Thursday, December 8, 2011

Learning from Elsa Fornero

The front page of the Wall Street Journal last Monday, December 5, had three pictures of a woman in tears. That woman is Elsa Fornero, the Welfare Minister in the new “technocratic” government of Italy. The fact that she was in tears was truly remarkable and it deserved to be on the front page of a major business newspaper. This is something new, and there is a lesson to be learned from it.

Elsa Fornero, a professor of Economics at the University of Turin, is an international expert on pensions. In charge of one of the most difficult reforms, i.e., changing the pension system in Italy, she has set out to implement a set of new and severe measures that nobody before her has been able to do, even though the current system is unsustainable.

Reforms might be right, but they are painful, and the fact that they are necessary does not alleviate any of the pain they inflict. Technocrats normally describe necessary reforms as the inevitable medicine that a country has to swallow to get better; the numbers are on their side, and no one had ever shed a tear when reform might mean that someone wouldn’t be able to pay their bills at the end of the month. But not Elsa Fornero. The woman who, for more than forty years, has done the calculations about the pension system in Italy; has shown in many scholarly papers that the Italian pension system is unfair, inefficient, and too expensive; has set up a center to study this topic in the most rigorous way, looking at data both in Italy and in other countries, was there at center stage to announce her reforms. The new Minister, who was appointed for her unique expertise, stopped speaking at the very moment she had to pronounce the word “sacrifice”—and cried.

This is not only a sign of humanity, a recognition that reforms often equal pain, but also an act of humility and of immense courage. It took a woman to attack reform of one of the most difficult and stubborn pension systems. She had one week to do it. She knew what to do and what was necessary. And when she described it, she told it as it is, and she cried.

I hope this is the start of a new phase both for politics and for women. Politicians need to have the skills and good judgment to set countries on sustainable paths and (financially literate) citizens should hold them accountable. And I hope we are done with the “iron lady” and similar clich├ęs about women in command. I highly recommend that other Italian politicians be so bold in their actions as the Fornero reforms, as well as show that they care about the well-being of their fellow citizens. We all can learn from Elsa Fornero to be ourselves; in her case, a woman who cares. When I grow up, I want to be Elsa Fornero.


Didar said...

Nice post. Agree with you that politicians do need to have the skills and desire to promote countries towards financial freedom.

One observation I have in here is, many of the politicians are businessmen as well. I afraid this plays a great influence in their desire to promote financial freedom, specially in third world countries.


frank caliendo said...

I agree. She seems like a truly decent person which, in the end, is what matters. She cares about the sacrifices of others and takes her job seriously. I suspect people only like her even more after the speech.

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