Corporate America Stole Our Broadly Shared Prosperity 1980 to Today
By Mark McDermott (Member of PSARA Executive Board)
The election of Ronald Reagan in 1980 set the stage for Corporate America’s all-out offensive to reassert their domination of our country and economy. Armed with a comprehensive political and economic strategy, a well-oiled propaganda machine, vast financial resources, a clearly articulated vision and values for America, and a resurgent right wing, the offensive began in earnest.
Relentless attacks against working people and unions, major cutbacks in critical social programs, extensive deregulation of financial industries and other key industries, large tax cuts for corporations and the wealthy, and aggressive promotion of free trade and the export of manufacturing jobs were the centerpiece of the big promises to restore widespread prosperity. At the same time, major increases in military spending were coupled with a more aggressive foreign policy. To quote a famous 1984 Reagan re-election ad: “It is morning in America again.” Unfortunately, for millions of hard-working and poor Americans, it was “Mourning in America again.”
What happened under the new corporate dominated regime? Good-bye shared prosperity. Hello stolen prosperity. No longer would Americans, poor, working class, or middle class share fairly in the growing wealth of our nation. My proof? Sometimes pictures are worth a 1000 words. Look the first graph.
During the shared prosperity of the late 1940s to the late 1970s, all income groups of families saw their average incomes double after inflation with the exception of the richest 5%. It was period in which a rising economic tide was lifting all boats. Poverty rates plummeted, income gaps between whites and people of color were narrowing and women began to gain on men.
Many challenges remained to create shared prosperity, and genuine economic opportunity and security for all Americans. However our long-term direction of the nation was producing greater opportunity and security for most Americans. Now look at the second graph.
Since the late 1970s, shared prosperity disappeared. The poorest 20% of families saw their average incomes drop by 11%, the lower middle class’s average income only rose 2% and the middle class’s rose only 10%. During the previous 3 decades the income gains income of these three groups were 116%, 100% and 111%.
The past three decades have been wonderful for the super-wealthy and corporate America. Between 1979 and 2006, the average income for the richest 11 thousand American families rose 386 percent. In 2006, their average income was $35.5 million. Tax rates for the super-wealthy were also cut. By 2010, corporate after-tax profits as a share of the total national income reached a record high while federal corporate tax rates reached the lowest point in more than 60 years. Times have never been better for Corporate America.
Today, we are still recovering from the worst recession since the 1930s. High levels of unemployment, mortgage foreclosures, poverty, and hunger and widespread economic insecurity remain serious problems. To understand the way forward to a renewed broadly shared prosperity and secure future, we must acknowledge that both Republicans and many corporate Democrats strongly supported financial deregulation which allowed Wall Street and Corporate America to collapse the economy and steal our shared prosperity.
Today, we face a crossroads in our nation’s history. The election of Mitt Romney will unleash a new wave of corporate domination and continuation of policies that advance the wealthy and powerful at the expense of the people. The re-election of Barack Obama is critical but it is far from enough. Next month we can begin to explore the long-term strategy to bring renewed economic security and opportunity for all Americans.