Robert Reich: Why The 3 Biggest Economic Lessons Were Forgotten

[xchrom]

http://www.alternet.org/economy/robert-reich-why-3-biggest-economic-lessons-were-forgotten



Why has America forgotten the three most important economic lessons we learned in the thirty years following World War II?

Before I answer that question, let me remind you what those lessons were:

First, America’s real job creators are consumers, whose rising wages generate jobs and growth.If average people don’t have decent wages there can be no real recovery and no sustained growth.
In those years, business boomed because American workers were getting raises, and had enough purchasing power to buy what expanding businesses had to offer. Strong labor unions ensured American workers got a fair share of the economy’s gains. It was a virtuous cycle.

Second, the rich do better with a smaller share of a rapidly-growing economy than they do with a large share of an economy that’s barely growing at all.

Between 1946 and 1974, the economy grew faster than it’s grown since, on average, because the nation was creating the largest middle class in history. The overall size of the economy doubled, as did the earnings of almost everyone. CEOs rarely took home more than forty times the average worker’s wage, yet were riding high.

Third, higher taxes on the wealthy to finance public investments — better roads, bridges, public transportation, basic research, world-class K-12 education, and affordable higher education — improve the future productivity of America. All of us gain from these investments, including the wealthy.

[ananda]

1. Forgotten or just ignored in the interests of a greed/power agenda?

..

[woo me with science]

5. It's dangerous to publish raw truths these days. nt

[Fumesucker]

2. The last paragraph says it all I think

As the gap between America’s wealthy and the middle has widened, those at the top have felt even richer by comparison. Although a rising tide would lift all boats, many of America’s richest prefer a lower tide and bigger yachts.

[reformist2]

3. I have to think the term "job creator" is pretty much dead as a propaganda tool.

It may have worked back when Dubya and Karl Rove first tested it, but I think most people now laugh derisively whenever the term is mentioned.

[hobbit709]

4. Henry Ford, reactionary old bastard that he was, knew you can't sell your goods if you don't pay

your employees enough to buy it.

[Theyletmeeatcake2]

6. What sort of high faluting pinko commie talk is this.....attacking our job creators

Right on brother...you're right on the money.all we have to do is get those bastards out of the temple...am I quoting the bible..nah,it can't be as I've never heard any men of god mention the big fella kicking the money lenders out of the temple...

[rock]

7. And now we face "the dirty swimming pool" problem

It's always extremely time-consuming with multiples of cost and effort to clean up a dirty swimming pool than it is to keep it clean to begin with. Also note: the bigger the pool the more exacerbated the problem is.

[Uben]

8. Greed makes men evil

They live for it, it consumes them, and eventually they'll die from it. But how many deaths will their greed be responsible for before they die? They don't care. It's all about them.

Pure evil.

[ProSense]

9. Blame it

For starters, too many of us bought the snake oil of “supply-side” economics, which said big corporations and the wealthy are the job creators — and if we cut their taxes the benefits will trickle down to everyone else. Of course, nothing trickled down.

...on Reaganomics, and a lot of us didn't buy into it.

Reagan fooled some people with his bullshit tax increases. Yeah, he increased revenue, but it was on the backs of low-income Americans and seniors, including taxing unemployment benefits.

The top tax rate was lowered from 50% to 28% while the bottom rate was raised from 11% to 15%. [4] Many lower level tax brackets were consolidated, and the upper income level of the bottom rate (married filing jointly) was increased from $5,720/year to $29,750/year. This package ultimately consolidated tax brackets from fifteen levels of income to four levels of income.[5] This would be the only time in the history of the U.S. income tax (which dates back to the passage of the Revenue Act of 1862) that the top rate was reduced and the bottom rate increased concomitantly. In addition, capital gains faced the same tax rate as ordinary income.

http://en.wikipedia.org/wiki/Tax_Reform_Act_of_1986

More: http://www.democraticunderground.com/10024465391#post30

[KG]

10. not forgotten; laughed at.

[AlbertCat]

12. No need for paragraphs...

Just say "Reagan" and you've covered most of it.

[bkanderson76]

15. Pretty much spot on....thank you

[malthaussen]

13. But the solution in this context would seem to be bringing back consumerism...

... which has critical environmental impact, increasing exponentially as the number of consumers increase. Ultimately, an economy based on waste is doomed.

-- Mal

[bread_and_roses]

16. Shhhhshshsh ... you're not allowed to point that out ...

Challenging the ordinary definition- of "growth" - more people buying more things that are manufactured from finite resources in inevitably polluting processes or grown in ever-less sustainable giant agra factory farms and consume ever-greater units of energy and generate ever-increasing mountains of waste - is the real taboo.

[TheKentuckian]

17. Even the best and brightest with the best intents cannot get there from where they started.

It is hard to let go. Reich and Krugman both have seen a lot of light but they cannot help but to have some blind spots that take longer to correct than others (see trade) because of philosophical considerations that I tend to think often come from hopes that probably are reasonable but just somewhat less universally applicable than they can see clearly, when, where, and how are almost always critical questions.

They will also being looking to adjust the system and avoiding fundamental changes, they deeply believe they have the answer and will not spend energy on looking for any other so they cannot operate there.

It is fortunate that there are a few voices that even the truest believers cannot easily completely tune out that are at least capable of acknowledging that the system isn't even working in its own context because even that is very rare now because the foxes have gone past the watching the henhouse, they have the deed and us hens have to pay rent.

You are right but most are very far from even seeing the more up front fuckload of fail we have on our hand is. Even if resources were unlimited, the system would artificially introduce lack into the markets. Look at housing, homelessness is enforced as an artificial upward pressure on market prices and rents. There is no housing shortage, supply and demand are peripheral.

[WhaTHellsgoingonhere]

14. 4. The movie "Network" came out nearly 40 years ago