It’s OK–we had a President, Richard Nixon, who somehow won office twice without about five people in the country voting for him.
And from what I’ve heard about European unemployment benefits, it’s not that bad to lose your job over there.
‘Not as bad as in America’ doesn’t equate to ‘not bad’! And the thing about unemployment in the 80s was that whole towns, regions and cities ended up with a massive long-term shortage of jobs.
Yes. But that’s the danger of any monoculture: the local employment was entirely dependent on one single industry - the coal pit or steel works or whatever. And many people couldn’t move elsewhere because the rental laws at the time were such that people were usually unwilling to rent out accommodation. Pity they didn’t fix that quickly enough.
The truth about that tax cut down to 40%.
You can argue that it should never have been as high in the first place that a cut to 40% came out as very generous, maybe that is true or maybe not.
The big idea was that if the highest earners in the UK were allowed to keep more of their wealth, then it would be reinvested and would in turn produce even more wealth which would trickle on down.
Except of course, the wealthy already had made their financial provisions, they had also made large amounts of free money by making multiple share applications in under sold state industries(something that was done by greedy Conservative ministers with their snouts in the trough- oh how easily we all forget eh ? share applications being made in the names of mentally incompetant elderly relatives for example - which in effect amounted to insider dealing)
On to that tax cut, from 60% down to 40%.
Any economist will tell you that putting such a large amount of liquid cash into an the economy in one massive splash is likely to end in tears, as demand suddenly rises, and inflation takes off and leads to higher interest rates, especially if it leads to a rise in imports.
You really don’t have to be a genious to work that one out, and guess what happened, the highest earning people got that one third cut in their tax and promptly went on a spending spree, (remember all those Porsches and BMWs ?)but they didn’t buy British manufactured goods, even if they had wanted to do so they couldn’t, since Thatcher had pretty much decimated our manufacturing sector.
So there was a predictable rise in imports, and predictably it led to a balance of trade problem, which in turn led to a currency problem, which in turn led to an increase in interest rates, this all took time during which even more damage was done to our manufacturing sector as the higher exchange rate made it more difficult to sell goods abroad, and the instability caused led to a loss of confidence.
The people who paid for all this were the newly mortaged, those who had taken up Thatchers ideal, and bought their own houses.
I’m rather surprised that folk fail to remember that house price crash, you know, all that negative equity, the repossessions and all that stuff, sure Thatcher had just left office when that one bit deep, but it was her policies that directly led to it.
People often forget that when Thatcher arrived she inherited inflation of around 7-8%, and everyone thinks she brought that down, in fact she did not, it came down initially, but by the time she left office, inflation was back at 8% again, she arrived when interest rates were around 14%, and despite these falling for a time, when she left office, interest rates were back up at 15%, she arrived with 1.3 millions unemployed, and left office with 2 million unemployed, after she had systematically doctored the figures.
Those who suffered most, were those who were thrown out of work and could not make any provision, oh, and whilst we are at it, lets also remember the great pensions mis-selling scandal, which cost billions and billions, and what about all those mis-sold endowments taken out to pay for interest only mortages ? this one is only really starting to begin to nip a little now, as of course the effect of this scandal takes 25 years to come to fruition.
There are millions of Britons who have yet to feel the full force of Thatcherite economics, but wait until they try to retire, I wonder how many will understand who was the cause of their future old age poverty.
B-b-b-but she lowered taxes!
That money was going into the economy anyway. What do you think the Inland Revenue do with it, put it under the bed?
So you’re telling us that whatever the tax rate, the end result is the same?!
sigh This stuff again? Soviet Communism was well on the long slide to economical failure and dissolution long before either Reagan or Thatcher took office; indeed, the Soviet fiscal and planning policies in the post-Khrushchev era were an economic disaster in the making, and despite Brezhnev’s repressive assertion of control over the satellite states of the Warsaw Pact in the late Sixties through the Seventies, political dissent continued to percolate. PJP II can at least lay claim to garnering international interest in the Solidarity movement of his home country, but Thatcher and Reagan were late-comers to the party who happened to win door prizes. To say that “she caused the collapse” is dismissive of the people who put it on the line behind the Steel Shade years before Thatcher et al came to power and did so not at risk to their political careers but quite literarlly to life and liberty.
As for her achievements on the domestic front I have no informed opinion except that it was clear that the English socialist system was collapsing under its own dead weight. The unemployment and economic readjustment may have been inevitable in any case, but Thatcher did come off as rather callous regarding the effects.
Stranger
Huh? No, I was questioning the premise of casdave’s argument. Seemed to be saying that a tax cut creates money out of thin air.
The collapse of communism in the USSR was a complicated thing, and was the result of many, many factors.
To mention just these three people, and no other factors, is an over-simplification at best, and at worst, is baseless revisionism.
For example, propping up (for 60+ years!) a perversely inefficient economy based on unrealistic philosophical theories surely had *something *to do with the collapse, right?
So the government would have bought loads of imports instead of spending oh… lets see, things like roads, railways, hospitals, schools, that kind of thing ?
That was anathema to Thatcher, who stated that she wanted to see the market(ie the public) pay directly for all the services it required.
No wonder the ordinary person feared for the National Health Service.
Thatcher called spending on public services ‘subsidy’, and yet called subsidy to her loyal rural support, the farmers, ‘support’.
No industry in the UK has had more ‘support’ than her farming electorate, farming has eaten more subsidy than the rest of British industry combined and multiplied 10x, on her market philosophy, most farms would have been shut down two decades ago as unfashionable and unsustainable, but she was never ever going to alienate her stoutest supporters was she ?
This is what is revealing about the Thatcher philosophy, industry which employed the masses was closed down because it was unprofitable, or rather not profitable enough which is a small but imprtant distinction, but when it came down to handing money to her wealthy land owning classes, she simply could not do enough for them.
Others may say that subsidy was a product of European intervention, but yet when Europe proposed intervention to assist mining regions to recover from the closure of their main industry by diversifying, she was not at all interested and put any number of obstacles in the way of those redevelopment grants, in other words, she was happy to accept European subsidies when it suited her supporters, but not quite as pleased when it was to be used to assist those who were not quite as keen on her.
Under Thatcher we ceased to be a significant manufacturing economy, instead we have become a service economy, which is all very well, except that this excludes huge numbers of people, and with the growth of internet communications, many of those miserable service jobs are being outsourced, leaving us with little to fall back upon.
No more than this was a basis for Thatcherite tax-cutting policies in the first place.
Also, what **Stranger **said. 
I honestly don’t understand what you mean.
Casdave points out the ludicrousness of the idea that cutting the top rate of tax will cause wealth to ‘trickle down’ - the money doesn’t spread through the national economy in the same way as government spending is capable of doing.
I guess that explains the terrible state of the economy, then.
Manufacturing jobs get “outsourced” too. All the western economies have moved towards becoming service economies, because we can’t compete with developing countries in manufacturing. It seems to be in the service industries that they are not so competitive.
Ah, well that’s another premise that I disagree with. I thought the big ideas behind the tax cut were that (a) it would encourage more direct wealth generation by increasing personal incentives - otherwise, the gov. is effectively saying “when you’ve made this much money, you might as well stop working”, and (b) the previous high rates of 60% or 70% or whatever they were, were simply unjust. The matter of what higher earners would spend the extra cash on is relatively unimportant. I think casdave overstates the Porsche factor.
I once asked one of my professors this-a man who defected from the USSR shortly before Gorbachev came to power. He said that if anyone caused the downfall, it was the Russian people, who WANTED the change.
I think to take that away from them by saying it was Reagan and Thatcher is somewhat insulting. JPII does deserve some credit, for his connection to Poland and the like, but Reagan and Thatcher? Bullshit. Said professor LAUGHED at the idea that Ronny had anything to do with it.
Yes. It’s correct.
The Soviet Union was well on the way to turning Britain into a stooge via the unions. When we retook the Falklands, it had a massive effect on the psyche of the country, and the West. Previously, it had been an attitude of gentle decline into socialist mediocrity, but then, we found we could stand up for ourselves. This little country sent a half-funded navy (Casdave can give you chapter and verse about that) half way around the world and kicked butt. We’d stood up for ourselves.
Then Reagan forced the Soviets to compete beyond their means. And Mrs Thatcher was staunch in her support. And so the edifice that was the Soviet Union came tumbling down.
Reds under the beds, and everything?
Really? The entire western world was in awe of one of the great military victories of modern times? Or do you just mean it ensured Maggie a landslide victory at the next election?