My Wife Believes American Workers Being Positioned To Accept Lower Living Standard.

[JHB]

32. That seems to have been the "elite consensus" since the 70s

It's a point of absolute ideology for Movement Conservatives, whose "golden era" is (aptly) the Guilded Age when business interests pretty much owned the government. Related to that, one of the unsung points Paul Krugman has mentioned in his column is the way "freshwater" (a.k.a., "Chicago School&quot economists seem completely ignorant of the data and precedent behind his arguments apparently because they practically purged any non-neoliberal views (like Keynesianism) from their curricula -- They didn't even learn it to argue against it. That's created a kind of economic Lysenkoism in elite circles (Republican, Democratic, and in Europe) demanding deregulation of businesses, lower taxes on the wealthy, and attacking the "welfare state" (any programs that mitigate the harsh effects of unbridled capitalism.

It seems like in the 70s this neoliberal economic view became a religious-like doctrine for "pro-business" interests both among the Rockefeller Republicans and the Democratic establishment. Not so coincidentally, around the same time the rise of television advertising in political campaigns made fundraising even more central to a politician's career than it had been and spawned a generation of political consultants who relied on it at the expense of nearly everything else.

With politicians ever-more reliant on contributions for campaign funding, the interests of donors have been what they heard. For some it's been a matter of ideology, but for the rest it's a rationalization for policies that they think will be good for their investments. And not cost them money in higher taxes.

You could see the effects during the arguments about raising taxes on the wealthy: "is $250,000 rich?" "should we add another tax bracket at the top. While the president and "centrist" Democrats focused on the $250K number, none of them pointed out that prior to the 1970s the number of tax brackets affecting incomes over $250K was not less than 40% and mostly over 60%. The percentage of brackets affecting incomes over 500K had been around 30% to a little under 50%. The top brackets used to kick in for incomes in the millions. The high inflation in the 70s pushed those percentages down (they weren't indexed for inflation back then) until Reagan, when progressive taxation on high incomes was wiped out completely: one or two brackets kicking in above $250K, and zero kicking in above $500K.

Money talks, and the people with it say "don't cost us money". So economic policy revolves around "pro-business" policies that go real easy on companies that reduce their overhead by reducing payroll in all sorts of ways. The money they save on paying employees is less money for the standard of living for employees in general. And if American workers can be made to get used to it, it won't cost the people benefiting from the current setup any money. So they want you to get used to it, and many politicians are happy to cater to that (and may have bought into that view themselves -- particularly the millionaires in Congress).