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Was Reaganomics Responsible For The Decline Of The Middle Class?

Was Reaganomics Responsible For The Decline Of The Middle Class?

By Ryan Velez

Writer Thom Hartmann started off his recent article for Salon in a rather bold way, saying “There’s nothing ‘normal’ about having a middle class. Having a middle class is a choice that a society has to make, and it’s a choice we need to make again in this generation if we want to stop the destruction of the remnants of the last generation’s middle class.”

Hartmann calls attention to the fact that the endgame of capitalism isn’t an equal distribution of wealth, but instead, said wealth is accumulating in a small group of elites at the top of the financial food chain. Sound familiar? With all the talk of the dying middle class and the 1%, Hartmann believes that this wasn’t a simple ebb and flow of economics or inevitability, but a decision that was consciously made, and he believes Reaganomics in the early 1980’s was the beginning.

“You can see this trend today in America. When we had heavily regulated and taxed capitalism in the post-war era, the largest employer in America was General Motors, and they paid working people what would be, in today’s dollars, about $50 an hour with benefits. Reagan began deregulating and cutting taxes on capitalism in 1981, and today, with more classical ‘raw capitalism,’ what we call ‘Reaganomics,’ or ‘supply-side economics,’ our nation’s largest employer is WalMart and they pay around $10 an hour,” Hartmann says.

He looks to the example of French economist Thomas Piketty, and his recent book, Capital in the Twenty-First Century. Piketty’s argument is that the middle-class explosion we saw in Western Europe in the U.S. during the mid-twentieth century only took place due to some specific circumstances. These are the destruction of European inherited wealth due to war and higher taxes on the rich, also due to war. Progressive taxation, according to Hartmann, is a bit of a safeguard against companies exploiting workers to try and get that last bit of money. “After all, why take another billion when 91 percent of it just going to be paid in taxes?” Also stemming out of a middle class and the expectations that come with it were many social movements, like the women’s movement and Civil Rights Movement.

With a current president promising to rewrite taxes, likely to the rich’s benefit, we certainly have to ponder what the ramifications would be to a middle class that some are already calling endangered. The question is, what options do we have, and are things already too late?

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