Thank you!
Before delving into the Cimmerian mists, a few words of thanks, and a slide, one of the ones I was telling you about yesterday.
Meanwhile, thanks.
It's not obvious these days to have a hall so full and full like this. So full, that is, without a free seat. Full like this, that is, full of people who want to understand and commit themselves. The feeling is that the balance between those we lost along the way and those we found is positive not only in quantitative terms (with respect to this, political exposure may have helped), but above all in qualitative terms. More young people, more families, more professionally qualified people, less emotionally unbalanced people, less braggarts, less mediocre.
We have gone through many sieves.
We can excuse those who got confused, but we can't excuse why they got confused: because they didn't trust me, that is, because they were grillino. For heaven's sake: if faith and trust are two different words there is a reason: they are two different things! Indeed, the foundation of faith is not rational. But it is irrational not to trust the path that has been outlined here and whose first decade was summarized today at #midtermgoofy. There is a goal (the usual), therefore there is a direction (which cannot be the straight line of the Sport bar strategists), therefore there is progress (someone remembered that at the previous #midtermgoofy Marcello had pointed out that there were cameras, today we had three national networks and we were on all the agencies with non-trivial messages), so we're moving forward. Anyone who doesn't see it is because they don't want to see it, it's because they didn't need to commit themselves, but kisses on the neck, blandishments and flattery to their own constipated little boy, or, worse still, a rapid socio-political lift. I'm sorry: not that I'm not courteous by nature, but wasting time for those who know more is sorry, and I know enough, by now, to understand if the person in front of me is a man of flesh and blood or shit and talk. So, based on this experience, I think I can say that the quality of the community is growing, and that's a good thing.
We have passed, I said, through many sieves.
My political investiture was the first, the exit from the Orthopteran government was another, COVID was another (and I was pleased today to see that someone understood what we did in that period), trust in Draghi was another , the thickest. We have shaken off the bran, there is fine flour left and with this, and with the leaven of our meetings, we will prepare our bread. We have a year to do it: natural leavening, and a long one.
So: thank you!
Naturally, thanks also to the institution that hosted us, and thanks also to the staff of a/simmetrie. They are a bit scarce, as you may have noticed, but at least they are beautiful to look at, and the eye also wants its share.
Or not?
In this regard, standing ovation for the graphics designed by Sara.
In any case, it amazes me how at each meeting it is possible to overcome the interest, the enthusiasm, the emotional tension, the intellectual satisfaction, in short: the success of the previous one. And this after ten (actually thirteen, but for the association ten) fucking years in which we could tell ourselves that nothing has changed, but something has changed instead. Not only the fact that we have shaken off so many excrements (which, forgive me, does not hurt). Not only the fact that power has become more ferocious and ruthless with those who contend for the scepter (as both Giordano, Capezzone and Foa have noted today). Not only the fact that now we can observe certain processes from the inside, and we can occasionally influence them (the European filiation, the cadastre, the reform of the CCBs, the reform of the governance of the authorities, etc.). But also, perhaps, the fact that we managed to focus on our real (and perhaps only) enemy: or rather, that you finally managed it, because I think I told you who to distrust from whom I told you in very unsuspicious times ! The little game they want to fuck you with, to make you believe that you would be stronger if your representatives were weaker, you, at least you, should have finally figured it out, or so it seemed today.
And this frightens others greatly: it frightens Power, and it frightens the mediocre.
And now, as promised, a slide that last night cost me ninety minutes of work, and which has its own reason, even aesthetically:
In red, the historical, actual value of GDP in real terms, in billions of euros. The dotted lines are instead the seven-year forecasts issued by the IMF in the 15 years from 2008 to 2022: a seven-year forecast path starts from each year (in dashed black) which, as you can see, only in very rare cases coincides with or is close to that which then would have been the actual, historical layout.
There is: I do not want to say that the IMF do not know how to make forecasts. Predicting at seven is not only impossible: it's also useless! But precisely for this reason I wanted to point out how vain the new European tax governance approach is, all centered on seven-year forecasts!
Vanum est vobis ante lucem surgere!
But there is also a detail in this graph, which I have tried to illustrate today, and which perhaps was not well understood. It is not by chance that these forecasts are so fallacious, but because it makes them become us with its economic policy prescriptions that it issues.
To understand what I mean, look at this table:
I built it by taking the forecast errors (historical minus expected) one step ahead, expressed as a percentage of the historical value, and the primary budget balances, expressed as a percentage of GDP.
Thus, for example, for the year 2008 the first column shows the difference between the historic value of GDP in 2008 and the 2008 forecast made with the information available in 2007, while the second column shows the primary balance/GDP ratio in 2008 .
The summary is in the lower right number, -0.75: a strong and significant negative correlation.
What does it mean?
It means that when the budget balance goes up (ie it cuts), the forecast error goes down (ie the actual value of GDP is lower than expected).
Attention! This may seem trivial to you, after so many years of talking about it: it is clear that if austerity (spending cuts, tax increases) "destroys domestic demand", then domestic demand (i.e. GDP) is destroyed. More than clear, I'd say it's tautological.
What is less tautological, less obvious, is that this strong negative correlation indicates that the multiplier continues to be underestimated in the IMF models! They just can't admit that the economy is responding to fiscal stimulus!
Anyway, my summary is this :
and after all even Cottarelli, who, as you will have seen, is not so bad if you consider the alternative, had to admit it: among the various amenities they bring with them, these new rules also have that of a constant dialogue with the Commission, to avoid being sanctioned every time a forecast error by others will have a negative impact on the spending paths agreed by the country.
But perhaps for this point to be clear to you, as well as the little drawing, you would also need a speech. Whoever was there heard it, I'll do it to the others when I can.
Meanwhile, good night, and for those who are there tomorrow, see you at the Agricultural Fair !
(… I remember the next dates: May 24th, July 10th. Then do as you like… )
This is a machine translation of a post (in Italian) written by Alberto Bagnai and published on Goofynomics at the URL https://goofynomics.blogspot.com/2023/04/grazie.html on Sat, 15 Apr 2023 20:18:00 +0000. Some rights reserved under CC BY-NC-ND 3.0 license.