We typically honor the convention to refrain from to speak ill of the recently departed. But Margaret Thatcher probably would not object to an epitaph focusing on how her political legacy was to achieve her professed aim of “irreversibly” dismantling Britain’s public sector. Attacking central planning by government, she shifted it into much more centralized financial hands – the City of London, unopposed by any economic back bench of financial regulation and “free” of meaningful anti-monopoly price regulation.
Mrs. Thatcher transformed the character of British politics by heading a democratically elected Parliamentary government that permitted financial planners to carve up the public domain with popular consent. Like her actor contemporary Ronald Reagan, she narrated an appealing cover story that promised to help the economy recover. The reality, of course, was to raise Britain’s cost of living and doing business. But this zero-sum game turned the economy’s loss into a vast windfall for the Conservative Party’s constituency in Britain’s banking sector.
By underpricing her privatization of British Telephone and subsequent vast monopolies, she made it appear that customers would be the big gainers, rather than large financial institutions. And by giving underwriters a windfall 3% commission (formerly based on floating the stock of much smaller start-up companies), Mrs. Thatcher oversaw the start of Britain’s Great Polarization between the creditor 1% and the increasingly indebted 99%.
Attacking rent-seeking in government, she opened the floodgates to economic rent-seeking in its classical sense: land rent in real estate (with debt-inflated “capital” gains) to make British property so high-priced that employees who work in London must now live outside it, taking highly expensive privatized railroads to work. Privatization also created vast new opportunities for monopoly rent for privatized public utilities, along with predatory financial takings by increasingly predatory banking.Michael Hudson
Mrs. Thatcher’s Mean Legacy — The Queen Mother of Global Austerity and Financialization
Jeffrey Sommers and Michael Hudson
3 comments:
Tom the last link failed.
Basically, Thacher and Reagan took the solutions to the Great Deppression and presented it as a problem.
The real problem was oil price shock and Soviet Union crop failures of 11972 which raised prices and caused stagflation, but that was ignored to this day.
Instead of that, they changed the focus of the real problem to the focus of problems of the rich, which was inflation caused by redestributional tax.
Today even the poor wants to solve the problems that are in the focus of the wealthy. That was the brain washing done by Thatcher and Reagan.
They changed the nature of the support for the agregate demand and supply side from tax redistribution to ever incresing debt of public and private sectors as the support for Nominal Surplus Circulation.
Thanks, link fixed.
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