Noemi as Mass distraction Weapon

Mr. Berlusconi recently filed a writ for defamation against La Repubblica for the famous ten unanswered questions. The following title is taken from the website of the newspaper (Article published August 28, 2009)

Come on, how can a question be defamatory? Anyway not answering is not the best way to defend oneself. The huge clamor about Noemi Letizia seems to be a frontal attack to the premier. The newspapers talking about the presumptive scandal seem to be the last chance of free press. Are we sure? Aren’t there any further questions that may be even more inconvenient for the premier?

On Jul 30th 2003 Bill Emmott Editor of The Economist sent an open to Silvio Berlusconi. In this letter still available on the website www.Economist.com we can read what follows:

«On April 28th 2001, we published a cover story entitled “Why Silvio Berlusconi is unfit to lead Italy” and a four-page investigation “An Italian story”. We sent you a letter on April11th 2001, containing 51 questions, that stated: “The Economist intends to publish shortly a feature on your business career and on the various investigations into you and your companies that have been carried out by the Italian magistracy during the last seven years”. You did not reply.»

The letter ends with the following:

The questions of the Economist seem much more relevant than those of Repubblica, aren’t they? Does anybody care? Is the presumptive summer scandal the most important thing Italian press should care about?

And what about government policies? Is anyone checking if the premier is maintaining his past promises? About tax reduction? About infrastructures? Has anybody heard about a soap opera named Alitalia? Is it finished? What happened in the last episode? The entire world is trying to face the worst financial crisis since Great Depression, do anybody know what is going on in Italy? Will our prime minister’s famous humor and optimism solve everything as usual?

Poor Taxi Drivers

On July 2009 on the web site of national newspaper La Repubblica appeare the following title

It says:

“Restaurateurs like pensioners they have both the same tax return / The case of micro-firm that earn less than employees”

Let’s consider another title of 2007

It says:

“Taxi drivers: very poor or big tax evaders their tax return is on average 13.800€”

Back to the article of 2009 we can read

So the average for taxi driver is now from 15k to 17k.

Let’s make some quick math.

A roman taxi driver in 2005 had an official income o 14k€. Let’s even assume that now it reaches 20k€. The flat rate for a ride from Rome centre to Fiumicino Airport is 40€. In the evening a ride from airport to North Rome costs on average 60€. Let’s assume that a taxi driver earn 30€ for each ride on average. An annual income of 20k means 666,6 rides (funny?) that is 3,3 rides per day if we assume a very conservative 200 working days per year. Can you believe this?

The last piece of the puzzle is the value of driving license. Tax inspectors in Emila Romagna estimated in 2005 a value of 200-240k. To keep the analysis simple we used gross figures, but the basic meaning is more than clear. Would you buy for 200 a license that allows you to earn 14 per year?

Self employed people in Italy pays taxes on the base of industry studies. This means that if their tax return is lower than what can be expected on the basis of industry studies there in an automatic control from tax inspector. The result is that large majority return an income equal to the minimum expected according industry studies. This allowed roman taxi driver to return an average income of 14k in 2005.

Let’s do some more quick math. A taxi driver may probably work 300 days per year for something like 10 hours per day. Let’s say that each working hour on average produces the income of just one ride and it is 30€. This ends with 10 x 30€ x 300 = 90.000€ per year.

Should industry studies be revised?

Do Italian employees understand the zero sum game that transfers onto them the burden of taxes unpaid by self-employed people?

If they even understand the game, do they realize what they are doing when they support political parties soft with tax evasion?

Why Italy cannot be ruled by fair governors

Karl Popper used to define democracy as that system where government can be easily replaced without bloodshed. According to this definition Modern Italy is surely a democracy. However there is probably something not working well in Italian democratic system. Many Italians share this belief and foreign press, especially the Economist, has been writing a lot about multiple faces of this problem.

Is Italian press truly free? Are Italians correctly informed about what happens in their country? Can they freely express their political will without bias? Many more questions could be asked about this theme and far more than a single article space would be needed to discuss them. Let’s focus on one single sentence: Italy cannot be ruled by fair governors.

The main reason is that private interests of some Italians and wrong understanding of some others conflict with the needs of the country. As a sort of opposite of invisible hand, the individual Italian, believing to pursue his own interest, causes damage to the whole country and therefore to himself too. For example Meritocracy is most of what Italy needs. However no meritocratic reform or policies could be well accepted by the voters. Let’s detail why.

Meritocracy should mean at least three things.

1. Ordinary law enforcement, such as
   1. Jail of convicted people;
   2. Fine or prison for tax evasion;
   3. In brief no law violation should be tolerated;
2. Standard market competition, for example
   1. Removal of law limitation of the number of competitors in such jobs like notary, pharmacist, taxi driver, and so on
   2. Remove administrative enter barriers to many kind of job or commercial activity
   3. Remove most of the existing labor market burdens
3. Bringing efficiency in public administration, namely
   1. allow firing those people that violate law and commit severe abuses
   2. give a reward to positive performance as well as penalty to negative ones

Voters that would not accept meritocratic reforms can be divided in three main categories.

Category one includes people that consider meritocracy a threat to their own interests namely

• professionals like notaries and pharmacists that benefit from law limitation of number of market competitors
• public administration employees that benefit from highly tolerant regulation enforcement (including sometimes severe law violation)
• people used to tax evasion (they are more than a non Italian can expect)
• more in general people afraid of ordinary law enforcement

Category two includes people not understanding or not willing to recognize meritocracy’s benefit including

• employees that are not able to realize the zero sum game that will transfer onto them the burden of tax unpaid by others
• people resigned to the idea that the status quo cannot be changed and it is useless even trying
• people that simply do not want or find worth spending time in considering the problem

Category three includes people that consider a political party just like a soccer team, something you choose with heart more than with brain or a passion you may even inherit from your father.

Only people belonging to category one get a tangible benefits from lack of meritocracy, however they are able to determine political results using the cooperation of categories two and three. Collaboration of category two is based on resignation, lack of will or time to become fairly informed and so on. Category three gives its support on a non rational base, its members prefer to believe in biased news or improbable announcements more than consider facts objectively.

In conclusion, Italy cannot be ruled by fair governors because a lobby is able to determine political results and the interest of this group conflict with those of the entire country. These lobbyists are helped in pursuing their own interest by others that do not understand or do not want to see the global damage to the country.

Proud Rome Mayor

This photo have been take in Rome at the beginning of August 2009.

It says that 400.000 Romans were fined since 2004. Thank to Rome’s mayor they can now avoid paying the penalty. How will this affect general perception of Law Enforcement? What kind of incentive is this?