In Republican debates it’s firmly settled that America’s “exceptional” due to President Reagan’s exceptional legacy. Well, just how exceptionally have you been doing?
Reaganomics promised us that, by letting the top earners pay lower taxes, the economy would miraculously grow and the extra wealth thereby created would trickle down to everybody else. But it’s the biggest hoax ever perpetrated on the American people. After 35 years of Reaganomics, with all that extra wealth allegedly trickling down, every year, you’d expect some evidence to show it.
But the economic numbers show the exact opposite has happened. We’ll use the numbers for personal wealth from the Organization for Economic Cooperation and Development, the prestigious free-market think tank. Wealth is the sum total of assets (homes, bank accounts, stocks, etc.) minus liabilities (loans, debts). Wikipedia has a sortable database at List of OECD countries by wealth per adult, 2013.
Switzerland was first, at $512,562. Second was Australia, at $402,578; third, Norway, at $380,473; fourth, Luxembourg, at $315,240. America was at fifth place, at $301,140. The story, however, doesn’t end there.
Those numbers are the mean (the simple average). The mean is distorted by the Warren Buffets, Donald Trumps, Koch brothers, etc. These billionaires skew the result hugely, yet they’re clearly not typical. America’s by far the most unequal industrial country, as to both income and wealth. (We’re focusing on wealth here.)
Real estate agents understand how a few mansions can affect the average price of homes in their area. So for half a century or so, they’ve been using the median to show typical home values. It’s the middle-of-the-road number: half above, half below (think of a highway: the median is the middle). For median wealth, we find the middle of the population, ranked by wealth, then see what wealth that middle person has. The best indicator of typical middle-class wealth is median wealth per adult.
So what’s the story from the OECD on that score? First was Australia, $219,505; second, Luxembourg, $182,768; third, Belgium, $148,141; fourth, France, $141,850; fifth, Italy, $138,653; sixth, UK, $111,514; seventh, Japan, $110,294; eighth, Iceland, $104,733; ninth, Switzerland, $95,916; 10th, Finland, $95,095; 11th, Norway, $92,859; 12th, Canada, $90,252. But where’s America?
We were 23rd, at $44,911, well behind those “socialist” Europeans. President George Bush Senior described Reaganomics as “voodoo economics.” He was right. Americans have become economic zombies.
The staggering difference between $44,911 (median) and $301,140 (mean) shows the utter failure of Reaganomics. The difference would be far less if that extra wealth really had trickled down to the masses. In reality, the top 1 percent have done spectacularly well, but the rest have been hosed. We now have inequality worse than in the Gilded Age. And 45 million Americans (that’s 14 percent) live in dire poverty. Mostly, they’re in the dirt-poor South and other Republican states.
Americans have been sold the myth that our gung-ho capitalism is better for everyone than the variants found in Canada and Europe. It’s a lie — boldly told and boldly sold — never rebutted.
The dirty secret of American politics is that the middle class and the working class were stabbed in the back by the Republican Party to make the upper class richer. It was cynical class warfare and America’s workers lost, as billionaire Buffet acknowledged. Democrats are unable to get this simple message out to the masses on the idiotic theory that facts don’t matter in politics. (Plainly they do, but the trick is to present them with emotional framing and clear messaging.)
From 1945 to 1975 this country experienced spectacular growth and everyone shared the benefit. Even blue-collar workers were solidly middle class. But during the Reagan Revolution, the right attacked unions, lowered taxes on the top earners, raised payroll taxes on workers, let major corporations pay no taxes and stopped investing in infrastructure.
To make matters worse, both parties approved abysmal free-trade policies and millions of jobs vanished with a “giant sucking sound” (Ross Perot). A few people got exceptionally rich from offshoring jobs. Most got poorer. And Wall Street’s stranglehold on American politics, by bankrolling candidates of both parties, led to rushed financial industry deregulation … which led to the Great Crash of 2008 … which led to foreclosures and bankruptcies … which wiped out billions of dollars of middle-class wealth.
We’re exceptional at the wrong things: delusion, mythology, propaganda and corruption. We’re exceptionally undemocratic because exceptionally rich people have rigged the political system for their own benefit. We have exceptionally mindless elections that cost exceptional amounts of money (even though everyone detests the TV ads, robocalls and mailers the money’s spent on).
Next time you’re fed misty-eyed mythology on Ronnie Reagan’s exceptional presidency and Republicans’ exceptional economic policies, simply say, “Show me the numbers!” Good luck. There’ve been none for 35 years.