The Agnellis were more than Fiat’s controlling shareholders. They have been the de facto royal family of Italian capitalism. Gianni Agnelli, the patriarch who died in 2003, was at the centre of a web the cross-shareholdings that gave a small group of entrepreneurs and bankers disproportionate power over Italian industry. The group was called the “salotto buono” (literally “the fine drawing room”).
The downturn has been tough on some of the old powerbrokers. Mediobanca, the investment bank disproportionately powerful because of its shareholdings, reported a plunge in profits after taking E281m of writedowns on strategic stakes in Telecom Italia and RCS Mediagroup.
But the old network might be replaced by something worse: “Berlusconism”. Silvio Berlusconi is prime minister, the richest man in Italy and master of most of the country’s media ... Berlusconi has already meddled directly in the national airline, Alitalia and the national telephone operator, Telecom Italia. His indirect influence is even being felt in old bastions of financial power such as Mediobanca where his daughter recently won a board seat.
Italy did not do too badly with the “mixed” state-private economic model it followed postwar. But Berlusconi’s version seems to have a special twist. His record shows he likes talking about reform, but his actions reveal an unhealthy interest in furthering his personal empire. With Italian GDP predicted to shrink 4% this year, that approach is the last thing Italian business needs. (via Fiat's dealing will change Italian capitalism).
Public sector economies of Europe
The economies of France, Germany and Italy are practically run by public sector monopolies - or subsidized behemoths, who make survival of competitors difficult by their ability to sustain losses - based on Government largesse.
Spain and Britain have all but collapsed! Which way will the US jump - will it also go the public sector way - go the Spanish way? By the way, the national industry in Spain these days is prostitution!
Which bring me to another question!
The lure of 'capitalism' ...
Why is the West so keen on calling these publc sector, subsidy driven regimes as Capitalism? Capitalism dpended on looted capital and slave labour to prosper - resulting in the famous 'laissez faire' quip. Capitalists wanted and got ‘laissez faire’ capitalism – which was a ‘coda’ for unlimited slavery. The restrictions on laissez faire were actually restrictions on slaves.
Now under socialism, they get unlimited protection from 'destructive' competition. Which is being papered over by names like crony capitalism, free market capitalism. etc., etc.
Look at Spain and Britain
Spain's national industry today is prostitution. Britain is floating on the sewage of the Bretton Woods bilge! After the multi-trillion dollar bailout, which has just begun, and with more than US$4 trillion with China, Japan, Russia and India, neither is the outcome certain nor is the outlook bright.
Last but not the least, we must remember the power wielded by the Chartered Companies of Europe - another word for public sector. East India Company was a public sector company!
The Rest of the World needs to be careful of these public sector monsters!
Public sector or oblivion
During the Great Depression, more than 19 auto companies (similar to the number of banks today) were folded into the Big 3. The Big 3 lived to fight for another 70 years. In their death throes, the US Big Auto is likely to go the way European auto sector has gone - public sector or oblivion.
Saddam lives (through his words)
The way it looks, it will mean the Mother Of All Mergers. At which point, there is no team of accountants in the world who can figure out what is where, or what condition what is in? And then the evasions, the lies the obfuscation can continue for some more decades?
Which model will US follow - public sector or closure? Subsidies or welfare?
Real low ... real truth (seen an oxymoron like that?)
The real question - who will pay for it?
Not the Americans! No siree. Definitely not.
Neither the American super-rich or the American welfare-poor? Not the American tax payers or the American tax evaders? Not the American Whites or the American Blacks?
It is the Chinese, the Russians, Indians, Brazilians and above all the Africans will pay for this! They have done, what bankers call non-recourse lending! The Chinese, Russians, Indians, Brazilians and the Africans, have no recourse. Who will the Chinese go to, for redeeming their US$2 trillion?
The bankrupt US of A? Welcome to the real world.
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