Saturday, March 5, 2016
Mass privatisation masks Britain’s failed economic policies
There is no doubt that throughout the last forty years or so neoliberalism has dominated government, housing, transport, energy and the financial sector in Britain and subsequently impacted on society in highly destructive ways. The peak of which is demonstrated no better than by the financial crisis that followed 2008 and the lingering state of recession in its aftermath.
At one point, just after the financial crisis started the government was on the hook for £1.16 trillion to save the banking industry from collapse. That fell to £456 billion in cash, loans and guarantees by March 2011.
You could point to many reasons for it, but there is one moment, a seminal moment of blame. Following the election of Margaret Thatcher in 1979 and subsequent meetings with US president Ronald Reagan, the financial markets experienced a transformation, more like a corporate coup d’état that effectively protected the banking industry from accountability. Financial protections imposed after the Great Depression were repealed. Financial crimes soared, it’s pinnacle reached in 2008 with a great unraveling, yet to be fully experienced.
This agreement on both sides of the pond made finance more important than manufacturing. Union powers were quashed and the Reagan/Thatcher theory of so-called ‘trickle down economics’ from that moment failed to trickle down as the middle classes embarked upon an unrelenting contraction. Higher corporate profits came at the expense of stagnating real wages for everyone else.
Gargantuan bank bailouts, quantitative easing and privatisation is the smoking gun of this failed project. The result today is that the current Conservative government has focused on austerity and ‘selling the silver’ in its battle for economic resurrection.
In 2013, George Osborne withheld £30 billion from the National Insurance fund that taxpayers contribute towards to be used only for social welfare. At the same time, poverty, increasing at an unprecedented rate drove millions into malnutrition with child poverty alone expecting to reach a Dickensian five million by 2020. Varying statistics puts around one quarter of Briton’s living in poverty.