The Italian Job

Italy is in a bit of a economic pickle – the banks need an urgent capital injection but as P. D. Jonson at the Henry Thornton site points out, (scroll to near bottom of article).

Fixing the weak capital position of Italy’s banks would require capital injections into Italy’s banks, with the only possible source the Italian government, but this is expressly prohibited by Euro area rules.

There’s another problem too – governments don’t have any money and what money they do appear to have is always appropriated from its citizens by tax. Governments are actually enormous capital/wealth/money churning machines which produce nothing, nada, zip.

The Italians, Greek, etc have run out of capital which always happens when you reject capitalism and adopt socialism. Under socialism there is no saving of money because all of it consumed by redistribution.

All socialists do not understand this basic economic fact.
All socialists are also utopians.
All the religious are also utopians.
Socialism is thus also a religion, and explains why socialists never learn because they can’t; their programming won’t allow them to.

About Louis Hissink

Retired diamond exploration geologist. I spent my professional life looking for mineral deposits, found some, and also located a number of kimberlites in NSW and Western Australia. Exploration geology is the closest one can get to practicing the scientific method, mineral exploration always being concerned with finding anomalous geophysical or geochemical data, framing a model and explanation for the anomaly and then testing it with drilling or excavation. All scientific theories are ultimately false since they invariably involved explaining something with incomplete extant knowledge. Since no one is omniscient or knows everything, so too scientific theories which are solely limited to existing knowledge. Because the future always yields new data, scientific theories must change to be compatible with the new data. Thus a true scientist is never in love with any particular theory, always knowing that when the facts change, so too must he/she change their minds.
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One Response to The Italian Job

  1. PeterMG says:

    I agree with your sentiment 100%, and certainly those who we readily identify as Socialists are experts at spending other people’s money and money they don’t have.

    One of the problems we have when trying to rationalise all the different arguments is that we use the Lefts language rather than use terms that may correctly describe our current reality. The left has been very cleaver over the years reframing say dictatorship as right wing when in reality it is the ultimate in left-wing politics with all control at the centre. They demonise “Capitalism” calling it right wing, as if it is the opposite of Socialism when it is not.

    Socialism and Capitalism are often loosely used to mean opposite ends of a political system when they individually do not describe the same thing. Socialism is about a form of government when all decision making and direction comes from the Centre. Socialism does not describe how you allocate capital. Capitalism is about how you allocate capital, and is nothing about who makes all the decisions or what social polices you have in place. These terms are not opposite ends of a political structure.

    Nowhere in the west do we have Capitalism. We have not had it for a very long time. The test of whether you have Capitalism is its necessary regulation. There is only one rule in Capitalism, and that is protection of the individual. Without this fundamental rule in place Capitalism does not work. We see this all around us today as what we have is crony capitalism, where all the rules favour government and multinational corporates and the effect is the same as communism.

    This is why globalisation has gone so disastrously wrong for those of us in the west where the corporates with no rules to protect the individual have been compelled at times to move production to low labour environments to then reimport the finished product. High skilled jobs have been replaced with low skill service jobs. This in turns tends to see people vote for socialism to claw back some of the lost standard of living, and when that fails they go radical. This is the point we are at today. It remains to be send how many countries can follow the example of the British and say “enough is enough” and seek to rest back control and formulate rules that protect the individual.

    Like

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