Wednesday, March 30, 2011

NATS Sell-Off

The United Kingdom continues to sell off the Crown Jewels. Figuratively, that is. (So far.)

Budget 2011: Government to reduce stake in Nats air traffic control business

"The national air traffic controller has joined the Channel tunnel rail link on the state auction table as the government pushed on with its asset disposal plans."

And then there’s this interesting tidbit;

"However, government sources said no decision had been made on the scale of the stake sale, amid warnings from airlines of "highly damaging" consequences if the state exits the business entirely. The Airline Group, whose members include British Airways and easyJet and which owns 42% of Nats, has warned that it might dispose of its stake if the government reduces its shareholding to zero."

I guess I should have seen that coming, but I didn’t.

Just in case you don’t think you’re interested in all this, former Prime Minister Margaret Thatcher started the whole trend of privatization. If you’ll read just that section (at the link) from Wikipedia you might glimpse something even more important -- and dangerous -- at the end.

”The privatisation of public assets was combined with financial deregulation in an attempt to fuel economic growth. Geoffrey Howe abolished Britain's exchange controls in 1979, allowing more capital to be invested in foreign markets, and the Big Bang of 1986 removed many restrictions on the London Stock Exchange. The Thatcher government encouraged growth in the finance and service sectors to compensate for Britain's ailing manufacturing industry. Political economist Susan Strange called this new financial growth model "casino capitalism", reflecting her view that speculation and financial trading were becoming more important to the economy than industry.”

In other words, Thatcher and her conservative-soul mate, Ronald Reagan, turned our countries away from manufacturing and towards finance. Away from building cars towards selling sub-prime mortgages. Privatization. Deregulation. Gettin’ the Flick?

David Cameron -- the new Conservative Prime Minister -- is trying to get the United Kingdom out of the same mess that America is in; a “casino capitalism” economy gone bust. Anybody remember Northern Rock? I bet my English readers do.

”Cameron describes himself as a "modern compassionate conservative.”

If that doesn’t send the British over the edge then they haven’t been paying attention.

By the way, it case you didn’t catch my recent post, Krugman says Cameron’s policies aren’t working.

”But the government of Prime Minister David Cameron chose instead to move to immediate, unforced austerity, in the belief that private spending would more than make up for the government’s pullback. As I like to put it, the Cameron plan was based on belief that the confidence fairy would make everything all right.

But she hasn’t: British growth has stalled, and the government has marked up its deficit projections as a result.”

Come on now. It’s all connected. Try to keep up.

Don Brown
March 30, 2011

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