I Am Amazed

Not by what is said, but by who is saying it, and where. The President of the Vatican bank says government intervention worsened the economic crisis. Writing in L'Osservatore Romano, he says:

The Vatican Bank president observed that the West has become a major consumer while its manufacturing productivity has declined, and that GDP has largely grown in terms of debt. “When all of this became too much, they [Western nations] threw in the towel,” he wrote. “Emergency measures from the State became necessary in order to raise public spending, but to be sustainable, it needs GDP growth, otherwise taxes become unbearable. In fact, this is what has happened.”

But the Italian financier believes it's possible to stem the West's economic decline, and he proposes some possible solutions. Most importantly, he argues for a “growth in productivity,” generated in part through making maximum use of “technology and the digital economy,” as well as “channelling savings into small and medium-sized businesses through the banking system.” Finally, he advises “studying appropriate currency measures.” All of this, however, “implies a change in the mentality of manual work, which needs to be rethought,” he said.

He also advised making exports of Western goods easier which would balance the loss of competitiveness. “One could then re-import production activity, favoring employment,” he said.

He ended by criticizing state intervention, saying it had exacerbated the economic crisis. Gotti Tedeschi wrote: “Many think that individual States need to intervene in order to resolve economic problems. But that happens with an increase in public debt. Countries that have chosen this path now regret it; others have not taken that road thanks to their politics, which are more attentive to the budget. But it is also necessary to be able to count on savings, on entrepreneurs, and on good banks — important elements, if not the only ones, to re-invent labor.”