The Italian (Non) Solutions - Rodney Johnson - HSDent

2012 is starting off a lot like 2011 finished, with really big problems and laughable solutions.  The latest installment comes from the Italians.

This country is one of the largest in the euro zone, and did a reasonably good job of staying out of the mortgage mess in the mid 2000s.  Their problems, unfortunately, are a lot worse.  They are a graying population with very top heavy social payments.  So with people getting older, few kids, and ever more funds required to make social payments, the government is facing an economic black hole.  This has been realized by the credit markets, who now charge the country of Italy roughly 7% to borrow for 10 years.  The Italian Solution?  Stay open longer.

As the Financial Times reports this morning, the Italians passed a law allowing all businesses to remain open 24 hours a day, 7 days a week, no exceptions.  That’s right, if you operate a restaurant, a bar, a clothing store, or even a dry cleaner, you can remain open every single day of the year, all day long.  Want to sell trinkets?  Do it at 3 am! Selling wine?  How about 7 am?  Want to press clothes at 11 pm?  Have at it.

This solution would be a stunning success if Italy’s problem was that too many consumers had too few opportunities to spend their money, but of course that’s not the case.  Instead, too few Italians have money to spend.  Their economy is soft and getting softer, led by demographics and an eroded manufacturing base, not to mention political paralysis.  Having stores open longer will simply mean, well, nothing.  Which is a lot like every solution offered throughout 2011.

Welcome to 2012.