The world is bailing out banks and car companies. Italy is coming to the rescue of parmigiano cheese.
In an effort to help producers of the cheese commonly grated over spaghetti, fettuccine and other pastas, the Italian government is buying 100,000 wheels of Parmigiano Reggiano and donating them to charity.
Though demand for parmigiano is strong in Italy and abroad, producers have been struggling for years to make money, putting the future of Italy's favorite cheese at risk.
In an effort to help producers of the cheese commonly grated over spaghetti, fettuccine and other pastas, the Italian government is buying 100,000 wheels of Parmigiano Reggiano and donating them to charity.
Though demand for parmigiano is strong in Italy and abroad, producers have been struggling for years to make money, putting the future of Italy's favorite cheese at risk.
Okay, now, I understand that parmigiano cheese is important to the economy of Italy, but this is a great way to illustrate the silliness of the whole 'too big to fail' argument. In the U.S., it's banks and cars; in Italy, it's cheese. But, the same principle applies: at what point is an industry 'too big to fail', and who determines that point? For example:
Now that the government has stepped in to help parmigiano makers, however, others are making a stink. "We've never received a single dime in state aid," complains Vincenzo Oliviero, who heads the association of buffalo mozzarella producers.
Mr. Oliviero says makers of the juicy white cheese eaten alone or on pizza have been suffering since Naples faced a trash crisis last year. Because most buffalo mozzarella is made near there, consumers stopped buying the cheese for fear that mounds of garbage in the area might have infected the water used to irrigate farms. Sales of buffalo mozzarella have fallen 18% over the past year. "We've asked for help, too," says Mr. Oliviero. Italy so far hasn't said no.
Economists say helping cheese makers sets a bad example, especially in a country that has gotten into hot water with European Union competition regulators for bailing out other ailing industries -- most notably the airline Alitalia.
"If you spend money on parmigiano, then on cabbage, then on Alitalia..., you're using state resources to help those that are inefficient," says Carlo Stagnaro, head of research at Italian think tank Istituto Bruno Leoni.
Mr. Oliviero says makers of the juicy white cheese eaten alone or on pizza have been suffering since Naples faced a trash crisis last year. Because most buffalo mozzarella is made near there, consumers stopped buying the cheese for fear that mounds of garbage in the area might have infected the water used to irrigate farms. Sales of buffalo mozzarella have fallen 18% over the past year. "We've asked for help, too," says Mr. Oliviero. Italy so far hasn't said no.
Economists say helping cheese makers sets a bad example, especially in a country that has gotten into hot water with European Union competition regulators for bailing out other ailing industries -- most notably the airline Alitalia.
"If you spend money on parmigiano, then on cabbage, then on Alitalia..., you're using state resources to help those that are inefficient," says Carlo Stagnaro, head of research at Italian think tank Istituto Bruno Leoni.
And that's exactly the problem. The state cannot make a rational, logical argument for denying any industry or business a bailout because those decisions are not being made on the basis of facts. Heck,they shouldn't even be decisions that are made at all...! The free market will sort out which businesses fail and which businesses succeed without any government intervention! Nevertheless, when you can't deny any industry or business a bailout, you inevitably end up with the state giving a bailout to every industry or business. The end result is the bankruptcy of the nation itself.
That's the danger of this liberal mindset - when you rely on feelings or nebulous concepts like social justice, there is no set rule by which everyone is treated fairly. Unintended consequences lurk behind every liberal policy corner, and often make things worse than the original 'crisis' which prompts the actions that bring about those unintended consequences.
A crap sandwich is still a crap sandwich, even if it's made out of cheese.
There's my two cents.
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