After communism and capitalism, there is asterism.

Tuesday, December 13, 2005

Sale of the Century

Looking at Ahmed Chalabi's posters in BagNewsNotes. Chalabi is offering the Iraqi people direct personal ownership of the oil wealth of Iraq. Sounds like a good deal - well it isn't.

This is nothing new. It is a crude form of the confidence trick that Margret Thatcher pulled on the British people in the 80's and the Russian government pulled in the 90's. Here is how it worked...

- In the 60's and 70's the State bought/built Britsh industries and utilities, like trains, telecom's and steel at great expense to tax payers.
- In the 80's Prime Minister Thatcher sold these same assets back to the same tax payers at highly discounted prices under the guise of selling them shares.
- Of course these shares were highly undervalued so the share price rose sharply after the sale.
- Tax payers grabbing a quick profit sold these shares back to same big investors that had owned these assets before the 60's.
So as a result Thatcher managed two tricks. 1. To sell to the British people their own property and 2. To transfer the assets of the British state to the big investors that financed her party at a large discount.

People were better off - at first. Then 10 years later chickens came home to roost. All the money that the state and the people made from the sale of these assets was spent not reinvested. All the profits that these industries genereated and will generate in the future go into private pockets and even get sent abroad. The state now has to try to force services down to a minimum and taxes up to a maximum as its only income is now from taxes.

Well it seems like Chalabi is going down the same road - give Iraqi oil to the people who will then sell it to big-oil at discount prices. Even cheaper than privatisation!


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