The (Missing) Ghost of Thatcherism

While President Javier Milei is easily the best head of state right now, it would be more difficult to pick the best head of state in my lifetime.

It may turn out to be Milei, depending on whether he ultimately can convince a hostile legislature to unshackle Argentina’s dirigiste economy.

Based on actual accomplishments, however, the choice would be between Ronald Reagan and Margaret Thatcher.

Today, let’s focus on Britain’s Iron Lady.

As explained in a great documentary film, she rejuvenated the U.K. economy with a wide range of good policies that addressed major impediments to national prosperity.

• Slashing confiscatory tax rates
• A reduced burden of government spending
• Privatization of state-run companies
• Reducing runaway inflation

Yet not everyone is a fan of Ms. Thatcher.

In an article for World Politics Review, Alexander Clarkson claims that the Conservative Party is in trouble because it is enthralled with Thatcherism.

…the collapse of support for the Tory Party…may also be the product of…efforts by successive governments since former Prime Minister Margaret Thatcher took power in 1979 to restructure the state along market-oriented lines. …When market-friendly, neoliberal approaches to governance failed to achieve expected outcomes, each new generation of Tory leaders convinced themselves that success would only be possible through doubling-down on ideological purity… Tory-led governments that followed under then-Prime Minister David Cameron in the 2010s were driven by a deeply held belief that shrinking the state was the only pathway to generating the economic growth needed… there are strong parallels between the former Soviet Union’s obsession with governing along supposedly “scientific” lines and the Thatcherite Tory Party’s belief that societies are shaped by rigidly predetermined laws of economic behavior. …it is no wonder that so much of the working-age population has turned against the political party whose ideological paradigms have dominated British governance since the 1970s.

This is nonsensical analysis.

Yes, various Tory leaders have paid lip service to Thatcher (much as U.S. Republicans in recent decades have said nice things about Reagan), but there’s a big difference between talking and doing.

And the various Conservative Party leaders this century (Cameron, May, Johnson, and Sunak) have not delivered Thatcher-type reform.

The chart at the start of this column shows how the U.K.’s score for economic freedom jumped significantly under Thatcher. Let’s now look at the same data, but for 1970-2021, not just 1970-2000.

Lo and behold, we see that recent Conservative Party leaders (the Tories have been in power since 2010) have not improved economic policy. At all. Indeed, there’s been a slight downward trajectory.

At the risk of understatement, Thatcher’s ghost must be very disappointed.

To be fair, it would have been very difficult for recent Tory leaders to produce dramatic improvements. After all, policy in 2010 was not nearly as bad as it was when Thatcher took office.

So I would have applauded modest improvement. But I will not cheer for modest decline.

Here’s another chart in defense of Thatchernomics. It shows per-capita GDP in the big economies of Western Europe starting in 1950.

You can see that the United Kingdom started with a big lead (presumably a legacy of WWII destruction on the European mainland).

However, France and Germany soon caught up. And then they passed the U.K. (blame Clement Attlee’s post-war socialism).

Notice, though, how the U.K. economy grew faster under Thatchernomics and closed the gap.

Interestingly, while France and the U.K. have been close ever since, Germany opened up a lead (though recent missteps on fiscal and energy policy make me wonder whether the current gap will close.

The bottom line is that the United Kingdom still needs Thatcherism (just like the United States still needs Reaganism).

P.S. I can’t resist sharing one additional excerpt from Clarkson’s article.

Thatcher famously went from championing the deepening of the EU’s Single Market in the 1980s to espousing Euroskepticism.

Clarkson seems to think this reflects poorly on Thatcher, but it actually reflects poorly on the European Union. Thatcher liked the E.U. when it was a free-trade area based on mutual recognition, but she became disillusioned as it morphed into a supra-national bureaucracy pushing harmonization, centralization, and bureaucratization.

P.P.S. I didn’t include Liz Truss in the list of Tory leaders this century because she was only in office 44 days and didn’t have a chance to implement any policies. It would have been interesting if she stayed in power since she wanted pro-growth tax policy, though I wrote back in 2022 that she “should have announced a spending cap, modeled on either the Swiss Debt Brake or Colorado’s TABOR.” I also noted that “In addition to worrying about whether Truss will copy Thatcher’s track record on spending, I’m also worried about her support for misguided energy subsidies.

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Thatcher, Lawson, and Pro-Growth Tax Policy

As documented in Commanding Heights: The Battle of Ideas, Margaret Thatcher and Ronald Reagan saved their nations from economic malaise and decline.

Today, let’s focus on what happened in the United Kingdom.

Economic liberty greatly increased during the Thatcher years.

She deserves the lion’s share of the credit for the U.K.’s economic rebirth and renaissance, but she also had the wisdom to appoint some very principled and very capable people to her cabinet.

Such as Nigel Lawson, who served as her Chancellor of the Exchequer (akin to a combined Treasury Secretary/OMB Director in the U.S.).

Lawson died last week, leading to many tributes to his role is resuscitating the U.K. economy.

The Wall Street Journal‘s editorial summarized his achievements.

…our problems are solvable, as they were a half century ago. One of those crucial problem solvers was British politician Nigel Lawson, who died this week at age 91. …the 1970s…was even more miserable in the United Kingdom than it was in the U.S. By the time Margaret Thatcher led the Tories into office in May 1979, inflation was raging and the country had been wracked by strikes in its “winter of discontent”… Lawson entered Thatcher’s administration… He made his historic mark as Chancellor of the Exchequer starting in 1983. He’s best known for his tax reforms, which reduced the top personal income-tax rate to 40% from 60% and brought the top corporate rate to 35% from a 1970s high of 52%. He also was a steward of the Thatcher administration’s privatizations of large state-owned firms and the “Big Bang” financial reforms that would transform London into a global financial center.

In a column for CapX, Madsen Pirie examines Lawson’s work.

Nigel Lawson left a huge legacy. Under his stewardship Britain went from being the sick man of Europe into becoming an economic powerhouse and one of the world’s leading economies. He is regarded by many as the finest Chancellor of the 20th century… Lord Lawson held the firm conviction that lower taxes created space for enterprise and opportunity, and made it his policy that in every Budget he would lower the burden of taxation and abolish at least one tax. …During his tenure, Britain was transformed from being an economy in which most major businesses and services were owned and run by the state, into one in which they became private businesses, paying taxes instead of receiving taxpayer subsidies. Failing and outdated state enterprises became modern, successful private ones. …His 1988 Budget…announced that all taxes above 40% would be abolished, and that the basic rate would be cut to 25%, its lowest for 50 years… Within a very short time, more money was coming into the Treasury from the lower rates than it had been taking in from the higher ones. It was a vindication of the Laffer Curve. …The top 10% of earners had been paying 35% of the total income tax take. Under Lawson’s lower rate that went up to 48%. In rough terms this meant that the top 10% went from paying just over a third to just under a half of total income taxes.

In other words, the lower tax rates in the U.K. had the same positive impact as the lower tax rates in the U.S., both in terms of encouraging growth and confirming the Laffer Curve.

But let’s not forget that there also was spending restraint during the Thatcher years, particularly when Lawson was Chancellor of the Exchequer.

Just like we got spending restraint during the Reagan years.

The moral of the story is that it’s great to have good leaders, and it’s great when those leaders appoint good people.

P.S. If you want the U.S. equivalent of Nigel Lawson, the best historical example would be Andrew Mellon.

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The Economic History of the 20th Century

It’s not often (actually, only once) that I share a video lasting nearly two hours. But this video – revolving around the intellectual rivalry between pro-market Hayek and pro-intervention Keynes – is an excellent summary of 20th-century economic policy.

We learn about the growth of socialism and communism during and after World War I.

This then led economists from the Austrian school – including Hayek – to explain why that approach (genuine socialism, meaning government ownership, central planning, and price controls) was doomed to failure.

But other forms of intervention and redistribution gained new adherents, especially when Keynes argued that the Great Depression was the fault of capitalism (for what it’s worth, I think the video fails to include analysis on how the New Deal actually lengthened and deepened the downturn).

Unfortunately, the Keynesian narrative dominated and the video informs us that the people of the United Kingdom voted for a socialist government when World War II ended. Which then led to the nationalization of the economy’s “commanding heights” and the enactment of the welfare state.

The United States didn’t veer as sharply to the left after the war, but there was no meaningful challenge to the the statist consensus that arose in the 1930s.

On the bright side, Germany rejected socialism by getting rid of price controls and allowing markets to flourish (the video overstated the degree to which a welfare state was imposed). But that was the exception to the rule. The world was gravitating to statism, including the developing world.

My favorite part of the video is that we learn about the creation of the Mont Pelerin Society and the emergence of Milton Friedman and the Chicago School.

That was the start of the laissez-faire counterrevolution. But it didn’t yield immediate results.

The left was in charge of economic policy from the end of the war through the 1970s in the USA and UK, regardless of which political party held power.

But bad policy sooner or later leads to bad results.

And that changed the political environment.

The latter part of the video tells the very happy story on how the sensible ideas of Hayek and Friedman eventually translated into the historic elections of Ronald Reagan and Margaret Thatcher.

If you watch the entire video, you’ll learn about how Reagan and Thatcher successfully overcame major challenges as they shifted their nations toward economic liberty (most notably, Reagan tamed inflation and Thatcher denationalized state-run companies).

And you’ll see that most of the world then followed – including the collapse of the Soviet Empire.

You even get some sympathetic quotes about capitalism from leftists such as Gordon Brown, Larry Summers, and Jeffrey Sachs at the end of the video.

So it seems like a happy ending. And capitalism indeed was the dominant force in economic policy about 20 years ago when the video was released.

Sadly, the track record of the 21st century (Bush II, Obama, and Trump) has not been overly favorable for believers in economic liberty.

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Margaret Thatcher’s Message to Washington’s Big Spenders

Margaret Thatcher was the British version of Ronald Reagan, a leader who resuscitated a nation by rolling back the size and scope of government.

She also is famous for one of the most accurate observations ever made about fiscal policy.

Her warning proved prophetic when the Soviet Bloc collapsed.

Her wise words also could be applied to what happened about a decade ago in Greece. And what’s about to happen in Italy.

But let’s not forget that the United States isn’t immune to the problem of excessive government. The Wall Street Journal has a sobering editorial on the pro-spending sentiment that dominates the nation’s capital.

…in Washington the politicians are debating how to spend another few trillion dollars in the name of virus relief. …Mrs. Pelosi’s House bill promises another $3 trillion for her various constituencies on top of the $2.7 trillion or so Congress has already spent on the pandemic. The goal is income redistribution… This political strategy may work since Republicans, as usual, are divided and defensive. …Mr. Trump…seems torn about what to support and is thinking only as far as November. This is a recipe for another deal on Democratic terms… Sooner or later the pandemic will end. The question is what kind of economy will be left. A second Cares Act would leave a legacy of vastly larger government that would mean slower growth and take years to overcome.

Yes, the spending binge will mean slower growth.

But I’m even more worried about what will happen in the future. Here are three things to keep in mind.

1. Largely because of Bush, Obama, and Trump, the federal budget has tripled since 1980 (Reagan and Clinton were comparatively frugal). Keep in mind that the increase in the accompanying chart shows the growth in spending after adjusting for inflation.
2. The burden of federal spending is projected to skyrocket in future years because of the combination of demographic changes and poorly designed entitlement programs. In other words, our fiscal outlook is grim even if politicians don’t approve an additional penny of new spending.
3. However, politicians are spending more money. A lot more.  As shown in the accompanying chart, this has caused a huge spike in per-capita outlays. And the crowd in Washington wants to make the red portion much bigger.

Given all this bad news, does Thatcher’s warning about running out “of other people’s money” apply to the United States?

As bad as the numbers are, my two cents is that the U.S. won’t suffer a fiscal crisis anytime soon. As I noted at the end of this interview, Washington can probably continue with business-as-usual fiscal policy for several more decades (Adam Smith observed that it usually takes a lot of bad policy over a long period of time to cause economic ruin).

But that doesn’t mean it’s a good idea to travel down that path.

Here’s an analogy. Smoking three packs of cigarettes a day presumably won’t kill someone within the first 10 years, but it’s definitely not a recipe for long-run health and vitality. Sooner or later, there will be consequences.

A mature and sensible people (like the Swiss) take steps to avoid the fiscal version of those bad consequences.

For what it’s worth, similar reforms have been proposed for the United States. Unfortunately, too many American politicians and consumed by self-interest and don’t think past the next election.

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U.K. Election Week, Part III: Remembering Margaret Thatcher

For two simple reasons, I want Boris Johnson to win a clear majority tomorrow in the elections for the British Parliament.

1. He’s not a lunatic socialist, like Jeremy Corbyn, the leader of the Labour Party and the British version of Bernie Sanders.
2. He’s promised a real Brexit, meaning the U.K. escapes a doomed-to-decline, ever-more-dirigiste European Union.

Beyond that, his platform is not terribly exciting for supporters of limited government.

Which makes me all the more nostalgic for Margaret Thatcher, the only good British Prime Minister in my lifetime (just as Ronald Reagan was the only good President in my lifetime).

I’ve previously shared two great videos of Thatcher, one about the real source of government funds and the other about the poisonous ideology of class warfare.

I can’t imagine Boris Johnson giving either speech.

Or making this statement.

Or giving these remarks.

As far as I know, Boris Johnson isn’t hostile to free markets and limited government.

He just doesn’t seem animated by a desire to shrink the public sector.

Thatcher, by contrast, was so sound on such issues that “Thatcherism” is now a term to describe good economic policy.

In a book review for City Journal, Alberto Mingardi celebrates Thatcherism.

Forty years on, Margaret Thatcher’s election as Great Britain’s first female prime minister still looks miraculous. …Right after World War II, Labour prime minister Clement Attlee, overly optimistic about the capacity of government to do great things, laid the foundations of the British welfare state. …The postwar economic consensus was so robust that it became known as Butskellism, since the policies of Rab Butler, the Conservative chancellor of the Exchequer from 1951 to 1955, and his Labour predecessor Hugh Gaitskell were indistinguishable. The glory days of interventionism didn’t last, however. By 1979, a third of the British workforce was employed by government, directly or indirectly, yet unemployment continued to rise throughout the 1970s. Inflation rose to double digits, exceeding 25 percent… Thatcher recognized the economic crisis as a failure of politics. She offered a gospel of government retrenchment and individual initiative that sounded outdated. She wanted to make people responsible again for their economic destinies, instead of entrusting their fates to state guidance. This meant denationalizing the British economy. Before Thatcher took office, “privatization” was a word out of science fiction; ten years after she left office, it was a global norm. She changed England and, by changing England, changed the world. …Thatcher aimed to stimulate self-reliance and independence, and she saw these virtues threatened by the culture of passivity that statism engenders. …the British political establishment always looked down on this shopkeeper’s daughter. And yet Thatcher’s defining quality, and the reason why we still speak of Thatcherism, is that she told people things that they didn’t want to hear.

And here are some excerpts about Thatcherism from a column by Roger Bootle for the U.K.-based Telegraph.

No previous British Prime Minister has had an ism named after them. …and if such an ism had been conjured up, it would surely not have been about economics. …“Thatcherism” was both substantial and essentially about political economy. …The main high intellectual influences, coming via Keith Joseph, were from Friedrich von Hayek and Milton Friedman. …Baroness Thatcher was ideological by nature. …When she first burst onto the stage it was a time for isms. Domestically, the 1970s had been a period of crisis. At various points, not just the economy but the whole system of democratic government in Britain seemed at the point of collapse. …Baroness Thatcher would have seen her ideological enemy then as “socialism”, which had brought the country low: excessive levels of government spending and taxation, lax financial discipline… Much of it was just the traditional liberal economic agenda, developed in the 19th century – free markets, free trade, competition, a small state, requiring only low levels of taxation, and financial probity. …Saying that this was just a retread of old 19th century liberalism doesn’t convey how radical these ideas were at the time, after decades in which markets were held under suspicion and even in a supposedly capitalist country like the UK, the state’s role in the economy was overwhelming. …there was more to Thatcherism than simply the liberal agenda. Classical liberalism was fleshed out with some more homespun beliefs – in value for money, efficiency, self-reliance, saving and wealth accumulation.

Warms my heart!

Speaking of which, I finally found some video of Margaret Thatcher’s famous line about socialists running out of other people’s money.

Shifting topics, nobody knows with total confidence whether Thatcher would have supported Brexit.

She was sympathetic to the original concept of Europe as a free-trade zone.

But as the free-trade pact began morphing into a pro-centralization supra-national government, she became increasingly hostile.

This video captures some of that skepticism.

For what it’s worth, I’m confident she would have been on the right side and supported Brexit.

I’ll close with an overall assessment of Thatcher’s overall economic record.

We’ll start with the United Kingdom’s score from Economic Freedom of the World.

As you can see, there was a dramatic increase in economic liberty during the Thatcher years.

The scores from EFW, which only exist in every fifth year, don’t exactly coincide with Thatcher’s tenure, but the trend is unmistakable.

Conversations with British experts lead me to state that she had three amazing accomplishments.

1. Radical reductions in tax rates on income, with the top rate falling from 83 percent (98 percent for investment income) down to 40 percent. Unsurprisingly, the rich paid more tax with lower rates, just as happened when Reagan lower the top tax rate.
2. Ending capital controls, meaning that people actually had the freedom to take money out of the country (many supposed experts advised against this liberalization, much as so-called experts advised Erhardt not to remove price controls in post-WWII Germany).
3. Industry privatization, which meant undoing the pure socialist policies that resulted in the nationalization of major industries (gas, telecom, steel, coal, transport, etc) and gave government ownership and control over the means of production.

Her only notable bad policy is that she increased the value-added tax.

I also give Thatcher credit for a better-than-expected record on spending restraint (the same is true for David Cameron), and I also think she deserves praise from helping to bring inflation under control.

To be sure, this simplified assessment only skims the surface. And it doesn’t address “sins of omission,” such as her inability to pare back the the country’s creaky government-run health care system (though she did some incremental reforms, such as internal markets).

Nonetheless, the bottom line is that Thatcher was an amazingly successful Prime Minister. For all intents and purposes, she saved the United Kingdom.

P.S. If you want to see my assessments of American presidents, I’ve looked at Reagan, Clinton, Hoover, Nixon, the second Bush, and Obama.

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A Tribute to Margaret Thatcher

The woman who saved the United Kingdom has died.

A Great Woman

I got to meet Margaret Thatcher a couple of times and felt lucky each time that I was in the presence of someone who put her nation’s interests first and was not guided by political expediency.

Such a rare trait for someone in public life.

The best tribute I can offer is to share some of her remarks that capture both her strong principles and her effective communication skills.

Here’s a clip from her famous speech stating that there’s “no such thing as public money.”

Can you imagine today’s spineless Tory politicians making such statements. Hardly, they’re too busy criticizing taxpayers for not voluntarily paying extra tax!

And here’s her powerful performance in the House of Commons exposing the left for being willing to impoverish the poor if it meant those with higher incomes suffered even more.

I’ve said the same thing in some of my interviews, but she obviously said it much more effectively.

P.S. If you weren’t sufficiently inspired by Thatcher’s words, here’s Reagan’s tribute to Coolidge and also a memorable passage from his inaugural address.

P.P.S. Let’s not forget that Thatcher was an indispensable ally with Reagan in the fight against the barbarity of communism.

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Evidence from England Shows that If You Want to “Soak the Rich,” Keep Tax Rates Low

I’ve pulled evidence from IRS publications to show that rich people paid a lot more to Uncle Sam after Reagan reduced the top tax rate from 70 percent to 28 percent.

The good ol’ days

But the Gipper wasn’t the only one to unleash the Laffer Curve. The United Kingdom saw similar dramatic results when Margaret Thatcher lowered the top tax rate from 83 percent to 40 percent. Allister Heath explains.

During the 1970s, when the tax system specialised in inflicting pain, the top one per cent of earners contributed 11pc of income tax. By 1986-87, with the top rate down to 60pc, that had increased to 14pc. After the top rate fell to 40pc in 1988, the top 1pc’s share jumped, reaching 21.3pc by 1999-2000, 24.4pc in 2007-08 and 26.5pc in 2009-10. Lower taxes fuelled a hard-work culture and an entrepreneurial revolution. Combined with globalisation and the much greater rewards available for skilled workers, Britain’s most successful individuals earned a lot and paid a lot in tax.

In other words, Margaret Thatcher’s supply-side tax rate reductions paid big dividends, both for the economy and for the Treasury.

Unfortunately, just as American politicians have forgotten (or decided to ignore) the lessons of the Reagan era, British politicians also have gravitated to a class-warfare approach. Allister points out that this is having a negative impact.

Yet times are changing, and not just because of the recession. HMRC recently slashed its forecasts for revenues from the top 1pc. It now believes the number of people expected to report £500,000 or more in earnings will fall by a tenth this year; those on £2m are set to drop by a third.

Why have the numbers headed in the wrong direction? There are almost certainly lots of factors, but tax policy has moved in the wrong direction and presumably deserves part of the blame. The top income tax rate is now 45 percent. The value-added tax has jumped to 20 percent. Allister provides more details.

Capital gains tax is too high. Luxury homes transactions are falling because of higher stamp duty. Britain is now a high tax economy; this is distorting work and investment decisions, gradually shifting talent and capital overseas. The overwhelming majority of high earners are already contributing disproportionately to the exchequer; tightening the screws further will be disastrously counter-productive. The lesson of the past 30 years is clear: the best way to entice the rich to pay even more tax is to keep rates low and allow them to get even richer.

I have to admit that I don’t want anyone to pay more tax, but I’m even less happy about punitively high tax rates. So I’m reluctantly willing to let the clowns in government have more money in exchange for a tax system that is more conducive to economic growth.

Here’s my Laffer Curve video, which explains more about the relationship of tax rates, taxable income, and tax revenue.

The ultimate goal, of course, is to shrink the central government so that the legitimate functions of the state can be financed at very low tax rates. Heck, if the United States and the United Kingdom had the kind of limited governments that existed 100 years ago, neither nation would even need a flat tax. A few user fees and excise taxes would suffice. Now that’s hope and change.

P.S. I periodically share two great Reagan videos, which can be seen here and here, but I also have a couple of inspiring videos of Thatcher in action, which can be viewed here and here.

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The United Kingdom Is Royally /*@#$&;^%*(

The United Kingdom has a magnificent history and has produced great leaders.

I get inspired, for instance, when I watch these Margaret Thatcher speeches about “public money” and “the poor poorer.” Sort of the same feeling I get when I watch the Gipper talking about Washington being a “company town” and the “unnecessary and excessive growth of government.”

But just as the United States has devolved by moving over time from Reagan to Obama, the United Kingdom has degenerated by going from Thatcher to David Cameron.

Cameron is supposedly a conservative, but it’s more accurate to say he’s an English version of George W. Bush. Some of the lowlights of his tenure include:

• Cameron has undermined the U.K.’s system of personal retirement accounts.
• Cameron is giving taxpayer money to statist environmental groups.
• Cameron has increased the capital gains tax.
• Cameron is increasing the burden of government spending.
• Cameron has whined that it is wrong for people to minimize their tax burdens.

And his statist mentality infects other Tory politicians.

Here is a report on the intellectually bankrupt ramblings of another enemy of freedom, as reported by the Telegraph.

David Gauke, a Treasury minister, told The Daily Telegraph that home owners who allow workmen to evade VAT or income tax were forcing others to pay more. …critics accused the Government of being “unnecessarily moralistic” about ordinary people trying to keep their household bills down. …According to a report by the Public Accounts Committee, more than two million people make cash-in-hand payments costing the Treasury an estimated £2  billion. There is no law against paying someone in cash… In a speech to the Policy Exchange think tank, he said that while using Isas and claiming gift aid on charitable donations was acceptable, buying homes through companies to avoid stamp duty and using service companies to reduce income tax was “morally repugnant”. Mr Gauke said: “These schemes damage our ability to fund public services and provide support to those who need it. They harm businesses by distorting competition. They damage public confidence. And they undermine the actions of the vast majority of taxpayers, who pay more in tax as a consequence of others enjoying a free ride.”

Can anyone imagine Margaret Thatcher saying something this offensive?

Particularly since it is Gauke’s views that are “morally repugnant,” not the actions of people who are trying to protect their property from a rapacious and greedy government.

Keep in mind that the burden of government spending in the United Kingdom consumes nearly 49 percent of economic output according to OECD data. That’s more than Greece, Portugal, Ireland, or Spain!

Sort of makes you wonder how long it will take before investors decide that it’s no longer a good idea to lend money to such a profligate government.

The good news is that the English people aren’t as bad as their politicians. As part of the story, the Telegraph is conducting an online poll, which you can see to your left.

Notwithstanding the statolatry of UK politicians, the voting so far is overwhelmingly on the side of taxpayers rather than the government.

But public opinion doesn’t really matter if government policy continues to drift in the wrong direction.

And, as you can see from this data, the long-term outlook for the United Kingdom is very grim. And we know Cameron isn’t doing anything to address this looming crisis.

Not that this makes the UK special. Thanks to reckless entitlement programs, the same data shows that the United States also is headed for Greek-style fiscal chaos.

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Margaret Thatcher Debunks the Leftist Agenda on Income Equality

The statists are making a big issue out of income inequality, hoping to convince ordinary Americans that redistribution is their only hope for a better life.

I’ve explained with a pizza analogy that this is horribly misguided because it falsely assumes the economy is a fixed pie.

Simply stated, it doesn’t make sense – or help anybody – if inequality is reduced by policies that hurt everyone, but happen to hurt upper-income people more than lower-income people.

Moreover, redistribution tends to create a “poverty trap” as people get seduced by dependency.

That’s why I’ve argued that economic growth is the best way of helping the less fortunate.

But I have to admit that Margaret Thatcher does a much better job of eviscerating the left’s agenda on this issue.

While it’s inspiring to watch Thatcher in action, it’s also painful to realize that the current crop of GOP presidential candidates seems generally incapable of making similar arguments. Can you imagine, for instance, Mitt Romney making these remarks?

Last but not least, Thatcher’s remarks remind me about Churchill’s famous quote, which is very appropriate for this discussion.

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of misery.

And if you want real-world examples, look at this chart comparing North Korea and South Korea, or this chart comparing Chile, Argentina, and Venezuela. Now ask yourself a simple question: Which societies have generated more prosperity and higher living standards for ordinary people?

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This Is the Politician I Wish Was Running for President

In previous posts, I’ve linked to some great speeches by some great Presidents.

Now here’s a speech by someone I wish could be President.

Margaret Thatcher saved the United Kingdom, just like Reagan saved America. Did anybody hear a candidate talk like either one of them during the last GOP debate?

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