Iron Lady? Rust in Peace. The Witch is Dead blogging continued

Parliament Debates Thatcher Legacy, as Vitriol Flows Online and in Streets by John Burns and Alan Cowell

Her death has been received in many quarters with a vituperation that was notably absent in the United States with the passing of former President Ronald Reagan, her ideological counterpart and cold-war wingman, and much of that criticism has played out on Britain’s streets. “Death parties” have been held in cities including London, Belfast and Glasgow, with banners reading “Rejoice, Rejoice,” graffiti declaring “Rot in Hell, Maggie” and celebrants “dancing on the grave” of the former prime minister. 

Nor has the vitriol been confined to the streets. An arch-advocate of modernizing Britain, Mrs. Thatcher has effectively been put into the stocks of the Internet age, with a blizzard of hostile Facebook posts, Twitter feeds, blogs on leftist Web sites and comments on online newspaper articles about her death. 

A Facebook campaign was under way to drive the street protesters’ anthem, “Ding Dong! The Witch Is Dead,” to No. 1 in Britain’s popular music charts.

Fareed Zakaria Fails to Appreciate the Fruits of Thatcherism by Dean Baker

Actually, the problems that Zakaria identifies are largely the result of Thatcherism. A main reason that workers have to struggle to keep their wages up is that central banks have deliberately raised unemployment in order to keep inflation low. This weakens the bargaining power of workers, especially those in the bottom half of the wage distribution.

The high unemployment of recent years can be attributed to a policy of financial regulation that allowed for banks to grow large with the implicit subsidy of a government granted too big to fail guarantee. It also required central banks to conduct monetary and regulatory policy without regard to asset bubbles. 

Thatcher and her kindred spirits in the United States and elsewhere worked to weaken labor unions. This has also reduced the ability of workers to secure their share of gains from productivity growth.

The split between winners and losers in the current economy does not fit Zakaria's description. The median wage for college graduates has been virtually flat since the 1990s. This group includes many people who have very high skills.

The comment about globalization is bizarre. The fact that other countries have become wealthier should help the rich countries, not hurt them. It only poses a problem in a context of bad macroeconomic policy, like having an over-valued currency. It also can be a problem with selective protectionism of the sort used in the United States. Trade policy has deliberately put less-educated workers in direct competition with low-paid workers in the developing world. By contrast, highly educated professionals like doctors and lawyers, are largely protected from such competition.

It is remarkable that Zakaria somehow fails to recognize the extent to which the factors that he identifies as problems were the direct result of Thatcherism. In many cases, such as the weakening of workers bargaining power, this was an explicitly stated goal of many of her supporters.