Old Glory
    

   

Areas for Investigation and Discussion
Capitalism, while imperfect, is the best known mechanism for wealth creation, but unregulated market forces can produce vast inequality and other negative consequences. We believe that our government of, by, and for the people, while also imperfect, has a central role in using the common wealth for the common good in a blanced economy.


U.S. Economic History   

In his 2007 book The Conscience of a Liberal,. Nobel Prize-winning economist Paul Krugman provides a detailed history of our transition from a great concentration of U.S. wealth at the top before the Great Depression, to a leveling of wealth disparity resulting from the New Deal and World War II, and then to a renewed inequality starting with the Reagan presidency.

Here are some highlights:
   

The Long Gilded Age (1875 to 1933)

About 32 American billionaires in 1932

Union membership: 11% of the work force

Top federal income tax rate: 24%

Percent of total income earned by the top 10%: 43.6%

Percent of total income earned by the top 1%: 17.3%

Key factors:

"Bourbon" Democrats
Political corruption
20% of voters disenfranchised
Conservative mentality

The Great Compression (1933 to 1980)

13 American billionaires in 1966

Union membership: 35% of the work force in 1945

Top federal income tax rate: 80% to 90%

Median wage (2008 dollars): about $25,000

Key Factors:

World War II wage controls
Government support of unions
FDR's New Deal
Republican acceptance of New Deal legislation

The Great Divergence (1980 to Present)

160 American billionaires in 2007.

Union membership: 12% of work force

Top federal income tax rate: 35%

Percent of total income earned by the top 10%: 44.3% in 2005

Percent of total income earned by the top 1%: 23% in 2010.

Median wage (2008 dollars): about $28,000

Key factors:

Globalization/off-shoring of jobs (Please see "The Betrayal of the American Dream" by Donald Barlett and James B. Steele, and "The Global Class War" by Jeff Faux)
Automation of jobs (Please see "The Lights in the Tunnel" by Martin Ford.)
Growth of a non-productive financial industry
Movement conservatism
Racism (civil rights backlash)
Runaway executive pay