I like Colin Espiner’s writing. He’s got he best of the journo blogs. He’s focussed on issues rather than politicking. But does he ever drop some clangers – saying the Chief Justice could be fired, confusing numbers on the dole with the number who are unemployed, saying the Prime Minister can’t affect wages, and this:
Actually, I think selling or part-privatising Meridian is a splendid idea. It would be a great addition to the stock exchange, which badly needs some new blue-chip listings. And everyone who moans about the obscene profits the company makes and the size of their power bill could do something about it.
Buy some shares. Not only would that put some of Meridian’s profits in your own pocket, but as a shareholder you could go along to Meridian’s AGM and give the directors what-for once a year. Brilliant.
1) Why does the stock exchange ‘need’ new blue-chip listings? We are told all the time by people with a financial interest in privatisation that it will ‘help the stock market’ but how? What good does that do the stock-market (apart from the owners of the stock-market who get more commissions)? More importantly, what good does it do for the wider economy, whether of not it helps the stock-market? In reality, doesn’t floating more huge companies into a relatively small market just mean that we won’t get a good price and the value of other shares will drop too?
2) Right now, I can do something (small) about Meridian’s prices, I can complain to my MP and the shareholding minister. My voice is worth as much as anyone’s. If it’s privatised, only shareholders will have a voice and that will be determined by their size. In reality, there will be one or two, probably foreign, owners and if you can afford the shares and turn up to the AGM you can yell all you like, you’ll just be ignored.
3) Right now, the profits that Meridian earns on my power bill come back to me and my community. They pay a dividend, that dividend pays for government expenditure on schools, hospitals, roads etc etc etc. Sell the thing, for what is bound to be a bad price (when did we ever get a good price for a privatisation?) and the profits will flow overseas while we have to cut services or find revenue from other sources.
4) Name a privatised company that has worked well. They’re rare as hen’s teeth. Why? Because most of them are in some kind of monoploy or near monoploy position. The natural inclination of a company in that position is to charge high prices, asset strip, make mega profits run the thing down, then demand a government bailout to prevent collapse.
I think that Colin’s quote shows the effectiveness of propaganda. There’s no actual argument that privatisation works for the reasons he claims. But when you hear the same endless mantra ‘privatisation is good, sharemarket needs depth, greater accountability, private pixies provide efficiency’ you start to believe it, you forget to question it.