Robert Reich writes that, in the three decades after World War II, the United States created the largest middle class the world has ever seen:
During those years the earnings of the typical American worker doubled, just as the size of the American economy doubled. (Over the last thirty years, by contrast, the size of the economy doubled again but the earnings of the typical American went nowhere.)
In that earlier period, more than a third of all workers belonged to a trade union — giving average workers the bargaining power necessary to get a large and growing share of the large and growing economic pie. (Now, fewer than 7 percent of private-sector workers are unionized.)
Then, CEO pay then averaged about 20 times the pay of their typical worker (now it’s over 200 times).
In those years, the richest 1 percent took home 9 to 10 percent of total income (today the top 1 percent gets more than 20 percent).
During that period, the national tax structure was radically different than the one Americans now live under:
Then, the tax rate on highest-income Americans never fell below 70 percent; under Dwight Eisenhower, a Republican, it was 91 percent. (Today the top tax rate is 39.6 percent.)
Consider what those taxes bought:
In those decades, tax revenues from the wealthy and the growing middle class were used to build the largest infrastructure project in our history, the Interstate Highway system. And to build the world’s largest and best system of free public education, and dramatically expand public higher education.
Then came the Thatcher-Reagan Revolution and the Great U Turn. And now, citizens have forgotten their former prosperity. Reich pulls no punches:
The collective erasure of the memory of that prior system of broad-based prosperity is due partly to the failure of my generation to retain and pass on the values on which that system was based. It can also be understood as the greatest propaganda victory radical conservatism ever won.
Conservatism has triumphed. But the United States has paid a terrible price.
This entry is cross posted at The Moderate Voice.