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The Italian post office, privatization is false, inside there is CDP.    The last remaining business is safe, still fully Italian.

Cassa-depositi-e-prestiti.-Chi-vuole-la-cassaforte-d-Italia_h_partb“There is nothing in the nature of this business, as there is in the transportation of passengers or commerce in general, which should give reasons as to what makes it a monopoly, both in the hands of the State and those of individuals.”

Playing with words is an exercise often adopted by those who wish to pull the wool over the eyes of its stakeholders. These days, the mainstream media frantically bouncing a title that carries with it a certain emotional charge: the Italian Post Office will be privatized.  Beyond the sensational goal, this operation has only been calculated for carrying other liquids into the State coffers, which we are becoming aware of how these oppressive tax policies have begun to give negative results. The estimates are inflated to make a good impression, but the reality is when the price is asked for.  Basically, the operation fielded by Letta Government predicts that over the next two years, 40% of the shares of the Italian Post Office is to be sold to private parties.  On the surface it sounds like good news, to the supporters of this market.  But it is not so. First of all, we fall into that cycle of fallacy being that the partial opening of the market will give long-term benefits.

The Short- term is safe, But in the long run?  You must be joking.  By acting in this way, i.e., by creating a hybrid between market and monopoly, you only end up aggravating a situation orothat is already decadent. The management of economic affairs in such an environment is similarly marred by the inability to work properly with this economic calculation.   As early as 1920, Ludwig von Mises, in his Economic Calculation in the Socialist Commonwealth, warned that central planning of the economy is a political mirage dictated by the supposed omniscience of those who are associated with popular authority to tamper with the signals of the market.    If the market opening is partial, it will end badly for allocating production factors within an economic environment where prices are not properly reflective or informative to those who rely on it.  This leads to the slow, but inexorable economic upheaval of the fraying fabric of social relationships and, therefore. requiring central planners to come up with further actions to hold together the ranks of their well-designed plans. This hybrid economy ends up becoming a dictated Socialist entity which is directed by a handful of individuals.  The last stage of this process is suicide:  just as the USSR in 1989.

Fake privatization and the dangers to credit

massimo-sarmi-conferenza-euromed-postal-di-marrakechThe partial sale of shares in the Post Office will only serve only to bring together additional funds to the largest apparatus of wasteful of resources, which will be poorly allocated in unproductive projects – such as this.  What is missing in central planning?  In “The Pretense of Knowledge”,  F. A. Hayek enlightens us: the changing desires of individuals, led by subjectivity, make it impossible to forecast proactive actions on the part of a small group of individuals. It is an arrogant and misleading claim to be able to continue the cold statistical patterns and mathematical models of individuals.  Therefore, true privatization should provide the full transfer of goods and assets to those who are willing to take ownership of the properties (through actions) – probably its employees. The State should completely exit from this business.

Public spending: why you can’t decrease?

By continuing to read the proposal, we learn that the portion sold by the State will cover the postal service and not the bank (Bancoposta) or insurance (Postevita). This is a real interesting point. Over the years, the Italian Post Office has invaded more of the large progressive sectors of the market.   As maintained by Massimiliano Found in his paper, “the Italian Post Office: the new IRI”.

A ghost is haunting Europe: the spectre of IRI, the Institute for Industrial Reconstruction by Duce and chaired by Alberto Beneduce.  If Sergio Ricossa could write in 1957 that “the true posteItalian sees with glasses Salmoiraghi (IRI), uses the electricity Finelettrica (IRI), listen to […] RAI programs with Cetra records and advertising SIPRA […], telephones with ‘IRI […] entrusts the savings banks of the IRI, reads newspaper supported by advertising of IRI,, “it could well be argued that the Italians of  2009 ships with the  true Post Office, saves with Bancoposta and pays with  PayPal, he ensures with Post life, uses electricity and phones with Mobile Post Office and make with Shop and Post Office spending that goes to Lourdes with Mistral Air.

As never before, the Post Office is now listed as a model of efficiency and innovation: after all it is under the eyes of everyone, evolution of profits, rising steadily from 22 million euro in 2002 to 883 in 2008, really not bad for a company that for fifty years had balance sheets seamlessly in the red, requiring enormous efforts on the part of public shareholder scheduling.

This is the price of central planning:  invasion of other sectors of the market to maintain t the illusion of solvency of unproductive investments which are deemed essential – for purposes of patronage – on the part of the ruling class.  But this does not fully explain why the State wanted to maintain control on the banking operations.  In fact, if you think about it, it is pretty intuitive. Two words: easy money.  If you noticed the advertising in tivvù, one in particular always comes back more often which advises the Italians to invest their savings (those remaining) in postal savings bonds. These are the source of funding of the Deposits and Loans Fund, which is seeking funds to maintain standing areas – zombies and drains- and resources.  Not only that, let’s not forget the postal savings accounts, which are crammed with several Italian funds.  While in recent years the accounts have been abandoned by the Italians, yet postal savings accounts have experienced a real boom.  What does this mean?  More money than you can handle by central planners.  How?   Three words: fractional reserve banking.

ansa110569362708175534_big1The funding source is represented by this giant of credit, is something that the State will not allow itself to get away from, because Italy, once entry into the euro, had to say goodbye to the ability of the Bank of Italy to create money out of nothing. Although the mainstream would argue that the CDP does debt when acting on behalf of the State, this is not correct   Debt on-budget, definitely not. Off- budget? You bet.  The problem with this configuration is that, as mentioned before, the allocation of resources by the central planners is subject to a general lack of vision of the economy, as a result waste and unproductive investments.  The Italian State has confidence in sustaining this illusion:  “Your money is there.”  But It is not so.  They boast a credit, but your money is gone.  Ultimately you are guaranteed behind the credibility and capacity to finance the State. Voluntarily?  I do not think so, especially since the postal savings books have become mandatory for certain monetary transactions and to collect pensions.

Encouraging growth (without public aid)

The confusion generated by the manipulation of words is disarming.  It is thought that if the State is run like a private company, it will thrive and prosper. This myth is debunked by Mises in Bureaucracy, where he warns that such a structure of the economy is doomed to failure, because the State is incapable of operating a proper economic calculation, and is not encouraged by the profit-loss system.   The only reform would be total privatization, where the State leaves the business scene that operated at first as monopolies, by withdrawing privileges and subsidies. Finally, you could argue that the resources derived from this operation will repay part of the debt accumulated so far by the Italian State. Oh Please!!  Five “measly” billions of Euros? The Italian State has an estate worth 300 billion euros – and that has yet to be disposed of.

Alessandro Sicuro


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