Friday, April 19, 2013

Disagreed Fareed

It was sad, listening to Fareed Zakaria last Sunday as he talked about Margaret Thatcher. I think his pro-Thatcher stance was deeply flawed. But truth be known, this is one of the reasons I listen to him. His position doesn't alway agree with mine. In that I do think he is brilliant, it makes me take a long look at my own positions.

I was watching Fareed's show on CNN -- Global Public Square -- but there is a companion article in The Washington Post. That article made the fundamental difference in our opinion jump off the page.

Could Margaret Thatcher’s reforms work in 2013?

"I grew up admiring Margaret Thatcher. It was obvious to many of us in India in the 1970s that socialist economics didn’t work and that Thatcher’s radical reforms were the right course, one we wished someone would advocate in India. (It took 12 years and a massive crisis for that to happen.) Her plans to cut taxes, privatize industry and deregulate have been vindicated by history, but that doesn’t tell us much about what to do today."

I didn't grow up in India. Nor did I grow up with socialist economics. I grew up with regulated capitalism. I didn't admire Margaret Thatcher. But for some reason, Fareed takes Thatcher's "accomplishments" and transfers them onto America's economics.

"Britain was not unusual. In most European countries, the state had as large a role atop the “commanding heights” of the economy. And while the United States was always far more free-market-oriented, even U.S. tax rates in the 1970s were in the range of 70 percent, and government tightly regulated telecommunications, transportation and finance."

In the U.S., the government didn't own the airlines. We didn't own the trains, the oil companies, the phone company, the car companies, etc., etc. We were much closer to the middle of what I consider to be the ideological road of economics. AT&T ("Ma Bell") was a regulated monopoly. Pan Am was the de facto overseas airline of the United States. You can see where this is headed (hopefully.) I'm having trouble thinking of a finance giant on the order of an AT&T and a Pan Am -- a too-big-too-fail bank --because there weren't any. Banking was distributed. But mostly the entire financial system was completely different. Wall Street -- the stock market -- and Main Street -- the banking system -- were kept separate. There was this little thing called the Glass–Steagall Act .

So, in my book, Fareed is only one for three in his logic. In telecommunications, transportation and finance, I only consider telecommunications to be better off. Let me take one paragraph to explore that. What's different? We split up the Bell System (which financed the Bell Lab by the way) into little-bitty pieces. Fast forward 30 years and we have AT&T, Verizon and a couple of GTE types left over. In other words, we're right back where we started. The difference that makes it better? The internet and technology. Did I mention Bell Labs? And DARPA belongs to the big, bad government. So much for Thatcherism transforming technology. Would all this have happened without breaking up the monopoly? I don't know.

I hope it has hit you: We deregulated airlines and we're down to...what? Five majors for now? After so much pain. Repeating the telecommunication business litany -- Bell, bust and back to Big. That leaves banking. From diversified to combining with "finance" to Too-Big-to-Fail with a global economic catastrophe to its credit. I hope this makes it plain why I used quotations marks around Margaret Thatcher's "accomplishments".

Sorry Fareed. I can appreciate what Margaret Thatcher did for the United Kingdom. I think I have a sense of it because of the way Americans fawn over Ronald Reagan. But America didn't need Thatcher's cure because we didn't have England's system.

But here's the real kicker. Here's what really matters to me. What did Margaret Thatcher do to make her citizen's lives better? I'll ask the same of her buddy Ronald Reagan. I'm not asking about something as minor as riding out a recession. Reagan and Thatcher's supporters want to put them on the pedestal of Greatness. Abraham Lincoln freed the slaves. FDR won a world war and started Social Security. Winston Churchill saved England. Clement Attlee brought in the National Health Service. What did Lady Thatcher do to deserve Greatness? Making a people feel better about themselves isn't a minor thing. But it isn't Greatness.

Greed is not Great. It isn't even good. Show me a religion that says it is. Governments aren't founded to make people richer. They are founded to make our lives better. Easing or ending poverty is a worthy cause. Seeking riches isn't. Thatcher and Reagan helped generate enormous fortunes with their policies. I want to know if they made their citizen's lives better. All of their citizens.

Don Brown
April 19, 2013

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