Spare_change
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- Jun 27, 2011
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As one of the people who've created the technologies that have increased productivity (mainly scientists and engineers), I came to the conclusion on my own back in the mid 90's that the average American had been gamed. It's been proven in many was since then - in the most easily understood way by the productivity versus hourly wage graph that I'm sure everyone has seen by now and by the graph that shows growth of the wealth concentrations in the upper wealth percentiles. I don't know how anyone could see these and not conclude that the productivity gains had been gobbled up by the people at the very top. How do you reconcile that - as the greatest of coincidences?He provided an accurate history lesson as anyone who lived through the supply-side economics era can testify. Show us where he's wrong.In 1980 we were sold the theory of Supply Side Economics or Trickle Down Economics. Specifically, if we make more money available to the investment class, than they'll use that money to grow the economy, which will brings jobs, material gain and opportunities to the lower classes.
In practice this theory had uneven success. Much of the extra wealth on top went into buying politicians so that our capitalists could create the trade and regulatory environment to ship production to dirt cheap labor markets in freedom hating nations. Another problem was that Supply Side Economics advocated for lower American wages (so that our suppliers would have lower operating costs and hence more incentive to invest). Taken together these things destroyed consumer purchasing power, which is why starting with Reagan The American family started to take on massive amounts of debt (to compensate for lost jobs and lower wages/benefits).
As a result, Reaganomics has left us with an upper class that has more concentrated wealth than any such class in history, coupled with a middle class that is too indebted to consume. This isn't a temporary crisis, it's a structural flaw that we keep trying to fix with more credit and a toxic cycle of asset bubbles.
But it gets worse. You know how republicans hate concentrated political power - well, take a guess what our singularly massive amount of concentrated wealth amounts to? Reaganomics, by concentrating wealth in the hands of the suppliers (which is spread across the entire investment class), has created exactly the kind of concentrated power that they claim to be against. This is why wealthy individuals on both sides of the political aisle own politicians. This is why lobbyists and not voters determine legislation.
Republicans don't get it.
We swallowed poison in 1980.
Turn off talk radio.
The money never trickled down you fucking fools.
It trickled into the pockets of politicians. This was predicted when Reagan announced that he was bringing the wealthy American back.
Your lack of understanding of even the most fundamental capitalism concepts is stunning !!!
You attack without facts; you accuse without proof; you bitch without having a solution.
In short, pretty much a waste of time. Bring something to the table other than accusations, innuendo and empty rhetoric.
Supply side economics argued that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services as well as invest in capital.
"Like most economic theories, supply-side economics tries to explain both macroeconomic phenomena and - based on these explanations - offer policy prescriptions for stable economic growth. In general, supply-side theory has three pillars: tax policy, regulatory policy and monetary policy.
However, the single idea behind all three pillars is that production (i.e. the "supply" of goods and services) is most important in determining economic growth. The supply-side theory is typically held in stark contrast to Keynesian theory which, among other facets, includes the idea that demand can falter, so if lagging consumer demand drags the economy into recession, the government should intervene with fiscal and monetary stimuli.
This is the single big distinction: a pure Keynesian believes that consumers and their demand for goods and services are key economic drivers, while a supply-sider believes that producers and their willingness to create goods and services set the pace of economic growth." Understanding Supply-Side Economics
" ...the American economy performed better during the Reagan years than during the pre- and post-Reagan years.
The following - http://object.cato.org/sites/cato.org/files/pubs/pdf/pa261.pdf - addresses the myths fomented by liberals about the supposedly disastrous supply-side period of Reagan. It specifically disabuses 12 'misstatements' used by liberals today. I won't address all of them, but I will post a couple specifically appropriate to this thread. (all referenced tables, etc., are available at the cited website).
- Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years.
- Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years; it experienced a loss of almost $1,500 in the post-Reagan years.
- Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.
- The only economic variable that was worse in the Reagan period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s. The productivity rate was higher in the pre-Reagan years but much lower in the post-Reagan years." Supply-Side Tax Cuts and the Truth about the Reagan Economic Record Cato Institute
Fable 9: Workers Had to Work Harder for Smaller Paychecks in the 1980s
Caught between the lawmakers in Washington and the dealmakers on Wall Street have been millions of American workers forced to move from jobs that once paid $15 an hour into jobs that now pay $7.
Barlett and Steele never back up such anecdotal claims with any facts. Here they are: the correct way to measure changes in worker pay from one period to the next is not by examining wages alone, but by tallying the total compensation per hour --a measure that includes wages and benefits--paid to a worker.
Nonwage benefits have been an increasing share of total hourly worker compensation. In 1960, 9 percent of worker compensation was in the form of fringe benefits; in 1975, 16 percent of worker compensation was wage supplements; and by 1990, that percentage had risen to 20 percent.
So although it is true that average real wages have been falling over the past 20 years, real compensation has been generally rising. The average real wage in 1990 dollars fell from about $11.00 an hour in 1980 to about $10.00 in 1988, a 9 percent decline. But real compensation per hour rose from $15.00 per hourin 1981 to $16.50 an hour in 1988.
Fable 10: In the 1980s the Rich Got Richer and the Poor Got Poorer
During the 1980s the bucket of liberty and economic freedom rose, while the bucket of income equality fell. Upper-tier Americans significantly expanded their share of national wealth, while low-income citizens lost ground. Reagan policies were critical to the shift.
During the Reagan years, the total share of national income tilted toward the wealthiest Americans. From 1980 to 1988 the wealthiest 5 percent of Americans increased their share of total income from 16.5 to 18.3 while the poorest fifth saw their share fall from 4.2 to 3.8 percent.
Yet it is not true that the gains by the wealthiest Americans came at the expense of low-income Americans. From 1981 to 1989, every income quintile--from the richest to the poorest--gained income according to the Census Bureau economic data (see Figure 11).
The reason the wealthiest Americans saw their share of total income rise is that they gained income at a faster pace than did the middle class and the poor. But Reaganomics did create a rising tide that lifted nearly all boats.
Tens of millions of Americans moved up the income scale in the 1980s--an economic fact that is obscured when only the static income quintile data from the start of the decade to the end are examined. Figure 12 shows that 86 percent of households that were in the poorest income quintile in 1980 had moved up the economic ladder to a higher income quintile by 1990. Incredibly, a poor household in 1980 was more likely to have moved all the way up to the richest income quintile by 1990 (15 percent) than to still be in the poorest quintile (14 percent).
Fable 11: The Poor and Minorities Lost Ground under Reagan's Economic Policies
The 1980s was the first decade since the 1930s in which large numbers of Americans actually suffered a serious decline in living standard.
The poorest 20 percent of Americans experienced a 6 percent gain in real income in the 1980s and have suffered a 3 percent loss in income in the 1990s. Figure 13, which compares the income trends for the poorest fifth of Americans over the past 20 years, shows that the poor did the best during the Reagan years. Black Americans saw their incomes grow at a slightly faster pace (11.0%) than whites (9.8%) in the Reagan years (see Table 9).
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In short, you have bought into the liberal rhetoric that the Reagan economic model failed. Obviously, that is simply false. But, it's important that you believe it, because the left has invested itself so thoroughly in Keynesian economics, that they can't afford to allow you to decide for yourself. In addition, in order for the liberal model to be correct, there MUST be a wronged class. That's why they foment racial division, gender division, and class division. They MUST have a victim group, or they don't have anybody to 'save'.
Don't buy their rhetoric - look at the facts.
As for one of the statements in the conclusions you posted:
Nonwage benefits have been an increasing share of total hourly worker compensation. In 1960, 9 percent of worker compensation was in the form of fringe benefits; in 1975, 16 percent of worker compensation was wage supplements; and by 1990, that percentage had risen to 20 percent.
This reflects the increasing costs of healthcare and (excused me for being jaded) these benefits are the best way for employers to lock in employees that has been devised to date.
The Reagan economy is representative of the strategies (and I use that term loosely) that have been used in the corporate and banking worlds ever since. Juice the system for short term, unsustainable gains and let whoever comes after deal with the consequences. We allowed ourselves to be painted into a corner by the people who assured us that the rising tide would lift all boats.
Oh, I'm sorry .... I cited published conclusions by one of the most prestigious think tanks, and you refute it with YOUR opinion, without a single piece of counter-evidence.
I forgot just how omniscient you truly are .....
give me a break!