Give her credit where credit is due. But don't try to turn her into a magician, says Paul Krugman. Like giving her credit for what happened during the years of Tony Blair. "Does she get credit for a reward so long delayed?," Krugman asks. Kind of like the eager naivete of giving Ronald Reagan credit for the Clinton boom. Dream on...
I guess there is a case that the Thatcher changes in taxes, labor regulation, etc. created a more flexible economy, which made the good years under Blair possible. But it’s an awfully long lag. And there’s another possibility. For what happened in the 90s that arguably redounded very much to Britain’s benefit? Why, the rise of fancy finance — which was a huge boon to the country that contains the City.
I’m sure that British economists will be hashing this stuff over in the days ahead. For now, consider this a caution: if anyone tells you that Thatcher saved the British economy, you should ask why the results of that salvation took so very long to materialize. ...Paul Krugman
