Euro-Crisis: An Alice-in-Wonderland Non-Crisis? Not quite...

Merkel-citronpresser               by hoppetossen via Flickr
Last week, it looked like the Euro-crisis was about to be resolved. 

Media hype was high, the European Council, originally scheduled for Sunday October 23 finally met on Wednesday October 26 and by Thursday the markets were ecstatic, happily bounding up. 

By Friday, the euphoria had died down. It had become crystal clear that Italy was the problem. 

Since Italy is not Greece, that was rather bad news. The nearly two trillion Euro Italian debt was bandied about and it sounded like an uncomfortably large amount of money. Plus German Chancellor Merkel, in her inimitable school-marmy style had grimly told everyone that this crisis was going to last a long, long time. And that unless everyone buckled up German-style, the Euro would  not be saved.

We've all heard that before: austerity ja. Follow the German model or die. 

So what's new about the Euro-crisis? 

The efforts of our European political elite, particularly the European Council, have an increasing Alice-in-Wonderland quality: the results of the last European Council looked very much like non-results

Yet those were non-results the markets liked. 

Does that mean investors know something we don't? Does it mean that the Euro crisis is a non-crisis? Yes to the first question and no to the second.

What happened on Wednesday at the European Council was this: in very simple terms, the banks bowed to Mrs. Merkel's (firm) entreaties and agreed to take a 50% haircut voluntarily. Money was set aside by governments to help those banks that might find themselves in difficulty because of said haircut.

The point here is that the agreement is voluntary. This means that an official declaration of default is avoided. Therefore, the insurance systems currently in place that rely on derivatives are NOT triggered into action. That was a huge relief for the markets, because derivatives are so opaque - and possibly so widespread -  that nobody knows what sort of tsunami à la Lehman Bros might occur if an actual default by Greece was announced.

Moreover, for the banks involved (that hold Greek bonds), it's not a bad deal: the markets had valued Greek bonds at 40% of their face value. They're getting 10% more. For sure. That's nice, right, so it's no wonder the markets bounded up for joy.

The euphoria didn't last because the fundamental problems remain unchanged. 

The Euro crisis is unfortunately very real. I've said it many times on this blog: the Euro hobbles along on one leg only (the monetary one). It needs a second leg (the fiscal one) to walk properly.  

That's because the European Central Bank (ECB) is NOT a real central bank. It's not at all like the Federal Reserve. It can't engage in "quantitative easing" or, put more bluntly, it can't print money if that's what's needed to convince the markets that the currency will be defended. 

That's something the ECB won't do. Because that's the way the Germans want it: a Central Bank to fight inflation, not a Central Bank to defend its currency from market attacks.

So what instruments are there to defend the Euro? 

The main one, the European Financial Stability Facility (EFSF) is still sitting at a modest €440 billion - nowhere near the amount needed to save Italy should it go under. At this moment, people are busy in Brussels. All sorts of financial machinations ("special vehicles" and an additional, stronger role for the IMF) are being concocted to try and expand the reach of said Facility. Like for example turning it into an insurer and/or trying to make it palatable to the Chinese. 

Actually other big holders of Euro reserves (of which there are quite a few among the BRICS but also in other countries like Norway or the Gulf States) can be expected to show interest. Nobody really wants to see the Euro go under: that would mean their most lucrative markets would go under too...

And yet, and yet...when all is said and done, as Krugman and Charlemagne (of the Economist) recently pointed out, the Euro crisis would be disarmingly simple to solve. All you have to do is turn the European Central Bank into a real central bank with the ability to print money as needed...

Wonder when that will happen...Any idea?

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Why the Italians Are Not Kicking Out Berlusconi

Silvio BerlusconiThe sneer of the winnerImage by rogimmi via Flickr
How come the Italians are not getting rid of Berlusconi? 

His popularity has sunk to the lowest levels ever, yet he is still up there, strutting about, the bunga bunga party boy! An "international laughing stock", as Ms. Marcegaglia famously called him. Italians are a serious people, how can they stand him?

The short answer is, the average citizen can't stand him but he's paid off enough politicians to stay in. 

The long answer? It's a little more complicated. Italian democracy is dysfunctional. And what has made it unworkable is the new election reform law that did away with the concept of  proportional votes and instituted a winner-takes-all system. The idea was to move Italy towards an American-style two-party system.

What happened instead was that a large number of Italian voters suddenly found themselves kicked out of the system - without anyone representing them in Parliament.

And Parliament? That's where the rub is. Deputies WILL NOT VOTE AGAINST BERLUSCONI because if they do, they lose all their benefits - golden salaries and pension and all the little perks like free cell phones and free train trips and official car etc etc. 

Why? Because pensions et al. are payable to them ONLY if they stay through the whole legislature, i.e. the whole 5 years until the natural end of Berlusconi's government.

Therefore, they'll never vote him out!

Simple. Meanwhile Berlusconi keeps looking after his own interests and waging all his battles against the Italian magistrates who are after him, skirting and avoiding indictments in all sorts of cases, from tax fraud to paying for his Bunga Bunga parties.

The only advantage in all this? None perhaps except that this time Berlusconi might well manage to get through Italian Parliament (and his reluctant ally Bossi, the leader of the Northern league) the major reforms called on by EU partners to save the Euro. 

Like raising the pensionable age to the EU level of 67 years, equal for men and women (not the case in Italy yet, that has the most generous pension system bar none - except for Greece's of course).  A hugely unpopular measure here in Italy where everyone loves their little pensions, including "baby pensions" you can get after working just five years...

So will Berluconi's weakness coupled with Italian's dysfunctional system save the day, allowing for passage of the necessary reforms through Parliament before the next European council meeting (scheduled for Wednesday 26 October)?

My guess is that it will work out. Deputies will prefer to save their skin (and benefits) rather than defend the (indefensible) Italian pension system. But then, I'm an eternal optimist!

Q4U: Do you agree that the main reason Berlusconi is still in power can be ascribed to deputies' desire to save their benefits? Any other reasons in your opinion? What are the chances that Italian democracy will be/can be reformed and made functional?

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Writers' Chat: YA Literature

YA Author Suzy Turner
YA Literature, Why it sells and Where it is Going
YA literature made headlines in 2011 when the children's books critic for the Wall Street Journal, Ms. Gurdon, accused some YA novels for being too violent and inappropriate for a teen market. 

More recently an article in the New York Times suggested that modern YA literature had lost the freshness of Peter Pan and Alice in Wonderland and moved into dark areas. The Harry Potter series was mentioned, referring in particular to Rowling’s “demonders” and her acknowledging that  inspiration for them came from a bout of depression she had suffered.

On the other side of the barrier, the Historian Amanda Foreman, author of  “Georgiana: Duchess of Devonshire,” told a reporter from the NYT (Pamela Paul, August 6, 2010) : “good YA is like good television. There’s a freshness there; it’s engaging. YA authors aren’t writing about middle-aged anomie or disappointed people.”  

Claude Nougat
I met with YA author Suzy Turner to discuss this, and we both felt that the resulting chat could be of interest to both YA readers and authors. The conversation is both here and on her blog

Suzy has just come out with DECEMBER MOON, the second book in her Raven series, and I came out with RECLAIM THE PRESENT, the second book in my Fear of the Past Trilogy.

Our points of views, as you will see, are somewhat divergent because, while we are both into YA literature, we come to it from widely different angles. Suzy is into a fantasy world filled with vampires, changelings and witches, I am into a paranormal world filled with historical characters who are the forebears of my protagonist. My books can be found on the upper right corner of this blog, while Suzy's books are about a young girl who discovers she possesses a unique ability inherited from her unusual family and you’ll find them on her site: http://suzyturner.com 

Claude: What’s your take in this controversy? Do you think YA authors have moved into forbidden territory for young adults – too dark, too forbidding, too violent? I don’t think everyone has, I know I haven’t but then I’m not into Peter Pan/Alice-in-Wonderland stuff either! 

Suzy:  Not at all. if you look back to the kinds of stories that were read to us as children, you'll see that they were just as dark and forbidding if not more so than in many of today's YA books. The Grimms Brothers' stories, for instance, were full of dark, terrifying tales! 

Claude: What I love about YA literature is that it is such a flexible genre: it contains everything from fantasy to paranormal - like both our books - to all sorts of other things, like dystopian fantasy, science fiction, thrillers. Just about anything goes, all genres are mixed and can even be found within a single novel - like mine which combines paranormal with historical elements. Mind you, I spent a lot of time doing historical research and travelling to the places I describe to ensure accuracy! Do you see that as an attractive feature of YA literature? Is that why - or at least one of the reasons - you wrote your book?   

Suzy: Absolutely and I think this is one of the reasons why it is such a popular genre not only for young adults but for older ones too. One of the reasons I wrote my book is because I felt the place in which it was set, had a story to tell. Powell River in British Columbia, Canada, bewitched me into creating a tale of fantasy!  Both of our books have one thing in common though and that is the "search for self" element within. Both of our main characters are trying to discover who they really are, albeit in very different guises. 

Claude: Yes, that’s what I liked about the YA classification: it gave me a chance to explore in depth the "search for self". When you are young, there's so much to learn about the world around you, but particularly about yourself. Tony, my protagonist – a computer whiz kid - is learning about himself in a very peculiar way: through his forebears who come back to him as ghosts, explaining to him what their life was like, what work and love meant to them. Normally that is something you learn from your parents and friends - I thought this was a different way of exploring one's roots. Going deep into the past. Your protagonist learns about herself by travelling abroad, from London to British Columbia and meeting family she didn’t even know she had! Isn’t that right? 

Suzy: Yes, Lilly actually grew up in London stuck in the confines of a tiny apartment, not allowed to go out and have friends, other than the one she secretly had at school. When her parents disappear and she moves to Canada, it is there that she begins to learn more about herself - through the family she never knew existed. In the beginning, she is so naive because she never had the chance to grow. 

Claude: Actually, searching for self is something that concerns us as adults too! We never stop discovering things about ourselves and trying to adjust to new challenges in our lives…Which I suspect is why YA literature has an enduring appeal to all ages! My Fear of the Past Trilogy focuses on the fundamental question: how much of ourselves do we inherit from our family and how much can we call our own? Are we born a virgin slate or do we inherit our character traits from our forebears? Bottom line, is there such a thing as free will?  Is this something your books are also concerned with, and in what way? 

Suzy: That is an interesting question, Claude, and one that is quite difficult to answer. In the beginning, Lilly is quite obviously born a 'virgin slate' until she discovers the truth about herself and then her true self - and her inherited ability - comes out. She really does discover that she is a different person after that moment. The same can be said of December Moon (Lilly's best friend). 

Claude: Overcoming the inheritance from the family can be hard, particularly if it’s a heavy one – like my protagonist who has a family extending back 900 years! But it can happen to anybody who meets the ghosts of his forebears the way he does!  This is why the title of the first book in the trilogy suggests the answer: Forget the Past! Go ahead and live freely, without harking back to it! In the second book, Reclaim the Present, the protagonist has another living-in-the past experience that teaches him that whatever he has inherited from his forebears – even if he’s been dealt the same cards in terms of inherited looks and character – it is up to him how he plays his cards! His life is in his own hands! To sum up, in my opinion, what distinguishes YA novels from other genres are coming-of-age experiences.   

Suzy: Absolutely, but there are also those YA books filled with violence in them, the kind that shocked Ms. Gurdon and probably turns off quite a few parents.   

Claude: Yes, but this is to be expected in a search-for-self kind of literature: not all kids are born with a golden spoon in their mouth! How do you feel about the role of violence in YA novels? Do you think violence should be avoided? Or is there a way to "integrate" it without making it "inappropriate" for teens? 

Suzy: I don't like to read violence just for the sake of it. If it is necessary to push the story forward then that's fine or if the main character needs to learn something through violent elements then okay. I just hate violence for violence sake. Raven, for instance, has little violence. There is talk of death but no gruesome scenes. Its sequel, December Moon, however, focusses more on the vampire characters in the story, some of which are evil, and the only way for them to be stopped is to be killed... so it does contain some pretty frightening scenes! 

Claude: Don’t scare me! Say, like what? Can you give me an idea of what happens in December Moon? I remember that was the name of your protagonist’s best friend back in London, before she moved out to British Columbia… 

Suzy: lol Yes that's right, December is Lilly's best friend and she discovers a family secret too... one which takes her to America, away from her not-so-nice aunt, and back with her mother, not far away from Lilly. That's all I can give away though! 

Claude: Thanks Suzy, I enjoyed the chat! Just to sum up: YA literature’s success seems to be due to its versatility. It’s not stuck in a genre, it’s open to all of them! And that means it’s open to innovation and new themes. And it’s focused on themes that are of continuing interest and relevance to all age groups, not just Young Adults! Those two reasons largely explain its enduring success. Would you say that’s right? 

Suzy: Oh yes absolutely, Claude. Its versatility is one of the defining facts about YA literature that makes it so appealing, not just to read but to write too. I love writing in this genre and I hope to continue to do so for years to come! Thanks for chatting with me Claude... it’s been a blast!

Q4U: Do you agree that "versatility" explains to a large extent the enduring success of fiction for young adults? In your view are other factors at work?

Do you believe that "quest for self" is a defining feature of YA literature? Are there other features that you see as more important? Do you think the trend towards violence and more extremist themes can hurt YA literature's popularity? 

Logo Amazon 
                                       SUZY TURNER     DECEMBER MOON
                                  CLAUDE NOUGAT    RECLAIM THE PRESENT

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One Baker's fight Against Italian Bureaucracy: 4 years to Move to his New Shop!

And he still isn't there! 

The building is finished, but the baker and his wife are still waiting for the "certificato di agibilità" (permission for "access"). It's taken them months to obtain the necessary  certificates and this is the last one they need from the "Comune", the village authorities before they can open their new shop - a bizarre piece of paper that is awaiting somebody's signature, but no one is there in the Comune to sign it. 

They've been waiting for a whole month now for this particular certificate, and when I went there yesterday to buy my bread, they were still waiting...

Let me show you the situation in pictures. Here's one of the several medieval towers on the outside wall that circles Mugnano, a small village of about 1,000 inhabitants in Umbria, the "green heart" of Italy:

Here's the entrance to the baker's shop:

Cute, isn't it? Wait till you see the inside:

Small but lovely, with vaulted ceilings. See the baker's wife laughing? She's always in a good mood when she sells you their goodies. They have no help - this is entirely a family business, and their daughter is studying to become a magistrate...So no one in the family is likely to continue the baking tradition - a pity, because this is one inspired and hugely talented baker and pastry chef! Judge for yourself: 

Looks yummy! And believe me, it is! 

Here's the new building on the outskirts of the village where our baker is supposed to move in. 

It's at a cross-road and therefore should bring him many more clients. In fact he's planning to expand his business and include a coffee shop and pizzeria - both activities that are impossible in the small, cramped quarters he's presently in. 

He's going to move into the left wing of this building:

In the right wing, there will be a small supermarket, and behind, in the background you can see some trees. 

Those trees hide the ruins of a 13th century Benedictine convent. That turned out to be one of the big problems encountered by the builder: because of the ruins, he had to stop his building and redesign it to make it "fit in" as per the rules and regulations of the Italian Belle Arte authorities.

Result, it took him nearly...4 years to complete the building!

Are these ruins something special? Well, you can see for yourself here:

Yes, they are nice, but they are totally abandoned and in dreadful shape.  No one is interested (or has the means) to restore them. Until some ten or fifteen years ago, they were lived in by poor peasant families.So, the last time this place was lived in by monks was a very long time ago...

Were the Italian Belle Arte wrong in imposing a "classic" style to the new building? Probably not, but surely they could have gone about it without wasting so much time. The two are not exactly next to each other, and it seems stretching it a bit to make so many demands on the builder...

I wanted to show you this baker's trials and tribulations because they illustrate perfectly why Italian businesses suffer, why innovation in an ancient country like Italy is so difficult. It is discouraged by a ghastly combination of understandable measures to defend and preserve the invaluable Italian artistic heritage with red tape, corruption and indifference. 

Reams of red tape because Italian bureaucracy has inherited laws and regulations of a vast number of rulers over the centuries, from the ancient Romans to Renaissance princes, from the Austrian and Spanish Empires to Napoleon's France and 19th century liberals.  

Then there's corruption of the direct variety (you have to "grease paws" to move things forward) and indirect variety (if you don't pay, you're left at the bottom of the pile). 

Last but not least, there's a general indifference on the part of civil servants that have conveniently forgotten they are at the service of citizens. Of course not all of them are like that, but too many are.

No wonder Italy is in such a mess!

Q4U: The intent here was to illustrate the damage to business innovation caused by the unholy combination of several factors: (1)bureaucratic red tape, (2) laxity verging on corruption and (3)  rules intended to preserve the cultural heritage. Do you see any other factors at work here?

Have you observed similar situations in the country where you live? Can you report on solutions? 

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Will book publishers be able to maintain primacy as ebook publishers? | The Passive Voice's Fantastic Post!

I love this analysis that Passive Guy - or Passive Voice, I'm not sure which he prefers - has just published and I can't resist giving you the link to his post here: 
Will book publishers be able to maintain primacy as ebook publishers? | The Passive Voice:

Passive Guy argues convincingly that traditional publishers have fallen prey to the well-known shortcomings of monopolists: rigidities, slowness, lack of invention, incapacity to respond to consumer demand. Just like Microsoft, once a highly innovative company that for a while was a near-monopoly in its industry, has become slow and uninventive - stuck in a rut and no longer able to make money outside of its "cash cow", ie the Microsoft Office products.

Faced with competition from Amazon and to a lesser extent from other etailers, chief among them Barnes and Noble, traditional  book publishers - meaning the Big Six - will find it hard or even impossible to maintain their primacy as ebook publishers. That's what both the Passive Voice and the Shatzkin Files maintain, and you better listen to what they say, they're the best bloggers in this area, with illuminating analyses of changes in the publishing industry.

I would just add to everything they've said that in my opinion the single reason Amazon managed to sail ahead of traditional publishers is that IT MAINTAINS RECORDS OF ITS CUSTOMERS. 

Amazon knows what people like to buy and therefore presents them with relevant attractive choices. So they keep buying. 


And that's something traditional publishers can't do. Other things they can't do is run readers community clubs, forum threads of interest to readers to enhance book discovery, reader reviews, likes and tags...All internet-based tricks to enhance book discovery and accessibility.

If Michael Shatzkin is right - see his post here - and the book market is really headed for 80% of total book sales, then traditional publishers are really in...a hole!

The only way to climb out of this hole for book publishers would be to

(1) improve their search for new products (i.e. new authors and books)...Any ideas?

(2) understand better the reader market; so far, they've relied on "genres" to get an idea of how much a book might sell (romance outsells all other genres), but this is hardly an exact science! They need to run book reader surveys and find out exactly what's going on, what people like to read, what they're looking for. And perhaps, but that might be too revolutionary, work some agreement with Amazon to find out what their customers buy so that they can come up with better books more appropriate to reader demand...As a minimum they could analyze the Amazon site and find out what books "other customers have bought": in the aggregate, that would give an indication of people's tastes in books.

Any other suggestions?



The Frankfurt Book Fair with the fair's tower ...  Frankfurt Book Fair Image via Wikipedia
The next big market for e-books? Brazil, India, China? Wrong, it's Europe!

What is rather odd is that all the buzz at the Frankfurt Book Fair is about Brazil and India. Big markets to be sure,and countries that are part of the famous fast growing  BRIC group rocking international trade.

Incidentally, we have to leave China out of the discussion because it is essentially a closed market: they've shut out Google and set up their own Amazon-like etailer. So, although China is potentially the biggest and fastest growing, from a globalized digital book market standpoint, it doesn't count. Not yet and perhaps never.

There are really two facts to keep in mind when analyzing the global book market. One is the number of people who speak and read English. Two, is the degree of alphabetization and education.

On both, continental Europe scores very high, ahead of anyone else in the world. English, we all know, is the language that is most widely spoken around the world, but especially so in Europe. And continental Europe has far more readers than anywhere else, Brazil and India included.

Yet, the European outlook doesn't look rosy. A recent survey commissioned through Rüdiger Wischenbart Content and Consulting, provides a broad picture of emerging e-book markets across Europe, Brazil and China, taking the US and UK markets as benchmarks. Rather than using forecasts, they have examined local factors and the unique defining traits of each market — from market sizes to tax and pricing regimes to cultural choices.

They have been able to document that the breaks to market expansion in Europe include everything from a "supposed tendency" to prefer printed books to "sticky" unfavorable prices.

I'm saying a "supposed tendency" because that is always something invoked at the beginning of e-book penetration in the market - the case in Europe where it is far behind the US. According to the Rudiger survey "in 2015 in Germany, e-book penetration of between 10 and 15% of the book market is conceivable; this number is considerably lower — around 8 to 10% — for Italy or Spain ..."

And e-book prices are "sticky" in the sense that they are not open to free competition. They are constrained by a variety of factors, chief among them legislation that fixes prices for books (for example in France) and  European VAT tax that hits e-books unfairly compared to printed books because they are not considered a "product" but a "license". 

In short, the European institutional environment is not favorable to e-books. But that could change. The European Commission is aware of the VAT problem and has shown signs of a willingness to fix it. Also several  national laws that fix book prices are presently under attack. 

What is more surprising are the breaks to expansion applied by Amazon itself. In America, it has systematically adopted aggressive sales strategies that have effectively promoted and supported its market expansion, chief among them, low-cost e-readers. The Kindle Fire is but the latest example of this policy: the Kindle Fire, unlike other tablets, is very likely to prove a winner against the iPad. 

But, as pointed out by David Gaughran in his excellent analysis of the European market (to read it, click here)Amazon has adopted policies that, if anything, seem to be designed to slow down market expansion...

First, and most disappointing, there's no Kindle Fire available in Europe and it doesn't look like it's coming anytime soon. 

Second, Amazon e-readers are systematically more expensive than in the US, to the point of discouraging potential buyers. Consider this as reported by the Wall Street Journal: " There was more anger from those who went to check Amazon’s European websites. U.K. customers found a new advertisement filling the front page introducing the “all-new Kindle for only £89.00.” This is the lowest-specified model that ships for $79 in the U.S. The U.K. cost includes 20% VAT, so the tax-free price would be £74.17 or around $115. That makes it over 45% more expensive in sterling than in dollars at current exchange rates." (bold highlight added)

But the disappointment with Amazon doesn't stop there. Actually, and from the start,  Kindle books have been systematically more expensive outside the US: Amazon charges $2 to "whispernet" an e-book to a customer (i.e. deliver it via Internet - which of course costs next to nothing). Plus it slaps on a 16% VAT tax because Amazon has elected to be headquartered in Luxembourg. Why go there? The VAT rate is lower there than elsewhere in continental Europe but it's still... 16%! 

As far as I know, its competitors in the US don't do that: it looks like Apple, Sony Store and Barnes and Noble charge the American price to people who live abroad. But I'm not sure and please let me know if you, the owners of iPad, Nook or Kobo, are paying more than 99 cents - the price I set for the first book in my Fear of the Past Trilogy ( I meant that as a "loss leader" - my next books are priced $3.99 in the US market which I feel is more in line with the amount of work I've put into them and with what I believe is their quality)

In any case, the big player in the market is Amazon and if others are charging less, the effect won't be noticeable. And Amazon really seems to be taking its time to enter the European market, perhaps creaming it first...until it actually gets into the market with a Kindle Store!

That's when things start to change. The infamous $2 surcharge has reportedly disappeared from Germany and France the minute Amazon opened its Kindle Store there - yet it's still on in Italy and I believe in Spain too, even though Amazon has just arrived there too.

Why the delays? I have no idea. 

Also, Amazon does very little to support its English-language authors in those newly-opened European markets. For example, you have to set up your author page on Amazon.fr and Amazon.de because it is not automatically transported there by the US-based Amazon.com. These are small things to be sure, but discouraging. 

Also new ideas to spread the market do not seem to be taken into consideration.For example, Amazon could consider setting up cheap translation services for its authors that could be based on the free Google translation function. All that would be needed are a few editors to verify that awkward turns of phrases are taken out and replaced by more appropriate language. That's much faster and cheaper than using a full translation service but no one is offering something like that (either inside of Amazon or out).

What a pity. A globalized market is just out there for the taking! 

If Amazon is too slow, surely that opens the door to others for the taking. It seems that Germans have woken up to the possibility and I've heard there are plenty of German e-book offers outside Amazon and already some German e-readers in the market at very low prices. I haven't seen them and don't know how good they are but if you have, please let me know.

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Income Inequality: Is Class Warfare Coming to America?

Barack Obama - CaricatureImage by DonkeyHotey via Flickr
As the Occupy Wall Street movement intensifies, the debate heats up on the question of income inequality and what it does to a mature society like the American one.

Obama is taxed as the Class Warfare President!

There have never been so many poor people in America. And, seeing how the Euro crisis is handled, one suspects the same will soon be true for Europe!

The International Monetary Fund has just come out with a study showing that rising income inequality could hurt economic growth. As reported in the Huffington Post , a rising income inequality could now be hindering economic growth.  If income inequality decreased by 10 percent, the duration of an expected period of economic growth would grow by 50 percent. 

A friend of mine who is both a savvy entrepreneur and a politically engaged author, pointed out that we no longer have a model of "trickle down" economics but one of  “flood-upward” to the top one percent, represented by the traders and bankers on Wall Street. He sent me a really striking newsletter about this and I can't resist sharing it with you. It contains, inter alia, a fantastic diagram, judge for yourself!
If it’s Class Warfare – Who’s Winning?

By Gordon S. Black, PhD

Family Income 
The propaganda circulating on the Internet would have you believe that President Barack Obama is engaging in class warfare – pitting the middle and working classes against the “great” makers and shakers who supposedly create the wealth in America.

The current protests on Wall Street and elsewhere are raising the same issue – who is getting better off in America today, the ninety-nine percent represented by most of us or the one percent represented by the men and women who created the financial meltdown in 2008? This is actually a pretty easy question to answer, and you might find it interesting. The chart above is an answer to the questions – who in American is winning the “Class Warfare” and when did it start. The dividing dates are the beginning of the Reagan Revolution in 1980 and the end of the Bush Revolution in 2007.

President John Kennedy famously said: “A rising tide raises all boats,” and in his time it did. The economic prosperity of the post-war period was a shared prosperity that made everyone better off. That “shared prosperity” ended with the three decades that started in 1980.  For the top one percent, life has never been better – huge mansions, private jets and yachts, private schools for their children, and the like. They are clearly the “winners” of the new economic policies. For the rest of us, the top 20 percent is doing all right, but it has been a struggle for everyone else.

Unfortunately, “trickle-down” economics is actually “flood-upward” to the top one percent, represented by the traders and bankers on Wall Street – the men and women who get their huge bonuses even when their institutions fail and spread misery among the rest of us.  The very people who today decry even the most basic safety net for ordinary Americans demand and get their own private safety net against their own failures -- the safety net of "too big to fail" that supports the luxurious lifestyles of tens of thousands of corporate bigwigs who have the political muscle to force Congress to protect them in ways that they would deny to all of the rest of America.  This is the new morality of the corporate managerial elite.

Obama did not start the “class warfare.” It started long before he came into office, and he is attempting to fight back with “too little and too late.” He is up against a $100 million dollar propaganda machine funded by people like the Koch Brothers and aimed at the little people who should know better, but do not.

But how did this happen?

How could the world change so dramatically for the ninety-nine percent of us without our understanding why or how it happened? 

Basically, over the past three decades, the “special interests” in the United States, representing the new “plutocracy,” have purchased Congress wholesale through the campaign financing system, and this chart is a direct expression of the need of the incumbent members of Congress to pay off those “interests” with your and my tax dollars. Their money, backed by billions in lobbying and paid-for advertising and other propaganda, owns Congress on both sides of the aisle, and this chart is what you get – the middle class declining, the working class without jobs, and the impoverished expanding, all trickle-down effects of an experiment in economics begun in 1980 and culminated with the tax-cut experiment under George Bush.

If this is our reality, why do they accuse Obama of “Class Warfare?” 

All propagandists operate with the same kind of lying. The Nazi’s, sponsored by the Krupp Industries, accused Poland of aggression as a pre-text for invading them. The Bush Administration, sponsored by the Koch Brothers, accused Iraq of possessing “weapons of mass destruction” as a pretext for invading Iraq. Now, they accuse Obama of starting a “class warfare” that they themselves started more than three decades ago, and which they are winning spectacularly.

These people rely on you, the American voters, to be dead, dumb and blind to their perfidy – to be little piglets that they can lead to their slaughter where they get everything eventually, and you get nothing at all. 

The final question only you can answer. Are you going to let them continue to slaughter your dreams for yourself and your family? 

Trust me – they believe after three decades of success that you will do nothing to stop them. Are they right?

Gordon S. Black, PhD,

For more information, please visit  www.indielitworld.com 
and join as a reader or as an author

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Cooking Tips and Recipes from the Heart of Italy...and Belgium!

Lake Trasimeno view, Umbria (Italy)Lake Trasimeno where I live           Image via Wikipedia

I live in the "green heart" of Italy - that's how Italians call Umbria. Il cuore verde dell'Italia.  Right next to Tuscany, it is the land of black truffles, ham, cheese, wine, olive oil, fabulous vegetables and pasta not to mention meat. The famous bistecca alla Fiorentina comes from beef produced 10 miles from where I live. What better place to experiment with cooking?

Recently I've set up my own vegetable garden, not far from Lake Trasimeno, famous for its spectacular sunsets:

Lago di TrasimenoLake Trasimeno sunset  Image by wege7 via Flickr

This year, for the first time we've grown our own vegetables (we've always lived in the city) and it's been quite an adventure: too much of one sort (eggplants, leeks, zucchini), too little of another (cucumber, melon). But whatever we managed to produce tasted exceptional. Tomatoes were actually RED!

You've guessed it, because of the vegetable garden, I found myself often in the kitchen. Thank God I love cooking! Food was always a matter of intense interest in my family, probably a combination of our French background and the numerous travels that brought us in contact with exotic cuisines. When I grew up, we moved all over: from Sweden to Egypt, Belgium, Russia, France, Colombia, the United States, Russia again, Italy, in that order. I've lived in Italy for the past...35 years - longer than anywhere else in the world! 

But now that I'm here by Lake Trasimeno, I feel at home.  

Being married to an Italian, I tend to cook Italian-style to please him...and myself! This is a country where you learn to love genuine, unaltered food rather than try to make clever sauces the way the French do.

This said, a nice tasty sauce to accompany fish is always welcome, particularly when if you live far away from the sea and the poor fish has lost its sea flavor in the long haul to your home!

If you can't grow your own veggies, I'd recommend you get bio food in spite of the extra cost. Bio is generally worth it because...I know, you think I'm going to tell you it's healthier. Maybe it is, this I don't know. But I do know bio food tastes noticeably better...except for eggs! I don't know why. You can't tell a bio egg from one that isn't. Worse, bio eggs don't poach well at all...Just like all the others! I mean, if you try to drop them in slow-boiling water, well...you have a mess! The egg white separates from the yolk and starts floating in the water in long filaments. If you've found a way to avoid that problem, let me know!

For some Italian recipes, like eggplants alla Parmigiana, it's taken me over twenty years to figure out exactly how to do it, and get the eggplant to be both light and airy inside and crisp on the outside. No soggy, oily stuff for me! In fact, I positively hate oily food and use olive oil as little as possible, just enough to avoid burning!

Eggplant ParmigianaEggplants alla Parmigiana Image by bro0ke via Flickr

This said, NEVER leave out cooking oils (or butter - provided you don't burn it!) from your cooking. A little oil is necessary for the body to function properly.

Actually that's been my life rule: since doctors keep changing their advice about what constitutes a healthy diet, I've decided to eat a little of everything, and use every cooking method, not leaving any out.  Do you remember how a few years ago, you were supposed to avoid eggs and spinach? Yet in an earlier decade, eggs were considered extremely healthy and Popeye the Sailor is said to have been invented to promote spinach eating...out of a can, for Goodness' sakes!!!

And you know something odd? The eggplants coming out of my garden, grown without fertilizers or additives of any kind, DON'T TASTE BITTER at all! All cookbooks tell you to sprinkle salt on the eggplant slices and leave it there to soak up the "bitter liquid" inside the eggplants. Well, mine don't have that liquid! They're incredibly sweet and I can cook them without any preparation at all.

Makes you wonder how industrial farms grow eggplants and what it is exactly that you buy in supermarkets...

I set up a separate blog for my recipes - more a den for family and friends than a real blog! It contains nothing but true and tried recipes, the kind I give to my children and hope they will continue to make for their own children...

Click here to go to that blog, try the recipes (they're all super easy) and enjoy! I've pasted below my recipe for Waterzoie, the Belgian National Dish (oh yes, I forgot to tell you, I'm Belgian, not Italian!)

Recipe: Waterzoie

leekImage by roboppy via Flickr

There are 10 million people in Belgium and probably as many ways to make Waterzoie, the national dish! You can make it with chicken or fish or seafood, but in all cases it will have leeks as its characteristic feature. It really is a leek soup with either chicken or fish floating in it.

Sounds bad? Think again! It really is very, very tasty and remarkably easy to do if you follow my recipe - it can be quite a lot of work if you start from scratch and actually make a broth with bones and vegetables to cook your meat or fish in. We're in the 21st century and I'm not ashamed to confess that I use industrial bouillon cubes...

Another advantage of Waterzoie is that it can be prepared in advance: the perfect dish when you have guests!

So here's the recipe for 4 persons.


  • 2 cups of leeks cut in julienne strips (at least 4 leeks and try to use the white part and not too much of the green)
  • 1/2 cup white onion, likewise cut in strips
  • 1/2 cup celery, also cut in strips
  • 1 whole breast chicken, leave it whole or cut in two halves,   Alternative: fish or seafood  
  • 1 or 2 bouillon cubes (chicken broth for chicken of course, and fish broth for fish, natch!
  • 1 cup cream (since I live in Italy I use Mascarpone, but normal cream is fine and is what's used in Belgium)
  • 1 egg yolk
  • Juice of 1/2 lemon (or more as needed - it has to have a sharp "tang")
  • Butter: one tablespoon 
  • Flour to thicken the sauce (about one tablespoonful of flour plus one of cornflour - maizena - but you will need to adjust to the quantity of broth you have)
Boiled potatoes to accompany


Boil the potatoes and while they're boiling prepare the waterzoie.

1. Cut all the vegetables, leeks, onion and celery,  in thin strips - julienne - about 1/2 inch long. Put in a wide pot,cover with water, add bouillon cube and a small amount (a tablespoonful) of butter.

2. Simmer, coveredfor about 10 minutes taking care the vegetables don't burn - add water if need be.

3. After that time and as the vegetables start looking limp, add over them the chicken breasts and sprinkle a little salt over the meat. Cover and continue to simmer another 20 minutes until cooked. At that point the vegetables should be soft and the chicken cooked throughout and tender.

3a. If you use fish then you have to add it after the vegetables have cooked at least 20 minutes: the fish always cooks fast. How long that will take depends on the kind of fish you have chosen: for example, sea bass filets in my view don't need more than 5 minutes. Same with shrimps. More time is needed for lobster. Everytime, adjust the cooking of your vegetables that will always require 30 minutes to reach the right point of mellowness.

4. Now in a saucepan prepare the basis of your sauce: beat in a tablespoonful of flour and one of cornflour in 2 cups cold water and set on the fire to boil. This is how I make a "roux": I don't start by melting butter and working the flour in it. That's not needed! You can always add the butter - fresh, better for your health - at the end, when the sauce is done! Remember to beat it with a whisk so that the flour mixes well in the water and keep beating when it boils. It should boil at least 5 minutes to ensure the flour is cooked.

5. Pull out the chicken (or fish) from the pot where cooked and set aside on a warm serving dish (cover to keep the meat warm) You will serve the potatoes peeled in the same serving dish.

6. Do the sauce: pour the "roux" mixture from your saucepan (that you did in step 4) into the pot with the vegetables. Adjust the quantity of broth (I like it fairly liquid - but it's up to you, how thick a leek sauce you really want). Add chicken bouillon cube(s) or fish broth as needed so that it is rather strong tasting: it shouldn't be too bland because at this point you add the cream + egg yolk + lemon juice. Adjust with salt, pepper and lemon to taste. Once the yolk is in, be careful if you need to warm it up : you cannot boil the sauce anymore or it will turn stringy on you!

7To serve: put the sauce (which will be very abundant!) in a soup toureen, and cut the chicken and potatoes for presentation on the serving dish.

This dish should be accompanied by full-bodied red wine if done with chicken - white wine if done with fish.

Enjoy!  You could be eating this in Brussels!

Brussels, view from the Kunstberg hill

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