Originally Posted by donsutherland1 Aside from reversing Argentina's invasion of the Falkland Islands

…and Britain's reliable and important contributions within the framework of NATO, Prime Minister Thatcher also played an important behind-the-scenes role in paving the way for the peaceful conclusion of the long-running Cold War.

We could not disagree more strongly on that matter. Argentina's act of naked aggression in invading the Falkland Islands constituted just cause and Argentina's implacability when it came to withdrawing prior to Britain's use of force made it necessary for military action to be undertaken.

Poverty is a complex socio-economic phenomenon. The interactions between various factors, including the possible decline in manufacturing that began prior to Prime Minister Thatcher's tenure and inability of the economy to fully accommodate the employment losses, may have contributed. If the incidence of poverty were largely or wholly a consequence of political choices, policymakers could simply make poverty disappear. That is not the case.

Finally, if one excludes transfer payments to find the underlying incidence of poverty, Britain currently does not fare worse than a number of major western European states such as France or Germany.

Originally Posted by donsutherland1 We could not disagree more strongly on that matter. Argentina's act of naked aggression in invading the Falkland Islands constituted just cause and Argentina's implacability when it came to withdrawing prior to Britain's use of force made it necessary for military action to be undertaken.

Poverty is a complex socio-economic phenomenon.

Finally, if one excludes transfer payments to find the underlying incidence of poverty, Britain currently does not fare worse than a number of major western European states such as France or Germany.

I respect your opinion on the matter, but strongly disagree.

The overall success for failures of a government are defined by much more than poverty statistics. Moreover, the cause(s) of the employment situation predated the Thatcher government.

The data offered a quick and reasonable snapshot in time for the present situation. Moreover, as the graph was constructed directly from the EU-SILC, the European Union's official microdata on income, poverty, social exclusion and living conditions, I have reasonable confidence in the data.

My only point was that despite the difficult economic transition associated with the secular decline in the manufacturing sector, Britain is not virtually alone in having a far worse poverty situation today than some of Europe's other leading nations. Needless to say, I would hope that the current government does what it can reasonably accomplish to reduce poverty.

Originally Posted by donsutherland1 I respect your opinion on the matter, but strongly disagree.

The overall success for failures of a government are defined by much more than poverty statistics. Moreover, the cause(s) of the employment situation predated the Thatcher government.

The data offered a quick and reasonable snapshot in time for the present situation.

Needless to say, I would hope that the current government does what it can reasonably accomplish to reduce poverty.

Britain faced a grave inflation problem. It made sense for the Bank of England to raise interest rates to such levels as were required to break the back of inflation. The Bank of England succeeded in curbing inflation. Given that inflation is harmful to long-run economic growth, the central bank deserves credit for taking the unpopular but courageous decision to curb inflation.

Originally Posted by donsutherland1 Britain faced a grave inflation problem. It made sense for the Bank of England to raise interest rates to such levels as were required to break the back of inflation.

Unfortunately, in the short-term, there is a trade-off between inflation and unemployment. U.S. Federal Reserve Governor and Columbia University Professor Frederic Mishkin discussed the benefits of low inflation and also the Phillips Curve ramification of monetary policy back in February.

Some excerpts follow:

Both economic theory and empirical evidence indicate that the stabilization of inflation promotes stronger economic activity in the long run. Two principles underlie that conclusion. The first principle is that low inflation is beneficial for economic welfare. Rates of inflation significantly above the low levels of recent years can have serious adverse effects on economic efficiency and hence on output in the long run. The distortions from a moderate to high level of long-run inflation are many. High inflation can cause confusion among households and firms, thereby distorting savings and investment decisions...

The second principle is the lack of a long-run tradeoff between unemployment and the inflation rate. Rather, the long-run Phillips curve is vertical, implying that the economy gravitates to some natural rate of unemployment in the long run no matter what the rate of inflation is...

Although there is no long-run tradeoff between unemployment and inflation, in the short run, expansionary monetary policy that raises inflation can lower unemployment and raise employment. That is, the short-run Phillips curve is not vertical.

Given the magnitude of inflation and what was at stake economically, I believe the Bank of England's tough approach was necessary even considering Phillips Curve implications. Britain was not experiencing a mere mild episode of inflation. It was in the grips of a persistent and substantial inflationary outbreak.

Originally Posted by donsutherland1 Unfortunately, in the short-term, there is a trade-off between inflation and unemployment. U.S. Federal Reserve Governor and Columbia University Professor Frederic Mishkin discussed the benefits of low inflation and also the Phillips Curve ramification of monetary policy back in February.

It was not the Bank of England's fault that Britain was in the midst of a then decade-long secular move away from manufacturing, that the manufacturing industry had not regained its pre-1973-75 recession peak, and that the industry had been shedding jobs since the 1960s. It was not the Bank of England's fault that chronic underinvestment, in part due to tax disincentives, had eroded Britain's economic competitiveness. It was not the Bank of England's fault that the national government had taken over a range of enterprises and jobs and companies that might otherwise had disappeared were being propped up by federal aid. Britain's economy was in a weakened state when it became necessary for the Bank of England to wage its decisive fight against roaring inflation. That weakened condition, not solely or largely the Bank's monetary policy, led to the economic pain that coincided with the fight against inflation.

To its credit, the Bank did not shrink from its objective. Instead, it persevered and ultimately overcame Britain's inflation problem. In my opinion, its resolute and successful effort against high inflation is one of its brighter moments. Hopefully, should Britain ever again face such an inflationary situation--and I very much hope it will not--the Bank of England will again respond forcefully and courageously as it did then to curb inflation.

Finally, Monetarism has evolved quite a bit. It is not dead, at least not in the sense of Marxism that has been widely abandoned (except in a few unfortunate, isolated, and misery-strewn pockets e.g., North Korea) and truly relegated to the texts and archives.