So, I finished reading Paul Krugman's
The Conscience of a Liberal (2007). It's about economic (in)equality in America, how it's changed over time, and why -- in particular, about the political interventions that have reduced or increased it, from the New Deal to movement conservatism, and why those political movements succeeded.
Right before it I read his
Pop Internationalism (1997), on the ubiquitous myths regarding international trade and the ill-founded notion of "competitiveness". In that he argued that "countries are not corporations", and not in competition with each other, especially for a country like the US where 90% of GDP is Americans producing for and selling to other Americans. Wages are generally driven by the average level of productivity, with little evidence or mechanism for trade driving them down, especially in general but even in cases like American unskilled labor.
This book doesn't challenge any of his earlier statements on trade, but it's rather more interventionist on wages; the economy generates wealth, but politics and social norms can control how much of that labor gets. We start with what he calls the Long Gilded Age, the Gilded Age proper and the years following, up to the Great Depression in 1929. Income increased at all levels, following the rapid technological development, but inequality stayed high, and politics were highly polarized between populist Democrats and big business Republicans. Then we got the Depression and the New Deal reaction, with Social Security, progressive income tax, estate tax, government supporting unions instead of breaking them, and government work programs, followed by WWII and outright controls on prices and wages. Eisenhower in 1952 brought the GOP to accept the New Deal consensus, and we had 30-ish years of 70-90% top tax bracket, 2.7% growth in the median income (doubling it), relatively low inequality between top and bottom brackets, a minimum wage that was half the average income, and 'bipartisan' politics since the parties basically agreed on major issues, competing on running the government.
( Read more... )...that'll have to be all for now.
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