A Personal Perspective on Limited Economic History

I was born in 1942, the war years. Following those wars years the economy flourished. The G.I. Bill encouraged veterans to get a better education and thus better economic lives. The New Deal was fresh and still active and people were still united, as folk are during times of war. They were interested in social safety nets for our citizens and building an infrastructure than would benefit industry and individuals alike. Business leaders were also active church members and used those values in their business dealings. (Well, some were unscrupulous bastards who used nasty ways to bilk others out of money with unfair practices which anti-trust legislation eventually tamed.) Half my life the economy was basically sound, there was a strong middle class that increased yearly in economic growth and the country flourished.

Then there are the next 35 years and things changed.

I just started reading Robert Reich’s Beyond Outrage: What has gone wrong with our economy and our democracy and how to fix it. He begins with telling the reader to connect the dots. “The first dot: For three decades almost all the gains from economic growth have gone to the top.” He points out during the 60s & 70s the top 1% got 9 to 10% of our total income; by 2007 that doubled to 23.5% and the wealthiest one-tenth of 1 percent tripled their wealth. It is like the late 19^th century all over again. And during this time wages for average workers have stagnated. “The second dot: The Great Recession was followed by an anemic recovery.” The middle class without increasing money could not buy as much depressing the economy and fell into debt trying to maintain the spending levels, and of course folk we laid off, especially from good jobs. “The third dot: Political power flows to the top.” Though they may not have intended this, the wealthy can give more to political campaigns indebting the elected officials to them. This has spiraled out of control. “The fourth dot: Corporations and the very rich get to pay lower taxes, receive more corporate welfare, and are bound by fewer regulations.” Thus corporations and Wall Street continue to gain more and more political clout. Tax cuts in 2001 and 2003 and extended in 1010 and 2003 saved the richest 1.4 million tax payers (the 1%) more money than the rest of America’s 140.89 taxpayers total income. “the fifth dot: Government budgets are squeezed.” So here come tax cuts to education, infrastructure, police, social workers, etc. “The sixth dot: Average Americans are competing with one another for slices of a shrinking pie.” This forces the middle class to compete with the poor. Instead of banding together we are forced apart, to each his own. “The seventh dot: A meaner and more cynical politics prevails.” All we have to do is look at the last elections to see how this has worked out. As a result in the time when we need to pull together, we have become more polarized, angry and vindictive. Note how folk are blaming the poor and entitlements for our woes rather than the inequality of wealth. Nasty.

Now I think of all those who are half my age or less, those born in 1977 and after. And since we are not very politically or economics astute at birth the date really extends back from that to those born when I was graduated from high school in 1960. Their entire lives have been lived in a time of screwed up economic practices far from the Keynesian demand side economics of my youth and before which grew our economy for all.

Furthermore, I don’t think they have much of sense of economic history of those times of prosperity and growth that took place in our country when the government assumed its role as a guide and provided leadership for the economy. There economic experience is limited to Reaganomics or supply side economics which just plain has not worked for the middle classes much less those in poverty.

The entire country is sliding more to the right while it should be sliding left to work on these economic issues. We need more middle class say to our government rather than the influence of the wealthy. We need to becoming together in unity to work for common economic and social causes rather than fighting each other over vested interests.

Frankly I am worried about our country which seems to be veering away from democracy to plutocracy or oligarchy. I am very worried about the children of those whose parents were born in the last 35 years of poor economic thinking. Their future seems bleak.

Yet, Robert Reich writes about how we can fix it. I hope he is right. I will let you know when I finish his book what his solutions are. Whether we will implement them is another story. In the meantime I am continuing to read Alex Tocqueville’s Democracy in America, and to stay sane, a novel or two.