Full Version: Is GW Bush the first Thatcherite US President?
Many US domestic critics of the current incumbent of the White House criticise Bush for presiding over the exporting of manufacturing (and, to a lesser extent, service) jobs, almost as policy. The idea is that the jobs that can be exported are not internationally competitive - if they were, they wouldn't need to be exported. This is not happening across the board, just in industries that are less politically important to the administration (or that are politically important to the opposition - for example, heavily unionised industries that give lots of money to the Democrats).
This echoes one of the main planks of Thatcherism in the UK of the 1980s - allow inefficient heavy industries, with strong union and cultural links to the Labour opposition, to go to the wall. Their products (e.g coal, steel) can be imported more cheaply from abroad, so the economy as a whole shows little appreciable loss except a trade imbalance. And the political opposition loses a lot of money in the short term, and a lot of its political base in the medium to long term.
While this is happening, adopt fiscal and macroeconomic policies that allow the defecit to balloon, give lots of big tax cuts to the richest sections of society (who are most likely your voters anyway) with the idea that their wealth will "trickle down" to the rest of the populace through investment. If unemployment and recession indicators go up, well, that's just an example of how "if it isn't hurting, it isn't working".
Clearly, this is not a 100% accurate analogy, since the American economy as a whole wasn't the basket case that the UK was in 1979. And Bush hasn't picked an internal fight as opbvious as the Miner's Strike. (Though maybe he hoped that the Iraq War would be his Falklands?)
But does anyone else see the parallels?
Debate question:
Is the Bush Administration mirroring the 80s Thatcher government?
If so, how far does the analogy stretch? Why hasn't anyone noticed before now, given the favourable way Thatcher is viewed in the USA? Why didn't Reagan do the same thing when he had the chance, given how close he was politically to Thatcher?
Why now?
If there is no link at all, why do you think this?
PS - Don't expect any Brits to be entirely objective on the subject of Mrs Thatcher, including me. She is at least as divisive a figure in UK politics as Bill Clinton is inside the USA - and he is respected by most people outside the US the same way Thatcher is outside the UK. We are too close to her to be able to be very objective about her - she is either completely wonderful or completely terrible, the truth being somewhere in between.
This echoes one of the main planks of Thatcherism in the UK of the 1980s - allow inefficient heavy industries, with strong union and cultural links to the Labour opposition, to go to the wall. Their products (e.g coal, steel) can be imported more cheaply from abroad, so the economy as a whole shows little appreciable loss except a trade imbalance. And the political opposition loses a lot of money in the short term, and a lot of its political base in the medium to long term.
While this is happening, adopt fiscal and macroeconomic policies that allow the defecit to balloon, give lots of big tax cuts to the richest sections of society (who are most likely your voters anyway) with the idea that their wealth will "trickle down" to the rest of the populace through investment. If unemployment and recession indicators go up, well, that's just an example of how "if it isn't hurting, it isn't working".
Clearly, this is not a 100% accurate analogy, since the American economy as a whole wasn't the basket case that the UK was in 1979. And Bush hasn't picked an internal fight as opbvious as the Miner's Strike. (Though maybe he hoped that the Iraq War would be his Falklands?)
But does anyone else see the parallels?
Debate question:
Is the Bush Administration mirroring the 80s Thatcher government?
If so, how far does the analogy stretch? Why hasn't anyone noticed before now, given the favourable way Thatcher is viewed in the USA? Why didn't Reagan do the same thing when he had the chance, given how close he was politically to Thatcher?
Why now?
If there is no link at all, why do you think this?
PS - Don't expect any Brits to be entirely objective on the subject of Mrs Thatcher, including me. She is at least as divisive a figure in UK politics as Bill Clinton is inside the USA - and he is respected by most people outside the US the same way Thatcher is outside the UK. We are too close to her to be able to be very objective about her - she is either completely wonderful or completely terrible, the truth being somewhere in between.
Is the Bush Administration mirroring the 80s Thatcher government? If there is no link at all, why do you think this?
I don't think so. One of the most heavily unionized industries in the US is the steel industry. The Bush administration used protectionist policies to prop up the steel industry despite this. The whole thing was unpopular with most free traders (which includes many Conservatives).
I don't see the Bush administration overly favoring one industry while snubbing another. It has certainly propped up the airline industry, which is understandable, but I haven't seen any evidence that it did so for political gain.
What kind of statement is this? Since you aren't in the US, I guess you don't realize what an "across the board" tax cut is. We'll have to give you some leeway there. Every single tax payer saw their tax burden reduced. It was not "targeted" at the rich, although the rich got a higher amount because they pay more. "If it isn't hurting, it isn't working"?? I have never heard this expression. Perhaps I need a refresher in "Working Class-hating for Evil Conservatives, 101"?
I don't think so. One of the most heavily unionized industries in the US is the steel industry. The Bush administration used protectionist policies to prop up the steel industry despite this. The whole thing was unpopular with most free traders (which includes many Conservatives).
I don't see the Bush administration overly favoring one industry while snubbing another. It has certainly propped up the airline industry, which is understandable, but I haven't seen any evidence that it did so for political gain.
QUOTE(Julian)
While this is happening, adopt fiscal and macroeconomic policies that allow the defecit to balloon, give lots of big tax cuts to the richest sections of society (who are most likely your voters anyway) with the idea that their wealth will "trickle down" to the rest of the populace through investment. If unemployment and recession indicators go up, well, that's just an example of how "if it isn't hurting, it isn't working".
What kind of statement is this? Since you aren't in the US, I guess you don't realize what an "across the board" tax cut is. We'll have to give you some leeway there. Every single tax payer saw their tax burden reduced. It was not "targeted" at the rich, although the rich got a higher amount because they pay more. "If it isn't hurting, it isn't working"?? I have never heard this expression. Perhaps I need a refresher in "Working Class-hating for Evil Conservatives, 101"?
QUOTE(Amlord @ Aug 3 2004, 02:13 PM)
Is the Bush Administration mirroring the 80s Thatcher government? If there is no link at all, why do you think this?
I don't think so. One of the most heavily unionized industries in the US is the steel industry. The Bush administration used protectionist policies to prop up the steel industry despite this. The whole thing was unpopular with most free traders (which includes many Conservatives).
I don't think so. One of the most heavily unionized industries in the US is the steel industry. The Bush administration used protectionist policies to prop up the steel industry despite this. The whole thing was unpopular with most free traders (which includes many Conservatives).
As was the British helicopter industry, which was propped up by the Thatcher government despite the opposition of othe conservatives who preferred a free market solution. Which is eventually what happened anyway, and the British army now get most of it's helicopters from Bell & Sikorsky.
QUOTE
I don't see the Bush administration overly favoring one industry while snubbing another. It has certainly propped up the airline industry, which is understandable, but I haven't seen any evidence that it did so for political gain.
Meanwhile other industries were either actively fought against - which was possible in the UK as they were nationalised and so under direct government control - or simply allowed to be subjected to market forces. In this latter situation, of course, the good ones succeeded and the poor ones failed. In the absence of any large-scale public ownership in the USA, this last case is the only possible comparison, and the current administration clearly believes that there is no political or economic advantage to be gained by protecting the jobs in furniture making or consumer electronics that many people have characterised as being "exported". Yet they clearly DO think there is political or economic benefit in protecting airlines, as you say. What's the difference? The there strategic benefit or a security interest in who owns the planes that shuttle people around inside the USA? What harm would there be if BA, Virgin, El-Al or KLM owned them?
QUOTE
QUOTE(Julian)
While this is happening, adopt fiscal and macroeconomic policies that allow the defecit to balloon, give lots of big tax cuts to the richest sections of society (who are most likely your voters anyway) with the idea that their wealth will "trickle down" to the rest of the populace through investment. If unemployment and recession indicators go up, well, that's just an example of how "if it isn't hurting, it isn't working".
What kind of statement is this? Since you aren't in the US, I guess you don't realize what an "across the board" tax cut is. We'll have to give you some leeway there. Every single tax payer saw their tax burden reduced. It was not "targeted" at the rich, although the rich got a higher amount because they pay more.
Please avoid the temptation to patronise - I was around in the Thatcher years here, and the tax cuts she introduced were indeed "across the board", with a skew towards the rich because they were paying the most. The lower rates of income tax fell from 28% to 25%, and the highest rate went down from 98% (!! - that's just silly, isn't it??
) to 40%. The phrase "trickle down" was used by the Thatcher government at the time, and was intended to express the current US administration idea that allowing wealthy people to keep more of their own money would mean they could invest in back into the economy and creat emore jobs and more wealth and would sort of spread it around.
The main thing to realise about trickle down economics under the Thatcher & Major administrations is that it did not work, so I wondered if anyone knew why it would be different under Bush in the USA?
QUOTE
"If it isn't hurting, it isn't working"?? I have never heard this expression. Perhaps I need a refresher in "Working Class-hating for Evil Conservatives, 101"?
No, you just need a refresher in UK conservative politics of the 1980s. This isn't something that was made up by bitter and twisted lefties - it was used by the Tory government during the first of their (many) recessions.
They had come in on a "Labour isn't working" platform, criticising their predecessor's record on unemployment. At that time, it was seen as shocking that there were a million unemployed. Within three years of the Thatcher takeover, unemployment had gone up to just over three million and the country was in a deep economic recession. The official line was "if it's not hurting, it's not working", implying that this was some kind of medicine that the country had to take before it could get better.
Up to a point, they were right.
But I think you misunderstand what I'm getting at. While overall I'm hostile to Thatcher for the manner in which she did many of the things she did (and latterly, most of the things she did full stop - only a Prime Minister completely out of touch with reality, never mind the electorate, could have put forward the Poll Tax - and I completely disagree with her assertion that "there is no such thing as society".), I think some of the underlying principles were sound. Particularly during her first two terms, which used the policies that I see parallels with in the Bush II administration.
I'm not really saying that, if the Bush administration are implementing some Thatcherite ideas, they are wrong to be doing so - it really depends which idea they are using.
What I am asking is, is the Bush administration using Thatcherite ideas, is this the first time they have been used in the USA (I'll give you a clue - it isn't; the California energy industry reforms was an attempt to mirror Thatcherite utility policy) and why is NOW the right time for a federal administration to implement them?
Is free market capitalism "Thatcherite"?
Are tax cuts "Thatcherite"?
Is smaller government "Thatcherite"?
Thatcher espoused free market neoclassic economics: lower taxes, smaller government, privatization of services. Does Bush use this same formula for economic policy?
To some degree, yes, but to most Conservatives in the US the answer would be no.
Bush has not allowed the free market to dictate the airline industry or the steel industry or the lumber industry or the agriculture industry. He has expanded the government, rather than shrink it. He has poured billions into the education system on the federal level (most Conservatives believe that education is a State or local issue).
Even Conservatives Are Wondering: Is Bush One of Us?
Big Government Conservatism Alienates Libertarians
No, I don't think Bush is a Thatcherite when it comes to economics if that means a Friedman type. He is no liberal, but he has clearly shown himself to be a "Big Government Conservative".
Are tax cuts "Thatcherite"?
Is smaller government "Thatcherite"?
Thatcher espoused free market neoclassic economics: lower taxes, smaller government, privatization of services. Does Bush use this same formula for economic policy?
To some degree, yes, but to most Conservatives in the US the answer would be no.
Bush has not allowed the free market to dictate the airline industry or the steel industry or the lumber industry or the agriculture industry. He has expanded the government, rather than shrink it. He has poured billions into the education system on the federal level (most Conservatives believe that education is a State or local issue).
Even Conservatives Are Wondering: Is Bush One of Us?
QUOTE
"Historically, conservatism in the United States has meant support for small government, balanced budgets, fiscal prudence and great skepticism about overseas adventures," notes Clyde Prestowitz, a former Reagan Administration official who back in the 1960s was among the young Republicans supporting Arizona Senator Barry Goldwater, a conservative standard-bearer. "What I see now is an Administration that's not for any of these things."
While there are plenty of Republicans who would take issue with Prestowitz's definition of the term, a growing number of conservative thinkers and policy-makers have begun to echo this view, as thumbing through the pages of the conservative press makes clear. Hungry for hard-hitting criticism of the Iraq war? You're as likely to find it these days in publications like The National Interest, a conservative foreign affairs quarterly, and the recently launched American Conservative as in publications on the left. Want a rundown on the billions in government subsidies that the Bush Administration has lavished on corporations even as it claims to champion laissez-faire economics? Look no further than the website of the libertarian Cato Institute, which bristles with such information. How about sober analyses of the multibillion-dollar budget deficits the Administration has overseen? There's no better source than the staid, conservative business press.
While there are plenty of Republicans who would take issue with Prestowitz's definition of the term, a growing number of conservative thinkers and policy-makers have begun to echo this view, as thumbing through the pages of the conservative press makes clear. Hungry for hard-hitting criticism of the Iraq war? You're as likely to find it these days in publications like The National Interest, a conservative foreign affairs quarterly, and the recently launched American Conservative as in publications on the left. Want a rundown on the billions in government subsidies that the Bush Administration has lavished on corporations even as it claims to champion laissez-faire economics? Look no further than the website of the libertarian Cato Institute, which bristles with such information. How about sober analyses of the multibillion-dollar budget deficits the Administration has overseen? There's no better source than the staid, conservative business press.
Big Government Conservatism Alienates Libertarians
QUOTE
But the sad fact is that Republicans have in recent years been awful on size-of-government issues. Worse, the conservative movement seems to have lost interest in the subject. The major conservative periodicals no longer devote as much space to the need to shrink government as they once did. Conservative policy wonks don’t seriously urge Republicans to scale back the scope of federal authority. David Frum, in his excellent book Dead Right, detailed how leading conservative intellectuals and politicians have been AWOL in the pursuit of smaller government and explained that the welfare state is a major cause of the right’s main economic and cultural concerns. Since returning to conservative journalism after leaving the Bush administration, he has mostly focused on other topics.
George W. Bush, while in many respects more conservative than his father, was never partial to the kind of anti-statist rhetoric used by Ronald Reagan. The substance of his policies has not been much different. He deserves credit for pushing tax cuts through a recalcitrant Congress, lowering marginal income tax rates twice, but he has done little to restrain federal spending even after accounting for increases in defense and legitimately homeland security-related outlays. As the Cato Institute’s Veronique de Rugy has written, the current data shows federal spending rising 13.5 percent in the first three years of the Bush administration, with non-defense discretionary spending going up 18 percent. These are bigger spending boosts than during Bill Clinton’s first three years in office.
Rather than eliminate any major federal agency, we have added a new Cabinet-level department. The education bill formulated with Ted Kennedy’s help increases rather than decreases the federal role in education. Foreign aid spending is up. Bush approved new tariffs on steel and softwood lumber, and signed a bloated farm bill that recklessly increases the subsidies paid by taxpayers and has negative trade consequences. He also signed the McCain-Feingold restrictions on political speech into law. The addition of a new prescription drug benefit to the already struggling Medicare program may be the next policy move to enlarge the distance between libertarians and Bush Republicans into a yawning chasm.
George W. Bush, while in many respects more conservative than his father, was never partial to the kind of anti-statist rhetoric used by Ronald Reagan. The substance of his policies has not been much different. He deserves credit for pushing tax cuts through a recalcitrant Congress, lowering marginal income tax rates twice, but he has done little to restrain federal spending even after accounting for increases in defense and legitimately homeland security-related outlays. As the Cato Institute’s Veronique de Rugy has written, the current data shows federal spending rising 13.5 percent in the first three years of the Bush administration, with non-defense discretionary spending going up 18 percent. These are bigger spending boosts than during Bill Clinton’s first three years in office.
Rather than eliminate any major federal agency, we have added a new Cabinet-level department. The education bill formulated with Ted Kennedy’s help increases rather than decreases the federal role in education. Foreign aid spending is up. Bush approved new tariffs on steel and softwood lumber, and signed a bloated farm bill that recklessly increases the subsidies paid by taxpayers and has negative trade consequences. He also signed the McCain-Feingold restrictions on political speech into law. The addition of a new prescription drug benefit to the already struggling Medicare program may be the next policy move to enlarge the distance between libertarians and Bush Republicans into a yawning chasm.
No, I don't think Bush is a Thatcherite when it comes to economics if that means a Friedman type. He is no liberal, but he has clearly shown himself to be a "Big Government Conservative".
QUOTE(Amlord @ Aug 4 2004, 02:42 PM)
Is free market capitalism "Thatcherite"?
Are tax cuts "Thatcherite"?
Is smaller government "Thatcherite"?
Thatcher espoused free market neoclassic economics: lower taxes, smaller government, privatization of services. Does Bush use this same formula for economic policy?
To some degree, yes, but to most Conservatives in the US the answer would be no.
Are tax cuts "Thatcherite"?
Is smaller government "Thatcherite"?
Thatcher espoused free market neoclassic economics: lower taxes, smaller government, privatization of services. Does Bush use this same formula for economic policy?
To some degree, yes, but to most Conservatives in the US the answer would be no.
She certainly espoused them, but she didn't really implement them.
Her application of free markets and privatisation was selective, the selection criteria being more about political expediency than economic desirability.
For example, tax cuts are neoclassical economics when coupled to the small-state stuff you cite. However, the Thatcher government (uniquely in recent British history) had huge new revenues from North Sea Oil which was frittered away on the social security bill for the three million unemployed, rather than invested in infrastructure or the like. It was also frittered away on the tax cuts, which also had the effect of creating an unsustainable boom that led to a sharp bust immediately afterwards. And all the way through, the Thatcher government ran a large defecit.
(as a side not, it was largely in response to this that the current Chancellor, Gordon Brown, came up with his (widely admired but increasingly fragile) "Golden Rule" of not borrowing to finance current expenditure but only capital investment).
This was forgivable, or perhaps even necessary, the first time around. Twice starts to look careless. Three times, however, and you have to wonder if they aren't doing it out of spite.
As for smaller government - well, yes, she did initially pare things back from 1970s excesses. But then stopped. And then slowly started to increase the size of govenrment again.
She was no libertarian either. Can we say that the size of the prison population is an indicator of libertarianism, in inverse proportion? The relationship is not linear, for sure, but by and large, a libertarian state leaves the people alone more, which while it expects more repsonsibility, has a more permissive attitude to what is and is not legal. It is fair to say that one migth expect to see prison numbers fall under a libertarian government, yes? Well, under Thatcher (continuing through Major and Blair, with no sign of a peak yet) prison populations rose and rose after a dip in the 60s and 70s. The Thatcher government had a distinctly authoritarian edge (And authoritarian is the antonym for libertarian in my dictionary).
I just can't help but think that, personality aside, some of the things that the Bush government is doing echo the things Thatcher did more than any other US government, including Reagan or Bush I. As I've said, I don't think there is a direct parallel, but the echo seems deafening from where I sit.
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