A lot of people have been asking me how America’s financial meltdown is affecting us over here in the Bel Paese. And, the true answer is, not much, thank you. And while they’re predicting a sure recession and all that goes with it, the sound you hear of the gears of productivity, growth and fiscal levity grinding to a slow halt have been resounding long before America’s blood bath.
In fact, Italy, has spawned an entire generation of mammonis whose only skill is how to live (well) off of mamma & papà (mamma for the cooking, cleaning and clothes, papà for the dough, expenses and fabulous cars and trips). Rather than be entirely productive, Italy is having a problem playing catch up with the rest of Europe, if not the rest of the world. The 1970s boom allowed parents to invest in properties, things, and all sorts of trappings, leading to the coddling of offspring to the point of inertia. From time to time, reporters enjoy getting the boy/man-on-the-street interviews, asking them how they’re coping…astoundingly, most proudly declare, they live off of daddy. So, with the low productivity, high competition, and out of control inflation (post-euro), the economy was already well in free fall long before Wall Street was.
Then, there’s the housing/mortgage crisis. Again, while cheap mortgages did take Italy by a storm, here it didn’t blow so hard and so fast. Italy still has a long tradition of home purchases for the kiddies; rarely do parents take out those mortgages. Defaulting on your mortgage? Italians don’t need the nanny state to bail them out, they get it from their own mamma state (tax and interest free, no less). I know dozens of mammas who currently fork over (from their retirement savings) the monthly mortgages, cars, and vacations of their adult kids. Call it an umbilical cord of credit.
The problem is, and I’ve been asking myself this question for years, how are these kids – with low savings, nonexistent means, under-employment, and high costs going to provide for their kids once the Boomer Generation (and I mean those who lived through the 1970s boom) are gone, along with their savings?
You want a bail out? The Italians are currently using buckets with holes in them in order to keep this ship afloat.