Tag: Iron Lady

Margaret Thatcher and the Battle of the 364 Keynesians

With the death of Margaret Thatcher, and the ensuing profusion of commentary on her legacy, it is worth looking back at an overlooked chapter in the Thatcher story. I am referring to her 1981 showdown with the Keynesian establishment—a showdown that the Iron Lady won handily. Before getting caught up with the phony “austerity vs. fiscal stimulus” debate, the chattering classes should take note of how Mrs. Thatcher debunked the Keynesian “fiscal factoid.”

According to the Oxford English Dictionary, a factoid is “an item of unreliable information that is reported and repeated so often that it becomes accepted as fact.” The standard Keynesian fiscal policy prescription for the maintenance of non-inflationary full employment is a fiscal factoid. The chattering classes can repeat this factoid on cue: to stimulate the economy, expand the government’s deficit (or shrink its surplus); and to rein in an overheated economy, shrink the government’s deficit (or expand its surplus).

Even the economic oracles embrace the fiscal factoid. That, of course, is one reason that the Keynesians’ fiscal mantra has become a factoid. No less than Nobelist Paul Krugman repeats it ad nauseam. Now, the new secretary of the treasury, Jack Lew (who claims no economic expertise), is in Europe peddling the fiscal factoid.

Unfortunately, the grim reaper finally caught up with Margaret Thatcher—but not before she laid waste to 364 wrong-headed British Keynesians.

In 1981, Prime Minister Thatcher made a dash for confidence and growth via a fiscal squeeze. To restart the economy, Mrs. Thatcher instituted a fierce attack on the British fiscal deficit, coupled with an expansionary monetary policy. Her moves were immediately condemned by 364 distinguished economists. In a letter to The Times, they wrote a knee-jerk Keynesian response: “Present policies will deepen the depression, erode the industrial base of our economy and threaten its social and political stability.”

Mrs. Thatcher was quickly vindicated. No sooner had the 364 affixed their signatures to that letter than the economy boomed. Confidence in the British economy was restored, and Mrs. Thatcher was able to introduce a long series of deep, free-market reforms.

As for the 364 economists (who included seventy-six present or past professors, a majority of the Chief Economic Advisors to the Government in the post-WWII period, and the president, as well as nine present or past vice-presidents, and the secretary general of the Royal Economic Society), they were not only wrong, but also came to look ridiculous.

In the United States, the peddlers of the fiscal factoid have never suffered the intellectual humiliation of their British counterparts. In consequence, American Keynesians can continue to peddle snake oil with reckless abandon and continue to influence policy in Washington, D.C., and elsewhere.

The Weinstein Marketing Team Understands Margaret Thatcher’s Appeal Better than the Writer and Director of ‘The Iron Lady’ Do

The reviewers warned me – don’t see The Iron Lady, the new movie starring Meryl Streep as Margaret Thatcher. Kelly Jane Torrance of the Washington Examiner mourns, “The climax of this movie about one of the most important people – not just women, but people – of the 20th century comes when Margaret Thatcher decides to throw out her dead husband’s clothes.” James Verniere of the Boston Herald asks, “Mamma mia! Why would you turn the story of Margaret Thatcher into a tale of a sweet, dotty old lady having a love affair with her beloved late husband?” Virginia Postrel excoriates the filmmakers: “These supposedly feminist filmmakers could have portrayed Thatcher as an ambitious woman who had nothing to feel guilty about. Instead they chose to inject guilt where it did not belong. They obscured Thatcher’s public accomplishments in a fog of private angst. The portrait of dementia isn’t the problem. The way the film uses old age to punish a lifetime of accomplishment is.”

Even the Washington Post, the New York Times (“You are left with the impression of an old woman who can’t quite remember who she used to be and of a movie that is not so sure either.”), and the New Yorker wonder why you would make a movie about one of the most influential and controversial political figures, the first woman to lead a Western country, the woman who arguably saved Great Britain and helped Ronald Reagan win the Cold War, and then spend half the film depicting her as a confused old lady with hallucinations.

Nevertheless, Thatcher is indeed a compelling figure, and the commercials and trailers showed Streep portraying her as a leader of conviction and strength. So I ignored the critics and bought a ticket. And the film was slightly better than I expected. It absolutely wastes about 40 percent of its time on the imagined scenes of a confused old lady. How much more rewarding it would have been to see a great actress play a pioneering political figure rising to power, leading her country, and facing opposition from both friends and enemies. Instead, we get a few vignettes of that, about half the film’s running time. So it wasn’t terrible, just a lost opportunity.

Interestingly, the marketing team at Weinstein Company seems to understand the appeal of a film on Margaret Thatcher far better than the writer and director. They know what the audience wants. Take a look at the trailer:

 

You’ll notice that there’s not a single shot of the old-lady part of the movie. Instead, it’s two fast minutes of Margaret Thatcher in action. Including a final scene (“Gentlemen, shall we join the ladies”) that harks back to an earlier scene of Thatcher on her way up, dramatizes her uniqueness – and is actually not in the film.

So I have a suggestion: Often the DVD of a film will include the film as released to theaters and also a “Director’s Cut” that reflects the director’s own artistic choices that the studio may have blocked. I recommend that the DVD of The Iron Lady include a “Marketer’s Cut” that omits all the old-lady scenes and just shows us Margaret Thatcher the political figure. And if there’s good material like the “join the ladies” scene left on the cutting-room floor, then the marketers could add that back in. In that case, I’d buy the DVD. In fact, someone should start a Facebook campaign: “Put a Marketer’s Cut of The Iron Lady on the DVD.”

By the way, Mitt Romney should not want Republicans to watch this movie: It will remind them of what it means to be inspired by a political leader.