Commentaries

Third person spells trouble in politicians

Beware of politicians who speak about themselves in the third person. It doesn’t necessarily mean they are paranoid. But it is usually an indicator of some kind of trouble.

More than a decade before he was forced out of the White House for lying, destroying evidence, bugging his political opponents and covering up a crime in the Watergate affair, Richard Nixon (right) famously told journalists at what he said was his last press conference: “You won’t have Nixon to kick around any more.”

Now Italian Prime Minister Silvio Berlusconi (left) has taken to referring to himself in the third person as the victim of left-wing judges and the media (at least the parts of it that he doesn’t own or control). His response to the Italian Constitutional Court’s ruling on Wednesday overturning a law that granted the prime minister immunity from prosecution during his term in office was to declare:

Without Silvio, the country would be in the hands of the left and you all know what would happen. The trials that they are going to throw against me are a farce. Long live Italy! Long live Berlusconi! 

What do the two have in common? Clearly a belief that they are victims of persecution, and perhaps also a sense that power exists to be used implacably against enemies.

Berlusconi, a billionaire media magnate and soccer club owner, also has a lot in common with Bernard Tapie, a self-made French businessman who owned Olympique Marseille when they beat Berlusconi’s AC Milan to become European champions in 1993. Tapie was briefly made a minister under Socialist President Francois Mitterrand before being sent to prison for fraud and match-fixing. He too talked of himself frequently in the third person, making comments such as “They want to destroy Tapie”.

In some cases, politicians may be indicating a loss of reality by referring to themselves in the third person. In his final months as president of the crumbling Soviet Union, as power ebbed from his office, Mikhail Gorbachev took to calling himself “Gorbachev” in interviews and speeches. Although he enjoyed international acclaim for loosening Moscow’s iron grip on eastern Europe and Soviet society, he too came to feel that he was a victim of enemies both among hardline Communists and nationalists who wanted to destroy him politically.

Own goal

For titans of new money, owning a sports team can be an appealing addition to a portfolio. So it was not surprising several years back to see American hedge fund and private equity executives buying baseball and basketball teams and Russian oligarchs acquiring English soccer teams. But in a global downturn, there aren’t many in a strong enough position to step up as the next nouveau riche in the world of professional sports.

For recession-proof new money, there is always organized crime

People working on behalf of the Camorra mafia clan based outside Naples tried unsuccessfully to acquire a controlling stake in the publicly traded Roman soccer club Lazio, say Italian police, which has arrested four suspects in connection with the attempt.

“There was a real attempt by organized crime to take over a listed company,” Guido Gentile, a lawyer who represents both the club and its president, Claudio Lotito, told Bloomberg News.

The police, Bloomberg says, are seeking three others including Giorgio Chinaglia, a former star striker for Lazio and one of the celebrated imports of the New York Cosmos in the 1970s.

In 2007, Italian market regulators fined Chinaglia 4.2 million euros after he announced that he represented a consortium interested in taking over Lazio but never identified who the investors were. Shares of Lazio rose afterward. Chinaglia has claimed that the bid was legitimate.

The danger of a lost generation

– Christopher Swann is a Reuters columnist. The views expressed are his own —

NEW YORK, July 24 (Reuters) – For the first time in three generations, Americans across the nation are facing the threat of long-term unemployment. Already more than one in four jobless Americans have now been out of work for more than six months, the highest level since records began in 1948.

For both individuals and national economies, long-term joblessness has proved to be extremely corrosive. Skills atrophy after extended periods of enforced indolence. Then, when an economy recovers, these workers are no longer in a position to fill new jobs.

As a result the potential maximum speed at which the economy can grow declines, and the workers themselves come to be seen as “damaged goods.” Those unlucky enough to be graduating in 2009 may find that their salaries never match those of similarly qualified peers who finished in 2006. To his great credit, President Obama has been quick to spot the danger. Under the administration’s stimulus package, the unemployed can now claim benefits well beyond the standard six months. In some badly afflicted states, insurance will last up to a year and a half.

The government is also offering $4 billion in funds to retrain workers. Tax breaks in the package aim to make it more affordable for young people to sit out the recession in school. Another $12 billion for community colleges has the same goal.

Yet even this heroic effort may be too little, too late for many Americans. The closest analogy to America’s current unemployment crisis is probably Japan. Here too was a nation accustomed to minimal long-term joblessness. In Japan the lost decade produced a lost generation.

Faced with a “hiring ice age,” graduates settled for lower status or temporary jobs. By the time companies were in the mood to hire again in bulk around 2007, they chose fresh graduates. Many of Japan’s thirtysomethings never caught up.

from Neil Unmack:

Pain in Italy

Ouch! Moody’s has just downgraded some Italian asset-backed debt parcelling leases made by UniCredit to its clients, called F-E Gold. One of the downgraded bonds took a rather nasty dive from A3 to Ba1, but aside from that the rating cuts aren’t too brutal. Moody’s report does give a quick snapshot of how corporate Italy is faring in the economic downturn. (Leasing is a core source of funding for the small and medium-sized companies that make up the economy’s backbone.) So far about four percent of the companies that borrowed by leasing real estate or equipment have defaulted since the deal was sold three years ago –  the same amount Moody’s was expecting over the life of the deal. The agency has now doubled its default assumption to 8.6 percent -- let’s hope it’s just being conservative.