From a New York trial court decision in People v. Govan (May 15):
[T]he defendant moves this court for an order allowing him to conceal his identity at trial. He argues that given the extraordinary amount of coverage the defendant, his actions in the courtroom, and the circumstances of the cases against him have received, he cannot receive a fair trial if the jury knows his true identity….
In February 2017, the defendant was arrested and charged with one count of Murder in the Second Degree in connection with the February 2005 death of Rashawn Brazell. Following Mr. Brazell’s death an investigation was conducted by the police. To that end, reward flyers were posted in the neighborhood Mr. Brazell lived as well as in the neighborhoods that he frequented, appeals for information were made to the public through the media and the case was even broadcasted on a segment of “America’s Most Wanted.” The investigation did not result in the identity of an alleged perpetrator and thus the defendant’s name was not mentioned in those media reports.
In November 2016, the defendant was indicted for an unrelated murder that occurred in 2004. As a result of new investigative leads regarding the death of Mr. Brazell, the defendant was subsequently indicted for the murder of Mr. Brazell in the instant indictment. Several media outlets reported on the defendant’s indictments and followed the court proceedings, including a court appearance where the defendant refused to be fingerprinted, shouted that he was innocent, and had to be subdued by court personnel. A video of this particular proceeding as well as other proceedings were run by various media outlets.
In August 2018, the defendant was tried by a jury before this court for the unrelated 2004 murder. The defendant was found guilty of the charges of Murder in the Second Degree and Kidnapping in the First Degree. On September 7, 2018, the defendant was sentenced by this court to 25 years to life in prison on each count to run concurrently. The media was present throughout the course of the trial, as well as at the court appearances leading up to the trial. Members of different press outlets reported on the trial, the verdict and the sentencing. Notably, during the course of that trial, the defendant failed to raise any claim that the media would affect the defendant’s ability to have a fair and impartial jury….
Here, the defense submits that given the “heinous allegations against [him]” and “the intense vilification of [him] on the internet,” the only way to ensure that he receives a fair trial is to allow him to conceal his identity. Both the People and the defense acknowledge that allowing a defendant to proceed anonymously in a criminal trial is unprecedented relief….
In highly publicized cases, courts look to the voir dire process to determine whether a defendant has been denied his right to a fair and impartial trial. For example, in Murphyv Florida, the United States Supreme Court faced the issue of whether the defendant was denied a fair trial when members of the jury learned, through the media, certain facts about the crime for which the defendant was charged and that the defendant had a prior murder conviction. In holding that the defendant was not denied a fair trial, the Court held that the defendant failed to establish that the trial was prejudicial or that the jury selection process created an inference of actual prejudice. In reaching its decision, the Court found significant that during the voir dire process no juror indicated an inability to set aside any information heard or learned about the case and “none betrayed any belief in the relevance of [defendant’s] past to the present case.” … Here, [too,] the court, together with the parties, can conduct a thorough voir dire of the prospective jurors to ensure that the defendant’s constitutional right to a fair trial by an impartial jury is not violated.
In addition to an extensive voir dire, jury instructions are an effective remedy in ensuring a defendant’s right to a fair trial. In every case, whether deemed newsworthy or not, once the prospective jury panel is brought into the courtroom, it is customary for the trial court to not only introduce the parties and ask the potential jurors whether they know or have had any contact with the parties, but also to provide a brief synopsis of the allegations and to ask whether the potential jurors know or have read or heard anything about the case. Additionally, a trial court is required to give the jury certain admonitions in its preliminary instructions. Those admonitions must include:
that the jurors may not converse among themselves or with anyone else about any subject connected with the trial; that they may not read or listen to any accounts or discussions of the case reported by newspapers or other news media; that they may not visit or view the premises or place where the offense or offenses charged were allegedly committed or any other premises or place involved in the case; that prior to discharge, they many not request, accept, agree to accept, or discuss with any person receiving or accepting, any payment or benefit in consideration for supplying any information concerning the trial; and that they must promptly report to the court any incident within their knowledge involving an attempt by any person improperly to influence any member of the jury
Here, the defendant speculates that notwithstanding the court’s instructions, the temptation to research the defendant is “just too strong.” He does not and, because jury selection has not commenced, cannot point to any example of a juror violating his or her oath or disregarding the court’s instructions. Contrary to the defendant’s baseless speculation, the Court of Appeals has held that jurors are presumed to “follow their oaths, answer the questions put to them truthfully and abide by the court’s instructions.” …
[Moreover, t]his is not a case where the trial takes place close in time to the alleged crime and media reports are fresh in the minds of the prospective jurors. Here, there has been no mention of recent or current media coverage of the defendant or the charges against him or any other indication showing that this case is still pervasive in the minds of Brooklyn’s jury pool.
Moreover, Kings County is a large county which unfortunately sees several dozen homicides a year. So far this year, Kings County has seen 35 murder complaints. Last year, in 2018, there were 97 homicide cases recorded in Kings County. And in 2005, the year Mr. Brazell was murdered, it appears that there were over 200 homicide cases in Kings County. Many of these murder cases were covered by the media. The situation here is vastly different from that of a high profile case in a small town or a smaller county where the case is likely to be the center of public attention.
The article relied upon by the defendant cites to two instances where a party was allowed to proceed anonymously at trial. Both, however, were in the context of a civil matter, and not a criminal case…..
Assuming arguendo that this court were to grant the defendant’s motion to conceal his identity, it would still not remedy the perceived harms asserted by the defendant. The defendant submits that entering his name in an internet search engine results in an immediate display of tremendous unfair and prejudicial information about him. However, as pointed out by the People, an internet search of the decedent’s name or of the allegations in the case, such as “body parts in subway,” would generate the same results as if one had conducted a search using the defendant’s name. Hence, concealing the defendant’s name would not prevent a juror who is willing to violate his or her oath and disregard the court’s instructions from finding media coverage of the defendant and the case.
Additionally, this court presided over a pretrial Huntley hearing in which a statement attributed to the defendant was litigated. The court denied the defendant’s motion to suppress the statement and ruled that the statement is admissible in the People’s case-in-chief. In his statement, the defendant told police that he was out of state when Mr. Brazell was killed and did not return to New York City until several weeks after. However, when confronted with a signature bearing defendant’s name in the guestbook from the decedent’s funeral, the defendant admitted that the signature was his and that he had attended the decedent’s funeral….
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Even if you’ve never had a sip of alcohol in your life, you probably understand that not all booze is created equal.
A light beer will affect you differently than a strong Belgian tripel. Wine has even more of a kick. Shots are the quickest way to get where you’re going, but you might regret them in the morning.
Figuring out how much to drink takes time and experience, but at least there are some guideposts along the way. It really comes down to a combination of potency and dosing. Want to know how strong a drink is? Just check the label to find the alcohol by volume (ABV) percentage for your drink. A good afternoon beer will have less than 5 percent ABV; a nice after-work cocktail might be made with 40 percent ABV gin or whiskey. Dosing is more a matter of tradition. Beer comes in pints or bottles, wine by the glass, and stronger stuff in a shot glass.
With marijuana, it’s much the same thing. Thanks to legalization, it’s now much easier for recreational users to find out the potency of the weed they’re buying. Tetrahydrocannabinol (THC). the main psychoactive element in marijuana, is measured in milligrams (mg)—a good beginner dose is about 10mg, while 30mg will leave you with a sustained, strong high.
But vaping is growing in popularity among marijuana users, and it creates a conundrum. A vape pen loaded with THC-infused fluid is the equivalent of a whole bottle of whiskey. Sure, you could drink the whole thing, but you’ll probably have a better time if you understand how much to consume.
Snoop Dogg—yes, really—might be part of the answer.
The rapper known for his love of green is also a partner in Casa Verde Capital, a venture capital firm that backs marijuana-related businesses. Earlier this month, they made headlines for delivering $3.5 million in funding to Indose, a vaping startup that promises to solve the marijuana dosing problem. The disposable vape pens sold by Indose include a small sensor that measures the precise amount of THC delivered with each hit.
“Dosage control is key to an effective and consistent cannabis experience, and there is no such thing as a universal dosage that is right for everyone,” Indose co-founder and CEO Benzi Ronen tellsGreen Market Report, a cannabis industry journal.
As marijuana becomes more widely legalized, many Americans will be trying it for the first time. While you can’t overdose on weed the way you can on booze, there’s still a certain amount of trial and error for first-time users. Maureen Dowd might not have gotten so hilariously stoned if she’d had access to this sort of tech (and if she’d stayed away from the edibles).
There’s obviously a market opportunity in being able to offer weed consumers, especially those who are just starting out, the ability to so precisely control their THC intake. This is exactly the sort of innovation that becomes possible only with legalization.
But there’s an equally important policy angle here—one that might undercut a new argument being rolled out by anti-legalization forces in states where weed is legal or soon could be.
In an op-ed published last month at Cal Matters, a website covering California politics and policy, Alex Berenson argues that “the harms” of marijuana legalization “are real—and if the scientific studies and data from Colorado and other early legalization states is any guide, they are only going to grow.” He points to data showing that emergency room visits for “marijuana-related” issues have increased in Colorado since recreational weed was legalized there in 2012, plus an increase in car accidents in which victims had THC in their blood.
Some of this is easily debunked. If more people are using marijuana, that means it’s likely more people in car crashes will have THC in their system—that doesn’t prove causality. As Reason‘s Jacob Sullum has explained, THC can remain in the blood stream long after the impairment that comes from being high has faded, potentially inflating these statistics.
Still, legalization advocates should not turn a blind eye to these critiques. There certainly are public health consequences to marijuana legalization, even if they are far less horrific than the consequences of prohibition. Reasonable rules limiting marijuana use and driving, for example, will be part of the next iteration of marijuana policy.
With products like Indose now available, the market is already providing the best method for dealing with the problems created by getting too high to function. Giving individuals greater control over what they put in their bodies is a win for both personal freedom and public responsibility.
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From a New York trial court decision in People v. Govan (May 15):
[T]he defendant moves this court for an order allowing him to conceal his identity at trial. He argues that given the extraordinary amount of coverage the defendant, his actions in the courtroom, and the circumstances of the cases against him have received, he cannot receive a fair trial if the jury knows his true identity….
In February 2017, the defendant was arrested and charged with one count of Murder in the Second Degree in connection with the February 2005 death of Rashawn Brazell. Following Mr. Brazell’s death an investigation was conducted by the police. To that end, reward flyers were posted in the neighborhood Mr. Brazell lived as well as in the neighborhoods that he frequented, appeals for information were made to the public through the media and the case was even broadcasted on a segment of “America’s Most Wanted.” The investigation did not result in the identity of an alleged perpetrator and thus the defendant’s name was not mentioned in those media reports.
In November 2016, the defendant was indicted for an unrelated murder that occurred in 2004. As a result of new investigative leads regarding the death of Mr. Brazell, the defendant was subsequently indicted for the murder of Mr. Brazell in the instant indictment. Several media outlets reported on the defendant’s indictments and followed the court proceedings, including a court appearance where the defendant refused to be fingerprinted, shouted that he was innocent, and had to be subdued by court personnel. A video of this particular proceeding as well as other proceedings were run by various media outlets.
In August 2018, the defendant was tried by a jury before this court for the unrelated 2004 murder. The defendant was found guilty of the charges of Murder in the Second Degree and Kidnapping in the First Degree. On September 7, 2018, the defendant was sentenced by this court to 25 years to life in prison on each count to run concurrently. The media was present throughout the course of the trial, as well as at the court appearances leading up to the trial. Members of different press outlets reported on the trial, the verdict and the sentencing. Notably, during the course of that trial, the defendant failed to raise any claim that the media would affect the defendant’s ability to have a fair and impartial jury….
Here, the defense submits that given the “heinous allegations against [him]” and “the intense vilification of [him] on the internet,” the only way to ensure that he receives a fair trial is to allow him to conceal his identity. Both the People and the defense acknowledge that allowing a defendant to proceed anonymously in a criminal trial is unprecedented relief….
In highly publicized cases, courts look to the voir dire process to determine whether a defendant has been denied his right to a fair and impartial trial. For example, in Murphyv Florida, the United States Supreme Court faced the issue of whether the defendant was denied a fair trial when members of the jury learned, through the media, certain facts about the crime for which the defendant was charged and that the defendant had a prior murder conviction. In holding that the defendant was not denied a fair trial, the Court held that the defendant failed to establish that the trial was prejudicial or that the jury selection process created an inference of actual prejudice. In reaching its decision, the Court found significant that during the voir dire process no juror indicated an inability to set aside any information heard or learned about the case and “none betrayed any belief in the relevance of [defendant’s] past to the present case.” … Here, [too,] the court, together with the parties, can conduct a thorough voir dire of the prospective jurors to ensure that the defendant’s constitutional right to a fair trial by an impartial jury is not violated.
In addition to an extensive voir dire, jury instructions are an effective remedy in ensuring a defendant’s right to a fair trial. In every case, whether deemed newsworthy or not, once the prospective jury panel is brought into the courtroom, it is customary for the trial court to not only introduce the parties and ask the potential jurors whether they know or have had any contact with the parties, but also to provide a brief synopsis of the allegations and to ask whether the potential jurors know or have read or heard anything about the case. Additionally, a trial court is required to give the jury certain admonitions in its preliminary instructions. Those admonitions must include:
that the jurors may not converse among themselves or with anyone else about any subject connected with the trial; that they may not read or listen to any accounts or discussions of the case reported by newspapers or other news media; that they may not visit or view the premises or place where the offense or offenses charged were allegedly committed or any other premises or place involved in the case; that prior to discharge, they many not request, accept, agree to accept, or discuss with any person receiving or accepting, any payment or benefit in consideration for supplying any information concerning the trial; and that they must promptly report to the court any incident within their knowledge involving an attempt by any person improperly to influence any member of the jury
Here, the defendant speculates that notwithstanding the court’s instructions, the temptation to research the defendant is “just too strong.” He does not and, because jury selection has not commenced, cannot point to any example of a juror violating his or her oath or disregarding the court’s instructions. Contrary to the defendant’s baseless speculation, the Court of Appeals has held that jurors are presumed to “follow their oaths, answer the questions put to them truthfully and abide by the court’s instructions.” …
[Moreover, t]his is not a case where the trial takes place close in time to the alleged crime and media reports are fresh in the minds of the prospective jurors. Here, there has been no mention of recent or current media coverage of the defendant or the charges against him or any other indication showing that this case is still pervasive in the minds of Brooklyn’s jury pool.
Moreover, Kings County is a large county which unfortunately sees several dozen homicides a year. So far this year, Kings County has seen 35 murder complaints. Last year, in 2018, there were 97 homicide cases recorded in Kings County. And in 2005, the year Mr. Brazell was murdered, it appears that there were over 200 homicide cases in Kings County. Many of these murder cases were covered by the media. The situation here is vastly different from that of a high profile case in a small town or a smaller county where the case is likely to be the center of public attention.
The article relied upon by the defendant cites to two instances where a party was allowed to proceed anonymously at trial. Both, however, were in the context of a civil matter, and not a criminal case…..
Assuming arguendo that this court were to grant the defendant’s motion to conceal his identity, it would still not remedy the perceived harms asserted by the defendant. The defendant submits that entering his name in an internet search engine results in an immediate display of tremendous unfair and prejudicial information about him. However, as pointed out by the People, an internet search of the decedent’s name or of the allegations in the case, such as “body parts in subway,” would generate the same results as if one had conducted a search using the defendant’s name. Hence, concealing the defendant’s name would not prevent a juror who is willing to violate his or her oath and disregard the court’s instructions from finding media coverage of the defendant and the case.
Additionally, this court presided over a pretrial Huntley hearing in which a statement attributed to the defendant was litigated. The court denied the defendant’s motion to suppress the statement and ruled that the statement is admissible in the People’s case-in-chief. In his statement, the defendant told police that he was out of state when Mr. Brazell was killed and did not return to New York City until several weeks after. However, when confronted with a signature bearing defendant’s name in the guestbook from the decedent’s funeral, the defendant admitted that the signature was his and that he had attended the decedent’s funeral….
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You may have heard the story about the Minnesota mother who faced jail time after accidentally failing to properly strap in her child’s car seat. Or the cops who arrived to question a mom who told her neighbors that her 9-year-old could help them do chores. Or the police officers who went door to door hunting for a man after he drove off from the mall with a toddler—who turned out to be his daughter. They’d been shopping. An onlooker had assumed he was a kidnapper and called the police.
We live in an age of fear, especially where children are concerned. Even as the world has become safer and richer, parenting has become a paranoid exercise in removing all possible risk from a child’s life. This is exhausting for parents and even worse for children. Too many have been taught that they are fragile, weak, and in constant danger. Instead of getting experience problem-solving and bouncing back, they have grown up unable to rise to the challenges that life presents.
No journalist has more effectively chronicled the strange and dismal culture of contemporary child rearing than Reason contributor Lenore Skenazy, 59, who is not ashamed of being “America’s Worst Mom.” She got that nickname after she let her son, then age 9, ride the New York subway home by himself in 2008. “Half the people I’ve told this episode to now want to turn me in for child abuse,” she wrote in a much-read piece for The New York Sun. “As if keeping kids under lock and key and helmet and cell phone and nanny and surveillance is the right way to rear kids.”
Skenazy went on to found the Free-Range Kids movement, dedicating her career to investigating and explaining how today’s parents became so afraid and what effects that fear is having on their children. In 2017, she co-founded the nonprofit Let Grow with a mission of encouraging schools and families to allow kids to “have some adventures” and therefore “grow resilient.”
In January, Skenazy spoke with Frank Furedi, 71, a Budapest-born sociologist now based at the University of Kent in the United Kingdom. When Furedi was 9, he had an adventure even more exciting than riding a subway by himself: His family got caught up in Hungary’s anti-Stalinist revolution of 1956. “The thing that I remember about that moment,” he told Spiked years later, “was the sheer optimism, the sense of power expressed by people who were normally extremely passive and fatalistic.” After the Soviets crushed the revolt, the family fled to Canada, where Furedi was drawn into the student left. Anti-Soviet and anti-statist—but not delighted with the West’s status quo either—he became a self-styled libertarian Marxist. He “saw the state not as a medium of liberation but as a medium of oppression, as something that limited the possibility for more radical change,” he explained to Spiked.
Over the years Furedi has frequently taken stands on censorship, technology, environmentalism, identity politics, and other issues that set him apart from the rest of the left. He is also the author of many books about fear, parenting, and campus culture, including 2002’s Paranoid Parenting, 2005’s Politics of Fear, and 2016’s What’s Happened to the University. His latest, How Fear Works: Culture of Fear in the 21st Century (Bloomsbury Continuum), looks at how fear has become the driving factor behind much of contemporary Western culture and the ways that has changed society for the worse.
In a wide-ranging phone conversation, Skenazy and Furedi discussed the origins of today’s fearful parenting, how schools and universities became incubators of scared kids, and why a refusal to tolerate risk has, paradoxically, led to a generation of children who are more fragile than ever before.
Skenazy: Tell me the basic idea of your book. How does fear work?
Furedi: What I’m trying to establish in the book is: What do we fear in the 21st century? There is a lot of material that is available on how people feared in the past, and it’s very clear that there have been a number of very important changes in the way we talk about fear.
For a start, in the contemporary era we talk much more about it. Fear is an overused word. We talk about it in relation to a lot more experiences than we did before—things that in the past would have been fairly uncontroversial, seen as being normal, not seen as a threat. I try to understand, Why is that?
For example, something as ordinary and banal as children making a transition from primary school to secondary school is seen as a big deal. You need to bring in all kinds of experts to make sure that children are not threatened by going to the big school.
My thesis is that the main reason we fear the way we do is because we have become increasingly prone toward medicalizing the threats we face. We tend to use the language of psychology rather than the language of morality or of politics or of social science to analyze the human condition. We tend to interpret the problems we face in terms of illness categories.
I see this all the time too. Even some grandparents who let their children walk to school and play outside now think that letting the grandkids stand on the sidewalk in front of the house to wait for the bus is too dangerous. But I don’t usually think of that as psychological or medicalized. I think of it as just fear inflation.
What you describe as fear inflation is absolutely right. But the reason fear is being inflated so much is because we have a different idea of what a child or human being is like. We now seem to think that children are defined by their powerlessness, their vulnerability. We believe that children haven’t got the psychological and the moral and the physical resources to deal with the challenges of everyday life.
One of the most interesting developments is that in the past, adults used to understand that fearing is not a bad experience for children. If children fear the traffic, that’s a good thing. In the last 50, 60 years, more and more, we’re arguing that the very act of fearing is itself a psychologically dangerous kind of knowledge. It can damage a child. And parents are told almost to insulate children from any possible experience that might induce a sense of fear in their kids.
There was a poll done in your country, England, of the worst fairy tales to tell children. I think the top result was “Little Red Riding Hood,” because it’s too scary. There’s a wolf. The grandma is gone. The child gets eaten. Parents were saying that they were changing the ending because it was too traumatic for kids to hear about Little Red Riding Hood encountering the big eyes, big claws, and big teeth of the Big Bad Wolf.
I think that’s happening everywhere at the moment. Old wonderful fairy tales are being Disneyfied to the point at which anything that is remotely scary is immediately censored, and there’s this really silly assumption that children are unable to deal with these kinds of stories.
Whereas I’m sure that when you were a kid, you remember, these were precious moments. We remembered those scary stories quite well. We might have been a little bit frightened, but they did teach us a thing or two.
At the moment, what we tend to do is seek refuge in the mundane: banal story lines where everybody’s got big smiles on their faces. That seems to be the way we think that children should be socialized and brought up—all the while forgetting that it’s totally impossible to shield young kids from the experience of fear. Whether you like it or not, things are going to frighten them. That’s part and parcel of growing up.
I think it’s a good part. Fairy tales exist to teach you what not to do, but also to inculcate a certain sense of, “Ooh, that was scary….Tell it again!” You get used to it. You get a little comfortable with the idea of being uncomfortable.
Fairy tales communicated some very important moral messages about what is right and what is wrong, about good and evil. They really helped socialize young kids into a moral vision of the world.
We’ve become very estranged from using the language of right and wrong with kids. In fact, in America, teachers often tell children there is no right and wrong answer. Everything is possible. Instead of teaching young people what’s good and bad and giving them very clear rules, we tend to rely on what I call the therapeutic technique of validating them—making them feel good. We seem to believe that the way to bring kids up is continually raising their self-esteem by smiling at them, by not criticizing them, by not using a red pen to correct their essays.
Children need to understand that failure is no big deal. They need to learn how to fail. They need to learn the difference between success and failure as early as possible, because that’s what will give them strength later on.
How did we get to this point? You seem to suggest that something happened after the ’70s. What was it?
At a certain point in Anglo-American culture, parents began to believe that they needed to be much more nurturing and caring [and] far less disciplinarian. Some of those beliefs were quite fine. But around the ’60s and the ’70s, these ideals mutated into ones that basically suggested it was really important that children were under adult protection as much as possible, because unless you were supervising them, they were likely to have very negative experiences.
It takes about two or three generations of parents before these ideals pervade the entire parenting culture. By the time the new parents that are bringing children up in the 1980s begin to become fathers and mothers, these kind of ideals have been totally internalized.
On both sides of the Atlantic, if you look at the elder generations of parents, people at my age or even older, they are far more permissive and far more chilled out than the youngest groups of parents. In fact, the younger generation of parents, the 26- and 27-year-olds, are more likely to be worried about virtually every dimension of a child’s experience.
I still don’t understand what happened in the ’70s that made us start thinking we had to watch over them more closely. Was it a crime wave? Was it a certain movie that scared everyone?
The most important overall development that occurred in the 1970s was a shift in culture away from a confident, future-oriented belief in the capacity of society to do big things. You had President [Lyndon] Johnson talking about the Great Society in the 1960s. If you compare that to President [Jimmy] Carter’s [1979] speech where he talks about the crisis of confidence in America, you can see a very big shift has occurred.
As you have this loss of confidence, and this happens all over the world, it’s paralleled by an emotionalism becoming institutionalized, where psychology becomes the dominant medium through which we interpret everyday human experience, and where problems that used to be seen as normal are increasingly recast in medical terms, as medical issues that we need to have a diagnosis for.
It’s in this context that you have a complete redefinition of what a child is, what they are capable of, what kind of risk and pressure they can handle. The whole therapeutic imagination that develops in North American societies fundamentally alters the way we view the child and the relationship of the child to the adults.
Yeah, the idea that fear damages them is really what we’re talking about. I read articles that are so disheartening, because they teach parents who might not feel worried that their job is to be worried and their job is to be supervising their children every single second. I feel bad for them. I never put down helicopter parents, because they’re being taught that only this kind of helicoptering is good parenting, is safe enough.
The key point for me is the underlying assumption that the real threat is not so much the physical injury that a child might have but the emotional one.
Let’s talk about the word vulnerability. You did a study where you looked at how much it’s being used today—and not with kids that are chained to the crib in an orphanage. How did we start seeing regular children as all vulnerable to depression and every other kind of trauma?
Mainstream psychology used to argue that children were much better at dealing with mental health issues than adults were, that when it came to trauma of all sorts, children could recover much faster than adults. That was the conventional wisdom. Then what happened was a number of studies were carried out in the late ’70s and early ’80s which began to suggest, bit by bit, that in fact we were wrong. Almost every dimension of childhood was reinterpreted as a potential threat to their mental health.
If you look at the way children then became educated, we became so focused on preventing them from having major mental health issues that, actually, we create problems that did not exist before. If you go to university in America or in England, you’ll find that mental health issues are like the No. 1 priority that all the administrators are focused on.
Right. I’ve seen that at my own kids’ universities. There are a lot of signs around: “Worried? Depressed? Don’t hold it in. Come to the mental health center.” On the one hand, it’s nice. If a kid is having a tough time, I’m glad there’s no stigma. But it does seem to assume that these problems are everywhere and that the university’s job is to be proactive about noticing and having kids notice any time their emotional temperature is even a little out of whack.
It normalizes the conviction that sooner or later, if not in your first year then in your second or third year, you’re going to have a mental health problem. When I go to my university and I’m going into the toilet, I look up and there’s an ad for if you’re thinking of suicide. If you’re lonely and you haven’t got friends, there’s a clinic where they have therapy dogs so you can feel more relaxed. If you look around, there’s about six or seven of these mental health adverts. That to me seems to be a very, very real problem. These days, almost the entire university is meant to be a safe space. The argument is, whenever you feel that you’re under pressure, you’re traumatized.
In your book you say, “powerlessness, fragility, and vulnerability are considered normal characteristics today.” Do young people overcome these finally when they leave the university?
Well, not really. I think that unfortunately we now see the human condition—in other words, what it means to be a human—very much in these terms. So the idea of being vulnerable and being powerless is something we carry on with us, or we’re meant to carry on with us, for the rest of our life. Even when we become adults, biologically mature individuals, we still are meant to have what they call “issues.” We expect people to have a variety of problems dealing with uncertainty. As a result of that, there’s a whole industry of professionals, from life coaches—I don’t know if you’ve ever met a life coach?
I actually have a friend who was very much helped by her work coach. She was doing poorly, and somebody was advising her, like, “Don’t say this to your boss” and “Don’t do things that way.” I don’t think she knew how to succeed in the work world, so the coach really helped her.
I’m sure that a lot of coaches can help. But I think there is a problem. If we’re now relying on people to tell us how to speak at work, what to say or not to say to our friends, how to bring up our children, how to make love to our partners, how to decorate our houses—so virtually every aspect of our life is subject to some kind of professional expertise—then it does have that effect of undermining our autonomy as individuals where we are, in a sense, making choices on the basis of our experience. [It diminishes] our own capacity for independent behavior and our ability to take responsibility for our action and to live with the consequences of the action that we’ve taken.
What interests me is that the fear is not just, like, “Oh, I might screw up and then I’ll have to deal with the consequences.” The fear is that if something bad happens, it’s the end of the world and you will never recover. We go to the darkest possible place.
When my mom let me walk to school, I don’t think her heart was in her throat every day, thinking, “I will feel so bad for the rest of my life if she’s kidnapped, raped, and murdered.” She didn’t think that way. She might have thought that I would fall down and I would have to get up, but I don’t even think she was worrying about that. So how come today we all go straight to “kidnapped, raped, and murdered” every time we let our kids out of our sight?
Worst-case thinking has become the norm in all institutions of society. That’s been very much the dominant way that risk aversion—the fear of taking risks, the fear of experimenting, the fear of trying stuff out—takes. I think that “responsible parenting” these days is defined as a kind of child care that assumes the worst thing [that could possibly happen] and takes precautions to make sure that doesn’t happen. Very often when you have discussions with intelligent people, they in their heart of hearts actually know that worst-case thinking is not very helpful.
My mom quit her job to stay at home with her kids. So obviously her first priority was us and our well-being. And yet she could let us go outside, ride our bikes, walk to school, go to the beach, even—the big bad beach. How did we get to “I could never forgive myself if…” being this line that all parents say and feel now?
Safety has acquired this enormous significance in our lives. It almost has a quasi-religious quality to it, where people regard everything that is safe as being, by definition, really, really good. And of course, the more we talk about safety and the more we focus on that, the more we become drawn to seeing a growing dimension of life and the world as unsafe.
Experiences that in the past we would have called a good risk are today seen in a very different way. Even that expression—”a good risk”—sounds irresponsible. Risk is by definition bad. It’s not an opportunity to make things happen. Risk is entirely a negative phenomenon. So we have this very one-sided way of dealing with risk, where we want to shield ourselves from it.
Safety has become an obsession in a way that is quite unprecedented. I don’t think there’s ever been a time in human history where so many things were deemed problematic or unsafe.
How do we turn the ship around?
That’s not an easy question to answer. It’s something I struggle with. I think the way one does it is by personal example. You often get parents who demonstrate through their actions that having a robust orientation to their children’s lives is going to make their kids stronger and more independent. I think that helps. The kind of work you guys [at Let Grow] are doing is really important in that respect, because it demystifies the reality that most parents live under.
In their heart of hearts, most parents know they need to give more space to their children, that they need more independence and more freedom to explore the world. I am quite optimistic that it’s possible to make headway. Not overnight, but certainly possible.
The other thing that we need is to have more discussions on why taking risks can be an exhilarating and positive experience, not a road to disaster. I just think we need to challenge a lot of this stuff.
In many ways, I regard our safety culture as not unlike the story about the emperor having no clothes.
How so?
When the little boy says the emperor is naked. I think that if we basically ask some questions—some pointed questions, and point out the ridiculousness of all the stuff that’s happening, maybe use a bit of humor alongside of it—I think we can make a positive impact.
This conversation has been condensed and edited for style and clarity.
from Latest – Reason.com http://bit.ly/2VT6iCD
via IFTTT
You may have heard the story about the Minnesota mother who faced jail time after accidentally failing to properly strap in her child’s car seat. Or the cops who arrived to question a mom who told her neighbors that her 9-year-old could help them do chores. Or the police officers who went door to door hunting for a man after he drove off from the mall with a toddler—who turned out to be his daughter. They’d been shopping. An onlooker had assumed he was a kidnapper and called the police.
We live in an age of fear, especially where children are concerned. Even as the world has become safer and richer, parenting has become a paranoid exercise in removing all possible risk from a child’s life. This is exhausting for parents and even worse for children. Too many have been taught that they are fragile, weak, and in constant danger. Instead of getting experience problem-solving and bouncing back, they have grown up unable to rise to the challenges that life presents.
No journalist has more effectively chronicled the strange and dismal culture of contemporary child rearing than Reason contributor Lenore Skenazy, 59, who is not ashamed of being “America’s Worst Mom.” She got that nickname after she let her son, then age 9, ride the New York subway home by himself in 2008. “Half the people I’ve told this episode to now want to turn me in for child abuse,” she wrote in a much-read piece for The New York Sun. “As if keeping kids under lock and key and helmet and cell phone and nanny and surveillance is the right way to rear kids.”
Skenazy went on to found the Free-Range Kids movement, dedicating her career to investigating and explaining how today’s parents became so afraid and what effects that fear is having on their children. In 2017, she co-founded the nonprofit Let Grow with a mission of encouraging schools and families to allow kids to “have some adventures” and therefore “grow resilient.”
In January, Skenazy spoke with Frank Furedi, 71, a Budapest-born sociologist now based at the University of Kent in the United Kingdom. When Furedi was 9, he had an adventure even more exciting than riding a subway by himself: His family got caught up in Hungary’s anti-Stalinist revolution of 1956. “The thing that I remember about that moment,” he told Spiked years later, “was the sheer optimism, the sense of power expressed by people who were normally extremely passive and fatalistic.” After the Soviets crushed the revolt, the family fled to Canada, where Furedi was drawn into the student left. Anti-Soviet and anti-statist—but not delighted with the West’s status quo either—he became a self-styled libertarian Marxist. He “saw the state not as a medium of liberation but as a medium of oppression, as something that limited the possibility for more radical change,” he explained to Spiked.
Over the years Furedi has frequently taken stands on censorship, technology, environmentalism, identity politics, and other issues that set him apart from the rest of the left. He is also the author of many books about fear, parenting, and campus culture, including 2002’s Paranoid Parenting, 2005’s Politics of Fear, and 2016’s What’s Happened to the University. His latest, How Fear Works: Culture of Fear in the 21st Century (Bloomsbury Continuum), looks at how fear has become the driving factor behind much of contemporary Western culture and the ways that has changed society for the worse.
In a wide-ranging phone conversation, Skenazy and Furedi discussed the origins of today’s fearful parenting, how schools and universities became incubators of scared kids, and why a refusal to tolerate risk has, paradoxically, led to a generation of children who are more fragile than ever before.
Skenazy: Tell me the basic idea of your book. How does fear work?
Furedi: What I’m trying to establish in the book is: What do we fear in the 21st century? There is a lot of material that is available on how people feared in the past, and it’s very clear that there have been a number of very important changes in the way we talk about fear.
For a start, in the contemporary era we talk much more about it. Fear is an overused word. We talk about it in relation to a lot more experiences than we did before—things that in the past would have been fairly uncontroversial, seen as being normal, not seen as a threat. I try to understand, Why is that?
For example, something as ordinary and banal as children making a transition from primary school to secondary school is seen as a big deal. You need to bring in all kinds of experts to make sure that children are not threatened by going to the big school.
My thesis is that the main reason we fear the way we do is because we have become increasingly prone toward medicalizing the threats we face. We tend to use the language of psychology rather than the language of morality or of politics or of social science to analyze the human condition. We tend to interpret the problems we face in terms of illness categories.
I see this all the time too. Even some grandparents who let their children walk to school and play outside now think that letting the grandkids stand on the sidewalk in front of the house to wait for the bus is too dangerous. But I don’t usually think of that as psychological or medicalized. I think of it as just fear inflation.
What you describe as fear inflation is absolutely right. But the reason fear is being inflated so much is because we have a different idea of what a child or human being is like. We now seem to think that children are defined by their powerlessness, their vulnerability. We believe that children haven’t got the psychological and the moral and the physical resources to deal with the challenges of everyday life.
One of the most interesting developments is that in the past, adults used to understand that fearing is not a bad experience for children. If children fear the traffic, that’s a good thing. In the last 50, 60 years, more and more, we’re arguing that the very act of fearing is itself a psychologically dangerous kind of knowledge. It can damage a child. And parents are told almost to insulate children from any possible experience that might induce a sense of fear in their kids.
There was a poll done in your country, England, of the worst fairy tales to tell children. I think the top result was “Little Red Riding Hood,” because it’s too scary. There’s a wolf. The grandma is gone. The child gets eaten. Parents were saying that they were changing the ending because it was too traumatic for kids to hear about Little Red Riding Hood encountering the big eyes, big claws, and big teeth of the Big Bad Wolf.
I think that’s happening everywhere at the moment. Old wonderful fairy tales are being Disneyfied to the point at which anything that is remotely scary is immediately censored, and there’s this really silly assumption that children are unable to deal with these kinds of stories.
Whereas I’m sure that when you were a kid, you remember, these were precious moments. We remembered those scary stories quite well. We might have been a little bit frightened, but they did teach us a thing or two.
At the moment, what we tend to do is seek refuge in the mundane: banal story lines where everybody’s got big smiles on their faces. That seems to be the way we think that children should be socialized and brought up—all the while forgetting that it’s totally impossible to shield young kids from the experience of fear. Whether you like it or not, things are going to frighten them. That’s part and parcel of growing up.
I think it’s a good part. Fairy tales exist to teach you what not to do, but also to inculcate a certain sense of, “Ooh, that was scary….Tell it again!” You get used to it. You get a little comfortable with the idea of being uncomfortable.
Fairy tales communicated some very important moral messages about what is right and what is wrong, about good and evil. They really helped socialize young kids into a moral vision of the world.
We’ve become very estranged from using the language of right and wrong with kids. In fact, in America, teachers often tell children there is no right and wrong answer. Everything is possible. Instead of teaching young people what’s good and bad and giving them very clear rules, we tend to rely on what I call the therapeutic technique of validating them—making them feel good. We seem to believe that the way to bring kids up is continually raising their self-esteem by smiling at them, by not criticizing them, by not using a red pen to correct their essays.
Children need to understand that failure is no big deal. They need to learn how to fail. They need to learn the difference between success and failure as early as possible, because that’s what will give them strength later on.
How did we get to this point? You seem to suggest that something happened after the ’70s. What was it?
At a certain point in Anglo-American culture, parents began to believe that they needed to be much more nurturing and caring [and] far less disciplinarian. Some of those beliefs were quite fine. But around the ’60s and the ’70s, these ideals mutated into ones that basically suggested it was really important that children were under adult protection as much as possible, because unless you were supervising them, they were likely to have very negative experiences.
It takes about two or three generations of parents before these ideals pervade the entire parenting culture. By the time the new parents that are bringing children up in the 1980s begin to become fathers and mothers, these kind of ideals have been totally internalized.
On both sides of the Atlantic, if you look at the elder generations of parents, people at my age or even older, they are far more permissive and far more chilled out than the youngest groups of parents. In fact, the younger generation of parents, the 26- and 27-year-olds, are more likely to be worried about virtually every dimension of a child’s experience.
I still don’t understand what happened in the ’70s that made us start thinking we had to watch over them more closely. Was it a crime wave? Was it a certain movie that scared everyone?
The most important overall development that occurred in the 1970s was a shift in culture away from a confident, future-oriented belief in the capacity of society to do big things. You had President [Lyndon] Johnson talking about the Great Society in the 1960s. If you compare that to President [Jimmy] Carter’s [1979] speech where he talks about the crisis of confidence in America, you can see a very big shift has occurred.
As you have this loss of confidence, and this happens all over the world, it’s paralleled by an emotionalism becoming institutionalized, where psychology becomes the dominant medium through which we interpret everyday human experience, and where problems that used to be seen as normal are increasingly recast in medical terms, as medical issues that we need to have a diagnosis for.
It’s in this context that you have a complete redefinition of what a child is, what they are capable of, what kind of risk and pressure they can handle. The whole therapeutic imagination that develops in North American societies fundamentally alters the way we view the child and the relationship of the child to the adults.
Yeah, the idea that fear damages them is really what we’re talking about. I read articles that are so disheartening, because they teach parents who might not feel worried that their job is to be worried and their job is to be supervising their children every single second. I feel bad for them. I never put down helicopter parents, because they’re being taught that only this kind of helicoptering is good parenting, is safe enough.
The key point for me is the underlying assumption that the real threat is not so much the physical injury that a child might have but the emotional one.
Let’s talk about the word vulnerability. You did a study where you looked at how much it’s being used today—and not with kids that are chained to the crib in an orphanage. How did we start seeing regular children as all vulnerable to depression and every other kind of trauma?
Mainstream psychology used to argue that children were much better at dealing with mental health issues than adults were, that when it came to trauma of all sorts, children could recover much faster than adults. That was the conventional wisdom. Then what happened was a number of studies were carried out in the late ’70s and early ’80s which began to suggest, bit by bit, that in fact we were wrong. Almost every dimension of childhood was reinterpreted as a potential threat to their mental health.
If you look at the way children then became educated, we became so focused on preventing them from having major mental health issues that, actually, we create problems that did not exist before. If you go to university in America or in England, you’ll find that mental health issues are like the No. 1 priority that all the administrators are focused on.
Right. I’ve seen that at my own kids’ universities. There are a lot of signs around: “Worried? Depressed? Don’t hold it in. Come to the mental health center.” On the one hand, it’s nice. If a kid is having a tough time, I’m glad there’s no stigma. But it does seem to assume that these problems are everywhere and that the university’s job is to be proactive about noticing and having kids notice any time their emotional temperature is even a little out of whack.
It normalizes the conviction that sooner or later, if not in your first year then in your second or third year, you’re going to have a mental health problem. When I go to my university and I’m going into the toilet, I look up and there’s an ad for if you’re thinking of suicide. If you’re lonely and you haven’t got friends, there’s a clinic where they have therapy dogs so you can feel more relaxed. If you look around, there’s about six or seven of these mental health adverts. That to me seems to be a very, very real problem. These days, almost the entire university is meant to be a safe space. The argument is, whenever you feel that you’re under pressure, you’re traumatized.
In your book you say, “powerlessness, fragility, and vulnerability are considered normal characteristics today.” Do young people overcome these finally when they leave the university?
Well, not really. I think that unfortunately we now see the human condition—in other words, what it means to be a human—very much in these terms. So the idea of being vulnerable and being powerless is something we carry on with us, or we’re meant to carry on with us, for the rest of our life. Even when we become adults, biologically mature individuals, we still are meant to have what they call “issues.” We expect people to have a variety of problems dealing with uncertainty. As a result of that, there’s a whole industry of professionals, from life coaches—I don’t know if you’ve ever met a life coach?
I actually have a friend who was very much helped by her work coach. She was doing poorly, and somebody was advising her, like, “Don’t say this to your boss” and “Don’t do things that way.” I don’t think she knew how to succeed in the work world, so the coach really helped her.
I’m sure that a lot of coaches can help. But I think there is a problem. If we’re now relying on people to tell us how to speak at work, what to say or not to say to our friends, how to bring up our children, how to make love to our partners, how to decorate our houses—so virtually every aspect of our life is subject to some kind of professional expertise—then it does have that effect of undermining our autonomy as individuals where we are, in a sense, making choices on the basis of our experience. [It diminishes] our own capacity for independent behavior and our ability to take responsibility for our action and to live with the consequences of the action that we’ve taken.
What interests me is that the fear is not just, like, “Oh, I might screw up and then I’ll have to deal with the consequences.” The fear is that if something bad happens, it’s the end of the world and you will never recover. We go to the darkest possible place.
When my mom let me walk to school, I don’t think her heart was in her throat every day, thinking, “I will feel so bad for the rest of my life if she’s kidnapped, raped, and murdered.” She didn’t think that way. She might have thought that I would fall down and I would have to get up, but I don’t even think she was worrying about that. So how come today we all go straight to “kidnapped, raped, and murdered” every time we let our kids out of our sight?
Worst-case thinking has become the norm in all institutions of society. That’s been very much the dominant way that risk aversion—the fear of taking risks, the fear of experimenting, the fear of trying stuff out—takes. I think that “responsible parenting” these days is defined as a kind of child care that assumes the worst thing [that could possibly happen] and takes precautions to make sure that doesn’t happen. Very often when you have discussions with intelligent people, they in their heart of hearts actually know that worst-case thinking is not very helpful.
My mom quit her job to stay at home with her kids. So obviously her first priority was us and our well-being. And yet she could let us go outside, ride our bikes, walk to school, go to the beach, even—the big bad beach. How did we get to “I could never forgive myself if…” being this line that all parents say and feel now?
Safety has acquired this enormous significance in our lives. It almost has a quasi-religious quality to it, where people regard everything that is safe as being, by definition, really, really good. And of course, the more we talk about safety and the more we focus on that, the more we become drawn to seeing a growing dimension of life and the world as unsafe.
Experiences that in the past we would have called a good risk are today seen in a very different way. Even that expression—”a good risk”—sounds irresponsible. Risk is by definition bad. It’s not an opportunity to make things happen. Risk is entirely a negative phenomenon. So we have this very one-sided way of dealing with risk, where we want to shield ourselves from it.
Safety has become an obsession in a way that is quite unprecedented. I don’t think there’s ever been a time in human history where so many things were deemed problematic or unsafe.
How do we turn the ship around?
That’s not an easy question to answer. It’s something I struggle with. I think the way one does it is by personal example. You often get parents who demonstrate through their actions that having a robust orientation to their children’s lives is going to make their kids stronger and more independent. I think that helps. The kind of work you guys [at Let Grow] are doing is really important in that respect, because it demystifies the reality that most parents live under.
In their heart of hearts, most parents know they need to give more space to their children, that they need more independence and more freedom to explore the world. I am quite optimistic that it’s possible to make headway. Not overnight, but certainly possible.
The other thing that we need is to have more discussions on why taking risks can be an exhilarating and positive experience, not a road to disaster. I just think we need to challenge a lot of this stuff.
In many ways, I regard our safety culture as not unlike the story about the emperor having no clothes.
How so?
When the little boy says the emperor is naked. I think that if we basically ask some questions—some pointed questions, and point out the ridiculousness of all the stuff that’s happening, maybe use a bit of humor alongside of it—I think we can make a positive impact.
This conversation has been condensed and edited for style and clarity.
from Latest – Reason.com http://bit.ly/2VT6iCD
via IFTTT
The European Central Bank continues to disproportionately inflate the debt bubble of the Eurozone, while the economic slowdown of the main European economies worsens. What was designed as a tool for governments to buy time in order to carry out structural reforms and reduce imbalances, has become a dangerous incentive to perpetuate the excessive spending and increase debt under two very harmful and wrong excuses: That there is no problem as long as debt is cheap and that there’s no inflation.
Cheap borrowing is not an excuse to increase debt. Japan has a very low cost of debt and the cost of servicing Japan’s public debt is almost half of the state’s tax revenues. Japan’s debt is 15 times higher than the tax revenue collected by the government in 2018.
The Eurozone official inflation since 2000 shows an increase of 40% in CPI while productivity growth has been negligible and salaries and employment remain depressed.
Monetary policy has gone from being a tool to support reforms to an excuse for not implementing them.
We must remember that the euro is not a global reserve currency. The euro is only used in 31% of global transactions, while the US dollar is used in 88%, according to the Bank Of International Settlements (the total sum of transactions, as the BIS explains in its report, is 200% because each transaction involves two currencies).
Bond yields in the Eurozone are artificially depressed and give a false sense of security that is completely clouded by extremely low interest rates and excess liquidity.
The balance sheet of the European Central Bank has been inflated to be 40% of the GDP of the Eurozone, while at the peak of quantitative easing the Federal Reserve’s balance sheet did not reach 26% of the US GDP.
The Federal Reserve Treasury purchases never exceeded net issuances. The ECB continues to buy back bonds once they mature despite having multiplied the repurchases and having reached seven times the figure of net issuances .
Sixteen 10-year sovereign bonds in the Eurozone show negative real yields. Greece and Italy, the other two, are amazing examples, as their yields (adjusted for currency and inflation) show a negligible differential over the US ten-year bond.
Excess liquidity in the Eurozone exceeds 18 trillion euros.
Everything is justified because “there is no inflation” and yet there is, and a lot. Not only in financial assets (huge bubble in the aforementioned sovereign bonds), prices in the Eurozone have increased by 40% since 2000 while productivity has barely increased.
Cheap debt must never be an excuse to increase it, but an opportunity to reduce it.
All this generates excessive complacency and accumulation of long-term risk.
The ECB ignores tail risk and accumulation of imbalances and expects liquidity to generate the levels of growth and inflation that have not been achieved after two trillion euro of expansion. Meanwhile, the risks of debt saturation rise.
Governments all over the eurozone identify low yields as some kind of market validation of their policies, when markets are artificially inflated by the central banks’ policies. This placebo effect has led many countries in Europe to abandon the reform impulse, and many believe that the solution to low growth is to return to the wrong policies of 2008.
Low yields are not a sign of credibility and low risk, but of financial repression and fear of a weaker macroeconomic environment in other assets.
The problem of the Eurozone is that it has relied entirely on the placebo effect of monetary policy to strengthen the recovery, focusing on a single objective, to make public spending cheap to finance, whatever the cost. This perpetuates structural imbalances, the perception of risk is clouded and the economy becomes less dynamic while long-term risks rise.
The ECB finds itself in a monetary trap. if it normalizes policy, the mirage of low yields will disappear and governments will react against it. However, if it keeps the policy, there is an increasing risk of repeating a Eurozone crisis without any tools to address it. That is why it must raise rates now and stop repurchasing maturities while markets remain optimistic.
Unfortunately, instead of proposing supply-side measures and curbing the excessive taxation and stagnating effect of government spending, many analysts will recommend more spending and more liquidity as solutions that will make the economy even weaker. The main problem with the accumulation of debt at low rates is that it has the same effect as a real estate bubble. It disguises real liquidity and solvency risk, because borrowing costs are too good to be true. And they are not true.
via ZeroHedge News http://bit.ly/2HFwlJD Tyler Durden
Soon after her son Carter was born, New York mom Elizabeth Dominguez was informed by staff at the Niagara Falls hospital she gave birth in that her urine test had come back positive for opiates. She was certain she hadn’t used drugs. She and her husband concluded the poppy seed bagel she’d eaten earlier in the day caused a false positive. And even though her son tested negative for drugs, the hospital still called Child Protective Services, which blocked the baby from leaving the hospital with the parents until the agency concluded its investigation and determined the bagel did cause a false positive.
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Just a week after DoubleLine CEO Jeff Gundlach warned of the risks emanating from the corporate bond market, Europe’s largest asset manager is building a credit fund centered around a ratings category maligned as a catalyst for the next global economic downturn – fallen angels.
As Gundlach explained, the increasingly leveraged BBB companies could be on the verge of a destabilizing crash as ‘fallen angels’ drop out from investment-grade indexes after being downgraded once the ratings firms can no longer ignore their worsening leverage ratio.
To amplify the risk surrounding the corporate bond market, Dodd Frank banned proprietary trading, which it said could make it more difficult for brokers to offer some support for the market that could soften the blow of a selloff.
“I think Jay Powell has his eye on the credit markets…broker dealer balance sheets don’t have the cushion they used to have…there’s no capacity in the financial system for a run on bond ETFs,” Booth said.
“In the old days, when retail would sell…dealers would balloon up their balance sheets…it was actually a great money maker. They can’t do that anymore – this shock absorber has been destroyed,” Gundlach added.
Bloomberg reports that the fund will buy bonds with an average rating of BBB-, the lowest investment-grade rank, in currencies including euros, dollars, and sterling from high grade to high yield.
As Jean-Marie Dumas, head of fixed income solutions at Amundi, said in a statement this week:
“In a world of persistently low interest rates, investors are looking for new ways to get attractive returns on their investments.’’
The fund is capitalizing on a sudden turnaround for debt pegged as the next source of financial havoc by the likes of Scott Minerd, Jeff Gundlach, and Deutsche Bank’s Aleksandar Kocic who fear the wholesale prolapse of the BBB-rated investment grade space, a tsunami of “fallen angels” that would obliterate the junk bond market as it more than doubles in size overnight from $1.1 trillion, and catalyzes the next financial crash.
Or, as Kocic puts it, “the global hunt for yield has encouraged investors to move down the credit spectrum to enhance returns. Within the IG universe, BBB issuance has grown significantly.” This is shown in the chart below, which shows that more than 50% of the entire IG index is now BBB-rated.
To Kocic, this is also the most negatively convex sector which is sensitive to spread wideners in steepening sell off. In other words, a possible wholesale downgrade to BB or lower would result in disorderly unwind of positions of the IG money managers which would be capable of raising volatility significantly. From there it would promptly spread to the rest of the market, and global economy, and lead to the next financial crisis.
But, for Jean-Marie Dumas’ new fund, it’s worth catching those falling knives angels, despite one glimpse at the level of yields on corporate bonds in Europe suggests there isn’t much downside to those yields…
And the gap between BBB and A spreads in euros now stands at 53 basis points after approaching 70 basis points at the start of 2019. Again, not a lot of ‘cheapness’ to profit from?
To sum it all up is simple – one of Europe’s largest asset managers (likely with billions of risky EU debt on its books just as the EU looks set to re-enter recession, despite “whatever it takes” monetary policy) is creating another vehicle to use other people’s money to buy said corporate debt before it falls off a ratings cliff – in other words – It’s a leveraged bet on The ECB (and Draghi’s replacement) going full-whatever-it-takes-er…
via ZeroHedge News http://bit.ly/2wjGQM8 Tyler Durden
Soon after her son Carter was born, New York mom Elizabeth Dominguez was informed by staff at the Niagara Falls hospital she gave birth in that her urine test had come back positive for opiates. She was certain she hadn’t used drugs. She and her husband concluded the poppy seed bagel she’d eaten earlier in the day caused a false positive. And even though her son tested negative for drugs, the hospital still called Child Protective Services, which blocked the baby from leaving the hospital with the parents until the agency concluded its investigation and determined the bagel did cause a false positive.
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Between May 23 and 26, 2019, the European Union’s citizens are renewing their continental parliament. Among the countries that will participate in the poles is Italy (voting on May 26) — one of the founding members of the EU, alongside France, Germany, Belgium, Netherlands and Luxembourg. Due to the very nature of cryptocurrencies, it’s tough to get a correct figure of the actual penetration of these technologies in a single country. However, relying on some proxies — as in the chart below — it is likely that the Bel Paese (the Beautiful Country) would fall outside the leading European group. Yet, since a couple of years ago, crypto and blockchain have become relevant topics for Italian institutions, political movements, business world and public opinion. This interest has been raised during the last few months, and it’s very likely that these issues will become more and more relevant during the weeks immediately after the European elections, when some significant novelties are scheduled.
Unknown by the law
No specific regulation prevents Italian citizens from owning, buying or selling, or using cryptocurrencies as a means of payment. However, cryptocurrencies are still a somewhat mysterious entity for Italian legislation and fiscal practice.
The Italian central bank, Banca d’Italia (the Bank of Italy), issued a first warning about “virtual currencies” at the beginning of 2015, defining them as “digital representations of a value […] created by private subjects who operate on the Web.” The risks that the bank pinpointed, for instance, included: the lack of information about these tools, the absence of any specific regulation, surveillance or guarantee, high volatility, and the possibility to be involved in illicit activities (such as international terror or money laundering).
Besides these, Banca d’Italia underlined that the tax authorities didn’t recognize the specific nature of the digital currencies, creating serious concerns about the perspectives that were open to the owners.
Agenzia delle Entrate, the Italian agency in charge of interpreting and applying tax regulation, tackles the topic only in two of its documents. First, in September 2016, the agency stated that companies offering professional services trading fiat versus crypto (and vice versa) could be equated, for fiscal purposes, with subjects trading among different traditional currencies (the agency applied to Italy a previous judgment of the Court of Justice of the European Union).
More recently, in September 2018, the tax agency presented its opinion about the fiscal nature of utility tokens issued during an initial coin offering (ICO) and equated them either to a voucher bought as an anticipation of a transaction involving actual goods or services (if purchased by the public) or to a payment in nature (if they intended to be employed as a form of retribution).
Besides these statements, the fiscal nature of cryptocurrencies remains — for the Italian authorities — uncharted territory: Only hypotheses are allowed, for instance, about a natural person’s income coming from mining and even from capital gains (some commentatorsassimilate the latter to the “different incomes,” as defined by article 67 of the Presidential Decree 22/12/1986 no. 917).
The very legal nature of cryptocurrencies remains blurred, as the only explicit mention to them in the Italian statutory body at the moment is among the preliminary definitions of the Decree 25/05/2017 no. 90, which accepts into the Italian regulatory framework some norms about money laundering established by the EU in 2015. This decree describes “virtual currencies” as “a digital representation of value, not issued by a central bank or a public authority, not necessarily related to a fiat currency, used as a tool of exchange for purchasing goods or services, and electronically transferred, stored and traded.”
The decree also established the obligation for all service providers related to the use of digital currency to report their activities in a special section of the registry already set for traditional currencies exchanges (a somewhat controversial issue, as previously reported by Cointelegraph). As a matter of fact, Italian experts of juridical and tax issues are still debating if regulation should better frame cryptocurrencies as actual money (like currencies), as investment tools, as goods or as digital documents.
The watchdogs
In December 2017, consumer association Codacons presented a petition to 104 public prosecutor offices all over Italy, asking them to investigate bitcoin (BTC) and blaming the “new currency” as possible fraud. Therefore, the association asked the judiciary to “identify everyone who issued BTCs on the national territory” and to persecute unregulated trading services and online scam schemes based in Italy. Alongside underlining the lack of basic knowledge about cryptos — which is widespread in the Italian public opinion — Codacons’ initiative pointed out another relevant issue: As a matter of fact, due to the lack of specific regulation, the Italian authorities can’t help but deal with cryptocurrencies using their traditional frameworks or interpreting it according to European resolutions.
At the beginning of 2019, for instance, the bankruptcy division of the Court of Florence was able to settle the complicated case of the BitGrail hack by seizing the personal assets of its founder and refunding the customers of the exchange from which hackers stole $187 million worth of Nanos in February 2018.
On the regulatory side, Banca d’Italia is the supreme regulatory body and guarantor of the Italian banking system, without any function as an issuing bank (the same as other national central banks in the eurozone). Until now, the central bank mirrored the same concerns of other similar European bodies, and it is therefore difficult to read some declarations about central bank issued digital currencies given by its deputy governor, Fabio Panetta, during a conference in Milan last June as a dramatic opening to cryptos.
Based on this, CONSOB has been very active during the past months, hitting businesses promoting crypto-based financial products and services that fall outside the regulatory framework of the TUF, which is aimed at providing Italian investors with adequate information and guarantees.
The authority is, nevertheless, quite conscious of the inadequacy of its traditional tools in dealing with the new business models and the means of the crypto economy, especially with ICOs. The designation of Paolo Savona as the new CONSOB president — a process that triggered quite a harsh confrontation between the political fronts — gave a considerable boost to the debate within the agency. Indeed, despite his age — the economist and former minister is 83 years old — Savona stated his interest in frontier technologies, even before his appointment in March 2019.
On March 19, CONSOB announced its commitment to an open debate to establish the pillars for new regulation explicitly designed for ICOs. The freshly appointed Commissioner Paolo Cioccadeclared to the local journal Repubblica that CONSOB aims to put an end to phenomena where “pathology is overcoming physiology,” setting, in the meantime, the premises to achieve new forms of regulation. Therefore, CONSOB published a 15-page document on its website (available also in English) that summarizes the “state of the art” of the debate about cryptos, ICOs and blockchain, presenting 15 operative questions to gather opinions from the experts. The agency was collecting comments on the document by mail or through an online form (in Italian only) until May 19.
The central institutions: a new perspective?
The previous government, led by Paolo Gentiloni (from the leftist-moderate Democratic Party, PD), promoted a comprehensive national plan to boost investments in new digital technologies (under the label of Piano Impresa 4.0, Industry 4.0). However, blockchain entered in the Italian political agenda — and jargon — only after March 2018’s general election, which brought to power a coalition between Movimento 5 Stelle (5-Star Movement) and Lega Nord (Northern League).
Last September, Italy joined the European Blockchain Partnership, a new entity promoted by European Commission five months earlier as a “vehicle for cooperation amongst Member States to exchange experience and expertise in technical and regulatory fields and prepare for the launch of EU-wide [blockchain] applications across the Digital Single Market for the benefit of the public and private sectors.”
Some months after, in December 2018, Italy was among the seven southern EU member states that supported a Malta-promoted declaration calling for help in the promotion of distributed ledger technology’s (DLT) use in the region.
During the same span of months, Deputy Prime Minister and Minister of Economic Development Luigi Di Maio (from the 5-Star Movement) announced the creation of a think tank of experts in charge of providing advice about emerging technologies, such as artificial intelligence and blockchain. The 30-member group on blockchain gathered for the first time on Jan. 21, 2019, and had other meetings during the following months based on a wide-ranging agenda. Their assignment is to present, by June 2019, an analysis of the present situation and to suggest suitable strategies to apply DLT to the industries and sectors that could gain more advantages from them. The ambition of the group is that Italy could design a formula that could also be disseminated among other European countries.
In the opinion of Vincenzo Di Nicola, one of the Ministry’s advisors and co-founder of the Conio on-chain wallet, Italy should avoid a late start, as has previously happened in the history of the country:
“I’m glad that Italy is waking up and that the country is giving attention to new technologies which could have a deep impact on its economy. In the past, unfortunately, we didn’t notice waves such as e-commerce or sharing economy. The result? They crushed us, and foreign companies seized the new markets. My personal hope is that, at last, this group would set the first step to sustain the creation of Italian businesses, which could then become leaders in the blockchain industry.”
The advisory group just met at the beginning of the year; therefore, it is difficult to recognize a strong correlation between its work and the proposals about blockchain’s definition, which were under debate at the Senato (the Italian upper house of parliament) since Jan. 23. The amendment to the broader decree on “Simplification” (Delegated Decree Law no. 989) aims to introduce legal force to the documents recorded via blockchain or smart contract, and it has been officially part of the Italian statutory body since February 2019. The actual technical standards required to match this legal requirement, however, should be unveiled by the Agency for the Italian Digitalization by the beginning of next May.
Blockchain goes local
Not only central institutions but also local authorities seem more and more involved in the debate about blockchain. Some initiatives are, as a matter of fact, more colourful than disruptive. It is difficult, for instance, to measure the actual impact of the council-run cryptocurrency AHU!, which was announced by Luigi Lucchi, the mayor of Berceto, in January 2018.
Berceto, a 2,000-person town in the Apennine Mountains, which has a twinning with the Lakota nation (another campaign promoted by Lucchi), aims to use AHU! to free its local economy from the so-called “tyranny of the euro” — however, no information about the roadmap of the project is presently available on the city council’s official website.
On a completely different scale, the city of Turin (led by the 5-Star Movement since 2016) is investigating the possibilities of blockchain since 2017 and, as a winner of the contest promoted by the EU Urban Innovative Actions Initiative, is developing Co-City, a project for collaborative management of urban commons to counteract poverty and socio-spatial polarization.
Even if the communication material produced by the project hardly mentions blockchain, Co-City has a partnership with the University of Turin Blockchain Initiative. This interdisciplinary research group is working to develop a sort of “local-based circular economy,” in which the citizens that collaborate to the reuse of urban commons could be rewarded by obtaining credits in cryptocurrencies that the local business activities involved in the initiative would accept as payment.
Even more ambitious is the commitment of the city council of Naples, which Mayor Luigi De Magistris (who created his own neo-leftist movement in 2015, Democracy and Autonomy) made public during the spring of 2018 and which was already reported in his interview with Cointelegraph last June.
During the past 12 months, a focus group of about 300 volunteers held regular meetings, discussing proposals and converting them in pilot applications. The issues under debate span from the adoption of cryptocurrencies in the shops of the city to their use for payments due to the city administration, considering even the “tokenization” of some services provided by the city council (e.g., school canteen vouchers, school book vouchers, ect.). Some topics have stronger political implications, such as the creation of blockchain-based electoral processes or the development of a complementary currency for the city, fostering a more substantial local autonomy.
This latter topic is not new for Naples, as the council led by De Magistris (during his first term) already promoted the napo, a sort of discount banknote (on paper) that should side with euros for payments in shops joining the project. Napo had short life between 2012 and 2015, as the Neapolitan shop-owners seldom accepted it.
Blockchain for democracy
It is hard to recognize if and how the different and often quarrelsome Italian political parties have different attitudes about issues such as cryptocurrencies and blockchain (or if they have an attitude at all). At the moment, they unveiled few or no specific points of their programs for the European Parliament election, and none of them involving the aforementioned topics.
Besides, very few were in the programs for the last elections in the spring of 2018. A mention to fintech — without further definition — was, for instance, included in the PD’s program for 2018’s general election (on page 12). At the other side of the political spectrum, Northern League’s 2018 program encompassed a chapter about “Digital Evolution” (page 67), which contains some general remarks about the need for Italy to oppose the overwhelming power of “Over The Top IT tycoons” (i.e., Amazon, Apple, Google and Microsoft) and no mentions of DLT.
Forza Italia (FI) — another party on moderate-right positions — expressed some interest for blockchain just after the last general election, when Ezio Luigi Fabiani, coordinator of the FI clubs set in the United Kingdom, officially endorsed the project Multiversum as a possible tool to improve the voting procedure of Italian citizens living abroad. After collecting more than $21 million during its ICO, from May to June 2018, this project for a new generation blockchain encountered severe difficulties to move on to an operational stage, and no recent information about a possible collaboration between Multiversum and FI is presently available.
Blockchain, however, seems to pique the interest of the Italian political parties, also referring to their inner workings and procedures.
The 5-Star Movement, for instance, appears as the more active in experimenting with the possibilities of information technology as a tool to achieve forms of direct democracy. The party was created in 2009 by former comedian Beppe Grillo and by web entrepreneur Gianroberto Casaleggio around Grillo’s website. Thanks to Casaleggio’s advice, the 5-Star Movement gathered its supporters and selected its candidates and program mostly through online tools, not without exciting sharp criticism among competitors about the efficiency and transparency of these means.
Last March, Davide Casaleggio — Gianroberto’s son, presently leading Casaleggio Associated and the figurehead of the movement — announced a shift toward the Rousseau blockchain, the online platform currently used to connect 5-Star Movement supporters among themselves and with their representatives in the parliament.
Casaleggio told Cointelegraph that this choice was aimed to achieve a higher level of “security, certification and stability in the voting procedure,” which blockchain could assure. Besides, an application involving democracy should guarantee complete anonymity of every vote/transaction — maintaining, nevertheless, the possibility to certify the subjects having actual voting rights and preventing multiple voting.
The 5-Star Movement held a test during its last gathering in Milan, relying on a clone of the Monero private blockchain, which the participants could access using an Android wallet (the controversial issue under scrutiny was the menu at the end of the meeting, with Margherita pizza being democratically elected).
The results of the test had been encouraging, Casaleggio explained — however some relevant issues lay ahead, such as the right mix between blockchain’s wide distribution (meaning some kind of incentive for the participation of independent nodes) and the need to guarantee a free-of-charge vote, quite hard to achieve in a genuinely permissionless network (in this case, free tokens were distributed just before the poll).
The 5-Star Movement’s experiment didn’t fail to raise some political controversy: Among its strongest critics is PD’s Member of Parliament Francesco Boccia, who has been interested in the application of digital innovation to democracy since 2012. In December 2018, Boccia promoted a workshop in Rome to demonstrate the pitfalls of Rousseau (the pre-blockchain version) and to present his proposal for an alternative platform that a group of developers was already working on called Hackitaly, which is based on the web-based framework Laravel.
The aim of the project — Boccia told Cointelegraph — is to create an open-source tool that the PD could deliberate to adopt in the short term and that, in the future, would also be offered to other political parties (even to the competitors). Hackitaly will incorporate blockchain as a means of secure voting — however, the PD’s group subordinates choice among the different technical solutions under study to more general issues. Boccia added:
“Personally, I’d incline for a truly distributed, permissionless solution; however, I could not be sure that this would be realistic. Adopting the perspective of the State, a permissioned option seems more feasible, but this should meet a set of rules about digital voting — for instance how to guarantee fair and independent validators also in a ‘private’ network — which, presently, does not exist in Italy. We are building an instrument that is open to everybody, but we need rules equal for everybody.”
No country for ICOs
Italy is far from being among the countries hosting the highest numbers of ICOs, such as the United States, Singapore, the U.K. or Russia. According to ICObench database, which has systematically collected data about ICOs since the summer of 2015, at the end of 2017, only three projects had set their headquarters in Italy, and they gathered about $860,000 on the whole (in the same period, 142 ICOs incorporated in the U.S., raising about $6.1 billion). During the following year, the number of ICOs based in Italy and the capital collected by them rose dramatically — however, at a slower pace compared with other countries. According to the most recent data available, 40 ICOs set their home in Italy as of now, yet considering the international ranking by funds gathered, the country slid from the 49th position at the end of 2017 to the 71th in March 2019 (by the way, ICOs in Italy raised up to $7.6 million, while the U.S. reached $7.4 billion).
Among the “larger” projects setting their headquarters in Italy, only two reached or overcame the aim of $1 million. However, the amount actual gathered was very far from the maximum threshold these ICOs set (Local World Forwarders collected 47% of the envisaged hard cap, while Namacoin fulfilled only 5%).
By the way, the picture of the “Italian” ICOs would be seriously distorted if it did not consider projects that are de facto Italian, even if they appear to be labelled otherwise in the official documents and statistics. Is this the case, for instance, of the ICOs whose totality or vast majority of the founders, top management and developers are Italian citizens and that nevertheless set their headquarters in countries that offered a business or taxation environment more favorable than Italy.
Switzerland, which shares its southern border with the most economically active Italian regions — and where 8% of the population speaks Italian — seems to be an especially attractive harbor for the Italian crypto entrepreneurs who could find here lighter bureaucratic procedures, straightforward taxation and a regulatory framework already taking into account the needs of crypto businesses.
Among the ICOs starting from ingenious Italians and making landfall abroad, some were able to gather an outstanding amount of resources. It is almost impossible, on the other hand, to produce a census of the managers and developers born or trained in Italy who occupy important positions inside international projects. Some notable Italians, for instance, include Alessandro Chiesa, co-founder of Zcash, and Simone Giacomelli, business developer at SingularityNet.
Businesses: playing safe with the blockchain
After last autumn’s severe drop in the market, words such as “cryptocurrencies” or “ICO” have lost most of their glamor in Italy’s public opinion. “Blockchain” is still a buzzword in the Italian media; however, the business world seems interested in finding a way to take only the “positive” elements of this technology (e.g., blockchain as a tool of data recording), putting aside the “negative” ones (e.g., cryptocurrencies). Companies and business associations are therefore quite kin to look with more interest to permissioned platforms rather than to explore the potential of a freely distributed ledger. By the way, it is not easy to measure the readiness of the Italian business world to the innovations introduced by blockchain, taking into account that only a few projects are already achieving some actual results.
Fintech appears to be the field of application closest at hand, with a strong preference among the major players for solutions based on decentralized rather than distributed blockchains.
In June 2018, for instance, 14 members of the Italian Banks Association (ABI) began to test the possibility of a blockchain-based interbank system based on Corda’s R3, which was developed by the ABI Lab innovation center. The latest news available about the project (from February 2019) states that the application for interbank reconciliations, labelled the Spunta Project, now involves 78% of the Italian banking sector and that it’s entering into a preproduction test phase. Notably, one of the largest Italian banks, Unicredit — which was also among Ripple’s supporters — didn’t join the national project and completed its first transaction via blockchain in August 2018, relying on the platform We.Trade.
The leading Italian power provider, Enel (formerly a state-owned monopoly), started a working group to explore the potential of blockchain in 2016, and from the spring of 2017, the Italian company has been among the partners of Enerchain, a project promoted by the German IT service provider Ponton to experiment with the possibility of blockchain-based energy trading among utilities. It is, however, difficult to retrieve information about the present development stage of the project; besides, some relatively recent statements made by Enel’s head of business development, Giovanni Vattani, stressed the interest of the company in blockchain as a tool for improving final customer payment or refund. For this reason, Enel partnered with Polytechnic of Milan and the consultancy Reply for a research project aiming to create a European Central Bank-issued cryptocurrency.
The interest of many companies are still in an exploratory stage, rather than aiming to already have a defined application. For instance, in January 2019, the Italian postal service provider, Poste Italiane, joined the Hyperledger Fabric community, intending to gather new competencies in a field that the company feels as relevant for future innovation.
In other cases, the commitment to the blockchain revolution seems to be fostered mostly by communication goals: In these cases, the path from announcement to development of the projects seems deeply affected by the volatility of the public’s interest in cryptos and blockchain — which is, in turn, affected by the volatility of the crypto market. It is unclear, for instance, if the soccer team Juventus, which announced its Official Fan Token last fall, met its roadmap (the token should have been activated during Q1 2019), as the company in charge of its development, Socios.com, doesn’t offer information or any means of contact through its website.
Alongside projects involving large companies such as the ones above, DLT could benefit Small Medium Enterprises (SME), which are the backbone of the Made-in-Italy sector. Some commentators, for instance, stress that blockchain would be a useful tool in the protection of industries such as fashion, providing opportunities for better detection of counterfeit or fake goods and enhancing customer affiliation.
The most famous Italian brands have yet to announce any critical projects — however, a test concerning traceability in the textile sector was launched by the Ministry of Economic Development in mid-March 2019, thanks to a partnership with IBM.
The crypto people
Even if a large part of the Italian population is still ignoring what cryptos and DLT are — or know them only for their pathological distortions — the Italian crypto community is quite a thriving reality. However, the actual dimensions of the phenomenon are quite hard to measure.
The forum Bitcointalk posted the first message on the local Italian board on April 2013, and since then, the Italian community has grown steadily: Six years after the first message by moderator HostFat, who is still in charge of the board, the posts in Italian are more than 258,000, on almost 16,000 topics. The Italian community, then, is among the top-10 most active local boards (ranking sixth) and second, after the German one, among the European boards.
Telegram is another medium that the Italian crypto community extensively uses: Italians are — of course — widely present in the international crypto-themed channels, but they also gather in a bunch of Italian-language chats, sometimes structured with a main chat and a cluster of child chats on specific topics. The subjects and features are pretty varied: Some groups are more focused on trading, others on ICOs and new projects. They are always run on a voluntary basis, however, with some having rather “professional” outcomes, such as the participation in ICOs on preferential terms or even bonds with market signal services.
The founders and coordinators of these channels often conceal their identity under their chat’s usernames, which are, however, quite transparent for the insiders of the community.
Contrary to the general propensity for digital anonymity, the channel Crypto Bar promotes live meetings and a face-to-face relationships among its members. Silvia Jones, founder of the group alongside Fa Busheri and MM, described the multiple faces of the Italian crypto-enthusiasts:
“The members of our community are a very heterogeneous group which spans from the housewife to the entrepreneur, from the salesman to the student or the lawyer. The age too could vary from 18 to 65. In spite of these differences, all of them have the basis for expressing their opinion and for debating it, bringing value to our channel, which aims to give an adequate cultural perspective, information and the basis for a sound analysis.”
The number of members in the Italian channels presents volatility that mirrors the crypto market. As of press time, taking into account multiple subscriptions (it’s considered to be an act of politeness to participate in the channels of the “competitors”) and fake or inactive members, it is likely to estimate the aggregated dimension of these communities in about 2,000-3,000 people. That is a smaller group, if compared with the months of the ICO hype. However, it is a living and more competent community, at least in the opinion of the Crypto Dave, creator of one of the oldest channels, CoinUp! (previously Ico & Co), which managed about 40 subchannels during the bullish phase of the market:
“The Italian ‘crypto-people’ had changed for better because they became more conscious. Who survived the ‘winter’ are people who understood what cryptos could offer as an alternative model of the economy, in spite of the losses they endured because of projects which didn’t take off. Who didn’t run away is, indeed, the Darwinian evolution of 2017’s investors: people who had become more knowledgeable, more committed and less inclined to fall victim of easy gains’ fascination.”
Please, no more white elephants
The debate about cryptos in Italy mirrors the best and the worst in the country. Italians are renowned in the world for being creative and ingenious people. The country has, however, strong resistance to novelties (the internet, for instance, spread very slowly in Italy). In addition, new businesses face many difficulties: An analysis produced by the Harvard Business School stated that startups set in Italy, for instance, could gather less than 1/10 of venture investments that are available, on average, inside the EU (only Romania and Greece are in a worse position).
Also, other problems for the healthy development of the industries based on DLT come from the bureaucratic and business culture of the country: Italy has, in fact, quite a strong tradition in building white elephants, both considering its public sector and some private companies. The landscape of the country risks then being plagued by half-unfinished highways, empty hospitals, unused exhibition centers and obsolete industrial plants, which the local politicians or business associations infallibly announced as a game changer at every opening ceremony.
On top of this, the lack of a systemic and long-term approach hindered the development of innovations for which connectivity and compatibility are crucial. This was the case, for instance, of the first wave of the spread of IT during the 1970-80s: Many small Italian companies were proud at that time to implement an IBM-compatible system, despite the almost complete lack of suitable business applications (regarding applications in the Italian language, the void was absolute). As a result, many brilliant, young software engineers gave birth to a plethora of small and micro IT-boutiques, which tailored specific tools, different for each company and lacking any shared standards. The consequences of this fragmentation affected the national system during the successive waves of IT innovation, both considering learning processes and implementation aspects. Public intervention hardly eased the process of technology appropriation: Even more recently, the effort to bring Italy to the digital era produced “Italian-only” oddities such as the Italian certificated mail protocol (known in Italy as PEC), as a substitute to a suitable digital signature procedure.
To prevent blockchain sectors from retracing the same steps, Italy needs to approach these new technologies with an open-minded attitude, and some signals allow for the hope of a change in perspective. Davide Casaleggio, for instance, underlined that:
“Italian politics noticed quite late the underway revolution. During the first half of 2018, four Italian companies gathered through their ICOs more than the whole domestic venture capital market. Although, all of them were forced to incorporate abroad because the Italian system was not ready. Market understood blockchain more than politics; however, during the last months, some big changes happened. The legal recognition of smart contracts seems to be a small thing, but it is an important step in a new direction.”
A new regulatory framework or an incentivization scheme, however, would not be enough without an active intervention on the key driver of innovation — i.e., people. According to Di Nicola:
“The biggest problem I see is that Italy lacks dramatically of ‘doers’, such as experienced software architects and developers. It hurts to say, but all our best minds in IT went abroad, and presently Italy doesn’t possess the critical mass of people needed for frontline projects. We have a desperate need for reshoring who knows how to build: the Government could inject endless ‘gasoline’ in the blockchain sector, however, if nobody knows how to build a ‘Ferrari’s engine’, it is difficult to take part in the race.”
via ZeroHedge News http://bit.ly/2W7iIvC Tyler Durden
