The Economy Isn’t Working. That’s Exactly the Plan.

[ZiprHead]

Inequality is reaching feudal proportions, where very few own almost everything, and everyone else is crushed under the wheel of engineered destitution.

The reason everybody is so angst-ridden about the economy is because we all have the wrong idea about what it is supposed to do and how it’s supposed to work.

Most of us have a quaint, 19th century idea about free markets and all that up-by-the-bootstraps Horatio Alger stuff. You know, work hard, play by the rules, keep your nose clean, and you’ll do well. That is certainly the cultural myth our society bathes us in.

But that’s not how things actually work. It’s the dissonance between how we imagine things work and how they really work that causes our perplexity and angst, and rage. It is also that dissonance that has been so deftly manipulated by Donald Trump and given rise to Trumpism.

Forty years ago, around 1980, the uber-wealthy decided they wanted to get their money out of the economy. There was too much political turmoil (Vietnam, Watergate), too much economic turbulence (Arab oil embargos, stagflation), and too high of a cost of production (high wages, environmental and labor protections).

They wanted to take their money somewhere where they could pay people 1/20th what they paid here (less than $1 an hour), where there were no environmental or labor laws, where the workforce was plentiful, hungry, and docile, and where politicians could be bought cheap.

In 1980, manufacturing accounted for about 22% of the U.S. economy. By 2012, just 30 years later, it contributed only 12%, an astonishingly rapid decline in historical terms, effectively a controlled demolition. The U.S. trade deficit, where we buy more from other countries than we sell, went from $19 billion in 1980—pretty close to a rounding error—to what looks to be almost $1 trillion this year. That is money that is sent directly out of the country to buy other countries’ goods. $1 trillion.

The second element of the controlled demolition of the economy was that the U.S. embarked on a plan to shift massive shares of U.S. income and wealth from the working and middle classes to the already wealthy. This is what was called “supply side economics.” It was Ronald Reagan’s signature economic policy when he ran for president in 1980.

The mythical story was that if we all gave more of our money to the already wealthy, they would invest it for us and the resulting economic boom would more than pay back the transfer, even after taxes and inflation. It sounded too good to be true. It was.

 

[Elixir]

Inequality is reaching feudal proportions, where very few own almost everything, and everyone else is crushed under the wheel of engineered destitution.

The reason everybody is so angst-ridden about the economy is because we all have the wrong idea about what it is supposed to do and how it’s supposed to work.

Most of us have a quaint, 19th century idea about free markets and all that up-by-the-bootstraps Horatio Alger stuff. You know, work hard, play by the rules, keep your nose clean, and you’ll do well. That is certainly the cultural myth our society bathes us in.

But that’s not how things actually work. It’s the dissonance between how we imagine things work and how they really work that causes our perplexity and angst, and rage. It is also that dissonance that has been so deftly manipulated by Donald Trump and given rise to Trumpism.

Forty years ago, around 1980, the uber-wealthy decided they wanted to get their money out of the economy. There was too much political turmoil (Vietnam, Watergate), too much economic turbulence (Arab oil embargos, stagflation), and too high of a cost of production (high wages, environmental and labor protections).

They wanted to take their money somewhere where they could pay people 1/20th what they paid here (less than $1 an hour), where there were no environmental or labor laws, where the workforce was plentiful, hungry, and docile, and where politicians could be bought cheap.

In 1980, manufacturing accounted for about 22% of the U.S. economy. By 2012, just 30 years later, it contributed only 12%, an astonishingly rapid decline in historical terms, effectively a controlled demolition. The U.S. trade deficit, where we buy more from other countries than we sell, went from $19 billion in 1980—pretty close to a rounding error—to what looks to be almost $1 trillion this year. That is money that is sent directly out of the country to buy other countries’ goods. $1 trillion.

The second element of the controlled demolition of the economy was that the U.S. embarked on a plan to shift massive shares of U.S. income and wealth from the working and middle classes to the already wealthy. This is what was called “supply side economics.” It was Ronald Reagan’s signature economic policy when he ran for president in 1980.

The mythical story was that if we all gave more of our money to the already wealthy, they would invest it for us and the resulting economic boom would more than pay back the transfer, even after taxes and inflation. It sounded too good to be true. It was.

A while back, when Trump was in the process of stealing $1.5 trillion for his donors and himself, I offered that a Democrat should run on a platform of taking that $1.5T back and giving it outright to taxpayers in lottery form. There are around 140 million taxpayers, so one in every hundred random taxpayers get a million dollars. What would THAT do to/for "the economy"? I know that another 120 millionaires in my county of 12,000 people would be a significant bump for every local business, non-profit and service club. Hard to image how it would effect communities in say, Appalachia.

 

[funinspace]

Not really a very well written article, and seems to contain the usual memes about 1980...

Not that I have the time to post a lengthy reply that would be required, but here is a link showing that manufacturing has been steadily declining as a percentage of the US economy since the mid 1950's (the charts are PNG and don't want to be displayed), making 1980 irrelevant to the point of the article.
https://www.minnpost.com/macro-micr...-lessons-understanding-decline-manufacturing/

 

[ZiprHead]

The percentage of the economy isn't what's being spoken about in the article.



And .pngs post here just fine.

 

[Old Woman in Purple]

A while back, when Trump was in the process of stealing $1.5 trillion for his donors and himself, I offered that a Democrat should run on a platform of taking that $1.5T back and giving it outright to taxpayers in lottery form. There are around 140 million taxpayers, so one in every hundred random taxpayers get a million dollars. What would THAT do to/for "the economy"? I know that another 120 millionaires in my county of 12,000 people would be a significant bump for every local business, non-profit and service club. Hard to image how it would effect communities in say, Appalachia.

I'm sure there would be many cases of responsible folks in dire financial straits that just need a break, stuck watching their lucky-but-irresponsible neighbor/relative piss their funds away on stupid $h!t.
I think a better hypothetical option would be to give every taxpayer $10k. Still enough to make a difference to most folks, and no-one walks away jealous or disgruntled cuz they didn't get anything while their next-door neighbor gets to retire early.

Either way, the money would be out there to stimulate the economy.

 

[funinspace]

The percentage of the economy isn't what's being spoken about in the article.

As you also quoted from your linked article, which is the percentages for the dates referenced regarding manufacturing as a percentage of the economy (aka GDP):

In 1980, manufacturing accounted for about 22% of the U.S. economy. By 2012, just 30 years later, it contributed only 12%, an astonishingly rapid decline in historical terms, effectively a controlled demolition.

View attachment 30633

And .pngs post here just fine.

oky...but even that data (employment in manufacturing) doesn't really suggest that 1980 was the inflection point as the whole 1970's decade was waves of where the employment flatlined before dropping for real, first around 1989-90, and then more seriously starting around 2000.

 

[Swammerdami]

Although I consider myself allied with progressives, I'll call out their exaggerations. The commondreams.org OP links to sheds more heat than light IMO.

Has there been a worldwide shift from Manufacturing to Services in Total Production? How are sales of Apple and Microsoft shown? The value of an iPhone is mostly software: does it show as service?

Many graphs of American economic trends show a clear inflection point near Reagan's election, but (as others point out above) we shouldn't try to make every economic narrative fit that meme. And smallish steps (beginning with taxpayer-funded healthcare for heaven's sake, and a progressive income tax) are the way to right America's economic course, not rounds of "Who wants to be a Millionaire?"

BTW, as I mentioned in another recent thread the last 4 decades of rising inequality is more of "reversion to the mean" than a new trend. Inequality was also high in the late 19th century. World-wide wealth throughout the middle of the 20th century was devastated by world wars.

By the other way, graphs from FRED are very nice and easy to manipulate. No need to take screen-shots: FRED lets you create a link to a (manipulable version of) the graph you construct.

 

[ZiprHead]

By the other way, graphs from FRED are very nice and easy to manipulate. No need to take screen-shots: FRED lets you create a link to a (manipulable version of) the graph you construct.

I specifically took the FRED screenshot without manipulation so it couldn't be misinterpreted.

 

[Loren Pechtel]

Although I consider myself allied with progressives, I'll call out their exaggerations. The commondreams.org OP links to sheds more heat than light IMO.

Has there been a worldwide shift from Manufacturing to Services in Total Production? How are sales of Apple and Microsoft shown? The value of an iPhone is mostly software: does it show as service?

Exactly. There's no way the economy could be where it is if it were just goods--we simply don't need that many goods. Furthermore, as technology advances we need experts to handle things for us. Nobody programs their own iPhone.