Wednesday, May 27, 2009

What Does the Mafia have to do with the Debt Crisis?

Bloomberg has quite a read today in Mafia Cash Increases Grip on Sinking Italy Defying Berlusconi. Consider this paragraph:

Unlike overleveraged companies burned in the credit crisis, the Mafia and its cash-based, debt-free business model are breezing through economic hard times. With young, savvy leaders at the helm, organized crime is poised to expand as legitimate companies founder.

The motto of this blog is "In equity, veritas". The word "equity" has a double meaning. Relevant to the current topic is the meaning of ownership (cash) rather than debt. What the lengthy Bloomberg article demonstrates is that Godfather Part III is happening today. You can be sure that this phenomenon is not limited to Italy.

The Mafia has been thrifty. The Corleone family lived below their means. This "debt-free business model" is one that used to be the American ideal. It is not too late for America and the large swaths of the world that have followed our lead to turn their backs on the Merchants of Debt and go back to where they once belonged.

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