Monday, March 1, 2021

Economist in Politics .. .. 'Indian Economy is the best economy'

Indian economy is ‘the best economy’ !  .. .. we know it too well. How interesting was Economics when you studied ?   An Economist is a practitioner in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy.  

This post is on an Economist turned politician, who earned a PhD from the prestigious Massachusetts Institute of Technology (MIT) in the United States, and then taught economics in several Universities.  After spending six years at the World Bank from 1984 to 1990, he led the treasury department at his country’s  economy ministry for a decade, working under nine separate governments. From that position, he  masterminded large-scale privatisations and contributed to deficit-cutting efforts that helped his Nation qualify for the euro.

Like other Countries in the region, Italy too was badly affected by Covid 19.   Recently, the Governors of Italy's regions called for the travel ban to be kept in place, as concern remains high about the potential spread of more infectious variants of the coronavirus first detected in the UK, Brazil and South Africa. The ban applies to all non-essential travel between all regions, regardless of which zone they are in under Italy's tiered system of coronavirus restrictions.

Anchored by Milan, Italy’s financial and fashion capital, Lombardy boasts sophisticated industry and world-class medical facilities. Yet it was overwhelmed by the first wave of the global pandemic, forcing doctors to ration ventilators and hospital beds while having to decide who lived and who died.  The catastrophe in Italy’s most affluent region was in part a consequence of having entrusted much of the public health care system to private, profit-making companies while failing to coordinate their services. Over the previous quarter-century, substantial investment has flowed into lucrative specialties like cardiac surgery and oncology. Areas on the front lines of the pandemic, like family medicine and public health, have been neglected, leaving people excessively reliant on hospitals  - rather sad state of affairs .. ..

Moving away – this is a quote attributed to Adam Smith : “Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog.”

Adam Smith was a famous  Scottish economist, philosopher as well as a moral philosopher, a pioneer of political economy, and a key figure during the Scottish Enlightenment, also known as ''The Father of Economics'' or ''The Father of Capitalism''. Smith wrote two classic works, The Theory of Moral Sentiments (1759) and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). The latter, often abbreviated as The Wealth of Nations, is considered his magnum opus and the first modern work of economics.  Smith laid the foundations of classical free market economic theory. The Wealth of Nations was a precursor to the modern academic discipline of economics. In this and other works, he developed the concept of division of labour and expounded upon how rational self-interest and competition can lead to economic prosperity.  

Vilfredo Federico Damaso Pareto[1848 1923) was an Italian civil engineer, sociologist, economist, political scientist, and philosopher. He made several important contributions to economics, particularly in the study of income distribution and in the analysis of individuals' choices. He was also responsible for popularising the use of the term "elite" in social analysis. He introduced the concept of Pareto efficiency and helped develop the field of microeconomics. He was also the first to discover that income follows a Pareto distribution, which is a power law probability distribution. The Pareto principle was named after him, and it was built on observations of his such as that 80% of the wealth in Italy belonged to about 20% of the population.  

Along the lines of famous Economists comes ‘Mario Draghi’ ,   Italian economist, central banker, academic, civil servant and politician who has been serving as Prime Minister of Italy since 13 February 2021.  He previously served as President of the European Central Bank from 2011 until 2019. Draghi was also the chair of the Financial Stability Board from 2009 to 2011 and governor of the Bank of Italy from 2005 to 2011. After a lengthy career as an academic economist in Italy, Draghi worked for the World Bank in Washington, D.C. throughout the 1980s, and in 1991 returned to Rome to become Director General of the Italian Treasury. He left that role after a decade to join Goldman Sachs, where he remained until his appointment as Governor of the Bank of Italy in 2006. His tenure as Governor coincided with the 2008 Great Recession, and in the midst of this he was selected to become the first Chair of the Financial Stability Board, the global standard-setter that replaced the Financial Stability Forum.

He left those roles after his nomination by the European Council in 2011 to serve as President of the European Central Bank. He presided over the institution during the Eurozone crisis, becoming famous throughout Europe for saying that he would be prepared to do "whatever it takes" to prevent the Euro from failing.  In 2014, Draghi was listed by Forbes magazine as the eighth-most powerful person in the world. In 2015, Fortune magazine ranked him as the world's "second greatest leader". In 2019, Paul Krugman described him as "the greatest central banker of modern times."

After Draghi's term as President of the European Central Bank ended in 2019, he initially returned to private life. On 3 February 2021, in the midst of the COVID-19 pandemic, Draghi was invited by Italian President Sergio Mattarella to form a government of national unity, following the resignation of Giuseppe Conte.  After successful negotiations with parties including the League, the Five Star Movement and the Democratic Party, Draghi was sworn in as President of the Council of Ministers on 13 February, pledging to oversee effective implementation of COVID-19 economic stimulus. 

With regards – S. Sampathkumar


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