Word: frosts
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...Gerry Frost, speechwriter for Sir Keith Joseph, Thatcher's Secretary of State for Industry, spoke to a largely English, mostly Laborite gathering at the Business School last Thursday, defending the first-year policies of the Tories that have resulted in 16 per cent inflation and two million unemployed, the highest since World War II. In a change of tune since campaign day, he said the Thatcher government was cutting only $4 billion from the national budget--no more than the Callaghan Labor government proposed to slice off in its later days. Unemployment wasn't really as bad as it sounded...
Conceding that monetarist policies to this point have failed to alleviate Britain's woes, Frost maintained they have played no part in the distinct downturn of the economy in the past year. The attempt to control inflation by tightening the money supply--cutting public spending and raising mid-range interest rates--has not worked, resulting only in 16 per cent interest rates, an economy mired in quicksand, and what promises to be a cold and turbulent winter...
...monetarists stick to their guns, largely because they have only one barrel that works. Theirs is a Randolph Scott world of black and white, profit and loss, widgets and blips. Frost said the Thatcher government has not gone nearly far enough in cutting spending, tightening money supply, and policing the trade unions. Although some portions of British Aerospace and the Post Office have been turned over to private industry, not enough other industries have gone back to the farm. British Leyland and British Steel--the latter losing over $1 million a day--still devour large chunks of British taxpayers' pounds...
Questioners in the audience reminded Frost that the British government loses so much money on its major public industries because it took them over in their death throes--an argument known as the "turkey theory" and often used on this side of the Atlantic to account for the weakness of public transit systems. British Steel's decrepit capital plant makes Bethlehem Steel look like the cutting edge of the new technology, and U.S. producers struggle way behind their Japanese competitors. Can the Tories really believe that selling British Steel to the private sector would suddenly make them competitive...
...Frost's simplistic assertion that public equals inefficient equals bad is contradicted by the experiences of Volkswagen and Renault. These two government-run (German and French, respectively) automobile firms have turned handsome profits and sold many cars in British Leyland's own market by investing wisely in new capital and research and development. Putting the blame for Britain's problems on government spending alone is cloud-cuckoo emotionalism and bad economics. It wins elections but doesn't run countries. According to Mr. Frost, only Mrs. Thatcher's strong stands on such questions as immigration and law and order--the sort...