Concentration of power is a chronic economic depressant

In a sweeping indictment of Italy’s economic and social record over the past decade, Mario Draghi, its departing central bank governor, has attacked the failure of successive governments to implement reforms and root out the “vested interests oppressing the country”. Source: FT

To those who follow my writings. I know Italy very well and my writings have been inspired by my experience there.

The “vested interests” mentioned by Mr. Draghi are what I call power groups. The concentration of economic and political power is strangling Italy. It has strangled Ireland, Portugal, Spain, Greece, Lybia, Egypt, Tunisia, Syria, Yemen, USSR, …...

My very humble opinion is that we are witnessing the same process here. Why do I say this? Because concentration of power leads to chronic slow economic growth and income inequality.

I was in Italy at the time when there was a big discussion on the budget. They call it “finanziaria” over there. I could not find in any newspaper what were the issues.

The people did not have a clue what was going on. I asked but no one knew. The newspapers reported only the bickering between various political personalities. People realized that new taxes were on the way.

But you can rest assured of one thing. The “vested interests” mentioned by Mr. Draghi were going to have a preferential treatment – as the oil companies in this country.

We are blessed in the USA because we know what is going on.

George Dagnino, PhD
Editor, The Peter Dag Portfolio. Since 1977
2009 Market Timer of the Year by Timer Digest

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