Uncanny how Cameron’s shower manages to repeat Thatcher’s mistakes – whilst ignoring what she got right
Harold Wilson was one of the most mendacious, incompetent prime ministers we have suffered under, but he had a very good turn of phrase.
“A week is a long time in politics” he remarked – and this has been quite a week.
I have been watching with worry and disgust the antics of the U.S. Republicans as they endanger the world’s economy because as far as I can see they are under the thumb of extremists. You may say U.S. politics are none of my business – but when the US sneezes the rest of us are in danger of contracting pneumonia.
Over here the parties have been competing to see who can offer the least affordable pre-electoral bribes when we have one of the world’s most highly indebted economies. And now we have the Great Royal Mail Share Farce, as people clamour for shares in that enterprise.
The last great sell-off of public enterprises was when the country was run by Thatcher and Major. Those governments made some silly mistakes, one of which is being repeated on a grand scale.
First. they squandered our money on massive advertising campaigns when – as I pointed out in my weekly column for Marketing magazine – they just had to stick inserts in every household’s utility bills. And second, they were so worried about failure that they under-priced the offerings. Consequently they didn’t raise the money they should have and City fat-cats made a killing.
Thatcher and Major made mistakes, but they did slash waste and left the British economy in the best state it has been since the 1920’s. This shower have managed the rare feat of increasing the deficit whilst being accused of cruel austerity.
In the case of the Royal Mail share offering it looks like they have made the underpricing mistake all over again – big time. I do not know by how much the issue will be oversubscribed. but I bet it will be a pretty spectacular figure.
Returns on investment generally are pretty crap. Markets have been rising largely because as central banks busily print money people have to put their cash somewhere rather than watch its value shrink. Compared to alternatives, the Royal Mail looks a good investment. This is a real business, with Parcelforce, once my client, fulfilling a need that is growing as internet marketing increases.
But why have they repeated the old pricing mistake? Because they don’t understand business and fail to study the lessons of history. Popeye Osborne’s family may have made money out of wallpaper, but he can’t recognise or chooses to ignore a housing bubble when he creates one.
The phrase “professional politician” is worth reflecting on. It is terrifying to realise that most of the people running this country have never run anything else. Few have had a proper job. Hardly any have ever risked their own money. Business expert “Vince” Cable has never been in business. No wonder they are repeatedly bamboozled in negotiations and get us such appalling value for money.
I don’t think previous generations of politicians were that much better than this one, but at least they were nearly all educated and quite a few had had proper jobs.
A comment about American politics: the only differences between Democrats and Republicans are cosmetic. They are the same lying thieves when all is said and done. There is plenty of blame to go around on both sides of the aisle.
The current shutdown is really nothing compared to the October 17 deadline to raise the debt ceiling. America is bankrupt. The only question is how long the politicians can keep up the charade.
My advice to everyone is to get ready. America’s about to erupt with the biggest sneeze in its history. Whether that sneeze happens in October or December or February is somewhat irrelevant.
It is interesting that all this started as a result of Obama’s Health initiative, which has already been watered down to the nth degree – and which the Republicans, who seem startlingly ignorant even by the debased standards of political debate, appear to think has something to do with communism.
It is also interesting that in the latest CNN survey of the happiness of nations the ones at the top – Denmark, Norway Sweden and such – all provide proper health care. They appear to have the absurd view that it is the duty of the state to look after its citizens, especially the sick, the old and the poor. I happen to have the absurd view that if a state does not do that it has no government worth the name.
The US comes number 17 in the happiness list. Perversely, Britain is even lower at number 22. I attribute this to the fact that our health service is in chaos, largely thanks to the meddling of successive governments. I am not often right, but I predicted this would happen in an article I wrote about twenty years ago.
The debt ceiling – which keeps getting raised – is a bit of a worry, too. I read a very funny piece yesterday – I think in The Daily Reckoning – that suggested anyone who lends money to a country as indebted and financially irresponsible as the U.S.is mad.
There again, we here seek to outdo you. Our debt is proportionately greater, whilst our politicians are, if perhaps better informed, equally mendacious.
If Obamacare genuinely provided universal health care for less cost, it might be viewed in a different light. But it does not, and even liberals are turning against it.
The reality is health care insurance premiums will go up significantly, sometimes doubling or trebling, while at the same time deductibles will go into the stratosphere.
A big increase in the cost of insurance combined with more risk put on the consumer in the form of higher deductibles is not a good deal for anybody except the insurers, who were naturally big supporters of Obamacare.
I’m not sure how Obamacare is being described to people outside the country, but it’s nothing like how it was sold. Which is par for the course, I suppose. Obama sold himself on one platform, but now stands on an entirely different one… one that looks very similar to George W. Bush.
Seen one politician, seen’em all.
The only thing I have gathered about Obamacare is that it doesn’t work very well.
Nor does our National Health Service – except when you have a real problem, whereupon they are brilliant
The principle of looking after everyone is sound. But carrying it out seems devilishly hard.
I guess most important things are.
I was vastly amused today by Bill Bonner who believes (as I do) that people should take responsibility for their lives.
He suggested that clinics should refuse to help overweight people.
That would save a hell of a lot of money here – and even more in the U.S.
Royal Mail is a punt at best.
1 They have a union that will strike when one if their “members” gets legitimately sacked for bullying
2 Deregulation will see them dead in the water when efficient and systemised organisations such as TPG can compete.