Reply #8: It's important to recall what was happening at each trend... [View All]

[JHB]

After WW2, the tax and regulatory structure favored investment in the real economy and in people: the GI Bill sent many thousands to college without saddling them with debt; infrastructure development created opportunities in places that previously had been too isolated or inhospitable (without saddling those localities with their own bond debt); high marginal tax rates limited the attractiveness simply siphoning off money from companies (above a certain level, most of it would go to Uncle Sam, so better to re-invest and build asset value), and it made more economic sense to use monetary "carrots" with employees than to rely only on "sticks"; strong regulation kept the FIRE sector wealthy but in check, and so on.

Then came Reagan and the takover of the economy by neoliberal/Chcago School theories, and it made more sense to gamble to win big than to build steadily -- especially if you could gamble with other peoples' money, and arrange to profit no matter who "won". The result has been ever-escalating bubbles, financial corruption, and dismantling of general prosperity.