{"id":268,"date":"2012-10-03T20:27:25","date_gmt":"2012-10-03T20:27:25","guid":{"rendered":"http:\/\/blog.sandralangston.com\/?p=268"},"modified":"2012-10-03T20:27:25","modified_gmt":"2012-10-03T20:27:25","slug":"ma-dove-questa-crisi","status":"publish","type":"post","link":"https:\/\/blog.sandralangston.com\/?p=268","title":{"rendered":"“Ma Dov’e’ Questa Crisi?”"},"content":{"rendered":"

http:\/\/globaleconomicanalysis.blogspot.com\/2012\/09\/monti-warns-italian-unions-over-200000.html<\/a><\/p>\n

I have never thought to post a link to an article before, but this one was so essentially synchronized with my current thinking that I could not resist. \u00a0I hope that if you take the time to read it, you will then come back and let me put in my two cents’ worth.<\/p>\n

Things are bad. \u00a0They have been bad for so long that the frog boiling in the pot has been comatose for some time. \u00a0Luckily for Italians, he has a shadow double which lives on happily \u00a0in the underground economy. \u00a0It is a world where following the rules imposed by \u00a0a \u00a0conga line of megalomanaical governments was never an option. \u00a0What we might see as “corruption” is simply survival to almost everyone buying, selling, or producing anything. \u00a0 Now, however, over ten years of imposed absurdity defined as EU “guidelines” \u00a0 combined with the current economic collapse has brought things to crisis level. \u00a0Will there be a reaction? \u00a0Who knows.<\/p>\n

I have been observing things, as we all have here, and so I have a few anecdotal stories which may help people from elsewhere understand what Italians are up against.<\/p>\n

My husband once had a store. \u00a0It was taxed in many ways, and he eventually got out of the business because the fiscal pressure was too great. \u00a0Business income taxes are around 45 percent to start. \u00a0 He had to pay tax on every article he sold, as if he had sold it, before he sold it. \u00a0Think about this: \u00a0You buy 100 articles, you pay up front for them, and immediately you turn over the hypothetical \u00a04 to 20 percent value added tax to the government, as if you had already sold all 100 articles. \u00a0 \u00a0If things go really well, you might sell 50 of these articles. \u00a0 The remaining fifty cannot be written off, and you are allowed only two “On Sale” periods of ten days in a fiscal year. \u00a0These must be communicated to the appropriate offices in triplicate ahead of time. (And yes, there is also a tax on each page of official documentation, which one must purchase in the form of stamps. \u00a0These range from a couple of Euros to 40, depending on the document.) \u00a0 These are established by region and by date. \u00a0 Stiff fines are levied on any store displaying a “SALDI<\/em>“** \u00a0sign outside of this permissible window of time.<\/p>\n

The roving representatives who offered their wares to store owners were also regulated by rules regarding competition, so in any small town there wasn’t really a choice as to whom to buy from. \u00a0Most representatives will not sell to a store owner unless he\/she buys a certain amount of merchandise. \u00a0In a tiny town, how many of X article, especially things like specialty clothing, do you think you can sell once someone has already bought one? \u00a0 Always, the \u00a0answer is “not nearly as many as you had to buy.”<\/p>\n

The store space is taxed on its size, taxed on its location, taxed on whether or not it has air-conditioning, whether it has a phone, a bathroom, internet, how much window space it has, \u00a0how many lights it uses and the size of its monthly electric bill. \u00a0God forbid you should be so lucky as to need an employee (most small stores are owned and run by one person or a family). \u00a0 Business owners are expected to not only pay a pre-established wage and follow all rules regarding hours, but they must pick up the tab for extensive medical and retirement fund coverage, and guarantee that there will be no firing before a certain period of months has passed. \u00a0No matter how \u00a0inept or dishonest the employee. \u00a0Hiring an employee is similar to adopting a child: you are forever responsible for that person. \u00a0It is a rare small business where the employee does not take home, every month, more money than his\/her employer. \u00a0No wonder jobs are scarce.<\/p>\n

But the most egregious example of the absurdity and extent of taxation on small business that I remember was the tax on signage. \u00a0It started by requiring a special tax if you had a sign, as most businesses do. \u00a0Sunsequently the sign was also taxed by its size. \u00a0Then the tax was increased if the sign used electricity to illuminate it. \u00a0But the final indignity came when, around the middle of the 1980’s, the government decided that store owners should be taxed according to how large a shadow the sign cast on the sidewalk at \u00a0a given hour, which I assume was not at noon. \u00a0I don’t think this tax is still in effect, but you can be sure the EU will have come up with something similarly preposterous.<\/p>\n

The government establishes how many pharmacies there can be, one of them for each 12 thousand inhabitants. \u00a0It establishes which items the pharmacy may sell. \u00a0The licensed pharmacist is inevitably the wealthiest person in town, along with the “notaio<\/em>.” \u00a0This is the notary, \u00a0whose signature is required on all transactions of property. \u00a0He must be paid a percentage of each land, car, house, business sale. \u00a0This percentage is very high. \u00a0 As you might imagine, the declared value of such transactions is a fraction of the actual price. \u00a0Buy a farm for 100 thousand Euros? \u00a0Declare its cost at 20 thousand. \u00a0Nevertheless, the notaio is not only very wealthy, but also one of the most despised people in town. \u00a0 The position of both\u00a0notaio<\/em>\u00a0and\u00a0farmacista<\/em>\u00a0is jealously guarded, and the license is passed down, always, \u00a0within the family for generations. \u00a0Find the nicest\u00a0palazzo<\/em>\u00a0in town? \u00a0It belongs to either the pharmacist or the\u00a0notaio<\/em>.<\/p>\n

It is said that as much as 50 percent of the Italian economy is underground. \u00a0I certainly hope so. \u00a0Recently a law was passed (ostensibly to regulate \u00a0money-laundering) \u00a0which mandates that any transaction larger than 1000 Euros (about 1,300 dollars) MUST take place electronically. \u00a0Cash is not allowed. \u00a0 Only a certain amount of cash can be withdrawn from one’s personal bank account in a 24 hour period. \u00a0 Add the transaction charge to an already tenuous bottom line in stores, and compound this by the fact that only about 25 percent of Italians will use plastic to make purchases, \u00a0factor in \u00a0the inflation which is sure to come, \u00a0and you can see the perfect storm on the horizon.<\/p>\n

So if it is true that \u00a0rules create behavior, much of the “corruption” prevalent in Italy is a direct result of the population trying to hang onto what little they earn. \u00a0The entire structure is built on successive levels, the “underground” levels being where the bulk of transacting takes place. \u00a0 I can testify, as someone who has been restructuring a house, that things can get quite interesting! \u00a0 Work a job if you can, but make sure you have enough chickens in your coop to exchange with your neighbor who grows wheat! \u00a0 \u00a0 And treat the winemaker well, too, you are going to need him!<\/p>\n

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“Seniority” mixed media on paper<\/dd>\n<\/dl>\n<\/div>\n

* \u00a0 \u00a0 “But Where is this Crisis?” \u00a0 A famous song from the 30’s which is always pertinent. \u00a0They even made a\u00a0Carnevale<\/em>\u00a0\u00a0float in theme, with an updated version of the song, which you might find amusing!! \u00a0If I have the time I will translate it.<\/p>\n

Recognize anyone? \u00a0\u00a0http:\/\/www.youtube.com\/watch?v=vjP9J33ztYE&feature=related<\/a><\/p>\n

**”SALE”<\/p>\n

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