Eighty Ferraris, Technocrats, Soccer, and the World Economy

80 Ferraris in one parking lot led me to reflect on a number of assumptions that as an American I had accepted.

Callista and I have recently been in Singapore, Paris, Rome, Florence and Siena.

It has been a good opportunity to see the world from outside America. Some of the experiences challenge the framework of traditional reporting.

Let’s start with the 80 Ferraris in downtown Florence. There was a street race the day we visited and as part of it the participating Ferraris were paraded through the streets. They were then parked around the Medici Palace — a former parliament building before the Medici family rose to power in the 15th Century. I counted 80 of these extraordinarily expensive cars ($229,000 to $429,000 depending on the model) in this one square.

If Italy ranks right after Greece and Spain as an economic basket case, how can that many hyper-expensive cars be in one square?

A big part of the answer is unpaid taxes.

There is a long history in Italy of routine tax evasion.

In fact, the problem is so great and wealth and income reporting so understated, that official numbers simply fail to capture the truth of what is going on.

Because the official world relies on official numbers there is enormous pressure to force Italians into paying taxes — especially when the country is nearing an economic crisis.

One new technique is to stop drivers of expensive cars and check their income tax reports. By some indications, this is significantly depressing the nation???s luxury car market.

This is in turn leading wealthy Italians to two new behaviors. First, to only drive a modest car in Italy and either sell their fancy cars or move them to vacation homes in other countries. Second, to give up on Italy and move their businesses to a friendlier country.

This pattern of people avoiding or undermining the authorities has a long tradition in Italy. Lampedusa’s classic novel The Leopard is the story of a Sicilian noble rejecting the new Italian state in the 19th century.

Today, over 100 years later, Italy remains a people with a government laid on top. There is an automatic assumption that rules and regulations are things to be coped with, not necessarily instructions to be obeyed.

Having a technocrat as prime minister reinforces the gap between citizens and government.

Italian Prime Minister Mario Monti never won an election.

He was an academic appointed to serve in the European Commission.

He was nominated to a life appointment in the Italian Senate one week before being appointed prime minister.

The gap between the citizens and the government in Europe keeps getting wider.

But while the challenges are growing, so is the interconnectedness between countries. We had a chance in the small town of Montisi to join hundreds of Italians to watch the Italy-Germany and Italy-Spain final UEFA European Football Championship matches. The most striking Italian player is Mario Balotelli. He is Italian born of Ghanaian descent playing professionally for the Manchester City team in England. He personifies the complexity and interconnectedness of the modern world.

At the Palio, one of the world’s oldest and most dishonest horse races and another major┬ásporting event for Italians, I was told attendance was down by at least 20 percent due to the poor economy.

By comparison with European problems it was fascinating to spend a week in Singapore. Former Prime Minister Lee Kuan Yew’s ongoing contribution to disciplined, autocratic self-government continues to attract investments, jobs, and prosperity.

The 5.2 million people living in Singapore (3.2 million Singaporeans and 2 million registered non-citizens) are focused on fast-tempo, hard-working economic achievement. As a result, in one recent survey more bankers said they wanted to work in Singapore than any other city in the world.

The intensity of education would stun most Americans. The commitment to achievement at every level is remarkable.

As we face our challenges in the United States we can learn a lot from Europe about what not to do and a lot from Singapore about an ethos that works.


View All