Some Things Reagan Got Wrong:

Trickle down economics:

Reagan believed that as the per capita gross domestic product of a country grows, in a free market economy, there will be a growth in income at all income levels in the society – the tide that lifts all boats, otherwise known as trickle down economics. In the period after World War II, up until the late sixties, the growth of gross domestic product corresponded to growth at all income levels. We were the economic engine that provided the goods that rebuilt the world after World War II, which helped our economy grow. World War II had destroyed the infrastructure of many countries, but not ours. Through the Marshall Plan, we also provided resources to help the other countries rebuild.

But, by the late sixties and early seventies, the baby boom generation was entering the work force, so the demand for jobs went up; a higher proportion of women began entering the work force, so the demand for jobs went up; and we started running a trade deficit – mainly due to our oil imports, because the Organization of Oil Exporting Countries cartel was able to raise world oil prices. And, the economies in Europe and Asia had recovered, so we no longer had the world markets that we had had before.

Our income growth started to stop with regard to personal median incomes. The median income for men was first greater than the median income for men in 2014, after adjusting for inflation, in 1969. From 1969 to 2014, male median income was on a roller coaster. (https://www2.census.gov/programs-surveys/cps/tables/time-series/historical-income-people/p02.xls). Female median income increased, though, by a factor of about 1.8, from 1969 to 2014. (In 2014, male median income was larger than female median income by a factor of about 1.6.). The increase in median household income from 1969 to 2014 would have been from more households having two breadwinners. At the same time, more of the labor of bringing up children became paid labor.

The gross domestic product increased by a factor of about 3.4 from 1969 to 2014, adjusted for inflation. (http://www.bea.gov/national/xls/gdplev.xls). The population of those over age fifteen increased by about a factor of about 1.8. (http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk https://www.census.gov/popest/data/national/asrh/pre-1980/tables/PE-11-1969.pdf). So, there has been a lot of economic growth, but we have not been seeing economic growth trickling down to men and by just some to women – at least at the median.

Granted, taxes (federal, state, and local) and government spending as a proportion of gross domestic product have not come down over the last 35 years (http://taxfoundation.org/article/short-history-government-taxing-and-spending-united-states). Rather the percentages have fluctuated between about 25% to about 30% of gross domestic product for revenues and between about 30% to about 38% for expenditures.

The world will end in a nuclear fire:

From a show on the Public Broadcasting Network (I think) several years ago, Reagan feared that the prophecy that the world would end in fire referred to a nuclear holocaust. So Reagan worked to get rid of nuclear weapons (a laudable goal). More likely, our world will end in heat from the fires in our coal and natural gas driven steam turbines and our internal combustion engines, because of the greenhouse gasses we are putting into the atmosphere. Reagan, unfortunately, reversed the progress that Carter had made in moving us away from fossil fuels. We are years behind where we should be in dealing with climate change, because of Reagan (and others). And, because of Reagan, we have a generation of Republican politicians who refuse to acknowledge science and our, very good, understanding of what we are doing to our climate.

The problem is not not enough government, the problem is government:

When Reagan was 19 (1930) – the age near which our view of life is formed – the population of the United States was about 123 million, with about 41 people per square mile. By 2014, the population was about 319 million, with about 90 people per square mile, and we were far more urbanized. (Between 1930 and 2014, we added Alaska and Hawaii to our country, which added a lot of area – which diluted the population density.) Our population is getting denser (in more ways than one, given our lack of dealing with our – urgent – problems). Our nation is also a lot more urban now.

When masses of people live in close proximity, people have a lot of judgements of rights and wrongs. In Recovery International’s literature, Dr. Low writes and talks about how, in rights and wrongs, it takes an expert judge to decide who is right and who is wrong, and even then, the decision is just an opinion. Regulations help sort out the rights and wrongs.

We have seen recently in the economic expansion of China, the harm that business can do in a young and poorly regulated economy – from smog in the air to poisonous baby food. Our rules and regulations have grown out of similar problems in the past within our own country.

Even with our current businesses, our national lessons of smoking and climate change bear witness to the fact that big businesses are often unwilling to stop their businesses from producing in the face of harm resulting from the use of their product. We need to put limits on businesses, because business do not necessarily have a moral sense.

Protecting the natural world as our housing base, businesses, and farmland expand is also a real necessity. With more of us, we need to learn to live with the natural world and part of learning to live with the natural world is being regulated.

According to an op-ed by Robert Reich a few years ago, Republicans in Congress and their mission to cut taxes have starved the regulatory functions of our government. We have not had the funds to protect our people at the level necessary and legislated. Reich wrote that the result is the so-called “inefficiency” of government that Republicans like to say exists. Government agencies do not have the human-power to provide the services that are mandated by law. Republicans then blame government “inefficiency” for the poor or lack of or untimely services.

Desperation is a good motivator:

When Reagan was 19, the world was in, and near the beginning of, the Great Depression. Reagan had a good view of the effect of desperation on a society. In astrology, desperation is contained in one of the twelve houses – the eighth house. About one twelfth of our personal and communal lives should be about desperation. However, it is my belief that when a society deals with desperation on a mass scale, we get phenomena like Nazi Germany, the Taliban, and ISIS; all of which grew out of the aftermath of war. There is also the loss to society of the people who never recover after the desperate times – from those who commit suicide to those suffering from post-traumatic stress disorder. Yes, desperation can be a motivator, but it can also be very destructive of a society. We need to do what we can to reduce the costs of desperation, as a society, while maintaining the motivation generated by desperation.

Link to article on US Wealth, Income, and Taxes

In this blog post, I am just providing a link to an article, Wealth, Income, and Power, by G. William Domhoff of the University of California at Santa Cruz.  The article provides an historical perspective on wealth and income distributions in the United States as well as giving information on the proportion of income paid in taxes by income classes.  While those with the lowest incomes in the United States do not pay much in federal taxes, the group pays quite a bit in state and local taxes.  From a graphic in the article linked below, the lowest 20% in income pay about 16% of their income in taxes – mostly state and local – about 1/4 of the class’s taxes are federal taxes, the next 20% income class (20% to 40%) pays about 20%, of its income in taxes, the next 20% income class (40% to 60%) pays about 25% of its income in taxes, the next 20% income class (60% to 80%) pays about 28% of its income in taxes, and the highest 20% income class (80% to 100%) pays about 31% of its income in taxes – about 2/3 of which is federal taxes.  The proportion of  income paid in federal taxes increases with each of the income classes as income increases.  Here is the link.  Enjoy!!!

http://www2.ucsc.edu/whorulesamerica/power/wealth.html