Mussolini's Ghost Finally Dies In Italy ... But By Charles Payne

Jan. 23, 2012 9:53 AM ET
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Wall Street Strategies has been providing independent stock market research since 1991 to individual, retail and institutional clients through a balanced approach to investing and trading. Charles Payne, our founder and chief analyst, is routinely sought after for his stock market, political, and general opinions by several prestigious news organizations. Currently, Mr. Payne is a contributor to the Fox News Network and Fox Business Network. He also hosts his own radio show on KFIAM 640 every Saturday from 2-4pm PST. Mr. Payne recently released his first book entitled Be Smart Act Fast Get Rich. Our all-star analytical team is called first when the media needs to know. We are regularly featured on several well respected finance-oriented radio and television programs such as Fox, CNBC, BNN, WSJ to name a few and widely recognized in the media as a leaders in the analyst community. In addition, Wall Street Strategies is part of Thomson-Reuters Consensus Estimates. Brian Sozzi is an equity research analyst specializing in the softline/hardline goods sectors of the retail industry for Wall Street Strategies Inc. Mr. Sozzi graduated Summa Cum Laude from Dowling College, receiving his Bachelors of Business Administration with a concentration in Finance and Accounting. Routinely sought after as a trusted point of reference for opinions and insight on the global economy and retail sector stock evaluation, Mr. Sozzi is a frequent on air contributor to CNBC, Fox Business Network, and Bloomberg, and is cited regularly by online/print publications that include Forbes, Bloomberg, The Wall Street Journal,, CBS Marketwatch, Reuters, Seekingalpha, Associated Press, Crain’s NY Business, Fortune, Barron’s, AOL Finance, and the Financial Times. In 2009, Mr. Sozzi became recognized by Starmine as a top-ranked equity research analyst for stocks under coverage in such categories as EPS Estimate Accuracy and Industry Excess Return. Carlos Guillen is an Equity Research Analyst providing coverage of the technology sector for Wall Street Strategies, Inc. Mr. Guillen has had experience working in both the sell side and the buy side. Prior to working as an analyst, he was a Design Engineer for Lambda Electronics. Mr. Guillen holds an M.B.A. from NYU’s Stern School of Business, and he has a B.S. in Electrical Engineering from Manhattan College. David Urani is a research analyst with concentrations on the homebuilding, staffing, medical devices, and logistical services industries. Along with providing institutional clients with up-to-date reports of individual stocks within his industry coverage, David assists the rest of the Wall Street Strategies research desk with timely analysis of vital economic data. A graduate of the A.B. Freeman School of Business at Tulane University, David earned a Bachelor of Science in Management while majoring in finance. With prior training experience running small businesses, he has an eye for key fundamentals that keep Companies running efficiently. David’s insight has been featured in several outside sources, including the Fox Business Network, MarketWatch, and SeekingAlpha. Carlos Guillen is an Equity Research Analyst providing coverage of the technology sector for Wall Street Strategies, Inc. Mr. Guillen has had experience working in both the sell side and the buy side. Prior to working as an analyst, he was a Design Engineer for Lambda Electronics. Mr. Guillen holds an M.B.A. from NYU’s Stern School of Business, and he has a B.S. in Electrical Engineering from Manhattan College.

Fascism should rightly be called Corporatism, as it is the merger of corporate and government power.
-Benito Mussolini

On Friday Italy approved additional reforms as it continues to hurry and reinvent itself into a nation that can once again be economically self-sufficient. Some of the measures are copies of the same inside-the-box thinking that attempts to generate employment movement and score political points. More railway lines for the south, public housing, and new schools buy the votes of the poor while making their plight much deeper. Sure, it sounds good, and who could be against new housing and schools? But the notion this is going to be an elixir is a lie that should stop. Western nations have a lot of schools and enviable housing.

It is tougher curriculums and reversing waning work ethics that Italy and the rest of the West outside Germany must figure out.

Other than the usual in-case-of-emergency-break-glass measure, Italy is finally taking the axe to antiquated policies that have stifled competition and innovation for decades. Mario Monti, the technocrat that once stopped the merger of GE and Honeywell, has seen the free market light. He is ditching the guild system which has made everyday life extremely expensive. Babysitters have guilds, and taxi drivers have guilds, and notaries have guilds; in all, 28 industries have guilds. These guilds limit membership, training and progress. This makes supply always more limited than demand and means big money for tasks that in America cost pocket change. In defense of this system, the head of the notary guild said only 17% of the industry are blood relatives, and it costs so much more than American services, but there is no robo-scandal.

People of the same trade seldom meet together even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices."
-Adam Smith

Guilds in general were a central constant during medieval times in Europe and Adam Smith railed against how badly it harmed economic progress. In fact, economic scholars agree it was the 1,385 guilds that destroyed Italy's economy in the seventeen century. By the end of the eighteenth century, guilds had been abolished. Then came Benito Mussolini. "Il Duce" decided on a scheme that hinted at Marxism in the sense of controlling production, but in this case, it controlled the companies that created production. It was formed from the word fasces, which meant bundle and was represented by the Roman symbol of an axe surrounded by a ring of rods.

In this case, Mussolini would bundle collectivism and power. He blamed capitalism, boom-and-bust cycles, class conflicts, wasteful competition, and profit-orientation. Does any of that sound familiar? It's the same message we've heard from the President and liberals over and over even as we have slogged through the worst post-recession recovery ever. I remember President Obama blasting boom and bust cycles and fretted that if we were to ever find a system that would stop them, let it at least be during a boom part.

Tomorrow night we will hear more about class conflict and suggestions that all hard work should receive the same pay even if it means a blow to profits. Make no mistake the economic aspects of fascism have always been popular with progressives.

FDR paid Mussolini a compliment, calling him and his economic program "honest purpose of restoring Italy," and once the New Deal was announced Mussolini repaid the admiration, calling it "boldly...interventionist in the field of economics." By the late 1930s, several other nations adopted the economic policies of fascism. Guess which nations thought capitalism wasn't good enough? Yes, you've got it: Greece, Spain and Portugal all picked up on the appeal of fascism and only later dumped it for socialism. Now Monti wants to take what's behind the door marked "F" for free markets.

He took his victory lap Friday saying it was the end of the "closed shop" mentality in professions, so now there will be more doctors and lawyers, and petrol station owners can choose who they purchase fuel from.

As one nation exits lingering vestiges of fascism, it appears America is ready to take the next step toward this compromise between socialism and Marxism. Sadly it's the other aspects of fascism that will stop the general media from connecting the dots to the goals of Elizabeth Warren and Nancy Pelosi. Those other aspects include totalitarian rule that focused on a society that bonded based on culture and blood. It promoted discipline through indoctrination and psychical education. Mostly it embraced violence to promote its agenda. Yet make no mistake, the economic goal is where Mussolini thought he would change the world. He died an ugly death, but his agenda lived on to contribute to the slow and ugly death of Italy's economy.

Now we see an administration that seeks to control indirectly through heavy regulations, rules and intimidation corporations. Industries that get the state's stamp of approval live on despite free market rejection. So we spend billions on solar and wind power that create scant jobs and no return on investment (which isn't the right word anyway). One definition of fascism said it was socialism with a capitalist veneer, which explains things like the Volt being pushed through with billions of dollars of taxpayer funds. It's like those public-private partnerships pushed so much at the beginning of the administration. Many were created and just simply became money pots for political bundlers.

I realize it's not in America's DNA, but the non-stop campaign against capitalism is working. In Italy, guilds were tolerated even as it was clear it was hurting the economy and anchoring the nation in a medieval world. Mostly, those that knew better accepted it as a third way between capitalism and socialism. There are those that think there should be something fairer than capitalism, and fascism offers a version of distribution that comes close to making things right. Of course opportunities to earn money are really fair, and jettisoning guilds in Italy was a major step in the right direction.

Letting government control wages through regulations or tax policy will not create opportunities but instead ruin upward mobility and the trail of prosperity it blazes in society.

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