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Tuesday, October 25, 2016

Former secretary of labor Robert Reich’s introduction of his new project explains why both income and wealth inequality began to skyrocket in the early 1980s. This wasn’t by chance, Reich explains. The greatest inequality between the rich and poor since the Great Depression is the result of specific policy choices made by the Congress and the president and supported by a Supreme Court that Senator Elizabeth Warren (D-MA) has said is becoming a “subsidiary” of the U.S. Chamber of Commerce.

Reich’s analysis echoes what our own David Cay Johnston reported in May of this year:

A revealing new examination of the top 1 percent in a variety of countries brings into focus how the American government’s tax, union bargaining, inheritance and other rules widen the growing divide between those at the top and everyone else.

Four economists found that such wealthy and technologically advanced countries as Japan, France and Germany have seen growth at the top, but not the chasm of inequality created in recent decades in the U.S. and Britain.

That is significant because it means that new technologies and the ability of top talent to work on a global scale cannot explain the diverging fortunes of the top 1 percent and those below, since the Japanese have access to the same technologies and global markets as Americans. The answer must lie elsewhere. The authors point to government policy.

Inequality Video

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  • Dominick Vila

    Most political systems are designed to benefit a few at the expense of many, and capitalism is not an exception to that rule, although it does afford more opportunities than communism, feudalism and other forms of government. Our system is designed to help corporations, encourage private sector investment, and reward the elite, often at the expense of the middle class and always at the expense of the poor. The rationale used to justify this concept is the alleged benefit of trickle down economics. If the rich get richer, according to this theory, the poor will get the crumbs they need to survive and be content. The bump on the road are the global economy and the huge opportunities for market expansion and higher profit in emerging super powers. The latters are an irresistible influence on our entrepreneurs who are more inclined to invest abroad to increase return on investment than invest at home to help their fellow Americans.

    • Independent1

      I know I’m probably beating a dead horse – but I lay a great deal of the blame on America’s economic inequality today on Ronald Reagan with this union busting and brainwashing of right-leaning legislators’ minds with his trickle-down economics nonsense: that the rich are benevolent keepers of the world and by giving them more and more money, they will take care of all us poor peons. Despite the fact that Bush jr. proved without a doubt that trickle-down economics is a fantasy, it still remains as a GOP mantra; all because they continue to worship Ronald Reagan and misguidedly believe he was a great president- when I will argue he was the worst president in American history; because of the enormous damage he did in destroying the fabric of American society.

      • idamag

        The other thing Reagan did was to start the anti-government idea.

        • Independent1

          He was also the first truely big spending president. He’s the one that gave the two Bushes the example of keeping 25 plus percent of their spending outside their budget so it couldn’t be tracked. Which of course helped those two in running up over 10 trillion in debts. And Reagan himself spent more in 8 years than all the presidents in office over the previous 50 years combined of non military spending. He tripled the 800 billion deficit he inherited from Carter driving it up to 2.3 trillion in 8 years. And he helped keep down unions making any inroads by appointing two union haters to the National Labor Relations Board. Reagan was actually kicked out as being president of the Screen Actors Guild when they discovered he hated unions.
          I’m convinced it was his busting of the Air Traffic Controllers union while in the process displaying his dislike for unions, that started the destruction of the bond that had existed between employers and workers. There had always been an unsaid agreement of “if you work hard and do good work, I’ll do right by you”. I can remember clearly that it was during the latter part of Reagan’s 1st term when companies started letting some of their best workers go, just so they could replace them with younger, less experienced workers who they could pay less; which of course, made their bottom lines look better. It was Reagan’s union busting that started the corporate notion of “what’s best for the stock holders supersedes what’s best for a company’s employees”. From then on, the vast majority of companies today focus almost entirely on maximizing their bottom line profits to make stockholders happy; and if that’s not what’s best for the employees, too bad.

          • ThomasBonsell

            Minor error but major distortion.

            Reagan did not inherit a $800-billion deficit from Carter.

            The $800-billion figure was debt; a debt piled up over two centuries of American history,

            Reagan inherited a deficit of less than $74 billion, a deficit brought on in part by a recession that was caused by the oil embargoes after the Iranian revolution.

          • Independent1

            Thanks for the correction and info on the actual deficit Carter passed onto Reagan. I know the difference and need to be more careful in using the terms correctly.

          • ThomasBonsell

            No problem. I notice typos such as this because I have been tying to set Reaganites straight for years over the fact that Carter had a much better economic record than did the Reagan-Bush regime.

            Better record on job creation, much lower poverty rate, much lower debt-to-GDP rate. And Carter was a much more moral man than was Reagan.

  • idamag

    It is definitely a purposeful endeavor. It has obviously been cleverly orchestrated. What is sad, is that they convince the masses that they are right. When they yammer about smaller government, they are talking about smaller government for the populous and greater largesse from our taxes for them. There are six global corporations, right now, that have plans in the working to own the governments. Search FPP. Read “Fahrenheit 451” to see what the world will be like when corporations own the world.

    • Independent1

      Corporations would have taken a giant step in that direction had Romney been elected. Mitt would have ended up as nothing more than a corporate puppet. I’m not sure even he realized the situation he would have gotten himself into when he talked a number of corporate CEOs to help in his election efforts by intimidating their employees into voting for him. At a corporate fund raising dinner close to the election, he suggested that the CEOs attending should write letters to their employees saying that there may be layoffs if Obama was reelected; and several CEOs followed through on his suggestion; the Koch Bros of course, as well as the CEOs of BofA, GE and some others.

      Can you even begin to imagine the leverage these companies would have had on Romney (not to even mention the millions they donated to his campaign for use in brainwashing the American public via TV ads)?? America would have easily become the first corporate run nation on the planet. Romney would have been spending all his time reworking every piece of legislation Corporations could come up with that needed rewriting to make them more “Corporate Friendly”, and with Romney in the White House, the GOP with a large majority in the House and some Senators representing states with conservative leanings, who knows what changes would have gotten made. But you can be sure of one thing, had the corporate intimidation even have suggested that it helped get Romney elected, more and more companies would have gotten into trying to influence America’s electoral results.

      • idamag

        They already have too much influence on the government. People, like you, who can think seem to be in the minority. Let’s say you live in a small town that has no internet and no television. The only entertainment is the local theater. The local theater owner hates Native Americans. He only shows movies that puts them in a bad light. You don’t like these kinds of movies, but boredom drives you to watch them. All the kids are watching them. The movies might not shape your thinking, but they will shape the kids’ thinking. The lack of mental stimulation dumbs down the town. Take a good look at what is available on television and it might answer the question of why people are getting stupider. A corporation trying to scare employees into voting a certain way is disgusting and un-American. Those are the businesses that we should shun. We should list them here, starting with Applebees.

        • Independent1

          You’re so right about them having too much influence and the SCOTUS decision on Citizens United certainly didn’t help in trying to keep their influence down. The vast majority of Republicans still have the notion that corporations can drive the economy; that without government stimulating the economy by injecting money into it, that corporations can actually get the economy reved up again. Yet I’ve asked many times how corporations would do that, and so far no one has been able to explain how it can be done.

          I’ve asked, would corporations across the country give everyone a raise to put more money into the economy for people to spend? Would companies get together and all cut prices so people with limited funds would start spending again? Would they get together and agree to pay the employees portion of the social security deduction so people would have more money available to spend? Or would they even agree to raise the minimum wage to a livable level so millions of people who are now struggling with incomes below the poverty level would start spending? (We know how companies have resisted that idea.)

          We all know that companies aren’t going to do any of those so there is absolutely no way companies by themselves without a government stimulus (either via increased spending or tax cuts) can really spur the economy). Hoover proved that when he had that notion back in the late 20s/early 30s and companies fell flat of their face resulting in the Big Depression (he actually cut spending and raised tax rates at the same time thinking companies would spur the economy and by raising tax rates the country would get a revenue boost). Just like Bush Jr. proved that trickle-down economics is a fairytale when he gave the wealthy the biggest tax cut in a decade and started two wars which should have helped rev up the economy, but in fact even doing those two, the economy over the next 6-8 years was one of the most lackluster in recent American history. And job creation was almost the worst since the big depression – only Bush Sr. had a worse job creation record.

          • InsideEye

            Should we have the same budget as proposed by JFK. there seemed to be more spendable money in our pockets.

          • Independent1

            I’m sorry, I’ve missed your point. Of course we shouldn’ have the same budget as JFK – the situation in America today is vastly different than it was 50 years ago. One thing we shouldn’t have though, is presidents who keep 200-500 billion in spending outside of their budgets so they can simply run up even more debt as Reagan and the two Bushes did.

      • DurdyDawg

        But it doesn’t stop there… The agenda is still alit in their pea brains and in the next presidential election we will be faced with yet another Romney clone because that’s the way this party has always operated and we owe them a presidency for all the money they wasted on the last two rounds. The next election will be even worse as the supreme court opens the door to more anonymous contributions.. The political system has gone capitalistic with private funding that equates to ‘Buying’ these positions and the GOP is the fore runner in this atrocity. Our next major election will indeed show this nation that the elite are determined to occupy this country and there’s nothing we will be able to do about it because we were naive enough to allow these same vultures to create and set up this farce.

  • Lovefacts

    People think of Reagan as a politician. He wasn’t. He was always an actor, and as president he played his greatest role. Prior to marrying Nancy, he was a liberal Democrat. The man had no depth and followed his handlers orders. The average American even thinks he was a great governor. He wasn’t. I was living in California when Reagan was governor. He was a disaster, along the lines of Arnie, and his legacy still haunts California.

    In 1967, when Reagan was elected governor, the educational system of California k-university was ranked #1 or 2 in the country. Except for registration and lab fees, it’s community colleges were free. The cost to Cal or UCLA was nominal–a family could send their kid to UCLA without a loan–around $150/quarter. But this was 1960s, and Reagan hated that students protested the VN war and believed that the state shouldn’t provide a low cost education to this pampered group.

    So, one of his first actions was an attempt to cease funding the state’s higher education system. While, he didn’t fully succeed, he did slashed support sufficient funds that the students then rioted about the cost. He also drastically cut funding for k-12 education. Yet during this time, he cut taxes on the wealthy. The result, California is now ranked 49th in spending on education and is tied for fifth-worst educational system in the country. Yes, Reagan’s legacy continues today, and it isn’t good.

    • Independent1

      I was a little surprised to learn that Arnie was just as bad as Reagan, in that, he almost tripled California’s debt in 7 years – from about 28 billion to about 79 billion (and that’s just bonds owed). Not sure why I was suprised – that’s been pretty typical of Republican presidents – Reagan tripled America’s debt from 800 billion to 2.3 trillion in 8 years – Bush jr. effectlively tripled the 4.9 billion debt he inherited from Clinton to close to 15 trillion when you count all the added debt that resulted from the disaster he allowed to happen: The Great Recession.

  • JDavidS

    There is not one single fact stated here that any thinking person hasn’t known since Ronnie Raygun was in the presidency. Yet the right continues to try to sell the masses “voodoo economics” conjured up by dim-wits like Lyin’ Ryan. If you read his “budgets’ they are something a first year economics major would be able to pick apart with ease. Ryan merely brushes over the most asinine parts with what I call his “magic asterisks”… no one, including him, has any clue in hell how those sections are going to work…or even if they will work (they won’t), so rather than try to explain them…which he can’t, he affixes a “magic asterisk”, and basically says “trust me, I can do it”. The man is beyond stupid… He should be standing in a pot and being watered every week.
    And yet he and the RepubliCONs/Tea Clowns try to sell this imbecile as credible and a “numbers guy”. To borrow from L.B.J….this asshole couldn’t fart and chew gum at the same time.

    • Allan Richardson

      What Adlai Stevenson said still holds true today. At one of his campaign stops a supporter told him, “Mr. Stevenson, every thinking man in America is behind you.” Stevenson replied, “Thanks, but I’ll need a MAJORITY to win.”

    • Independent1

      What’s really unfortunately for America is that more than 50% of Americans still think Reagan was one of our best presidents and actually believe his “voodo economics”, when the fact is, Reagan was probaly our worst president ever.

  • Bill

    Reagan was the start of the assault on the middle class by the GOP. That is why he is such a hero to them today. Reagan had no problem with the deficit as long as it benefited the Rich. Every GOP President since then has felt the same way. The only time the deficit matters is when the GOP is not in power, like now. The working people of this country need to take a good look at the GOP and understand who they really care about, the Rich. Every policy they support, every policy the reject, is for the benefit of the Rich. They have no problem raising taxes on the middle class but cry the world will end if you tax the Rich.