X Marks the Spot Where Inequality Took Root: Dig Here.

[elleng]

'In 2002, I heard an economist characterizing this figure as containing a valuable economic insight. He wasn’t sure what the insight was. I have my own answer.

The economist talked of the figure as a sort of treasure map, which would lead us to the insight. “X” marks the spot. Dig here.

The graphic below tells three stories.

First, we see two distinct historic periods since World War II. In the first period, workers shared the gains from productivity. In the later period, a generation of workers gained little, even as productivity continued to rise.'>>>

http://www.eoionline.org/blog/x-marks-the-spot-where-inequality-took-root-dig-here/

[Warpy]

1. I remember it all too well

Inflation was blamed as the big bogeyman starting in 1969 when Richard fucking Nixon took office. He blamed it 100% on greedy workers demanding high paychecks, especially those greedy workers in unions. He didn't get a hell of a lot of traction with it until OPEC started with an embargo and then tripled the price of offshore oil. That handed his successor, Ford, the runaway inflation that the GOP had been screaming about for years but wasn't there. He, too, blamed greedy workers who thought they should be able to live decently by the sweat of their brows.

A 40 year policy of making sure wages lagged far behind inflation was put into place, continued by the conservative Democrats who ran and were elected to counter the fictitious turn to the right the country was supposed to have made. And media continued to lie about what was happening to purchasing power at the bottom of the pyramid, where we were all living.

Reagan jiggering the tax code to favor the richest just put the whole thing on steroids.

Never forget what the conservatives in both parties have done to us. Never forget they all blamed inflation on us, instead of a combination of the inflation built into fiat currency by the Fed plus the OPEC oil shocks. Never forget that the minimum wage was originally set to allow a family of four to manage on a full time wage without subjecting them to extreme penury.

Know who your enemies are. They are the conservatives who always describe themselves as pro business or fiscally sane. They're not.

[elleng]

3. Thanks for the wise analysis, Warpy.

[HeartachesNhangovers]

2. Figure 1 of the article says:

Something happened in the mid-70's

which caused inequality to increase steadily thereafter. There's a theory (not mine, but I think there's something to it) that the wealthy basically control how much inequality there will be, through their control of finance, manufacturing, government and government regulation. The only periods when the wealthy will allow an equitable distribution of wealth is when they feel that their own control is at risk, and that this only occurs during wartime when there is a draft and Americans are being sent overseas to die. The theory holds that when this happens, the wealthy fear that the American public will unify and threaten their control and even their existing wealth. Therefore, during these periods only, they consent to higher taxes on themselves and greater wealth distributions to the non-wealthy. But as soon as the crisis ends, so does their willingness to share.

So what happened in the mid-70s? The Vietnam War ended in April 1975. The last person was drafted in 1972, but it makes sense that it took a few years for inequality to show a definite upward trend.