The End of Economics: Down Reagan's Rabbit Hole

[Donnachaidh]

http://www.commondreams.org/view/2011/09/22-9



At the end of the Cold War, historian Francis Fukuyama stirred a few months of lively controversy — and eventually embarrassed himself — by declaring the “end of history.” Despite Fukuyama’s example, however, I suspect the first person to declare 2011 the beginning of the “end of economics” will be seen as a prophet.

The gradual death of economics as a serious element of public policy dates to 1981, when new president Ronald Reagan embraced the supply-side ideas of George Gilder. “Reputable economists” mocked Gilder’s theory as “trickle-down economics.” But it scored a big hit among free-market fundamentalists who saw too much money churning through the U.S. economy without first passing through their sticky fingers.

In spite of reality, supply-side theory is still with us. Skeptics, of course, were right. In 30 years, nothing has trickled down. I haven’t gotten a penny. Neither have you. Money directed to the rich, as it turns out, clings to the rich.

Meanwhile, the average U.S. family’s net wealth — adjusted for inflation —has not changed. At all. The top one percent of earners are 176 percent better off than they were pre-Gipper, but income for the middle of America’s middle class grew just 21 percent, or about 0.8 percent a year. Better than nothing? Maybe, except that most of this growth came from one-income families becoming, by necessity, two-income families.

More at the link --