Do you feel like your salary has stagnated? Do you feel like your economic situation has gotten worse? Jacob S. Hacker and Paul Pierson, in Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class says middle-class incomes have gone nowhere since the Seventies, but the Rich have had their net worth skyrocket. It’s not a secret. Federal tax returns that Hacker and Pierson use for their analysis show how things changed 30 years ago as the Government changed the rules to give advantages to the Rich. Operating like detectives, Hacker and Pierson follow the economic clues to explain the system that allows the Rich to escape taxation and regulation. How can hedge fund managers make billions of dollars yet pay a lower tax rate than their secretaries? How did the top 0.1 percent of Americans come to control almost 25% of the total wealth of the U.S.? Prepare to be enlightened and outraged if you read this excellent book. GRADE: A
Basically the problem faced by the Very Rich is that the U.S. can no longer afford a middle-class labor force; competion from just about everywhere else is too cheap, so that’s where the big $ guys have to send their jobs if they want to stay obscenely rich. The corollary to tis is that if they succeed in substantially reducing the middle class, they will have no U.S. market for their products. And so the cycle spins…
Hacker and Pierson document how Government has changed the tax code to favor the Rich, Dan. And, of course, the Middle Class takes the hit.
You ask–
How did the top 0.1 percent of Americans come to control almost 25% of the total wealth of the U.S.?
I answer: Two words: Ronald Reagan. Life has never been the same since he was elected.
Hacker and Pierson show the tax changes favoring the Rich accelerated during the Reagan Years, Deb.
I was thinking about that this morning, Deb, as the ridiculous deification of Ronald Reagan goes on. Grover Norquist says Reagan “ending the Cold War” (as if he did that, and single handed) was more impressive than FDR winning WWII.
How do you even begin to talk to someone with a mindset like that? Forget Palin and others like her who know nothing. Reagan believed in tax cuts? Yeah, he did, and Reagonomics started us down the road that has put us where we are today.
They also seem to forget that his policies were so disastrous for the economy that he had to agree to the biggest tax increase in history.
Reagan also eliminated the synthetic fuels program to find alternatives to oil, Jeff. What if we had continued that research for the past 30 years? We might not be drilling in the Gulf or face $4 a gallon gasoline.
Third try at a response so this time I will just say, I agree with what’s said above me.
Phil would find the politics in WINNER-TAKE-ALL POLITICS compelling, Patti.
George, how does Clinton fare in the book?
Clinton tried to slow the impact of the tax changes, Drongo, but the Congress (led by Newt) rammed their own laws through. The repeal of the Glass-Steagall Act, that deregulated the banking system and caused our present economic problems, happened on Clinton’s watch.
I’m not going to read it, I would be, as you say, outraged, and with nothing I can do about it, why put myself through that? It’s not like I don’t have a pretty good idea what’s happened, and continues (every time the GOP makes a move) to happen. So I stop to smell the roses, enjoy the view, red good books and stay hunkered down as best I can…
Don’t read Paul Krugman’s NY TIMES columns, either, Rick. Or you’ll have a stroke.
On Clinton’s watch, but not by his direction, as you say, Congress rammed that through, just a it killed his efforts at national health care.
Congress has a lot to answer for, Rick. We could have had national health care for almost 20 years if they hadn’t jumped ship.
Don’t forget something else that happened during the Reagan era: Laws that required companies to fully fund their pension plans were repealed. Companies discontinued pensions and/or used those funds as part of leveraged buy-outs. Now all of the boomers who lived (and worked) through those times are retiring, there are no more pensions–and you’re lucky if you’ve got enough in your 401K to get you through your first year of retirement.
As for me, I plan to be working (even if it’s only to ask, “Do you want fries with that?”) until I die–and I have a degree and have a reasonably-reliable job.
Yes, you’re right, Deb. “Pension-reform” put an end to fully funded pensions (reason given: “They cost too much.”). We’re paying a Big Price for those Reagan Years today.
Clinton didn’t do much to fight for national healthcare, and he didn’t do much to stop the repeal of Glass-Steagall. He was the Neoliberal Tool of big business, and he rode his hobbyhorses for all the benefits they could reap for the Democratic Party at the expense of the nation. Hence the hostility of the Grover Norquists of the world, who saw that as the prerogative of the GOP. That the two criminals Reagan and Clinton are treated so kindly by our happy apologists is and will continue to be sickening.
Politicians focus on getting re-elected, Todd. Running the country comes second.
Not to jump on a hobby horse, but we can’t forget the rise of the religious fundamentalism since 1980. When Reagan (or, presumably, Lee Atwater) made a conscious decision to court the religious right to win the election of 1980, I couldn’t help but think of that scene in “Cabaret” where Fritz, the indolent German nobleman, says, “Oh yes, we’ll let the Nazis into the government and they’ll take care of the communists for us, but we’ll control the Nazis.” Then the next day, after watching a Hitler Youth Rally, Michael York’s character asks Fritz, “Do you still think you can control these people?”
WINNER-TAKE-ALL POLITICS explores that Republican-Religious Right connection in detail, Deb. While the “social agenda” catered to the Religious Right, the economic agenda focused on making the Rich richer.
CABARET? I had the unfortunate experience of reading Shirer’s RISE & FALL OF THE 3RD REICH durng the Bush era and spent about a week hiding under my bed.
Shirer’s book is terrific, Dan. One of my favorites (although it’s scary).
Okay, I must confess (though I lok back on it and blush) I voted for Reagan. Twice. After the relative paralysis of the Nixon-Ford-Carter years, it was nice to see Government running again; gave me te same warm feeling Italians got when Mussolini made the trains run on time.
Reagan, like most Presidents, did some Good Stuff, Dan. But he also did some Bad Stuff we’re contending with today.