Aioli


Today’s is International Women’s Day, increasingly important in the United States but a long-time holiday of major standing here in Romania.

ioanapetrescu

And so you’d think that I’d be quite happy about the fact that the new Ponta 3 cabinet has a number of female members, including Ioana Maria Petrescu, the new Minister of Public Finance.

After all, she’s relatively young (age 34) and thus not nearly as old as the other ministers, most of whom are still Communist dinosaurs. She occasionally flashes a genuine smile in public, something you almost never see Romanian politicians do. She both writes and speaks English fluently, something heretofore sorely lacking in Ponta’s administration. She’s intelligent and well-educated and is a compassionate, caring person.

So why am I so dismayed about her?

Meat Puppets

American English has a slang term for just about everything. A “sock puppet” is an online account that looks like it belongs to an independent person but is actually being controlled by proxy by someone else. Usually “sock puppets” appear in clusters, one person using their “real” account to do something (such as express a political opinion) and then logging into their sock puppet accounts to “like” or “upvote” the original post, thus inflating its online reach.

A “meat puppet” however is a person who rents out their “real” online account for cash. If you pay me to express an opinion, that makes me a “meat puppet”, otherwise known as a “gun for hire”. There are still real mercenaries in the world, soldiers who fight for whomever pays them, and “meat puppets” are their online equivalent.

Back on February 6, the Minister of Public Finance, Daniel Chitoiu, suddenly announced his resignation. It was a unclear at the time why he had done so and at first everyone (including me) assumed it was just another cabinet shake-up. After all, as I’ve written about before, Ponta had already replaced fifteen ministers so one more was hardly newsworthy.

Initially the PNL (Chitoiu’s party) was going to select a replacement and everything would go back to normal. However, the ongoing tension between Antonescu’s PNL and Ponta’s PSD flared up as the two sides negotiated various ministerial positions. Ultimately, the PNL withdrew from the USL coalition entirely and for an entire month the government was in “interim” mode. It wasn’t until last week that the new “Alianta PUP” (literally “Kiss Alliance”) was legalized and the new Ponta 3 cabinet confirmed.

Now the public (via the media) has discovered that both Daniel Chitoiu and his wife Laura had been operating as meat puppets for the PNL mafia based out of Hunedoara. Laura had been working for the ASF (government body in charge of financial supervision) and was writing “emergency” government ordinances to benefit PNL-controlled corporations. Since day one, the Ponta administration has been extraordinarily fond of using “emergency” government ordinances (called OUGs in Romanian) because they bypass the normal parliamentary procedures for debating and voting on bills.

Now we know that Laura Chitoiu issued an OUG in order to protect a firm controlled by Ilie Carubulea. The DNA has a case against Laura Chitoiu, which apparently included bugging her phone as transcripts have been released that clearly show that she was writing these “emergency” government measures directly at the behest of Dan Radu Rusanu (nickname “Uncle”), who had been Chitoiu’s boss, a man with deep ties to the PNL mafia.

As a side note, it’s interesting that Dan Radu Rusanu, who has been deeply corrupt for a long time, once threatened a cop in 2003, telling him “You’ve got two minutes to leave the mayor’s office or in two days you’ll be out of a job.” That mayor was Mircea Muntean, who was a known meat puppet controlled by Dan Radu Rusanu and the cop who was in his office was Traian Berbeceanu, a man I’ve written about before.

Unlike his wife, there aren’t any (as of yet) published transcripts showing Daniel Chitoiu’s involvement with “Uncle” Rusanu but it does look like the DNA is including him in their case against Laura. What is known for sure, however, is thatthe original speculation about Daniel Chitoiu’s sudden resignation had to do with the mini scandal over the “electorata” which he was about to implement without consulting his superiors in the PNL. They in turn accused him of “collaborating” with the PSD and then pressured him to leave office.

“Electorata” is a Romanian portmanteau from the word “elect” for elections and “rata” for install payments to a bank. The idea was to give certain low-income Romanians a reduction in their bank repayment rates but this was seen as pandering for votes because two important elections are scheduled this year, one in May for the European Parliament and one in November for the successor to Traian Basescu.

Looking at the transcripts and public records, however, it’s pretty clear that neither Daniel nor Laura Chitoiu are really that intelligent. The “electorata” scheme wasn’t a deeply sublime political strategy but something that came directly from the IMF.

Because Romania’s judicial system is incredibly opaque and corrupt, banks have a hard time getting judgements (such as personal bankruptcies) against people with outstanding loans and thus find it difficult to collect their debts. The IMF then came up with the idea (after first trying it out in Bolivia, which ended in disaster, as most of their plans do) of trying to entice debtors into making more payments to the banks by reducing their monthly payments, and that is what Daniel Chitoiu was trying to implement before it blew up in a political scandal.

On one level, he and his wife were meat puppets working for “Uncle” Rusanu and the PNL mafia but on another level he was just following orders from the IMF.

Cornering the garlic market

In September 2013, Ioana Petrescu was hired on as an economic “adviser” to Prime Minister Ponta, a position that doesn’t require parliamentary confirmation (or oversight). The news of her employment scarcely made a ripple at the time, sandwiched in between several other new hires that also appeared in the Monitorul Oficial.

Ioana Petrescu came to national attention in October 2013 when she wrote her (now infamous) piece in the Ziarul Financiar entitled “Please buy my garlic”.

I’ve yet to see this article translated into English so what follows is my doing (with some minor formatting edits for clarity):

Immediately after I arrived in the country, I stopped at a supermarket in Bucharest to buy a coffeemaker, an essential for me because I don’t last long without my daily fix.

When I left the store, I saw a lot of people standing on the sidewalk selling all sorts of things, from clothes to household goods to food. I made my way through them and was about to cross the street when I heard someone cry out behind me.

When I turned around, I saw an old woman down on her knees on the sidewalk, tugging at the hands of a young man. When I got closer, I saw that she had some garlic in her hands and was desperately trying to give it to the young man. I heard her say:

“Please buy my garlic! I haven’t sold anything today. I’m begging you, please!”

It looked like that the young man had been considering buying some garlic from her but then changed his mind and now the woman was on her knees, tears in her eyes, begging him to buy her garlic. It was the most shocking thing I had seen so far in Bucharest.

The old woman was about 70 to 80 years old. In my opinion, she should’ve been home with her grandchildren, watching soap operas on television and not outside on the sidewalk, begging people to buy her garlic.

Ioana Petrescu had been living in the United States for the past 14 years, only returning to Romania in September when she got her job as Ponta’s economic adviser. I don’t know what kind of sheltered life she had been living but I’ll take her word that an old lady selling garlic was the most shocking thing she’d seen in the capital.

The rest of the article is her using this experience to advocate her own ideas on the economy, something which will be discussed in further detail below. But I did want to point out one thing very quickly about that last line, wherein a young woman believes that senior citizens should be “home watching television and playing with their grandchildren” instead of selling garlic on a street corner.

Most of my family lives in the United States and I have (and have had) plenty of elderly relatives, all of whom do in fact stay home and watch a hell of a lot of television. None of them stand on street corners selling garlic but they don’t much play with the grandchildren either because American families are widely dispersed as an economic necessity. My elderly relatives are indoors all the time, in poor physical health, living off their (more than adequate) pensions and savings.

In contrast, most elderly Romanians I know are in far better physical health. They do get outside, whether that’s to supplement their meagre pensions by selling garlic (or other things) or to visit their families and grandkids, who do live close by. The elderly Romanians whom I know are far poorer financially but far richer in both family connections and physical health, which makes me wonder which system is truly the better one.

Due Diligence

Who is Ioana Petrescu? And where did she get her ideas? I rather expected the media to do a little more work in fleshing out her background but so far I’ve seen nothing more substantial than her official CV, which lists her ample accomplishments of having graduated from Wellesley College and Harvard University, both prestigious institutions of higher learning. She has a bachelor’s degree in economics and mathematics, a Master’s degree in economics and a PhD in economics, which technically makes her Doctor Petrescu.

Apparently these facts are good enough for the Romanian press, including the “rightwing” publications that are generally hostile to and suspicious of just about everything Ponta does. A charming young woman with a boatload of degrees in economics becoming the Minister of Public Finance is a non-controversial choice and thus not worth any investigating.

But where did she come from? How did Ponta even find out about her to be able to give her the position of his economic adviser just a few short months ago? And why did he pick her to be his new Minister of Public Finance instead of following his usual procedure of giving away the post to another one of his political cronies?

The answer to the last question seems to be that Ponta found it hilarious that she took (PDL member and former Finance Minister) Gheorghe Ialomitianu to school a couple of months ago during some kind of debate on economics. But it still doesn’t answer where she came from, considering that her entire adult career has been in academics and that she’s never managed a company before, much less a country’s finances.

As much as I detest corruption and incompetence in the government, the very fact that Ponta chose someone competent for the job immediately caused me to be suspicious. And so I began to dig into her background to find out exactly who this woman is that now controls this very important ministry, responsible for everything from selling Romania’s sovereign bonds on the international market to administering and collecting taxes to ensuring smooth compliance with the IMF’s targets.

It should be a great moment for Romania, a bright citizen who got a top quality education abroad and has now returned home to better her country but quite frankly, I wish we still had Daniel Chitoiu in the post, and that’s saying something.

Markovian Parallax Denigrate

Unlike her boss, it is abundantly clear that Ioana Petrescu is quite intelligent and actually wrote her own doctoral thesis without plagiarizing and stealing other people’s work. Back in 2003 she wrote a paper entitled Stochastic Processing Occurring in the Theory of Markov Chains and their Applications, a subject (Markov Chains) that’s been near and dear to my heart for many years as it deals with both both prognostication (“predicting the future”) and calculating probability distributions. For years I’ve had an entire category of posts on the subject and for a long time I had some “fun with ngrams” on the side panel of the blog as well (unfortunately they had to be phased out when Twitter changed their API).

Every article on Ioana Petrescu says that she’s been living in the United States for 14 years. Extensive public records are online and so I know that she graduated from high school in Bucharest and then immediately went to study in the United States, first at Wellesley College and then later at Harvard. After she graduated, she went immediately into teaching and is still technically “on sabbatical” from her post as a professor at the enormous University of Maryland in College Park.

I know she speaks Italian, as she once worked as an Italian language tutor at Wellesley. This probably came in handy when she was in Italy at the end of August 2013 for the yearly congress of the International Institute of Public Finance in Sicily, less than a week before her appointment as Victor Ponta’s economic adviser.

I also know that she was interested in studying economics from the very first year as an undergraduate at Wellesley College, a prestigious all-female university. What Ioana probably didn’t know was that a particularly strange woman named Mary once graduated from that same university back in 1929. Three years later, in 1932, Mary married Fred C. Koch, who built one of the most successful petroleum companies of all time. The Koch family later used their wealth to finance scholarships at many universities, including Mary’s alma mater of Wellesley College.

I don’t know if Ioana received a Koch scholarship to attend Wellesley but I do know that it is a very expensive school, currently costing 57000 dollars a year for a Massachusetts resident, which is a lot of money for an ordinary American family, to say nothing of a Romanian student who has to pay the full “out of state” price (which is higher).

What I do know is that Ioana’s economics teacher at Wellesley was a woman named Silvia Ardagna, who was born and raised in Italy. The two must have bonded, able to speak Italian to each other, and clearly Ms. Ardagna had a significant influence on Ioana’s early years as a student. Later, when Ioana began to study at Harvard, she must’ve been delighted to have Ms. Ardagna as a professor again for she was then teaching at that university. I also know that the two women are close enough that Ioana has regularly used her as a personal reference on her CV.

Silvia Ardagna is now an executive director at Goldman Sachs, known as the Great Vampire Squid for its evil machinations in destroying municipal, state and even national economies.

Whether it was under Ms. Ardagna’s direct tutelage or due to the long influence of the Koch family on Wellesley College (or both), somewhere along the line Ioana was convinced into drinking a particular brand of Kool-Aid, a “libertarian” economics philosophy that advocates governments having a minimal involvement in financial regulation allegedly in order to make countries more prosperous.

Koch and Bull

In 1891, an immigrant from the Netherlands, Harry Koch, arrived in the very small town of Quanah, Texas in the United States. The Koch family was originally from Germany (hence their German surname) but had been living in Holland for a few years when Harry emigrated to the United States.

Harry’s grandfather had been working for a shipping magnate where he met his future wife, the daughter of his boss. The two married and Harry’s grandfather and father were making good money shipping goods by sea between Holland and Germany.

Harry used his money to start up a newspaper, writing articles that supported the big banking and railroad (and then later oil) interests in the state. From this excellent investigation into his background we find out much more:

In those wild early days of the railroad age, real estate speculation was a central plank of the business plan. The U.S. government had given vast stretches of public land to railroad companies, and the companies needed to sell that land to settlers to create customers and pay off debts.

And that meant railroads were in constant need of local publishers to promote the countless railroad towns that had been planned and parceled by the railroad companies across the country, with the aim of luring enough gullible settlers with wildly exaggerated stories of fertile soil and prosperity to trigger real estate booms—all so that railroad insiders could make easy money offloading overpriced dirt lots on the hapless settlers.

Dutch investors were heavily involved in several railroad lines in the North Texas area, including the Fort Worth and Denver Railway Company, which had spawned Quanah in 1887 and owned just about all the land in town. County records show Harry provided advertising services and worked directly for the Fort Worth and Denver for nearly 20 years, sometimes receiving payment in the form of land transferred directly from the legendary railroad builder Grenville M. Dodge, who helped lay the Union Pacific and more than a dozen other lines across the country.

By the time he died, Harry Koch was extraordinarily wealthy, money that his son, Fred C Koch (Mary’s husband) used to found Koch Industries, the second-largest privately held company in the United States. Fred C. Koch passed away in 1967 but two of his sons, Fred R. and Charles G. Koch together run both the business as well as manage their philanthropic endeavors, which includes everything from university scholarships to funding think tanks, a sort of corporate “university” where academic people are paid money to write papers and publish reports that support a specific political position.

One of those think tanks partially funded by the Koch family is the American Enterprise Institute (AEI), founded in 1938. Among other things, it was particularly close to the George W. Bush administration and it was during his presidency that Ioana Petrescu became a research “fellow” for the AEI, churning out papers that supported the AEI’s well-established libertarian views on economics. The other main funder of the AEI for years was, incidentally, none other than the CIA.

AEI current and former scholars are everywhere, from Frederick W. Kagan (married to Victoria Nuland) to Kevin Hassett, who was once John McCain’s economic adviser.

The Company you keep

Ioana Petrescu’s academic papers are accessible to the public and it is clear who has been influencing her libertarian views on economics. Besides Ms. Ardagna, Ioana’s CV also lists Martin Felderstein (who awarded Ioana her doctorate degree) and Kevin Hassett, under whose personal direction she worked during her time at the AEI, as references. But who are these people?

Kevin Hassett was once named the world’s worst economist after his economic predictions in 2001 were disastrously off the mark. Hassett and the AEI are open admirers of the economist Hernando de Soto, saying in 2007 that de Soto should be given the job of head of the World Bank.

Martin Feldstein, who was the “driving force” behind George W. Bush’s initiative to privatize Social Security, is also a huge fan of Hernando de Soto, both men members of a “speakers bureau” that organizes very lucrative “talks” around the world that earn them fees of several thousand dollars per appearance. Both men also favorably reviewed this book by Sebastian Edwards, a Chilean Economist who once worked for the World Bank. Feldstein, among other things, was also a member of AIG when it ran itself into the ground in 2008 and only survived due to a massive government bailout.

But who is this Hernando de Soto and why do his views matter? From here:

His name is Hernando de Soto and he’s been adored by everyone from Milton Friedman to Margaret Thatcher to the Koch brothers.

In 2004, the libertarian Cato Institute (neé “The Charles Koch Foundation”) awarded Hernando De Soto its biannual “Milton Friedman Prize”—which comes with a hefty $500,000 check—for “empowering the poor” and “advancing the cause of liberty.”

With help and funding from US and international institutions, De Soto quickly became a powerful political force behind the scenes. In 1990, De Soto insinuated himself into the inner circle of newly-elected president Alberto Fujimori, who quickly turned into a brutal dictator, and is currently serving a 25-year prison sentence for crimes against humanity, murder, kidnapping, and illegal wiretapping.

The harsh free-market shock-therapy program that De Soto convinced Fujimori to implement resulted in mass misery for Peru. During the two years De Soto served as Fujimori’s advisor, real wages plunged 40%, the poverty rate rose to over 54% of the population, and the percentage of the workforce that was either unemployed or underemployed soared to 87.3%.

In 1992, Fujimori orchestrated a constitutional coup, disbanding Peru’s Congress and its courts, and imposing emergency rule-by-decree. It was another variation of the same Pinochet blueprint.

Years later, Fujimori’s notorious spy chief Vladimiro Montesinos testified to Peru’s Congress that De Soto helped mastermind the 1992 coup. De Soto denied involvement; but in 2011, two years after Fujimori was jailed for crimes against humanity, De Soto joined the presidential campaign for Keiko Fujimori, the jailed dictator’s daughter and leader of Fujimori’s right-wing party. Keiko Fujimori ran on a platform promising to free her father from prison if she won.

That’s the man Milton Friedman (a hero to AEI), Martin Feldstein, Kevin Hassett and other “libertarian” economists all consider to be an excellent role model, a man who destroyed Peru’s economy while working for a vicious dictator.

El Sendero Luminoso

These are Ioana’s ideological role models and you can see it in all of her papers, ranging from her “buy my garlic” piece in Romanian to her much more academic English-language papers entitled The Impact of Progressivity in Countries with Tax Evasion and Entrepreneurship, Bribes, and the Taxation of Personal Income, all of which advocate that everyone pay their taxes so that the government can better provide services to its citizenry. Except of course that in countries like Romania, few people trust the government, knowing full well that politicians are more likely to stuff their pockets than properly spend government revenue.

Superficially, libertarian theories always seem reasonable. Reduce government oversight and encourage people to start up (taxpaying) businesses and prosperity will soon follow. The only problem is that, time after time after time, it just never seems to work out that way. While there’s an earnestness in Ioana’s position papers that you don’t find in the more cynically self-promotional works by Friedman, de Soto, Feldstein, et al, it doesn’t change the fact that nakedly capitalistic economic theories end up wreaking destruction.

Ioana, as far as I can tell, seems to be a genuinely compassionate person, who truly does believe she is working to improve people’s lives. The problem is that her ideological mentors are all espousing inhumane concepts, designed to maximize capitalism’s ability to suck wealth out of poor nations (and people) in order to line the pockets of the super rich.

These are the maxims that the IMF and World Bank have thrived on for 70 years, which is why the IMF’s current eagerness to “rescue” neighboring Ukraine comes across as sinister. Romania and dozens of other countries have already gone into debt to these institutions and yet you’ll rarely find a single “beneficiary” of these loans anywhere on the planet that ultimately came to believe that it was anything other than a total fucking disaster.

Certainly Daniel Chitoiu and his predecessors, including Gheorghe Ialomitianu and Varujan Vosganian (among others) were deeply corrupt political cronies but I can’t help but be thankful that it was their very incompetence which inadvertently helped to protect Romania from streamlining their implementation of all of the IMF’s demands over the years. Every government since 1990 has certainly wanted to accede to the IMF’s demands but time and time again, due to corruption and greed, they’ve failed to come through, to the endless dismay of the IMF.

I just can’t but feel that if Ioana Petrescu ever gets enough traction in the job that Romania is going to suffer badly. She’s ambitious and smart enough that she might actually succeed where her predecessors have failed. If I thought that “free market reforms” were the medicine that Romania’s economy needs, I’d be rejoicing.

Unfortunately, if Ioana Petrescu and others like her get their way, it’s probably going to be a very sad case of the road to hell being paved with good intentions.

Pawn to king’s bishop 3

As far as I can tell, Ioana Petrescu’s family has no deep political connections or “juice” with anybody. Ioana herself has been gone far too long and is too young to have the old Communist-era ties that serve most politicians so well. It looks pretty clear that Ponta nominated her as Finance Minister mostly just because he thinks she’s smart and because he greatly enjoyed her intellectual smackdown of Ialomitianu (a man that Ponta loathes) a few months ago.

But the question still remains, how did she come to be chosen as Ponta’s economic advisor in the first place? Her entire academic career has been in the United States and while I’ve seen her working with Italian and South American economists, I haven’t seen a single link between her and any Romanian schools or institutions or researchers. None of the newspapers ever mentioned how Ponta found out about her either. It’s like she just dropped in out of the blue last September.

All I do know is that last June, at the secretive Bilderberg conference in Britain, the list of attendees included Martin Feldstein, Ioana’s mentor and the man who awarded her her doctoral thesis. There were no Romanians at the meet-up in 2013 but perhaps Etienne Davignon (who was present at the meeting) managed to reach out to his old friend Mugur Isarescu the Grandmaster to help introduce their young disciple to the “right people” in Bucharest.

But until someone in power bothers to asks, I guess we’ll never know.

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23 Responses »

  1. Sam, it’s totally disingenuous of you to disparage libertarian philosophy, which for better or worse reduces the government’s role, in a country such as Romania, run by such a kleptocratic political class. I am not talking about extremes, but if you choose a direction for the country, more libertarianism and less regulation would reduce corruption – which is arguably the biggest plague of our society.

    • ” more libertarianism and less regulation would reduce corruption ”loool

      • Yup. Libertarian policies allow the market (that is, the consumers) to determine which companies do better than others. Socialist policies allow the gov’t more power to interfere with the market and to pick which companies to prop up and which ones to destroy. This system inevitably leads to corruption.

  2. Also, before criticizing Soto as a “wacky libertarian” who “destroyed” Peru’s economy (which was thriving of course, when the country was in a civil war with the Marxist/Maoist insurgents), do you even know WHY he was so well regarded by so many economists across the political spectrum? It had nothing to do with libertarianism. His winning gamble was offering property rights to poor people who built makeshift housing on public land. Official home ownership brought many benefits, such as the kids being able to register for school, for vaccines, the parents able to get loans, since they now had collateral, legitimizing the informal market etc. This one property rights policy literally brought millions out of poverty, so I would inform myself a bit better before dismissing a “libertarian” (which I don’t even think he is).

  3. Foarte interesant! Mai facea cineva pe un site oarecare o obsevartie despre legatura Ioanei Petrescu cu grupul Bilderberg.

  4. Great Sam, step by step you show us your ugly, tupamaros,sandinista, bovarista cheguevarista face. You like Stiglitz, Krugman and Pravda don’t you?

    • G.P., we are able to draw our own conclusions concerning Sam’s blog. We really don’t need your help in this regard. I’ve made this suggestion to others commenting on this blog. Why not start your own blog? Leave this space for a more constructive conversation.

      • Who’s we Robert Macfarlane? My comment was directed to Sam not to “we”, or you.
        So let me understand you, this blog is for people who think like you?
        People who love Stiglitz and Krugman?
        Why don’t you start your own socialist-liberal blog?

      • Well, G.P. I would comment below but the system doesn’t allow. No. We are those who have to read your unsolicited personal attacks. Again, if you wish to state your own opinion make your own blog.

  5. I would have thought it would be encouraging that Mr. Ponta has selected this capable young woman to tackle the reported problem of widespread tax avoidance, which impedes efforts at
    improving Romania’s medical system, its public education, its highway infrastructure, its emergency services, its training of police, and other government functions so often complained
    about here in the past. Who do you propose would have been a better choice?

    • It’s not tax avoidance that causes shitty services. It’s the lack of competition (the government knows they only have to do enough to get by) compounded with the lack of transparency/accountability in government contracting. If they collected twice as much money, do you think it would go towards better services? Or private offshore accounts and populist policies aimed to get more votes from spineless leechers?

  6. A very good analysis. The most important question everyone is overlooking has to be this however: whatever happened to ideology based politics? How is it possible this has happened? Speaking of political background (or lack of it), but with all due respect to her excellent qualifications, is Ms. Petrescu supposed to be PSD, liberal, or some kind of “independent technocrat”? OK Victor Ponta is not only PM but supposedly head of the PSD, the social democratic party. Is this not a party you’d expect to be rooted in at least some socialist doctrine of protecting the vulnerable sections of society from market forces? And if so, then how does it happen they select what appears to be a hardcore libertarian economist for such an important post? I am disappointed by this idea of (supposed?) socialists or social democrats working together with libertarians or people who promote wild capitalism. This is without saying which way is better – capitaism or socialism – although there has to be a middle way. It’s only socialism that makes capitalism bearable, although it’s capitalism that gives an economy a dynamic. The trouble is the wild capitalism tolerated or even promoted by Ponta and his clan – the fracking rights given in rural areas to Chevron, Petrom and other energy shark corporations, and this in flagrant violation of common decency and civic norms.

    • Why the downward thumb … did I say something wrong? :-[.

      • No. There is a clash of culture occurring. I’ve been noticing a difference in approach between how things are here in the USA and Romania. Having an opinion about something is nothing more than stating a preference. Politics, economic theory, life is full of opinions. I am sure you realize this. In the USA at least, politics is a contact sport.

        Anyone who is of the free market mind (unfettered capitalism) is going to find your remarks offensive. The other side is also true, anyone who sees government as a protector of freedoms and society will find your remarks equally offensive.

        This isn’t a measure of correctness, but of opinions. When someone doesn’t agree with you it doesn’t mean you are wrong. A common rhetorical tactic here in American politics is to assume someone is wrong, therefore they are wrong.

        I don’t know if Sam is factually correct all the time, but he provides an insight that is accessible. Learning about Romania is very difficult especially from Romanians themselves. Sam’s blog makes my quest a little easier in that respect.

        There is a way to disagree without being disagreeable. I can see from the posts of this past week that is a concept not yet recognized by many who respond to the blog. If the poster’s goal is to somehow knock down Sam, well, good luck. All you really do is make yourself look pretty, ummm, not so respectable. Personally, I don’t give your words much weight. I drift.

        My concern for Romania is this: America is held in such high esteem by so many Romanians, that what America does is not always scrutinized. As an American I can say that capitalism doesn’t care about the little guy, it only cares about profit. Always keep that in mind when looking at our economic system. Microsoft has offices in Romania, not because the workers in Romania are magically better than workers in the USA, it is because they are cheaper. Significantly cheaper.

    • You don’t seem to understand “wild capitalism”. What is happening here with chevron etc is the opposite! It’s the gov’t picking winners and losers, not the market (which is just an impersonal name for the consumers as a whole).

      • @Robert Macfarlane: Thanks for mentioning that I managed to offend everyone, on both the right and the left. Not sure why this is, but I take it as a compliment. You are right that America (and it’s unhealthy brand of capitalism) is not yet sufficiently scrutinised in Romania, but this is changing very fast in Romania. The low esteem in which the Chevron energy shark corporation is held is a case in point, not to mention (abstracting America from the equation) the fact that just over 50% of people look back with nostalgie to the Ceausescu era, after seeing first hand the abuses of Romanian capitalism since 1989. As for the Microsoft presence in Romania, your statement is a little unfair see ref: http://www.networkworld.com/news/2003/0610msav.html . The IT outsourcing may be cheaper than in the US, but there’s also a lot of IT talent, as distasteful as it is for me say, not being a fan of anything Microsoft.

        @jos_cenzura: True in a way what you say, in that companies like Chevron and RMGC get “favored bid” status for whatver “backroom” geo-political reasons, but wrong in a sense, or perhaps I’m not focusing on the specific problem, or naming and shaming the evil by it’s proper name: global corporate, FASCIST ECO-RAPE.

        @both of you: Nobody has answered my original question: whatever happened to ideology based politics? At what point did it disappear from the global political landscape? Is it the fault of Tony Blair’s maybe? My point is that we seem to be living in an age of robber barons, and everyone just acts as if this were normal. As Robert says, and increasingly around the world, everything just boils down to profit.

      • @Andrei….My point concerning Romanian computer talent is not directed at their quality. Romania is known for its mathematics skills, a prerequisite to just about anything computer related. My point is this: Business goes where labor costs are lower. This is business 101 stuff. The largest cost of any product is labor. Lower your labor cost, increase profit. I think we can agree with this point.

        Labor. In the USA, up until about 15 years ago, the number and quality of math oriented student required for the computer industry was easily met by our education system. However, there can a time when the demand for these student out paced the supply. Congress introduced a visa program which allowed foreign workers to fill this demand. That in itself is a huge topic. What did we learn? First and foremost these workers would settle for a lot less money than the workers before them. Initially they accepted pay about 1/5 to a 1/4 less in salary. The impact wasn’t huge but it was noticeable. Further, it was discovered through this experiment that most of the time these foreign workers integrated well. Business still needed to cut costs in some fashion. There are two ways this can happen: 1. Reduce wages further. 2. Reduce costs associated with having worker (e.g. benefits).

        Outsourcing accomplished both. In the beginning this was started by outsourcing less critical operations. Certain staff positions like security and administration jobs were outsourced to local third parties. The worker remained employed, albeit for less compensation, and the company saved money. Bottom line, outsourcing worked. Fast forward….support was outsourced. Three times out of five is I need technical help with something I am speaking with someone from India or Mexico. I can tell you what the cost saving it in real numbers. At that time a phone tech support person in the USA made about $20/hr at the low end. In Mexico that same person is making $8/hr. Do the math. The difference goes into the share holder’s pocket. I can personally I am doing the same work I did in 2002 and make 1/2 the salary today.

        Is the Mexican worker any smarter than the American worker? No. Is the Romanian worker any smarter than the American worker? No. This doesn’t mean they are not smart. You have to be smart to work in this business. However, we all don’t live in the same economy. We all don’t have the same salary. Companies increase profit by taking advantage of these things. The cost saving typically is not passed on to the consumer.

        My comment was not to disparage Romanian workers. I don’t recall if I mentioned it above, but I have mentioned this several times here in Sam’s blog: Romanians are pretty smart people. I’ve worked with two now. The first, a woman named Oana, was pretty smart. We used to discuss and debate things at lunch and she was pretty good. I wish we could still have those discussions.

        My analysis is on the cost of labor, not the quality of labor.

        Ideology…I think we are using the word differently. Here in the USA that word has a certain meaning which has no practical application in political public life? My post is getting kind of long…

      • @jos_cenzura (continued): That is to say, if there were any “social democratic” instincts left in the PSD, then what’s happening now in Pungesti, would not be. The voice of the local community would be taken into account. As things stand both Chevron, as well as the local and the central government are refusing to listen to the near unanimous voice of the local community and town council demanding that Chevron vacate the site, while the site itself is being protected 24/7 by police, with all residents under constant surveillace, tantamount to harassment, hence my earlier point about global corporate fascism. Ponta is a puppet of the US global corporate fascist hegemony.

      • You don’t seem to understand capitalism as it is practiced in general. There is no “free market.” It doesn’t exist except in the libertarian’s’ mind. People don’t have a freedom to choose the best product or even drive future products. The only driver of capitalism is profit. Period. Any system which is based upon nothing but greed is not good.

        I am curious as to which libertarian system in history has actually worked for any length of time between people, societies, and nations? Even capitalism has to be regulated even to work as poorly as it does now.

  7. Don’t throw out the baby with the bath water… I am not a libertarian but most people who are willing to tackle bureaucracy get my support. How about giving Ioana Maria Petrescu a chance and contributing ALSO POSITIVE suggestions…

  8. “My concern for Romania is this: America is held in such high esteem by so many Romanians, that what America does is not always scrutinized.”

    No kidding our tax system in the US for instance… thousands of pages of idiotic rules and a most inefficient administration. NOT A MODEL

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