The outspoken know-it-all economist
“I wouldn’t shower with Renzi, what if you drop the soap… And young professionals? It’s best if they run as soon as possible”
It’s not easy to classify a man like Alberto Forchielli, also because he does everything possible to floor you. He can tell irreverent jokes in the middle of a serious analysis of the global economy. His favorite targets are politicians. His “Romagnolo” heritage affects his humor, and pushed him to tell Franceso Rutelli “to go fuck himself” on a TV talk-show. “I can’t stand them anymore,” Forchielli begins, “Italian politics— which is a joke— and these elites that have ruined Italy over the last 40 years.”
Forchielli’s CV is three pages long. The much abbreviated version: businessman, 60-years-old, Harvard MBA, colleague to Nobel Prize winner Joseph Stiglitz at the World Bank, Romano Prodi’s collaborator at Iri and the European Commission, Andreatta’s collaborator on the Foreign and Defense Budget, Finmeccanica president in Asia, and founder of Mandarin Capital Partners, the first foreign private equity fund to receive an investment from the Chinese government. “I spent the first half of my life telling Italians how things work in the US, and I spent the last 22 years explaining to Europeans why the Chinese are kicking our asses.”
Another particular: Forchielli doesn’t love turns of phrase. When I invite him to 24 Mattino on Radio 24, he’s a walking landmine. Take it or leave it, like when he said “I wouldn’t shower with Renzi; if you drop the soap he’ll put it in your ass.” Forchielli divides his time between Imola, Bangkok, Shanghai, Hong Kong, Boston, and Munich. And he judges his beloved Italy terribly: it’s a country that won’t recover and is worth escaping. “I wrote a book on the above-mentioned ruling class that will come out in September. The title is, “Power is Boring: the globalized world explained by an anarchic protagonist.”
Why protagonist?
“Because I’ve tried to change things, but I’ll admit it: I am part of that generation that thought only about its own interests and went pompously to the front of the line.”
Today, Italians are looking at the banks, especially Monte dei Paschi.
“I call it Monte dei Rip-offs. They destroyed five centuries of history in three years.”
But MPS saved itself.
“In this way: Pantaloon puts money through the Cassa Depositi e Prestiti, and foreigners eat it up making the capital increase.”
Who is to blame for the current situation?
“MPS made some crazy errors, like the acquisition of Banca 212 and Antonveneta, then there was a gang that made heinous operations in derivatives. I mean, it’s the classic case of bank policies not being able to produce anything but disasters.”
And yet last January Renzi encouraged people to acquire MPS shares.
“Renzi is, in fact, a politician. But it’s not over: after MPS, other banks will risk failing.”
Which?
“Be a good boy, let’s try to stay out of jail. But when the economy stagnates, bank crises are obvious.”
Padoan says that Italian banks are solid.
“When Padoan talks, I scratch my balls.”
There’s Forchielli’s irresistible propensity for stinging quips.
“Think about it. All of the medium-sized banks are in rags, the Cassa di Risparmio di Cesena is also in crisis and it never went beyond Bagnacavallo. Banks fail because businesses can’t pay their loans back, and the real estate market won’t take off again. What’s more, because business are going like shit, banks won’t give out loans and therefore have no income.”
You’re notoriously pessimistic. How will things end for us?
“I see Italy heading toward “Mexicanization.”
Which is?
“We will become like Mexico, with an economy characterized by three sectors: the first will be formal, advanced, coupled with Europe. I see a productive north, districts with modern businesses, contained criminality, and two thirds of sales from exports.”
The second sector?
“A large slice of Italy will operate completely under the table. Districts like Prato, Campania, and the south in general. They will have a domestic economy; there will be a resurgence of agriculture, mills with 2,000 undocumented workers, and foreign entrepreneurs, always more Chinese. In a short time, it will no longer behoove the Italian State to close these enterprises because the laborers won’t have anything else to do except steal or deal drugs.”
The third sector?
“One part of the country will be in the hands of organized crime that will weasel its way into this climate of absolute poverty with low-cost labor and little competition from clean sectors. The real objective is not to say that Italy will take off again, as Renzi does, but to tolerate these dynamics and make sure that delinquency doesn’t pollute the other two sectors that, for better or worse, will create wealth.”
You’re saying that we should tolerate that a part of the productive system will be in the hands of organized crime?
“Exactly. It’s the Mexicanization of Italy.”
It sounds like the phrase, “we need to live with the Mafia.”
“Yes it does.”
It’s a disaster!
“I know. But I’m afraid it’s the reality. We need to learn to live with criminality and direct it toward more intelligent economic initiatives, far away form the bribes and wealth of productive companies, whether they’re formal or operating under the table.”
But why won’t the economy take off again?
“Global conditions are extremely favorable with the low cost of oil, but there’s no demand because American consumers are tired of consuming and Chinese investors are tired of investing. In addition, we have huge public debt on our shoulders. Where do you want to go?”
Germany is making it.
“They made their labor market flexible, businesses invested in research and development, they tried to keep jobs at home, they have organizational abilities, and a better genetic make-up than the rest of us.”
Genetic make-up?
“Of course. We are anthropologically incapable of organizing ourselves. We’re litigious, we don’t unite, and we have this eternal sense of excellence. Our businesspeople are imbued with the “viscount syndrome.” It’s more important for them to have the keys to their cities rather than create businesses on a global level.”
In short, Italy won’t take off.
“A country moves forward because it either costs less than the others or it makes things the others can’t. Between labor costs and bureaucracy we’re not cheaper, and there hasn’t been a new business in Italy in the last fifty years. We lack the resources and universities to invest in technology. Because of this, the only sensible answer is to take a step backwards. Indeed, going back under the table, to mills, and intensive agriculture. They’re all jobs that immigrants will do effectively, possible abolishing the minimum salary. The future is a return to the past.”
This is why you wrote you book, Find Work Immediately! But you mean overseas. The book’s thesis is that young Italians need to abandon Italy as soon as possible. Why?
“The Italian economy will not be capable of generating enough qualified jobs to satisfy the demands of younger generations. It’s better for young people to leave. We’ll live with immigrants picking Sicilian tomatoes and thanks to remittances from Italians overseas, like the Filipinos do today.”
Which jobs are most in demand overseas?
“We should export engineers, IT technicians, life science graduates, but also pizza-makers chefs, and nurses.”
If a kid wanted to study medieval history in college, what would you say to him?
“Are you aware that you’ll end up sleeping under a bridge once your grandfather’s money runs out?”
Forchielli, will you tell me what you think about Brexit?
In the short-term it may have been a fuck up, but the English are united and I have the suspicion that they will soon become the 51st American state.
Really?
“As her first act, Theresa May blocked the realization of the Hinckley Point nuclear power plan worth $20 billion that was financed by the Chinese. She clearly did it under US pressure. And I see a different future for London after Brexit.”
Which is?
“After the first jolts, I’m afraid that England will become a huge fiscal paradise, like the Caymans, right at our doorstep.”
Another disaster for us.
“In fact, I didn’t say this would be a good thing, but you asked me what would happen. From their point of view, they got rid of the Chinese in 24 hours and if they want to sign the TTIP, the agreement with the US, without us they will.
And Europe?
“It’s fucked.”
Clearly. You live in Boston for 3 or 4 months a year. Do you like Trump?
“Trump was useful because he destroyed the republican party and he’s brought real issues to light. But he is exactly what he seems: a con man, even in business. All of my friends in real estate avoid him because he doesn’t pay his bills, then he lets himself get sued and ends up paying with 30% discount.”
How will he become president?
“I don’t think he’ll make it. But some of the things he says are right. To start, the US needs to get along with Putin. Then, NATO allies need to help pay the bills, and taxes on the rich must be increased.”
Will you explain to me why you ridicule Italian politicians?
“I can’t talk about them seriously. Italian politics is a joke, populated by Pokemon. Berlusconi was the biggest Pokemon, but he aged and isn’t funny anymore. Now there’s Renzi, who was a big Pokemon, but he’s learning.”
Before that there was Enrico Letta.
“He based himself on two big misunderstandings: when he talked about take-off, in truth he meant his flight, not the economy. When he cited spreads, I think he must have been drinking spritz. Aside from these ambiguities, Letta is a man the world envies.”
You can’t stay serious. Like when you said that if you showered with Renzi…
“He’ll put it in your ass because he’s unscrupulous and a liar, but he’s brought me close to landing on Mars because if the referendum passes, the Senate will shut down. If it does, I’ll build a stature of him riding a rearing horse at my house in Imola. I’ll put it in front of the main entrance.”
Will Renzi hold up?
“I hope so because after him it’s the deluge; if the M5S wins, there’s no hope. I had sympathy for them in the beginning, but they’re meaningless. They’re populism, the protest. Faced with the M5S, Renzi seems ennobled, almost a hero.”
How do you think of all the jokes that you write, also on Facebook and Twitter?
“I have a friend that helps me, he’s my Mogol. But I will never reveal his identity.”
Alberto Forchielli interviewed By Alessandro Milan for Libero Quotidiano
Published in Monday, August 15, 2016
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