EVENTS
LEADING TO THE 80s:
The rise of the Corporate Special Interest System
America entered the 70s with a clear legacy of helping the poor.
However, Congress enacted several changes in the mid-70s that allowed an
explosion of corporate lobbyists to influence government. In an election
system where the best (but not perfect) predictor of victory is the amount
of money spent, it is crucial for politicians to curry the favor of lobbyists
to win their donations. By 1980, corporate special interests dominated
both the Democratic and Republican parties in Congress, and paved the way
for the pro-business, anti-labor legislation of the Reagan Revolution.
(For further analysis, click on More.)
The economic slowdown of the 70s
The U.S. emerged from World War II with a booming economy. In 1973,
however, America's tremendous growth inexplicably slowed. Growth rates
have remained low from 1973 to this day -- despite the so-called "Seven
Fat Years" of the Reagan era. America's decelerated standard of living
has resulted in political pressure on leaders to restore growth. Mainstream
economists say the problem of increasing productivity is deep and poorly
understood. This, however, has not prevented many snake oil salesmen from
both parties from claiming to know the secret to restoring growth, and
getting elected based on those unsound promises. (More)
The Rise of Supply-Side Economics
Supply-side advisors to Ronald Reagan promised to restore economic
growth by cutting taxes. The statistics below will examine the success
of this policy, but for now it is interesting to note who the supply-siders
were. Contrary to public perception, they were not drawn from any of the
nation's thousands of mainstream conservative economists. Rather, they
were a half-dozen journalists, congressional staffers, and crank scholars
isolated from mainstream academia. Of the 18,000 economists in the multi-partisan
American Economic Association in the early 80s, only 12 were supply-siders.
But they had a politically potent message to sell -- cut taxes -- and they
won the confidence of Ronald Reagan. (More)
Next Section: Inequality of Wealth and Income
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