Well, the results of 35 years of supply side economic are in. The rich have gotten vastly richer and the middle class has gotten the shaft. During the previous 35 years, 1945-80, the distribution of wealth was much more equitable. Workers saw their incomes rise with productivity. Reagan’s supply-side economics shifted the gains in productivity to investors. No wonder the populist movements in both parties are gaining so much steam.
Free-market ideologues in the Republican party would call this development freedom. The rich are getting richer because the system is set up to benefit them. Reductions in the top income bracket and capital gains gave them more money to invest, money that never trickled-down but inflated their coffers. Organized labor has been steadily losing its influence as manufacturing jobs were sent overseas. Big corporations and their shareholders get bailed out by the tax payers but small businesses just go under.
As David Leonhardt of the New York Times says, “Different policies could produce a different outcome. My list would start with a tax code that does less to favor the affluent, a better-functioning education system, more bargaining power for workers and less tolerance for corporate consolidation. Remarkably, President Trump and the Republican leaders in Congress are trying to go in the other direction.”
Republicans believe that if we just give more freedom, or money, to the wealthiest Americans, they’ll unleash an entrepreneurial spirit that will create businesses and wealth. But maybe the real entrepreneurial energy is in the much larger low income and lower middle class communities. After 35 years, it’s time we try investing more in them for again.
Back in 1980, Pell Grants covered the entire cost of a two-year degree and 77% of a four-year degree. Today, they cover just 62% of a two-year degree and 36% percent of a four-year degree. In 1965, the average CEO made 20 times the salary of a company’s employees. Today, it’s 276 times as much. There’s a reason people think the system is rigged.
Income inequality is the central problem facing the broadest number of people in our society, not access to bathrooms or police shootings or immigration reform. While Democrats in power should address all of those concerns, they need to run campaigns on an economic platform and message that addresses economic well-being. We need more investments in education and a higher minimum wage. We need a tax system that rewards work as much as investments. And we need an infrastructure program that modernizes our grid, improves transportation including rail and provides greater access to broadband in rural areas. It’s still the economy, stupid.
Thomas Mills is the founder and publisher of PoliticsNC.com. Before beginning PoliticsNC, Thomas spent twenty years as a political and public affairs consultant. Learn more >
The top 1% in the United States have enjoyed a feast of increasing plenty since the 1980s. The gap between the top 1% and the bottom 90% has become a chasm. We live in different worlds.
Nowhere is the difference between the top 1% and the rest of the world more evident than how corrupt or incompetent executives are treated. Most of us expect that if we do a poor job, we would maybe get a warning and maybe another chance, but, sooner or later, we will be shown the door. We could apply for Unemployment Insurance, but our lives would change dramatically as soon as our paychecks stop. Most Americans are a few paychecks away from serious jeopardy. We are one serious illness away from the brink.
When United Airlines CEO Jeff Smisek was implicated in wrong-doing in 2015 related to Bridgegate in New Jersey, they sent him packing. His staff and customers were glad to see him go, but he took a little something with him – $26 million in cash and stock-options along with free first-class airfare, airport parking and a company car for life.
Bill O’Reilly of Fox News was caught again and again taking rude liberties with co-workers, a known sexual proclivity which cost the news corporation millions in hush money and settlements. After his last indiscretion, he was let go – with $25 million.
Even those who aren’t criminals or perverts live very different lives from the rest of us. Doctors work hard. They study for years, and they do an enormous amount of objective good for our world, but they aren’t paid like the CEOs in the health industry: Cigna CEO David Cordani, annual salary $17.3 million; Aetna CEO Mark Bertolini, $17.3 million; United Healthcare CEO Stephen Helmsley, $14.5 million.
Before he was Florida’s governor, Rick Scott oversaw the looting of Medicare by his former company Columbia/HCA which defrauded the government of billions and paid a fine of $1.7 billion after the company was caught, the largest fraud settlement in U.S. history. Scott narrowly escaped a prison sentence, but he was awarded nearly $10 million when he left the company.
Many of us wish to retire with a comfortable income. but GE’s Jack Welch must have felt like he won the lottery when he left with $417 million from his old job. Exxon CEO Lee Raymond left with $321 million. One wonders how many people were denied needed health care to provide United Healthcare CEO William McGuire the $286 million with him to go play golf.
How is it that a minimum wage is an outrage, and these mountains of money are considered reasonable compensation?
The trend toward greater and greater compensation being piled upon fewer and fewer people has not abated. It is accelerating
When the Forbes 400 was first published in 1982, it reported only 13 billionaires in the United States. In 2016, there were more than 500 billionaires in the U.S., too many for the list of 400.
Capitalism will always produce inequality in performance, results, and compensation. The private sector will always dominate the private sector, and, in general, a robust economy will produce more jobs and greater prosperity for everyone.
There will be distortions, a tendency toward monopoly and a pressure on the legislatures from those who have unimaginable wealth. The Koch brothers complained bitterly about the Obama Administration, yet they added at least $1 billion apiece to their pile of billions every year he was in office. How much better does it have to be for them to be happy? If $70 billion wasn’t enough for them, and $80 billion did not make them satisfied, why should we reorganize life in America around their happiness?
They are going to be miserable bastards no matter what we do for them, but they used their massive fortune to undermine any efforts to make life less difficult for everyone else.
The United States is 23rd out of the 30 largest industrial nations in income equality. The U.S. is rich, but only for a small number of people. Our current system does not promote prosperity for most of the people who work here. Our nation’s wealth is concentrated in the hands of very few people, and it is becoming more concentrated.
Piling wealth on top of wealth does not create general prosperity. There is a mountain of evidence on that topic. The Republicans still want tax cuts and program cuts so that the mountains of wealth in the hands of a few will get higher. The Republicans have exactly the wrong prescription for what ails North Carolina and America.
“Money is like manure. If you pile it up in one place, it stinks. If you spread it around, it makes things grow.”
Where have you gone Joe D….uh Biden? He’s the best we have – and a very good best too – until someone younger emerges. I’m happy to see Elizabeth Warren going on foreign trips, making good relationships with our military and still giving it to the creeps in the swamp.
Come on, Joe – speak for us regular Americans! Remind us of the old but enduring values of the Democratic Party!
Thank you, “Disgusted” and Thomas Hill and you all for your words.
Lots of good information here. Thank you, Jay. I am keeping the page.
Thank you, too, MyTurnNC.
The results of this economic experiment have been known for years and they are not pretty.
What I find particularly galling is that people who should know better and have the education and/or capacity to view the data from 1980 to 2015 will still defend neoliberal economic policies and in particular the theories of Friedman and his cohorts.
And finally, the outcomes that we see in society today could not possibly be what President Reagan and others intended when they began this journey in 1980. (And if they did intend to create this type of wealth inequality then they should not be honored at all but rather held in contempt and rebuked for the result of their machinations.)
Disgusted, You are so correct. My personal opinion is that no amount of intelligent argument will change this situation of voting against one’s interest. The religious and other prejudices now run too deep. Symptomatically, we have Franklin Graham going to Trump’s inauguration and calling him “God’s appointed”. Publicly-available tax returns show that the charitable organization Samaritan’s Purse pays Franklin $450,000 per year, and the Graham Ministries pays him another $150,000. This is in addition to his free lodging and travel expenses. Neither should we forget that the Ministries had a $33 million slush fund more than 30 years ago (I don’t know what it is now), and that the Grahams live on a 66-acre resort at Montreat, surrounded by an electrified fence. I am a Christian myself, but I have had enough. It is my position that we must allow the people (including ourselves) to suffer under their choices, rather than pushing halfhearted relief programs through Congress. Another option is the formation of a new political party. I, for one, have had enough of “the best we can do” mentality that pushed Hillary Clinton to head the Democratic ticket and put Moron Trump in the White House.
The Democrat’s simple message: We Don’t Want to Lower Corporate Tax Rates — We Want to Lower Your Tax Rate.
That might work because many people are ignorant to the fact that they are the ones that actually pay the corporate taxes. The tax is added to the cost of the company’s goods and services.
I assure you ExxonMobil, for example, knows what their complete cost structure is, including taxes, and that cost is figured in the price of the fuel they sell.
When you have a Wall Street buddy like Chuck Schumer leading the charge to get Democrats to level the playing field, the message isn’t exactly compelling. Mr. Mills pooh-poohed Bernie as an unelectable socialist in the latest presidential contest. Mills’ understanding of history often seems accurate, but his notion of what to do next, or at least who is best equipped to do it (Hillary?) is open to question.
Would someone please forward this post to the DNC, DSCC, and whatever and get them on board? Clintonism is over. The Third Way is no longer The Way. Why is this so hard to understand? I’m so frustrated I’m about to give up on Democrats.
In 2000 and 2016 we reaped the results of “giving up on Democrats”, and we have, and will, lived with the consequences! No, not all Democrats are perfect, but they are golden compared with what we are now saddled with!