Monday, August 2, 2010

Viva Italia!

"If economists were running things in Italy, all those 'millions in ill-fated manufacturing jobs" would already have had to 'otherwise find work as, for instance, taxi drivers,'" writes Steve Sailer in reposne to more of "the usual chatter from economists about how Italy is doomed because it hasn't embraced globalization fully enough" — "Is Italy Too Italian?" "Why won't Italians get with the program and outsource their entire manufacturing base to China?"

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Blogger Mark in Spokane said...

If it wasn't for the fact that I don't speak Italian, Italy almost sounds like exactly the kind of place I would like to live!

BTW, one reason their banking system is so solid is because they embraced a very Hamiltonian view of banking -- no weird Jeffersonian hostility to the idea of banks, but no globalized, utopian vision of banks, either. Rather, they pursued the kind of balanced banking with modest government support and supervision that was the hallmark of the Federalist approach to banks, as well as the traditional Whig/Republican approach until the rise of the libertarians in the 1960's.

Viva Italia indeed. Interesting side note: most Federalist political theory, particularly that of John Adams, was based heavily on Italian philosophers and historians -- and not just Machiavelli. There's a great book on this, John Adams and the Spirit of Liberty. Must reading for anyone of paleo-con inclinations with an interest in the Founding Period (has a nice book blurb on the back by Forest MacDonald).

10:55 AM  
Anonymous Steven P Cornett said...

Actually, the Italian banking system, as well as the Hamiltonian Bank of the United States (the first attempt in this country to create a US central bank, which finally succeeded in creating the much hated Federal Reserve) took away 62% of the net worth of the country to the banks and those connected to it (many of them foreigners) during its operation. The War of 1812, America's first war of aggression, which we lost, resulted in a 44% reduction of the value of the dollar on top of it.

The banking system is also the reason why the Italian lira frequency fell into periods of hyperinflation. If the Italian economy is strong, it is in spite of instead of because of the banking system, whose economic alchemy results in the same things there as in the U.S.

11:10 AM  
Anonymous Steven P. Cornett said...

In other words, my Viva will be for the first nation that ends fiat currency and drives the monetary alchemists out of the temple and brings back money based on silver or gold.

That will be the country I move to, unless it happens to be the U.S.

11:12 AM  
Blogger Mark in Spokane said...

The Bank of the U.S. was far more accountable than the Federal Reserve is.

The Federalist banking idea was still tied to gold and silver backed currency. It wasn't a fiat currency.

The Italian banking system is one of the most stable in Europe right now, as Salier points out in his post.

I agree that a solid basis for currency is best -- fiat money suffers from all sorts of problems. Bad idea for Nixon to scuttle the silver standard when he did...

11:25 AM  
Anonymous Steven P. Cornett said...

The Federalist banking idea was still tied to gold and silver backed currency. It wasn't a fiat currency.

The Framers of the Constitution and the first Congress came up with the dollar as a primarily silver standard (371.5 grains / dollar Silver). The bank of the United States still created inflation simply by the mechanism of fractional reserve, so that notes that people thought had real money behind it didn't have the money it promised.

That was still enough to cause inflation that I mentioned above. The bank was supported largely by Alexander Hamilton, as you correctly noted.

10:14 AM  

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