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| Thatcher 2012 |
The majority of observers felt that it was in poor taste to celebrate the passing of a frail old woman suffering from dementia. A smaller group of people argued that it was perfectly acceptable to debate the record of public figures at the end of their lives. And they believed that if that record largely consisted of divisive and harsh policies, it was a commentator's duty to say so with brutal honesty.
I can see the point for each position. But I am not interested in moralistic arguments.
I just want to make a simple observation about gender.
For that let me compare her record with that of her fellow conservative Ronald Reagan.
Thatcher's Legacy
Margaret Thatcher set out to destroy the trade unions as she she saw them as a destructive economic force. She did not see the relevance of trade unions in resisting income inequality. While trade unions can be unreasonable and make life difficult for everyone with their only weapon (strikes), they also play a very important role in economic regulation. They resist income inequality and by forcing businesses to pay more for labor they increase the purchasing power within the domestic market.
The Post-War bargain was to keep a balance between union wages and business profits. This worked as long as the world economy consisted of the US and Europe. Within that Keynesian model, businesses did not see the need to invest to increase productivity and this proved to be a huge mistake on their part. When Japan rose in the early 70s to compete with the US and Europe, these companies were caught off guard. Rising oil prices did not help as their relatively old production systems were not energy efficient (the same oil shock did not affect Japan's industrial output).
Unions did not understand the problem and continue to ask for more wages. Businesses did not understand the problem and focused on high wages as the reason for their inability to compete with Japanese goods. After several years of stalemate (and a funny economic period known as stagflation), the Tories came to power to apply the solution favored by the business side, namely wage reduction.
How do you achieve that? By going after the unions forcefully and relentless. She refused even their reasonable demands to force them into prolonged strikes and eventually economic bankruptcy.
As part of the same formula, she sold off profitable state-owned enterprises. The privatization wave served two purposes: one was to get rid of unionized workers and the other was to transfer wealth from the public sector to the private sector at a minimal cost. The companies they sold off were (a) natural monopolies like water, gas and electricity, (b) industries that modernized themselves in recent years prior to privatization, like the British Steel (c) former monopolies who investment in infrastructure could never be profitably duplicated by competitors, like British Telecom or British Airways.
For the business side, her government led to huge profits, much lower taxes, the rise of a gigantic finance sector (dual effect of deregulation and the need to raise large sums during the privatization process) and a formidable power position.
For the labor side, the end result was decline in union membership, loss of bargaining power, high unemployment, two recessions and rising income inequality.
Normally, it is not easy to implement such policies and expect to be reelected. But she did it by using a tried and true formula: when facing a recession and dismal ratings, go start a war. It increases public spending dramatically and it forces everyone to rally around you in a wave of patriotism.
She defended a tiny piece of rock near Argentina and the rest is history.
Ronald Reagan's Legacy
In the US, her biggest admirer and self-described partner Ronald Reagan implemented exactly the same policies at around the same time.
He destroyed the unions (in 2012, the unionized workers in the private sector constitute only 6.6% of the workforce). He reversed income inequality dramatically. His budget cuts led to a severe economic downturn that was dubbed Reagan's recession. His first term is marked by double digit unemployment in most of the United States.
Reagan tried hard to find companies to privatize but the US did not have a comparable economic asset density. So instead, he began the outsourcing revolution, that is contracting out public sector jobs to private companies. As with the Thatcher revolution this served the same dual purpose of cutting unionized public sector jobs and transferring wealth from public sector to private sector.
Like Thatcher, Reagan was also big on deregulation. He started the deregulation process in the natural gas, railroad, banking and telecommunication sectors. In fact, the starting of the infamous 2008 crisis is not the repeal of the Glass-Steagall Act but the Garn-St. Germain Depository Institutions Act passed under Reagan. This removed restrictions on loan-to-values for Savings and Loans and it encouraged banks to make very risky real estate investments (resulting in the first S&L bailout). If that sounds familiar, it's because it is a smaller version of the later crisis.
He also lowered taxes significantly for the upper brackets. They were as high as 70% when he came to power. He first lowered them to 50%. Then, in 1986 he lowered them to 28% while increasing the lowest brackets from 11% to 15%. In other words, he took from the poor and gave to the rich.
As a direct result of his policies, the US is now one of the worst countries in terms of income inequalities. Its middle class is shrinking towards oblivion. Its corporate executives became so greedy that they nearly destroyed the global economy for their personal enrichment.
And one last similarity: When his policies proved unpopular during his first term (just like Thatcher's) what did he do to? Well he invaded Grenada.
This led to increased spending (and massive borrowing) and a swell of patriotic pride. Grenada not being sufficient, he kept it up by escalating the Cold War.
Two Historic Figures at Their Death
When Reagan died (also suffering from Alzheimer's by the way) you could not believe the eulogies. Even his worst critics acted as if they were grudgingly conceding the man's massive contributions. He was credited with the productivity revolution, the end of Cold War and a large boom period.
Actually, none of these can be directly attributed to his policies. But nevertheless the man was lionized at his death. He was celebrated as one of the greatest presidents who made the US a better place.
Far from being named a divisive and hated figure he was promoted to patron saint of the GOP status. You cannot get past a GOP primary without declaring your undying admiration for and your strict allegiance to him.
So we have two politicians who followed the exact same path, implemented the exact same policies, in fact, pointed at each other as their muse and mentor.
When one of them died she became the Wicked Witch of the West.
When the other died he was canonized as St Ronnie.
Can you tell me how to explain this?
And can you tell me that there is no misogyny in that?
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