Margaret Thatcher and Ronald Reagan were Good for the World but Bad for Special Interests

Posted by PITHOCRATES - April 14th, 2013

Week in Review

People either loved Margaret Thatcher.  Or they hated her.  And it all came down to their political ideology.  If you were pro-capitalism you loved her.  If you preferred socialism you hated her.  And the biggest socialist to hate her (and her friend Ronald Reagan) was the Union of Socialist Soviet Republics (USSR).  Not only did the success of her economic policies make the failure of the Soviet economic policies stark by comparison she was outspoken about her hatred of communism.  Even allowed her good friend, Ronald Reagan, base American nuclear cruise missiles on British soil.

Capitalism’s victory over Soviet socialism was so apparent that Mikhail Gorbachev opened dialogue with the Great Margaret Thatcher.  Ultimately bringing about the Soviet’s defeat in the Cold War.  Because socialism as an economic system doesn’t work.  Which is why Britain soared to new heights under the capitalist policies of Margaret Thatcher.  While the Soviet Union collapsed under their socialist policies.  And she entered office when Britain was at its worst (see To blame Margaret Thatcher for today’s problems is to misunderstand history by Allister Heath posted 4/9/2013 on The Telegraph).

[Margaret Thatcher] inherited a basket case of an economy, crippled by obsolete state-owned firms, a legacy of decades of poor policies. Management was insular and demoralised, the workforce used as pawns by militant union leaders who would call strikes at every opportunity, customers treated like dirt and production techniques stuck in the past.

Productivity was appalling, overmanning the norm and the quality of UK-made goods notoriously poor. Britain was sclerotic, anti-entrepreneurial and anti-innovation, often specialising in industries with no long-term future.

Yet it is a little-known fact that manufacturing output actually went up during her time in office, despite the necessary liquidation of so many unviable plants.

This was basically the problem they were having in the Soviet Union.  Everything was state-owned.  Production techniques were stuck in the past.  No one clamored to get their hands on good Soviet products.  Because there were no good Soviet products.  And they had far too many workers in their plants building stuff no one wanted.  While store shelves sat empty and people went without the basic necessities.  Britain was far along the path to outright socialism.  While Soviet Union was nearing the end of that path.  Margaret Thatcher turned the country around before they could end up where the Soviet Union was.  And the sun began to shine once more on the British Empire.  Albeit a smaller one.

Output had grown another 4.9pc by the start of 1997, when the Tories were booted out. Given the bitterness of the 1980s’ recession, caused by the desperate need to wring out extreme levels of inflation from the system by using high interest rates, it shows just how effective her supply-side reforms turned out to be…

…She was right to slash income tax, to repeal capital controls and to shake up the City of London with Big Bang. Most of her reforms to retail banking, including allowing banks and building societies to compete with one another, were spot-on.

There were some bad changes, however, though not the ones usually cited: still-high inflation made the ultra-safe saving banks unviable, especially after the EU forced the UK to introduce retail deposit insurance in 1979; there was a counter-productive move away from individual responsibility in retail financial services; and the UK signed up to the Basel Accords in 1990, a flawed international system to regulate banks that triggered all sorts of dangerous unintended behaviour and ensured financial institutions retained far too little reserves. In all cases, however, these were changes that didn’t really follow her basic philosophy…

Thatcherism was about choice, individual responsibility and independence from the state, not the politicised, artificially pump-primed markets we ended up with by the mid-2000s. She hated bail-outs, government subsidies and nationalisations; and would have looked on in horror at the gradual socialisation of losses and privatisation of profit in the financial services industry in the 15 years running up to the crisis.

Starting with the rescue of the LTCM fund in 1998 in New York, regulators decided that no large financial institution could ever fail. Alan Greenspan saw himself as an economist-king, manipulating interest rates to bolster financial markets and ensure perpetual growth, and triggering a giant bubble that burst twice. This was corporatism, not genuine capitalism.

Under the new order, including Gordon Brown’s late, unlamented Financial Services Authority, banks were disciplined neither by the free market – the authorities were there as a backstop, so there was no chance of going bust – nor by regulators, who allowed risk to build up unchecked. Greed was no longer balanced out by fear; moral hazard had replaced prudence. Thatcher, the grocer’s daughter and keen student of F.A Hayek, would have despaired.

A genuinely Thatcherite government in the 2000s is unlikely to have tolerated the explosion in the money supply – and house price madness – that Brown allowed, not least because Lord Lawson made a similar mistake in the late 1980s when he was Chancellor, triggering an earlier, disastrous house price bubble and bust. The parallels between the two episodes are striking but bizarrely uncommented upon.

So it is silly to blame Thatcher for today’s problems. If only one of her disciples had been in power in the 2000s, we wouldn’t be in anything like the mess we are in today.

Supply-side reforms?  Those were the same kind of reforms that her good friend, Ronald Reagan, favored.  And by using them he undid the Keynesian damage of his predecessors (LBJ, Nixon, Ford and Carter).  Pulling the United States off the path towards socialism.  Long before they got where Britain was before Thatcher.  But like in Britain it didn’t take long to return to the failed policies of the past.  The Keynesians returned in full force.  Playing with interest rates.  Keeping them artificially low to interfere with market forces.  Causing great irrational exuberance.  Those famous words uttered by Alan Greenspan.  An irrational exuberance his Federal Reserve policies enabled. Allowing people to borrow cheap money to invest with abandon.  With no fear of the economic fallout.  Pure Keynesian economics.  This wasn’t capitalism.  For capitalism would have raised those interest rates before they created such great bubbles.  And capitalism would have disciplined those free markets.  By checking greed with fear and having serious consequences for irrational exuberance.  Not government bailouts.

If Thatcher and Reagan were in office in the past decade things would be a lot better now.  And the simple proof of that is that when we moved away from their policies we created the mess we have today.

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Margaret Thatcher

Posted by PITHOCRATES - April 8th, 2013

It is a sad day.  One of the greatest world leaders of the 20th century has passed.  The great Margaret Thatcher.  The Iron Lady.  Who saved Great Britain.  And made it great again.  By championing conservatism over socialism.  Who dared to stand strong against the Soviet Union.  Rejecting détente.  For she hated communism.  Her actions, along with those of her good friend American president Ronald Reagan, made the world a better place.  Few were hated more.  Because she dared to stand on principle.  And fought back when challenged.  Something unheard of these days.  The world needs more Margaret Thatchers.  And far less of what we have.

Let’s us pray we don’t soon forget what she did.  And let not the revisionists disgrace her legacy.  God bless the good lady.  We thank you for your service.  And wish you everlasting peace.

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The Left Hate Margaret Thatcher and Ronald Reagan because they Restored their Countries to Greatness

Posted by PITHOCRATES - September 16th, 2012

Week in Review

The British Left hates Margaret Thatcher.  So much that they are already selling t-shirts celebrating her death.  Though she is still alive.  For she is the Ronald Reagan of Great Britain.  A singularly remarkable person who came along just in time to save a nation in decline.  And restore it to greatness (see The Left hates Margaret Thatcher because she reminds them they are wrong about everything by Daniel Hannan posted 9/12/2012 on the Daily Mail).

Now and again, we are reminded of the sheer nastiness of a certain kind of Leftie. Not, let me stress, all Lefties: I have Labour friends who are motivated by a more or less uncomplicated desire to help the disadvantaged.

But they march alongside some committed haters who define their politics not by what they like, but by what they loathe. They also define opponents not as human beings with whom they disagree, but as legitimate targets.

A lack of empathy, bordering almost on sociopathy sits behind their talk of caring and sharing.

Not much different from the American Left.  Who hate their political opponents.  And attack them personally.  With no understanding of the underlying policy in question.  For they never say they prefer tax, borrow and print (money) Keynesian economics over a more Austrian approach of sound money and low taxation.  The kind of policies that have made great economies great.  Instead they say their opponents hate women, hate poor people, hate children, hate seniors, etc.  And yet they are the tolerant people.  Who tolerate everyone that agrees with them.  And hates all those who disagree with them.  Making these tolerant some of the most intolerant of people.  Which is why they hate Ronald Reagan in America.  And they hate Margaret Thatcher in Britain.  Even though they both returned their countries to prosperity after a decade of decline and despair.

I am just old enough to remember the end of the Seventies: power cuts, three-day weeks, constant strikes, price and income controls, inflation.

Worst of all, I remember the sense of despair, the conviction that Britain was finished.

I don’t believe you can grasp Margaret Thatcher’s achievement without the context of what she displaced.

Throughout the Sixties and Seventies, this country had been outperformed by every European economy. ‘Britain is a tragedy — it has sunk to borrowing, begging, stealing until North Sea oil comes in,’ said Henry Kissinger.

The Wall Street Journal in 1975 was blunter: ‘Goodbye, Great Britain: it was nice knowing you.’

Margaret Thatcher’s victory in 1979 was like a thaw after the cruellest of winters. Inflation fell, strikes stopped, the latent enterprise of a free people was awakened.

Having lagged behind for a generation, we outgrew every European country in the Eighties except Spain (which was bouncing back from an even lower place). As revenues flowed in, taxes were cut and debt was repaid, while public spending — contrary to almost universal belief — rose.

In America we were mired in stagflation and a record high misery index of the Carter Seventies.  Much of which he inherited from LBJ’s Great Society and Richard Milhous Nixon’s abandoning of the quasi gold standard.  The Nixon Shock.  Because he refused to cut Great Society spending.  As did Gerald Ford.  As did Jimmy Carter.  No one wanted to cut back spending and continued to print money to pay for the Great Society spending causing the record high inflation during the Seventies.  Which added to the high unemployment that gave Jimmy Carter that horrible misery index.  And malaise.  Like Daniel Hannan I’m just old enough to remember how bad it was in the Seventies.  And how great Ronald Reagan’s Morning in America was.  We were better off after 4 years of Ronald Reagan than we were after 4 years of Jimmy Carter.  And the numbers proved it.  Lower tax rates increased tax revenue.  Allowing even greater government spending.  Which was the source of the Reagan deficits.  Not the tax cuts.

In the Falklands, Margaret Thatcher showed the world that a great country doesn’t retreat forever.

And by ending the wretched policy of one-sided detente that had allowed the Soviets to march into Europe, Korea and Afghanistan, she set in train the events that would free hundreds of millions of people from what, in crude mathematical terms, must be reckoned the most murderous ideology humanity has known.

Margaret Thatcher and Ronald Reagan stood together against communism.  While Jimmy Carter eroded America’s military power so much that the Soviets actually put together a nuclear first-strike doctrine.  For unlike the policy of Mutual Assured Destruction (MAD) of previous administrations the Soviets believed they could launch and win a nuclear war against Jimmy Carter.  Reagan and Thatcher rebuilt and deployed nuclear and regular military forces to reduce the threat of a Soviet first-strike.  And made the enemies of Great Britain and the United States fear and respect our military might.  It was peace through strength.  For all free and democratic countries.  Not the detente of Jimmy Carter that encouraged the Soviets to add a nuclear first-strike doctrine.  The beginning of the end of the Cold War began under Thatcher’s and Reagan’s watch.

Why, then, do Lefties loathe her so much..?

No, what Lefties (with honourable exceptions) find hard to forgive is the lady’s very success: the fact that she rescued a country that they had dishonoured and impoverished; that she inherited a Britain that was sclerotic, indebted and declining and left it proud, wealthy and free; that she never lost an election to them.

Their rage, in truth, can never be assuaged, for she reminds them of their own failure.

The same reasons the American Left hates Ronald Reagan.  Because he, too, returned his country to greatness.

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The Poles recognize Ronald Reagan and Pope John Paul II for their Role in Winning the Cold War

Posted by PITHOCRATES - July 14th, 2012

Week in Review

Jimmy Carter believed in detente.  He wanted to work with the communists in the Soviet Union.  Those living in Eastern Europe disagreed.  As they lived under the boot of Soviet oppression.  They wanted their liberty.  They didn’t want to hear Jimmy Carter talk about making nice with the Soviets.  Because they didn’t want to improve their relations with the Soviet Union.  They wanted the Soviet Union the hell out of their countries.  Others agreed with them.  Ronald Reagan.  Margaret Thatcher.  The dynamic duo.  A Polish Pope.  John Paul II.  A Polish union leader.  Lech Walesa.  Leader of the Solidarity movement.  And a great people.  The Poles (see Poles honor Reagan and John Paul II for their role in anti-communist struggle with new statue by Associated Press posted 7/14/2012 on The Washington Post).

Polish officials unveiled a statue of former President Ronald Reagan and Pope John Paul II on Saturday, honoring two men widely credited in this Eastern European country with helping to topple communism 23 years ago…

Reagan and John Paul shared a conviction that communism was a moral evil, not just a bad economic system. And Lech Walesa, founder of the Solidarity movement that led the anti-communist struggle in Poland, has often paid homage to both men and told the AP in a recent interview that he deeply respected Reagan…

Poles widely credit the Polish-born pontiff’s first visit to his homeland after becoming pope as the inspiration for Solidarity’s birth. During a Mass in Warsaw in 1979, he used subtle language to suggest that Poles should try to change their system, a message not lost on the receptive nation. Poles also remember that when the communist regime imposed the martial law crackdown in 1981, rounding up dissidents and imprisoning them, Reagan lit candles at the White House to show his solidarity with the Polish people…

Another member of the organization, Andrzej Michalowski, credited Reagan’s arms race with Moscow with leading to the unraveling of the Soviet Union and its inability to keep controlling Eastern Europe. He said the monument was designed on a small scale so visitors to the park would feel John Paul and Reagan are still with them.

Much to the horror of those on the Left Ronald Reagan did not follow Carter’s policy of detente.  He didn’t want to make nice with the Soviets.  He wanted to defeat the Soviets.  And free people everywhere from the boot of communist oppression.  And he did.  Thanks to John Paul, Lech Walesa and Margaret Thatcher.  The British and the Americans presented the Soviets a fearful military force to ponder.  And supported the poles as they dared to defy the great Soviet bear. 

Few even know this history today.  But back then these were transformative times.  For it was the beginning of the end of the Cold War.  A war we won by not trying to get along with the Soviets.  But by aggressively attacking communism.  Calling the Soviet Union the Evil Empire.  For it was.  As anyone living in Poland during the Cold War will attest to.  There was nothing good or redeeming about communism.  And Carter’s policy of detente only breathed life into a dying corpse.  And delayed the inevitable.  As Lech Walesa knew.  As John Paul knew.  As Ronald Reagan knew.  For it was only a matter of time before communism was left on the ash heap of history.  And thanks to these people that time did come.  The Soviet Union is no more.  And Eastern Europe is now free.

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John Waters ashamed of Britain’s Colonial Past, wants to force the British on the Falkland Islands to become Argentine

Posted by PITHOCRATES - March 3rd, 2012

Week in Review

Once again the Falkland Islands are back in the news.  And the Argentines are calling the UK pig-dog colonialists.  Again.  Why, one could say that this ongoing dispute is just Another Brick in the Wall (see Roger Waters says Falkland Islands are Argentinian in reported comments by Uki Goni posted 2/28/2012 on The Guardian).

“I am as ashamed as I possibly could be of our colonial past,” Waters is reported to have said to TVN journalist Amaro Gómez-Pablos. When asked if the islands are British or Argentinian, Waters reportedly replied: “I think they should be Argentinian.”

Actually, as an American, I’m rather ecstatic about Britain’s colonial past.  As I’m sure the Canadians are (except, perhaps, the Francophile Quebeckers).  And the Australians.  The New Zealanders.  The South Africans.  The Indians.  Sure, we didn’t always see eye to eye but look at us now.  Some of the best places to live in the world were once part of the mighty British Empire.  So even though I’ll never bow to British Royalty, I gotta tip my hat to the British.  Their agricultural advances, representative government and capitalism sure made the world a better place.

And as far as Waters’ opinion on conflict resolution, suffice it to say I’ll listen to him when David Gilmour joins him on tour.

“My view is that certainly it saved Margaret Thatcher’s political career at the time at the cost of a great many Argentine and British lives, which disgusted me then and still does now. I was never a huge fan of Margaret Thatcher,” Waters told the press conference in Chile.

Waters arrived on the heels of the American actor Sean Penn, who sparked controversy two weeks ago when he lambasted Britain for what he termed “ludicrous and archaic colonialism” in the Falklands after meeting with President Kirchner in his role as special ambassador for Haiti.

Saved Margaret Thatcher’s political career?  So the Falklands War was a political diversion?  Funny.  Because it was the Argentines who were suffering under human rights violations under a military junta and economic despair at that time.  Who invaded the Falkland Islands to divert Argentines from their despair.  Thinking the British wouldn’t fight for these islands.  The problem was, though, that those living on the islands were for all intents and purposes British.  And they wanted to remain British.  Which they still do to this day. 

The Falkland Islands were uninhabited when the British first landed there.  They claimed the islands and left.  Then the French came in and did the same.  And built a settlement.  Then the British came back.  Then the French ceded their settlement to the Spanish.  And the Spanish kicked the British out.  Then the Argentines kicked the Spanish out of Argentina.  And claimed all Spanish territory around them.  Including the islands.  Which they took.  For about a decade.  Then the British came back in 1833 and have been there ever since. 

Argentina is as much a colonial power in the Falklands as the British, the French and the Spanish.  Something that Waters and Penn simply overlook.  And the only reason Argentina is interested once again in these islands is because the British have discovered oil deposits off their shores.  Something else Waters and Penn conveniently overlook.

Which just goes to show you when it comes to geopolitics perhaps we shouldn’t listen to actors and musicians.  As good as they are in their respective fields they seem to be a bit too eager to join in on the side of the underdog just to stick it to the big dog.

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A Keynesian has an Austrian Moment

Posted by PITHOCRATES - January 15th, 2012

Week in Review

There are a few schools of economics.  The Keynesian school gain prominence following World War I.  Governments like it because it justifies big government.  And government interventions into the free market to ‘fix’ market failures.  Using the power of central banking and monetary policy.  And fiscal tax and spend polices.  With such interventions they believe they can eliminate or at least lessen the impact of recessions.  Because the architects of these policies believe they are smarter than market forces.

Another prominent economic school is the Austrian school.  Which favors limited government.  Low taxes.  A sound currency.  And where the government doesn’t use the central bank and monetary policy to manipulate currency and interest rates to interfere with market forces.  For they believe, as history shows, such interventions into market forces results in worse and prolonged recessions.

So that’s just a very brief overview of these two schools.  John Maynard Keynes was a Brit.  And very influential in Europe.  Where his policies are still embraced in these social democracies.  But even these devout Keynesians can have a moment of doubt and waiver in their beliefs.  Even chief correspondents in the most esteemed newspapers (see ‘Strangely Austrian’ posted 1/10/2012 on the Ney York Sun).

In any event, Mr. Rachman notes that Dr. Paul has recalled dining with Hayek and being inspired by Ludwig von Mises, “another economist of the Austrian school.” He writes that this explains Dr. Paul’s “otherwise baffling remark” after the Iowa caucus, in which the Texan said: “I’m waiting for the day when we can say we’re all Austrians now.” He calls Dr. Paul the “purest advocate of a powerful conviction on the American right that the US is afflicted by an over-mighty state.” He notes that “Paulite suspicion of central banks that threaten to debase the currency is powerfully echoed in Germany — where the Hayekian right is horrified by the operation of the European Central Bank . . .”

Mr. Rachman doesn’t predict which trend will set the tone for the new age. But he offers this confession: “Under normal conditions I would probably sign up with the social democratic tendency. The Tea Party is not my cup of tea.* [* His erstwhile king, George III, wasn’t all that crazy about it either.]  But I spent the weekend reading newspaper accounts of the ever more incredible figures that may have to be poured into the bail-outs for banks and countries in Europe. Then I turned the page to read of demands for more protectionism and regulation in the EU. For light relief, I then went to see ‘The Iron Lady’ — the new film about Margaret Thatcher. The whole thing has left me feeling strangely Austrian.”

Strangely, indeed. The importance of the column lies in the fact that Mr. Rachman is not just any scrivener. He is the chief foreign affairs commentator for the leading Keynesian newspaper in England. Here he is kvelling over Ron Paul and the Austrians.

The “we’re all Austrians now” line is a play on what Richard Nixon reportedly said when he decoupled the U.S. dollar from gold in 1971, unleashing double-digit interest rates and inflation.  He said, “I am now a Keynesian in economics.”  Which was a play on what Milton Friedman wrote in 1965, “In one sense, we are all Keynesians now; in another, nobody is any longer a Keynesian.”  Dr. Paul is waiting for the day when those in government abandon the failed policies of Keynesian economics and adopt the policies of the Austrian school.

Margaret Thatcher was British prime minister during the Eighties when Ronald Reagan was the U.S. president.  Who were both adherents to the Austrian school of economics.  And who both saw incredible economic growth when they were in office.  By following those Austrian policies.

After listening to Dr. Paul in the U.S. Republican primary race, reading some articles on the financial problems of Europe and the cost of their bailouts, the European Union’s demand for protectionism and regulation to protect their markets and then seeing the film about the Great Margaret Thatcher Mr. Rachman was given pause for thought.  Which often happens when you actually learn Austrian economics.  Because it makes sense.  And there is a lot of economic history proving the success of these policies.  But will it last?  Probably not.  Because Keynesians just like Keynesian economics so much.  Like a religion.  They accept it on faith.  And want to believe.

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After a Series of Central Planning Failures Senator Durbin says what the Economy Needs is more Central Planning

Posted by PITHOCRATES - October 30th, 2011

Week in Review

The great Margaret Thatcher was a limited-government conservative.  She brought the UK back from the abyss of socialist malaise.  Fixed the economy.  Gave the people a life of plenty.  And good times.  The last Soviet leader, Mikhail Gorbachev, visited Margaret Thatcher.  He was impressed.  The people in the UK weren’t hungry.  He asked her how she did it.  How was she able to feed her people?  For in the Soviet Union this was a never ending crisis.  Growing enough food on their collective farms to feed their people.

An odd question for Thatcher.  Or any other capitalist.  Because elected leaders of capitalistic countries don’t feed their people.  The free market economy does.  And it does it very well.  For the Soviets had the breadbasket of Europe within her borders.  The Ukraine.  And the UK was but a tiny island nation.  With barely a fraction of the farmland as the breadbasket of Europe.  Yet the British could feed her people.  And the Soviets could not.  Which just goes to show you that planned economies are all well and good if you want to control and oppress your people.  But they’re abject failures if you want to feed your people.  Still, there are those who still believe in the folly of central planning (see Durbin knocks GOP for not ‘designing the economy’ by Joel Gehrke posted 10/29/2011 on The Washington Examiner).

Despite the demonstrable failure of the bank bailouts, the 2009 stimulus, and the federal loan program that produced the Solyndra scandal, Democrats still believe that Congress should play a major role in shaping the economy — with the help of expert planners, of course.

Senate Majority Whip Dick Durbin, D-Ill., acknowledged as much while offering a misguided rebuke to congressional Republicans. “Simply standing back while trying to design the bumper sticker for the 2012 election instead of designing the economy to put Americans back to work,” Durbin said during an interview with the Chicago Tribune, “is not what the American people are looking for.”

The Democrats took both the House and the Senate in the 2006 midterm elections.  They held that power until the Republicans took back the House in the 2010 midterm elections.  They had 4 years of full legislative control.  And what designing of the economy did they do?  Just the destructive kind.

The housing bubble blew up on their watch.  And the fallout, the subprime mortgage crisis, happened on their watch.  The Great Recession happened on their watch.  The bank bailouts, the stimulus and the federal loan program that produced the Solyndra scandal happened on their watch.  And if that wasn’t enough destruction, they unleashed the job-killing, economy killing, private health care insurance killing Obamacare.  And they wonder why the economy isn’t doing any better.

No, Senator Durbin.  We don’t need any more of your expert planning.  Anymore and I’m afraid you guys will do some damage that not even a Margaret Thatcher can fix.

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Wisconsin Takes a Step Forward, the UK Takes a Step Back

Posted by PITHOCRATES - March 9th, 2011

 A Foul Stench Wafts across the Rheine

Empires come and go.  But one truly transformed the world.  And still is today.  The British Empire.  Their representative government, property rights and economic policies unleashed unimaginable growth and prosperity.  They gave us the Industrial Revolution.  And we’ve never looked back.  Great nations started as British seedlings.  Canada.  Australia.  India.  New Zealand.  To name a few.  And, of course, the United States.

Sadly, the UK strayed in the 20th century.  As many nations did.  Including the US.  Thanks to a foul stench that wafted across the Rheine.  Karl MarxFriedrich Engels.  They wrote a book.  The Communist Manifesto.  And their goal was to replace capitalism with socialism.  And then replace socialism with communism.  The ultimate welfare state.

The British government exploded in the 20th century.  They nationalized industries.  Raised taxes.  And empowered unions to the point that the nation was at their mercy.  If they didn’t get the pay raise they wanted you didn’t have any electricity.  Their strikes were notorious.  People called them the British Disease in the Seventies.  But help was on its way.

Thatcher and Reagan cut Taxes to Economic Prosperity

Margaret Thatcher was prime minister during the Eighties.  And she started turning the UK around.  Like her counterpart did in the US.  Ronald Reagan.  Both cut taxes.  And nearly doubled their tax receipts (see High income tax will cost the country dear by Telegraph View posted 3/9/2011 on the UK’s Telegraph).

Between 1979 and 2009, UK corporation tax rates fell by half, even as the revenue from the tax rose by half – hard evidence that lower taxes encourage economic activity and boost Treasury receipts.

People deride ‘trickle-down’ Reaganomics in the US but it worked.  And it worked in the UK, too.  Because jobs are everything.  If you don’t have jobs your economy goes into the toilet.  If you have jobs your economy soars.  It just doesn’t get simpler than that.  And how do you create jobs?  You give people a reason to be brilliant.  Give entrepreneurs an incentive to create something.  Let businesses be profitable and they will take every opportunity to grow their businesses.  To be even more profitable.  All the while creating jobs.  Every step of the way.  The more they grow the more jobs they create.  And the better life gets for everyone.

Of course, remove that incentive and it’s the opposite.  If you raise taxes you reduce profits.  And that removes incentive.  Well, they are raising taxes again in the UK.  And what will the genius entrepreneurs do?  Well, what would you do?

Behavioural changes prompted by the higher rate – with entrepreneurs departing for more benign tax regimes or devising ways of avoiding the new tax – are set to flatten economic growth and lead to a collapse in tax revenues. The think tank estimates that the cost to the Treasury over a decade could be as much as £350 billion… Why should wealth-creators stay here when almost two thirds of their income is taken from them? The answer is that they won’t.

History has shown that higher tax rates rarely bring in the money the government expects.  While lower tax rates bring in more money than any of the naysayers ever dreamed.  So why, then, do they keep raising taxes?  Politics.

The Deed is Done in Wisconsin

Big Government needs supporters.  With the wane of private sector unionization, it’s getting harder and harder to get people to support Big Government.  Because people who work and enjoy life have no need for government help.  So they need to find people who do.  Or create them.

Enter the public sector unions.  These people beg for high taxes.  Because they are paid with tax dollars.  So the more people in the public sector, the more people there are to support big government spending.  It’s a little of the old you scratch my back and I’ll scratch yours.  And to sweeten the deal, public sector workers not only get pretty decent pay, they get outrageous benefits.  All paid for courtesy of the taxpayer.

And this is what is at issue in Wisconsin.  The union was ready to cave on everything but the collective bargaining.  Because that’s how they pass the full cost of their benefits onto the taxpayer.  Without the taxpayer having any say in the matter.  Until now, that is (see G.O.P. Tactic Ends Stalemate in Wisconsin Union Fight by Monica Davey posted 3/9/2011 on The New York Times).

The bill makes significant changes to most public sector unions, limiting collective bargaining to matters of wages only and limiting raises to the Consumer Price Index unless the public approves higher raises in a referendum. It requires most unions to hold votes annually to determine whether most workers still wish to be members. And it ends the state’s collection of union dues from paychecks.

So now if they want a raise larger than the Consumer Price Index (as a lot of raises are determined in the private sector for COLA raises), they have to ask the taxpayer to approve the raise.  And you can see why they are against this.  They want to keep getting big raises without the people paying them having any say in the manner.

And the whole choice thing about staying in the union?  And making people write checks for their union dues?  Why, if people do that, some are not going to stay in the union.  Not all union members vote Democrat.  But nearly all union dues go to Democrat candidates.  So, of course, the unions don’t want any of these changes to come to pass.  Or government.  Because the little arrangement they had was a nice way to dump bushels of taxpayers’ money into Democrat pockets.  Often against their will.  Or without their knowledge.

Public Sector Union – A Vehicle to Steal Money from the Private Sector

Everyone knows what we need for economic prosperity.  Thatcher and Reagan showed how to do it in the Eighties.  And they turned around nations that were in a pretty sorry state.  Tax cuts spurred that economic activity.  And filled government coffers.  However, Thatcher cured the British Disease.  And Reagan fired the air traffic controllers.  They stood up to the unions.  And that choked off a lot of money funneled (i.e., laundered) to the opposition parties.

And this is what the Left fears in Wisconsin.  That responsible government beholden to the taxpayer may waft out from Wisconsin and infect other states.  Thus turning off the great spigot of coerced political contributions.

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Government Bureaucrats are bad for your Health in the UK and in the US

Posted by PITHOCRATES - March 2nd, 2011

 To be Great be like Margaret Thatcher and Ronald Reagan

People have said that the British and the Americans are one people separated by a common language.  We’re very similar.  Even if we speak the Queen’s English a bit differently.  It turns out that’s not the only thing we share.  We also bend over backwards to compare ourselves with great conservatives from our past (see Look at what the Conservatives are achieving by Michael Fallon, MP for Sevenoaks and deputy chairman of the Conservative Party, posted 3/2/2011 on the UK’s Telegraph).

Yes, Thatcher abolished the dock labour scheme – 10 years after she was elected. Yes, she tackled trade union power: they finally lost their closed shop in 1988, nine years after she started. Yes, she set up grant-maintained schools, independent of local authorities. But when we left office, they comprised less than 5 per cent of the country’s total.

David Cameron’s Government has moved further and faster. Take the public finances: public borrowing, cyclically adjusted, will be 0.3 per cent of GDP by 2015, well below the 2.6 per cent it was in 1990, and the budget will be back in surplus. Corporation tax was 34 per cent when Thatcher left office; by 2015 it will be 24 per cent. Small business tax, 25 per cent in1990, will have fallen to 20 per cent.

Not only is David Cameron Thatcher-like, he’s even out ‘Thatchered’ her.  This speaks volumes about the greatness of Margaret Thatcher.  In America, it’s the other half of that dynamic duo.  Ronald Reagan.  Come election time, every candidate is trying to show how Ronald Reagan he or she is.  Even the Democrats.  Even Barak Obama as his poll numbers plunge.

For a first-term prime minister leading an entirely novel coalition, the essential tasks might be enough: growing the economy; weaning it off its over-reliance on public spending, financial services and an unsustainable property boom; and pulling our finances back from the brink over which Greece and Ireland plunged.

Yet far more significant is the quiet revolution that is turning government inside out – away from Whitehall and targets and regional authorities and back to councils, GPs, head teachers, police commanders, community groups and charities. Ending the state monopoly in almost all public services, encouraging new providers, ensuring competition and choice – these are the most radical reforms since the Attlee government.

And Obama couldn’t be any more un-Ronald Reagan-like if he tried.  He’s trying to take America in the opposite direction that David Cameron is trying to take the UK.  Cameron is trying to decentralize while Obama is trying to centralize.  Especially health care.

Poor Quality, High Cost and Rationing in the National Health Service

The National Health Service in the UK has high costs and quality concerns.  The costs have been addressed in the past by rationing services.  The quality concerns have been addressed by layers of bureaucracy that have often been the original cause of the quality concern.

The problem with the NHS is size.  It’s a behemoth.  And because of that, it has layers of bureaucracy.  Which results in bureaucrats making decisions for patients instead of doctors.  They’re trying to change all this by grouping together and empowering local general practitioners (GPs) into consortia (see Hospitals shake-up essential, says King’s Fund by Nick Triggle posted 3/2/2011 on the UK’s BBC).

The government has protected the NHS budget by giving it small above-inflation budget rises over the next four years.

But the report said it was still entering a “cold climate” because demands and costs were outstripping the settlement.

It said without change there could be a “downward” spiral of falling income, growing deficit and declining quality.

Will this fix all the woes of the NHS?

Scandals such as Mid Staffordshire, where an official report found hundreds of patients died needlessly because of poor care, could not be ruled out.

Probably not.  But it’s a step in the right direction.  For the patients, at least.

A Department of Health spokesman said GP consortia would strengthen the ability of the NHS to make the right decisions.

“We urgently need to modernise the NHS – that is why our plans include many measures to make services more responsive to patients and to consistently drive up quality.”

The key to good health care has always been the doctor patient relationship.  The more people that get in between the doctor and the patient the poorer the health care gets.  Because the focus shifts from quality to cost efficiency.

This is a step in the right direction, but it’s still a heavy bureaucracy.  There is another way to ensure quality, though.  Competition.  When my dad had his first heart attack the paramedics gave us a choice of two hospitals they could take him to.  One had a bad reputation.  The other didn’t.  We chose the one with the good reputation. 

That other hospital continued to do poorly for years and eventually had financial troubles.  Then a big hospital bought it and brought it up to their standards.  And many years later, both of these hospitals are now providing quality care.  You see, competition makes everything better.  Even health care.

Using High-Fructose Corn Syrup instead of Sugar making us Obese?

The British and Americans have something else in common.  We like our sweets.  While one of us loses their teeth to this indulgence, the other has gotten obese (see The Fight Over High-Fructose Corn Syrup by Sharon Begley posted 2/28/2011 on The Daily Beast).

Now a stream of studies shows that sugar and corn sweeteners differ in important ways, including how they affect the appetite-control centers in the brain. That suggests that [High-Fructose Corn Syrup] HFCS may be partly responsible for the obesity epidemic…

The new study is too small to decide the question—it included only nine people—but it fits with other research on both humans and lab animals.  Scientists led by Jonathan Purnell of Oregon Health & Science University gave fructose, glucose, or salt water to volunteers and then measured brain activity with functional MRI scans. Over several regions of the cortex, activity increased in people given glucose but decreased in those given fructose, the scientists will report in Diabetes, Obesity and Metabolism. Cortical regions that responded differently included the orbital prefrontal, a key player in the reward circuit, and regions that process the pleasurable effects of food. “It’s evidence that fructose and glucose elicit opposite responses in the human brain,” says Purnell…

Rats eating equal calories from the two gained significantly more weight on HFCS than on table sugar, scientists led by Bart Hoebel of Princeton reported in 2010. The HFCS-fed animals also had increases in abdominal fat and triglycerides. And in a 2010 review, scientists at the University of California, Davis, noted that, in people, fructose added to abdominal fat and other measures “associated with increased risk for cardiovascular disease and type 2 diabetes.” HFCS is not the sole culprit in obesity. But the body and brain don’t seem to treat it as an innocent bystander, either.

Great Britain’s early Caribbean colonial possessions sent shiploads of cane sugar back to England for their tea.  And to make their chocolates.  They so liked their sweets.  And, as a consequence of this sugary indulgence, their bad teeth are legendary in the world of dental hygiene.  George Harrison even wrote a song about a fellow Brit with a chocolate addiction.  Eric Clapton.  Who he warned that he’ll have to have all his teeth pulled out after the Savoy Truffle (a song on the BeatlesWhite Album).

So the British are the butt of many a dental hygiene joke.  But they aren’t obese.  Like the Americans are.  Who also have a sweet tooth.  But we don’t eat sugar.  We eat HFCS.  Why?  Not because we prefer it.  But because of our government.  Big Corn lobbies Congress for sugar tariffs.  And Congress delivers.  Which makes imported sugar more expensive than HFCS.  So we eat HFCS not by choice.  But by government fiat.  And it now appears it may be part of the cause for the explosion in obesity and diabetes in America.  How about that? 

Yet another reason to keep government bureaucrats out of our health care system.

Conservatism Works every time it’s Tried

Bureaucrats are good at shuffling paper.  They aren’t good research scientists.  Or doctors.  So it’s best to keep them shuffling paper.  And let the professionals determine what we should eat.  What we probably shouldn’t eat.  And take care of us when we get sick.  I’m sure we’d all live a longer and healthier life if we do.

The dynamic duo of Margaret Thatcher and Ronald Reagan knew this.  Their conservatism worked.  It made the UK and the US great again.  And this is why everyone bends over backwards to show how much they are like these great conservatives from our past.  Even those who couldn’t be more opposed to their philosophy.  Because they know that conservatism works and has worked every time it’s been tried.  And they’re willing to admit that (a little) at election time.  Even if they’re lying through their teeth.  That is, if they haven’t been pulled out yet after the Savoy Truffle.

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Save the Planet? Or Save the People?

Posted by PITHOCRATES - November 10th, 2010

Margaret Thatcher, Ronald Reagan and Pope John Paul II Defeated Communism

John Bull once ruled the world.  The British Empire circled the globe.  Literally.  The sun never set on the British Empire.  She was feared and respected.  And envied.  Her representative government set the standard for other liberty-seeking people.  She was an economic powerhouse and a military superpower.  Which she used to give us great things.  The Industrial Revolution.  And the Pax Britannica.  Nearly a century of peace.  John Bull was invincible in the 19th century.  Then a foul wind wafted across the Rhine.  And Great Britain would never be the same again.

Of course, it was Marxism that broke wind across Western Europe and Great Britain.  And it changed Great Britain.  Instead of continuing greatness there was class struggle.   Capitalism was under attack.  Government grew big.  To protect the industrial proletariat from the bourgeoisie.  Unionism grew and their recurring strikes were called the British disease.  Soon the industrial proletariat was living like rich capitalists while the masses went without.  They had no choice.  Big Government was taxing them to death to pay British labor.  Then along came Margaret Thatcher who brought back some sense to the nation.

 Thatcher turned Great Britain around.  Then she and Ronald Reagan took on the Soviet Union with an able assist from Pope John Paul II.  The Polish pontiff helped to cause quite a bit of trouble in Poland.  Soon Poland would be free.  And within the same decade, the Berlin Wall would fall.  As did the Soviet Union.  Margaret Thatcher, Ronald Reagan and Pope John Paul II defeated communism.  John Bull was back.  Standing beside Uncle Sam.  But now a new foul stench is in the air.  This time coming from East Anglia.

University of East Anglia will Trade People for the Planet

Big Government does not give up easily.  It wants to tell us how best to live our lives.  And at the University of East Anglia, they’re telling us that we, mankind, are killing the planet.  They had a lot of facts and figures.  Leaked emails, though, showed that their data was ‘massaged’ to support their theory on global warming. 

They insist man is destroying the environment.  They point to receding glaciers as evidence.  Of course, those glaciers once nearly reached the equator.  And when they moved some 2,000 miles, man wasn’t using fossil fuels.  So it makes one believe the leaked emails more than their theory on global warming.  But it doesn’t stop them from trying to tell us what’s best for us.  Or, rather, what’s best for the planet.  Which is an important distinction.  Because, in their world, it’s one or the other. 

Town halls and city councils across Great Britain are turning off their street lights.  A couple of reasons are given.  One, their Big Government spending is bankrupting them.  Another is to save the planet (see New dark age on our streets: Up to 75 per cent of councils are dimming the lights to save money by Laura Caroe and David Derbyshire posted on the Daily Mail).

Up to three-quarters of councils are planning to turn off street lamps or dim the lights in an attempt to save money and meet climate change targets, a poll has found.

Well, that’s sensible, isn’t it?  Cut government spending.  And save the environment.

But police fear that darkened streets will act as a haven for burglars, muggers and vandals – and motoring experts warn that there may be more accidents on the roads.

And this apparently is a trade environmentalists are willing to make.  People for the planet.  After all, it’s the people that are destroying the planet in the first place.  So what if we lose some of them along the way to save the planet?  It’s only fair.  At least that’s what they no doubt think at the University of East Anglia.

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