Monday, April 8, 2013

Margaret Thatcher and the 'Tina' Factor

Earlier today we wrote about the recommended reasons for investing in the stock market and referred to the nickname 'Tina.' {See "Stocks for the Long Run ... The 'Tina' Factor and Financial Repression.'"}

In a different context, the 'Tina' factor was what British Prime Minister Margaret Thatcher was referring to when she declared her unwavering belief that 'there is no alternative' to a free market system for a free and prosperous self governing people.

The "Iron Lady" was one of a kind and was steadfastly opposed to socialism, communism and big government while steadfastly believing in the power of individual freedoms and responsibilities, free markets and self reliance.

Rare among politicians, she said what she meant and meant what she said.

The editorial Not for Turning is subtitled 'The woman who saved Britain with a message of freedom:'

"In that dreary winter of 1979, the piles of uncollected trash in London's Finsbury Park seemed to stretch for miles. The garbagemen were on strike. So too, at one time or another, were hospital workers, ambulance drivers, truck drivers, railwaymen. Also gravediggers: In Liverpool, corpses had to be warehoused as they awaited burial—yet another long queue that socialist Britain had arranged for its patient masses.

This was the "Winter of Discontent," when Great Britain came about as close to economic collapse as at nearly any point in its peacetime history, and it was the country Margaret Thatcher inherited when, on May 3, she defeated the Labour government of James Callaghan to become Prime Minister—the first woman in the office and 49th in a line that includes some of the greatest figures of Western civilization: Winston Churchill, Benjamin Disraeli, the Duke of Wellington, William Pitt the Younger.


Thatcher died in London Monday, at age 87, having earned her place among the greats. This is not simply because she revived Britain's economy, though that was no mean achievement. Nor is it because she held office longer than any of her predecessors, though this also testifies to her political skill. She achieved greatness because she articulated a set of vital ideas about economic freedom, national self-respect and personal virtue, sold them to a skeptical public and then demonstrated their efficacy.

Consider economic policy. Britain in 1979 had a double-digit inflation rate, a top income tax rate of 83% and rising unemployment. Public expenditures accounted for 42.5% of GDP. There were price, dividend, currency and wage controls, although the last of these were flouted by trade unions on whose support the Labour government depended.

Margaret Thatcher, 1984
The government accounted for about 30% of the work force. The state controlled most major industries: . . . . What was left of a private economy was smothered in red tape.

Most British policy makers of the time had no real grasp of economics: no idea what caused inflation; no idea how to run state-owned enterprises (much less that government shouldn't run businesses at all); no idea—beyond increasing civil-service rolls—how to create jobs. Worse, the cluelessness was bipartisan. . . .

Thatcher was different, an "instinctive conservative" whose economic philosophy drew from her father's observations of stocking a grocery. Her memoir recalls her youthful wonder at "The great complex romance of international trade which recruited people from all over the world to ensure that a family in Grantham could have on its table rice from India, coffee from Kenya, sugar from the West Indies." She had also, with her cabinet colleague Keith Joseph, spent years transforming those instincts into practical theories for governance.

And so it went for the next 11 years, as Thatcher and her government stopped printing excess money to kill inflation, cut marginal tax rates to unleash private incentives, privatized public housing so the poor could own their own homes, did away with currency, price and wage controls to eliminate the distortions they imposed on the economy, curbed runaway spending and sold off one state asset after another so they might be competently and profitably managed.

All this was done despite sharp short-term economic shocks and in the teeth of immense resistance, particularly from trade unions. In 1984, the coal miners union of Arthur Scargill went on strike for nearly a year. Similar strikes had brought past governments to their knees, but Thatcher, in a feat of immense courage and political skill, remained immovable and eventually won public opinion to her side. As she had famously said of herself a few years earlier (without being believed), "the lady is not for turning."

But staring down labor unions was the least of it. In March 1979, a faction of the Irish Republican Army murdered Airey Neave, her campaign manager. Eleven years later, they murdered Ian Gow, her former private secretary. There would be IRA outrages at the Harrods department store, in London's Hyde and Regent's Parks, in Enniskillen, Northern Ireland, and, in October 1984, at the Grand Hotel in Brighton, where Thatcher was herself the principal target. None of this cowed Thatcher, who understood that the main threat IRA terrorism posed wasn't so much to British sovereignty in Northern Ireland as it was to the very concept of majority rule.
The same went for the Falklands. Critics of that war paint it as a display of jingoism, carried out chiefly for Thatcher's political convenience. Yet the issues at stake were larger than the possession of some rocky and frigid islands in the South Atlantic. Would Argentina's unprovoked aggression be resisted or rewarded? Would 1,800 Falklanders—loyal to the Crown, English-speaking—be consigned without real protest to foreign rule and dictatorship?

There should never have been any serious argument over these questions, but there was. And looking back, it's remarkable how much Thatcher was willing to risk in a fight lesser statesmen would as soon have skipped. Britain lost six ships and suffered hundreds of casualties in the war. But in fighting Thatcher showed that Britain was prepared to defend its rights, its interests and its principles—intangible assets of nationhood that had once made the country great.

These assets served more than Britain. Thatcher understood that Britain's fight was also the West's, and vice versa. So she agreed, over massive protests, to the stationing of U.S. nuclear cruise missiles at Greenham Common as a counterforce to the Soviet SS-20; and she agreed to let the U.S. launch air strikes from British bases against Libya, in retaliation for Moammar Gadhafi's terrorist campaigns in Europe. In summer 1990 she steeled President George H.W. Bush after Saddam Hussein had invaded Kuwait: "This is no time to go wobbly."

Deeper than this was Thatcher's sympathy with what is best in America: freedom, enterprise, opportunity, optimism and the urge for self-improvement. No doubt this reflected Thatcher's background as a grocer's daughter who'd risen on her own talent and effort. . . .


Thatcher came to power when Britain and the West were in every kind of crisis: social, economic, moral and strategic. Along with Ronald Reagan and Pope John Paul II, she showed the world the way out. She believed in the inherent right of free men to craft their own destinies, and in the capacity of free nations to resist and overcome every kind of tyranny and injustice.
These were the right beliefs then as now. She was the right woman at the right time."

Summing Up

There will never be enough leaders like Margaret Thatcher.

She spoke the truth, stood up for freedom and accepted the consequences of leading without bowing to the polls and thereby making a mockery out of leadership.

To repeat, the Lady Thatcher always said what she meant and meant what she said.

Today the world is very much in need of but missing that kind of simple and straightforward tell-it-like-it-is-do-the-right-thing leadership.

As is the U.S.

And that's too bad for all of us.

That's my take.

Thanks. Bob.

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