Former Clinton Labor Secretary Robert Reich asked the following on
“Why has America forgotten the three most important economic lessons we learned in the 30 years following World War II? Before I answer that question, let me remind you what those lessons were:
First, America’s real job creators are consumers, whose rising wages generate jobs and growth. If average people don’t have decent wages there can be no real recovery and no sustained growth.
In those years, business boomed because American workers were getting raises, and had enough purchasing power to buy what expanding businesses had to offer. Strong labor unions ensured American workers got a fair share of the economy’s gains. It was a virtuous cycle.
Second, the rich do better with a smaller share of a rapidly growing economy than they do with a large share of an economy that’s barely growing at all.
Between 1946 and 1974, the economy grew faster than it’s grown since, on average, because the nation was creating the largest middle class in history. The overall size of the economy doubled, as did the earnings of almost everyone. CEOs rarely took home more than forty times the average worker’s wage, yet were riding high.
Third, higher taxes on the wealthy to finance public investments — better roads, bridges, public transportation, basic research, world-class K-12 education and affordable higher education – improve the future productivity of America. All of us gain from these investments, including the wealthy.
In those years, the top marginal tax rate on America’s highest earners never fell below 70 percent. Under Republican President Dwight Eisenhower the tax rate was 91 percent. Combined with tax revenues from a growing middle class, these were enough to build the Interstate Highway system, dramatically expand public higher education and make American public education the envy of the world.
We learned, in other words, that broadly-shared prosperity isn’t just compatible with a healthy economy that benefits everyone — it’s essential to it.
But then we forgot these lessons. For the last three decades the American economy has continued to grow but most peoples’ earnings have gone nowhere. Since the start of the recovery in 2009, 95 percent of the gains have gone to the top 1 percent.
Then Reich explains a lot of true stuff, while leaving out a ton of things the Clinton administration did to bring about our current state of massively unequal income distribution.
For starters, instead of defending the middle class, President Clinton joined his Wall Street masters in redistributing income from the middle to the top via free trade treaties, such as NAFTA. Take a look at the graph below.
The US free trade regime began during the 1980s, during the regime of President Ronald Reagan. Jobs, however, had been exported from the US since the 1950s. Under Clinton, and Wall Street Congressmen, such as Ron Wyden, the exportation of jobs accelerated with NAFTA, as anybody with half a brain can see from the graph above, though not Wyden, who apparently still clings to fulfill the desires of his Wall Street masters.
In this case, the financial markets are a Ponzi Scheme. They need to increase steadily in value over the course of time. Otherwise, they’ll accelerate downward. That’s the primary purpose of redistributing income from the 99 to the 1 percent, that is to keep the Ponzi scam known as Wall Street from collapsing, as it did during the Great Depression.
Furthermore, free trade treaties also pave the way for US corporations to create jobs overseas. Millions have been created over there rather here because of NAFTA, the South Korea free trade treaty and more.
And finally, with all the jobs begin shipped away, or created away, from the United States, that meant downward pressure on wages, benefits and salaries. And the difference between the old higher wages and the new lower wages have been redistributed from the pockets of the middle class to the already fat wallets of the 1 percent.
This is precisely why the stock markets tripled in value, more or less, during the last four years of the Clinton regime.
It’s accurate to conclude that the primary purpose of the regime of free trade is to redistribute income upward, and to lower wages, salaries and benefits.
The result of all this has been to diminish the middle class by redistributing the tax bases for our schools and social safety nets to the 1 percent, increase poverty, and corrupt democracy in the USA. And that’s just a few of the negative things this inequality has done.
Now Wall Street Ronnie Wyden wants to continue this process of redistribution via the Trans Pacific Partnership, the biggest income redistribution scam of all time in favor of Wall Street and the 1 percent.
As for the Clinton regime, there were plenty things President Clinton did to redistribute income from the 99 to the 1 percent, but Reich has no intention of letting you in on this, like the free trade scams.
In other words, the political and economic game has been rigged, and Bill Clinton and his labor secretary Robert Reich played big roles in creating this inequality, and now Reich is trying to pretend that his boss and he played no role in creating this rigged game.
For the rest of Reich’s semi-accurate story, click the link below.