders and the rich.

The left is notorious for solving every problem with 'let's raise taxes and go after the rich'.  The French socialists attempted this by imposing a 75% tax on the rich but the tax was later declared unconstitutional by a French court.  Undeterred, the French socialists are now back with a proposed 66% tax.  Meanwhile, the rich are escaping from France in droves as they fear asset and income confiscation.  The French economy has hit the skids and unemployment is soaring.

What the left gets right:  some on the left are indeed aware that trillions of dollars have bailed out the rich and they acknowledge the injustice of bailing out banksters and the rich.

What the left gets wrong:  The left continues to cling to its insane delusion that if they only had control of all wealth and resources that their perfect communitarian society would become a reality. In fact, it's well documented that socialism/communism snuffed out 100 million lives in the 20th century alone, and mostly by starvation.  Moreover, progressives, Democrats and liberals are indeed responsible for snuffing out nearly 100 million lives in wars that it embraced and eagerly started.  Who got America into WW I, WW II, the Korean War, the Vietnam War and the Balkan Wars?  All progressive, liberal Democrats:  Wilson, Roosevelt, Truman, Lyndon Johnson and Clinton.

What the right gets right:  Nothing really.

What the right gets wrong:  Throughout the world, the right consistently and vigorously defends the status quo, the banksters, central banks, corporatism, crony capitalism, corporate bailouts and in America the Republican right has become the War Party with its overt advocacy of a historically Democrat styled muscular interventionist foreign policy.

While the right claims to defend free markets, limited government and liberty, it's record on all 3 is a big fail.  In fact, the so-called right in America and elsewhere is just as big government statist and warmongering as the left, a situation that keeps liberty activists and advocates for free markets, peace and civil liberties in a state of perpetual war against the Republican right and the Democrat left.

Nobody on the right ever said that the banksters or the rich should be subject to the discipline of free markets and suffer the consequences of stupid investment decisions.  Had it not been for the public bailing investors, bondholders and banks, the rich would have justifiably lost a lot of their wealth.  To elevate risk taking and gambling to the status of a government earned subsidy is the equivalent of bailing folks who gamble risk free at the central bank and Wall Street casinos.

Ultimately the spending, debt and statism will destroy the prosperity and liberty of the people and bring down western civilization because with very minor exceptions like Switzerland, western governments and its voters have indeed embraced the state as the Golden Calf and the cornucopia of plenty.

This will not end well.  In fact, it is guaranteed to end in a big pile of profound human misery, riots, civil unrest and the big thump of government tanks and swat teams crushing the people.

While I salute the Italians and the rise of Beppe Grillo for their courage to raise a truth that needed to be raised, the problem with Grillo is that while he can accurately diagnose the problem and the disease, he falls way short on solutions for the problem and a cure for the disease.  But heck, at least Grillo is halfway there in that he has exposed the massive corruption and political con game of governments bailing out the rich.

Public Sector Unions and How They Have Destroyed the West

In his outstanding book, Boomerang, Michael Lewis was spot on in his analysis of Greece:

As it turns out, what the Greeks wanted to do, once the lights went out and they were alone in the dark with a pile of borrowed money, was turn their government into a piñata stuffed with fantastic sums and give as many citizens as possible a whack at it. In just the past twelve years the wage bill of the Greek public sector has doubled, in real terms – and that number doesn’t take into account the bribes collected by public officials. The average government job pays almost three times the average private-sector job. The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses. The average state railroad employee earns 65,000 euros a years. Twenty years ago a successful businessman turned minister of finance….pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true. “We have a railroad company which is bankrupt beyond comprehension…..and there isn’t a single private company in Greece with that kind of average pay.”

For more on Greece:

Greece: Yes, Life Does Go On When the SHTF

Suffocating Athena: Public Sector Unions Kill Greek Salvation — Again 

Greece’s finances are spinning out of control. If nothing is done, public debt could reach 179.3 percent of GDP by next year. But this does not concern unions. They are fighting the austerity measures that could give Greece its first budget surplus in 10 years.

Hardly a day goes by when we aren't greeted with youtubes and photos of civil unrest in Greece, Spain and other European nations reeling from the big punch of economic misery. These folks are protesting austerity measures that includes proposed cuts in compensation, pensions and benefits. In Europe, public sector unions are an incredibly powerful force because they literally control nearly all vital infrastructure like power plants, transportation and much more. Over the decades, these union have managed to vote themselves huge salaries and benefits that far exceed private sector pay for comparable skills.

Spain is another country facing severe financial and economic problems. Spain has mountains of debt and a hugely bloated socialist public sector.  Spain, like other European nations with busted economies, has proposed a solution that will only magnify the problem:  higher taxes.

Time to Burst Spain's Public-Sector Bubble

Among this week's measures—which Spain's cabinet will officially approve today—is a hike in the rate of VAT to 21% from 18%. Civil servants' wages are being slashed by 7%, unemployment benefits beyond the sixth month will be reduced by 15%, and some bureaucratic expenditures and subsidies will be cut by a third.....

Until now, the Rajoy government had tried to maintain the oversized public sector by raising taxes on families and enterprises.....

The sad part of this story is that the bloat in the Spanish public sector is actually quite recent. Government spending swelled thanks to the extraordinary revenue growth provided by the housing bubble. Between 2001 and 2007, total revenues grew by 67% while expenditures increased by 57%. Spain ran modest budget surpluses for a few of those years, but those vanished as bubble revenues ran out while spending continued to grow. A 1.9% surplus in 2007 turned into an 11.2% deficit in just two years.

By the end of 2011, public expenditures were 75% higher (33% higher after adjusting for inflation) than a decade before.

The Economist chirped in on the severity of the situation which is far more complicated than a mere localized capital vs. labor dispute. Even the statist and socialist leaning Economist observed that public sector unions have been literally feasting at the expense of the much lower paid private economy that, incidentally, works to pay the taxes to feed the bloated public sector.

The battle ahead

LOOK around the world and the forces are massing. On one side are Californian prison guards, British policemen, French railworkers, Greek civil servants, and teachers just about everywhere. On the other stand the cash-strapped governments of the rich world. Even the mere mention of cuts has brought public-sector workers onto the streets across Europe. When those plans are put into action, expect much worse.....

People in the private sector are only just beginning to understand how much of a banquet public-sector unions have been having at everybody else's expense...

While union membership has collapsed in the private sector over the past 30 years (from 44% of the workforce to 15% in Britain and from 33% to 15% in America), it has remained buoyant in the public sector. In Britain over half the workers are unionised. In America the figure is now 36% (compared with just 11% in 1960). In much of continental Europe most civil servants belong to unions, albeit ones that straddle the private sector as well. And in public services union power is magnified not just by strikers' ability to shut down monopolies that everyone needs without seeing their employer go bust, but also by their political clout over those employers.

Many Western centre-left parties are union-backed. Britain's Labour Party gets 80% of its funding from public-sector unions (which also, in effect, chose its new leader). Spain's sluggish state reform may be partly explained by its prime minister's union membership. In America teachers alone accounted for a tenth of the delegates to the Democratic convention in 2008.....

Public sector unions claim they enshrine middle class values and that they they indeed represent the working class man.  In fact, the opposite is true.  Public sectors really don't care about a damn thing except their license to steal at the expense of the common man. In bankrupt California, it's a crisis of public sector tyranny.

Who Runs California? Follow Public-Sector Union Money

California: A century ago, a railroad dominated the Golden State. Now government workers are in charge. A look at funding marshaled against a reform initiative tells the story.

Public employees want us to think they're members in good standing of the struggling middle class, but they sure manage to pony up the cash when elections come around. Maybe it's strength in numbers. Maybe it's union strong-arming. Whatever the reason, California's teachers, firefighters, police, prison guards and other government workers are, as a group, the richest and most powerful in state politics.

The public sector unions have become a noose around the necks of government and taxpayers. Socialist governments everywhere bred them, fed them and now are faced with the abject horror that nobody can afford them.

So as we witness the protests on an almost daily basis, the protesters are all pampered public sector union employees just raising hell at the prospect that their gravy train is in jeopardy.

For public sector unions, it's austerity for everybody except for them. Compounding the situation is the fact that European nations borrowed heavily to fund their un-affordable cradle to the grave entitlement states. However, there are indeed severe problems beside the public sector unions which include that fact that taxpayers are being forced to bailout the failed banks that are swimming in bad loans. The dual edged sword of socialism for public sector unions and banksters will continue to impede economic recovery while intensifying the misery of stagnation.  In fact, together they definitely have the power to guarantee the death of Western Civilization.

Spain, Italy and can Secessionist Movements hit the US?

Catalonia is getting a lot of international press lately because of its secessionist movement that is seriously contemplating secession from Spain. Catalonia is Spain's most prosperous region and includes 16% of Spain's population as well as a fifth of Spain's economy.  Like the rest of Spain, Catalonia is experiencing profound economic problems and Catalonians are sick and tired of sending their tax dollars to the central government in Madrid. Much has been written about the situation in Catalonia.

Catalan Leader Boldly Grasps a Separatist Lever New York Times

Spain risks break-up as Mariano Rajoy stirs Catalan fury The Telegraph

Secession crisis heaps pain on Spain Financial Times

The situation in Catalonia isn't the only secessionist movement brewing in Europe.  In Italy the Venetians are in a secessionist mood.

Venetian Protesters Demand Independence From Rome; Polls Show 70% Favor Independence

Its not just regions in Spain that are sick of centralized government. Take a look at Italy where Venetian protesters demand independence from Rome.

The rally, which was organized by the separatist Indipendenza Veneta party, drew large numbers of energetic protesters.

“The situation here is almost explosive, so today we have thousands of people who have gathered in front of the regional government and we’re going to present to them a resolution signed by thousands of participants to have a referendum for independence,” Chairman of the separatist Indipendenza Veneta Party, Lodovico Pizzati, told RT.

“The main reason is economic. We are in a situation worse than a colony because the tax rate in Italy is the highest the world and our services are extremely poor. We have 20 billion euros missing from our regional resources each year and that’s unbearable,” Pizzati said.

And while some question the region’s ability to stand alone, Pizzati says the goal is completely attainable.

In Italy, the Venetians aren't the only Italians considering secession; Sicily and Sardinia also have secessionist movements brewing because folks are sick of sending their tax  dollars to Rome. Then there's the Scotish secessionist movement.

Scotland's 'explosive' push to secede from the U.K.

Basically, these various secessionist movements are the result of crushing economic misery amid mountains of unsustainable debt.  It's a three-part drama that is unfolding:  1.  the collapse of the European cradle to the grave socialist entitlement model 2. failed statist Keynesian policies and 3.. forcing the people to endure austerity to bailout the banksters.  Even The Ecomonist was quite upfront in correctly labeling Spain's bailout as a bailout of Spanish banks.

The Spanish bail-out  Going to extra time, The €100 billion pledged to help Spain was meant to rescue the banks and calm the euro zone. Instead it has added to the drama

It's true that the banks who made bad loans are being bailed out and it's also true that transferring the cost of the bankster bailouts to the people is grossly unfair and unjust.  Nowhere was a European styled bankster bailout more hideously thieving than in the case of Ireland.  Ireland was an economically flourishing nation with low taxes and low debt, an unusual situation for a European nation.  But Ireland suffered a severe bout of Banksters Gone Wild and the Irish people were left paying for the hugely expensive mess.

The Withering Shamrock: How the Irish People Got Stiffed by the Irish Government

In Greece, the financial disaster is attributable to unsustainable borrowing to maintain an unsustainable socialist cradle to the grave entitlement state. The Greeks couldn’t live on the money of other Europeans forever and their day of reckoning arrived. In Iceland, a tiny nation of 300,000 fishermen and farmers magically churned themselves into high finance gurus who traded on money borrowed from Iceland’s banks that borrowed the money from foreign banks. The Icelanders did the only thing they could do; they allowed their banks to go bankrupt and started over by going back to fishing and farming....

But Ireland? Ireland is a real tragedy because the Irish people are paying for the financial sins of its corrupt government, banksters and bankrupt real estate developers. The Irish banks borrowed from foreign banks who lent mountains of money to Irish real estate developers. Irelands was praised by the media and financial pundits as an economic miracle – living proof that borrowed fiat money creates wealth and prosperity until one day it all ended. The great Celtic Tiger ceased to roar and lay mortally wounded in September, 2008.....

Aside from the fact that the Irish people are idiots for supporting a government that bails out the rich at their expense, the story of how it actually happened is even more horrifying. The gory story is succinctly laid out by Michael Lewis in his outstanding book Boomerang.

But what the Irish government did next was unthinkable. It voted to guarantee the debts of Irish banks which then became the debt of the Irish people. The Irish government told the public that it must save the Irish banks. Lewis makes a most astute observation and discloses that the bailout of the Irish banks was nothing more than a bailout of bondholders:

"....These private bondholders didn’t have any right to be made whole by the Irish government. The bondholders didn’t even expect to be made whole by the Irish government. Not long ago I spoke with a former senior Merrill Lynch bond trader who, on September 29, 2008, owned a pile of bonds in one of the Irish banks. He’d already tried to sell them back to the banks for 50 cents on the dollar-that is, he’d offered to take a huge loss, just to get out of them. On the morning of September 30 he awaked to find his bonds worth 100 cents on the dollars. The Irish government had guaranteed them! He couldn’t believe his luck.

But it gets worse as Lewis states:

"A political investigative blog called Guido Fawkes somehow obtained a list of the foreign bondholders: German banks, French banks, German investment funds, Goldman Sachs. (Yes, even the Irish did their bit for Goldman.)" Michael Lewis in Boomerang.

 And it gets worse as Credit Writedowns reported on 3/3/12 that Irish taxpayers are now even paying unsecured bank creditors."

Folks are certainly catching on to the stone cold reality that while austerity is forcibly being imposed on the poor, the pensioners and the middle class, there is zero austerity for the criminal bankster class who continue to have a license to plunder no matter where they are.

As the economic situation continues to worsen in the US, and it will, one has to ponder how many US states will start clamoring for a divorce from Fedzilla, the Bridezilla that consumed an entire nation.  It certainly isn't beyond the realm of possibility. Failed government at all levels creates a lot of desperate people who will resort to desperate measures for their own survival.  Most assuredly, trust in government won't be a component of their survival plans.