Reagan takes the rein A THATCHER INTHE WHITE HOUSE

Scan page 1

«What's wrong with bankruptcy?" was Ronald Reagan's first response to news that the Carter government had bailed out the flagging Chrysler Corporation at huge expense last year.

Reagan subsequently toned down his public position on But the new President has ridden to office on a platform of policies strikingly similar to the monetarist theories which have led the Thatcher government to lay waste whole areas of British industry, driving unemployment over the 2½ million mark.

When Thatcher travels to the USA to congratulate Reagan on his election victory over a discredited and disastrous Jimmy Carter, she will hail the success of a campaign based on pledges of:

*three successive annual cuts of 10% in Federal income tax;

*tax concessions to industry and a wholesale scrapping of health, safety and environmental regulations;

*a major increase spending;

*a cut in public service spending;

*lowering the minimum wage to persuade employers to hire unemployed youth at rock bottom rates.

Virtually all of these policies have in one way or another been implemented by Thatcher in Britain-with catastrophic results for the working class.

If Reagan attempts a similar package of policies in a US economy already teetering on the edge of recession, it seems certain that he will push it decisively over the edge as well.

Breathing space

The first casualty of his monetarist schemas could be the Chrysler Corporation, now clinging onto life only by the skin of its teeth.

A $400 million governmentbacked loan last week offered the firm a breathing space before imposing a shutdown.

But the terms agreed to by Chrysler's bankers-in which $1,068 million of debts was wiped out in exchange for a mere $150 million in cash and $500 million in worthless shares -make it clear there will-be no more bank loans for a corporation that is regarded as already bankrupt.

The most generous concession was made by the United Auto Workers' union bureaucracy, who handed over a 2year wage freeze on behalf o their 180,000 members in Chrysler-worth a staggering $783 million.

But the dying firm still owes $1.2 billion to the government -on which it is legally bound to pay interest, and which it must repay in two years' time: it owes a further $1.1 billion around the world; and it lost a cool $1.8 billion last year.

For Reagan to bail out this sinking ship would amount to a major and embarrassing retreat from his declared policy: but for him to allow Chrysler to go under would immediately add another 500,000 to the unemployment queues of the USA.

Spending cuts

Whatever he decides the US economy as a whole will certainly feel the impact of the massive spending cuts Reagan will need to impose to finance his planned tax cuts.

This in turn will further add to the downturn in the world But the main threat posed before the working masses of the world centres on Reagan's commitment to massively increased military spending.

After the traumatic overthrow of US-backed dictatorships in Iran and Nicaragua, Reagan, along with top military chiefs and sections of the US capitalist class, is determined to use force if necessary to prevent further such setbacks for imperialist control.

He has proposed the stationing of US troops in the Sinai desert to help prop up both the Zionist state of Israel and Sadat's puppet regime in Egypt, and a "get tough" policy against revolutionary struggles in the Carribean.

An early his attitude towards open US intervention in El Salvador (see His military policy will build on the foundations of Carter's huge war budgets in the last two years. Carter's outgoing budget provides for an unprecedented peacetime allocation of $200 billion-which Reagan is committed to increase.

Carter's plan includes:

*Increased pay for the armed forces.

*More cash for new strategic *More cash New Secretary of State nuclear weapons. *Improved sea and airlift capacity for use in Europe and elsewhere.

*More cash towards the planned Rapid Deployment Force.

This represents a major increase in an already lethal arsenal of nuclear and conventional forces deployed against the workers of the world.

In this respect, Reagan is of course ten times more dangerous than Thatcher on an

Scan page 2

The capitalist media have described the political events that have occurred in West Africa recently as a mindless and random Though the international Wer y 21 January 1981 of giving direction