Sunday, November 25, 2012

One year of Mario Monti in Italy: grandfather's government

After one year as head of the Italian government, there is no doubt that Mr. Mario Monti has been successful at implementing  a policy of fiscal rigor and cost containment. He has been successful also because he has been good at managing his media image, consistently playing the role of the wise grandfather. However, the Italian economic problems can hardly be solved by purely fiscal measures. What follows is a personal interpretation of the situation.

In a debate that took place in 1980, Ronald Reagan, then presidential candidate,  demolished the incumbent democratic president, Jimmy Carter, with a single sentence, "There you go again!" That sentence became so famous that it even has a specific Wikipedia entry.

That old debate came back to my mind when, this month, I read that the Monti Government, in Italy, had reached one year of life. But what was the connection between Mario Monti and Ronald Reagan? It took me some head scratching before I could find an answer. And then it downed on me: yes! Monti was playing the role of the grandfather, just as Reagan did in the 1980s.

Ronald Reagan was a genius of communication and he had a natural talent for playing roles. In the 1980 elections he consistently played the role of the wise grandfather and he used that role to demolish his younger opponent. It was a case of asymmetric rhetorical warfare: Reagan could tell to Carter "there you go again", but Carter could not tell that to Reagan. It was grandfather vs. grandson: no contest. That would have gained the election for Reagan even without the help of the Iran hostage crisis that arrived later on.

At 69, Mario Monti is younger than his predecessor, Silvio Berlusconi (76), but he has been playing a completely different role. Whereas Berlusconi played the "alpha male," rich, powerful, and successful with women, Monti played the grandfather; calm, reassuring, and wise. He showed a remarkable skill at this role; avoiding displays of power and continuously dropping hints of normalcy in the media: his wife shopping at the market, having Christmas dinner with his family, and the like. Just as in the confrontation between Reagan and Carter, there was no contest in the struggle of Monti against Berlusconi. After decades of rule by an elite that looked more interested in sex and money than in serving the country, Italians appreciated a lot having a prime minister who didn't boast about how many women he had and about how rich he was. In a way, Berlusconi was victim of his own success: alpha males tend to generate a lot of opposition and to be toppled after their first major mistake (and Berlusconi made more than one).

In Monti's implementation of government, people look at their leader as if they were looking at their grandfather: a wise figure that helps them when they are in trouble. Grandpa may ask you sacrifices, of course, but you have no doubt that he is doing that for your well being. So, Italians submitted to Monti's cure of fiscal rigor and higher taxation with startling patience; at least up to now. So far, we haven't seen anything like the disorders that have accompanied the similar crisis in Spain and in Greece.

But can Monti's political experiment continue for a long time? Maybe, but there is a big problem: Italy's troubles may be well beyond fixing by fiscal rigor alone. Facing the convergence of the resource crisis, of onrushing global warming, and the general ecosystem disruption, even grandfather's wisdom may not be enough. The old ways of fixing an economy just don't seem to be working any more. Italy's whole economic system seems to be collapsing and the country needs to find new resources in order to survive. These new resources could have been obtained by continuing the politics of support for renewable energy which, instead, the Monti government abandoned. At the same time the Monti government failed to disengage Italy from some extremely expensive public works, such as the new high speed railway line from Turin to Lyon, which are weighing heavily on the country's budget. In short, Monti's cure for the Italian economy is starting to look more and more like curing a cough by chocking the patient to death. 

After one year of sacrifices, Italians haven't seen improvements in their condition: taxes keep rising, services keep being slashed, finding an apartment for rent at reasonable prices is nearly impossible, unemployment is increasing, and the struggle to arrive to the end of the month is becoming more and more difficult even for those who still have a salary. Mr. Monti keeps saying that someday growth will restart, but that is starting to sound hollow. Right now, Italy seems to be on the brink of a collective nervous breakdown and the recent street protests are a symptom of what may happen in the future. Grandpa's pill to cure Italy's illness was always bitter, but now it looks more and more ineffective.


Ugo Bardi is a member of the Club of Rome, faculty member of the University of Florence, and the author of "Extracted" (Chelsea Green 2014), "The Seneca Effect" (Springer 2017), and Before the Collapse (Springer 2019)