— by Robert Reich, Chancellor’s Professor of Public Policy at the University of California at Berkeley; Secretary of Labor in the Clinton administration.
I keep on debating right-wingers who tell me the economy is working for everyone, that widening inequality isn’t really a problem, that the rich are using their wealth to generate growth and jobs — and that therefore supply-side “trickle-down” economics — starting with Reagan’s giant tax-cuts on the rich and continuing through George W. Bush’s tax cuts on the rich — has been a huge success. Baloney. Yesterday’s Census Bureau report reveals just the opposite.
MIDDLE-CLASS SHARE OF TOTAL INCOME DROPPING: The middle 60 percent of households took home only 45.7 percent of the nation’s income in 2012, the same percent it took home in 2011 and well below the 53.2 percent it used to take home in 1968.
TYPICAL HOUSEHOLDS ARE LOSING GROUND. The average under-65 household in the United States has lost $7,490 in annual income since the year 2000. In 1989, the median American household made $51,681 in current dollars; In 2012, $51,017. That means that 24 years ago, a middle class American family was making more than the a middle class family was making one year ago.
ALMOST ALL THE GAINS HAVE GONE TO THE TOP. Between 1967 and 2012, the average income of the top 5 percent grew by 88.2 percent in real terms, or three times the 26.6 percent growth experienced by the middle 60 percent.
Get it? Supply-side economics has been one of the biggest failures in American history. It’s a cruel hoax – a hoax because nothing has trickled down, cruel because it has imposed extraordinary hardship on millions of Americans.
Time Magazine named Robert Reich one of the ten most effective cabinet secretaries of the twentieth century. He has written thirteen books, including the best sellers “Aftershock” and “The Work of Nations.” His latest, “Beyond Outrage,” is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause. His new film, “Inequality for All,” will be out September 27. Here’s the trailer for that film: