Politics.

[athelind]

"As Reaganism led to the death of representative democracy, the nation underwent a radical political transformation. The Gilded Age of the late 19th century and its robber barons had morphed into the late 20th century and its predatory corporate chief executive officers such as Enron's Kenneth Lay. The much weakened institutions of governance were again dominated by moneyed interests."

Comments

[pathia.livejournal.com]

I won't argue that everything Reagan did was wonderful


However, would you propose we continued to live under stagflation which is what was occuring before his term (And is trying to rear its head again actually, but its been kept down so far)

The choice between robber baron CEO's and stagflation is pretty clear to me.

[athelind.livejournal.com]

Yeah, and all it cost us was democracy.

[pathia.livejournal.com]

We don't live in a democracy and never have.

[archteryx.livejournal.com]

This is a choice? Stagflation was caused, in large part, by horribly massive structural deficits from the Vietnam War, combined by an economic downturn. The high interest rates that the former caused exacerbated the latter and led to a vicious circle.

Coddling robber barons, tax cuts for the rich, etc, won't do diddly to head off that. Nor, admittedly, will adding new benefits to Medicare. The only thing that'll head off stagflation is cutting the deficit down to size, BEFORE interest rates start to skyrocket.

-- ArchTeryx

[pathia.livejournal.com]

The extrodinarily high tax levels of the 70s had a critical role as well. The upper tax bracket was above 70%, at its highest it was 90%.


When you have such a high tax rate, the rich sink all their money into land, because it's impossible for them to recover from 70-90% being taken from them every year. When the tax cuts were initiated they unlocked this money to fuel the booms of the 80's and 90's.

VC firms did not exist in their present form until the Reagan tax cuts, they just weren't there.

[archteryx.livejournal.com]

Bah. There were several boom and bust cycles with the highest marginal tax rates at 90%. Reagan conservatives take as gospel that the lowering of the top tax rates brought on the booms, but in reality, the timing of the great 90s boom corresponded closely to an INCREASE in taxes on the highest brackets.

Which is the right answer? It's hard to say from an objective perspective. Everyone's pretty much going to point to their politically favorite cause, link it with the beginning of a boom/bust, and go from there. But the running of large tax-cut-driven deficits combined with prolonged downturns seems to be closely correlated. The question really is -- which is cause and which is effect? I saw it's cause. But that's just my political position.

-- ArchTeryx

[pathia.livejournal.com]

Of course, I'm not saying Clinton did anything horribly wrong with those tax raises. He didn't raise them to 70-90% you see, when you get over 50%, it causes all sorts of odd things to happen.

What I said about the super rich is mainly my own annecdotal experience, because while my family is quite middle class, my uncle is a multi-multi millionare and he's detailed how he did his finances in the 70's and 80's, as well as what all his fellow multi-multi millionares did.

[delako.livejournal.com]

Im so upset at myself that I didnt go see Gorbachev when he came last week....