Sunday, June 18, 2017

A return to Piketty: "Reaganomics killed America's middle class."

Seven days in April ...

7 Days of Piketty: Thursday, or "Squeezing the rich ... if the world introduces a Piketty Tax."

7 Days of Piketty: Wednesday, or "Piketty's Three Big Mistakes."

7 Days of Piketty: Tuesday, or "Egalitarianism’s Latest Foe: a critical review of Thomas Piketty’s Capital in the Twenty-First Century."

7 Days of Piketty: Monday, or "The Geography of Populist Discontent."

7 Days of Piketty: Sunday, or "Why Economic Inequality Threatens Our Republic."

7 Days of Piketty: Saturday, or "All men are created unequal."

7 Days of Piketty: Friday, or "Capital in the Twenty-first Century' explained."

 ... but I forgot this one, from way back in 2014.

Reaganomics killed America’s middle class, by Thom Hartmann (Alternet via Slate)

This country's fate was sealed when our government slashed taxes on the rich back in 1980

There’s nothing “normal” about having a middle class. Having a middle class is a choice that a society has to make, and it’s a choice we need to make again in this generation, if we want to stop the destruction of the remnants of the last generation’s middle class.

Despite what you might read in the Wall Street Journal or see on Fox News, capitalism is not an economic system that produces a middle class. In fact, if left to its own devices, capitalism tends towards vast levels of inequality and monopoly. The natural and most stable state of capitalism actually looks a lot like the Victorian England depicted in Charles Dickens’ novels.

At the top there is a very small class of superrich. Below them, there is a slightly larger, but still very small, “middle” class of professionals and mercantilists – doctor, lawyers, shop-owners – who help keep things running for the superrich and supply the working poor with their needs. And at the very bottom there is the great mass of people – typically over 90 percent of the population – who make up the working poor. They have no wealth – in fact they’re typically in debt most of their lives – and can barely survive on what little money they make.

So, for average working people, there is no such thing as a middle class in “normal” capitalism. Wealth accumulates at the very top among the elites, not among everyday working people. Inequality is the default option.

You can see this trend today in America. When we had heavily regulated and taxed capitalism in the post-war era, the largest employer in America was General Motors, and they paid working people what would be, in today’s dollars, about $50 an hour with benefits. Reagan began deregulating and cutting taxes on capitalism in 1981, and today, with more classical “raw capitalism,” what we call “Reaganomics,” or “supply side economics,” our nation’s largest employer is WalMart and they pay around $10 an hour.

This is how quickly capitalism reorients itself when the brakes of regulation and taxes are removed – this huge change was done in less than 35 years.

The only ways a working-class “middle class” can come about in a capitalist society are by massive social upheaval – a middle class emerged after the Black Plague in Europe in the 14th century – or by heavily taxing the rich.

French economist Thomas Piketty has talked about this at great length in his groundbreaking new book, Capital in the Twenty-First Century ...

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